Smith & Nephew plc (SNN) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

February 21, 2023 3:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Deepak Nath

So good morning, and welcome to the Smith & Nephew Full Year 2022 Results Presentation. I'm Deepak Nath, Chief Executive Officer. And joining me is Anne-Francoise Nesmes, who is the CFO of the company.

So I'm pleased to report a good finish to 2022. Underlying growth rate accelerated versus the first nine months with all of our franchises contributing. We've continued to outperform in sports and wound management, which generate together 60% of group sales. We're still early in our work to fix orthopaedics. And although growth improved there, too, it will take some time for us to get to where we want to be.

The company is well positioned going into 2023, and we're transforming the way we're operating Smith & Nephew through our 12-point plan, driving greater rigor and execution as we deliver our strategy for growth. Delivery of the 12-point plan is progressing, and our KPIs are already moving in the right direction, and I'll share some of that data with you later.

But with improving operations and a good exit to 2022, we expect both faster growth and margin expansion in the coming year. We're also updating our midterm targets. On growth, we feel very good about the outlook. We're continuing to execute well in our outperforming businesses. And the fix of orthopaedics is underway, and we're delivering a high cadence of innovation.

For the margin, the macro environment has been more challenging than me or anyone else expected back in 2021. Inflation has been higher, and global supply chains have stayed disrupted for longer. And our midterm goals reflect offsetting most of that additional pressure through a range of cost actions. However, it's also and moving the date of our margin target back by a year. Shortly, I'll cover how we'll deliver the targets of consistent 5% growth or above and at least a 20% trading margin by 2025.

I see the delivery and more importantly, the fundamental improvements we're making required to achieve them as the first step and our ambition to transform Smith & Nephew. But first, I'll begin with the highlights of our full year numbers.

So revenue was up -- was at $5.2 billion, and that's 4.7% growth on an underlying basis with one less trading day in 2021. Reported growth was at 0.1%. Trading profit was $901 million, which is a 17.3% trading margin.