Smith & Nephew plc (NYSE:SNN) Q3 2023 Earnings Conference Call November 2, 2023 4:30 AM ET
Company Participants
Deepak Nath - Chief Executive Officer
Anne-Francoise Nesmes - Chief Financial Officer
Conference Call Participants
Robert Davies - Morgan Stanley
Veronika Dubajova - Citi
Lisa Clive - Bernstein
Jack Reynolds-Clark - RBC
David Adlington - JPMorgan
Graham Doyle - UBS
Hassan Al-Wakeel - Barclays
Sezgi Oezner - HSBC
Operator
Deepak Nath
Good morning and welcome to the Smith & Nephew Third Quarter Trading Report Call. As mentioned, I'm Deepak Nath and is Chief Executive Officer and joining me is Chief Financial Officer, Anne-Francoise Nesmes.
So before I begin today's presentation, just draw your attention to our announcement today that John Rogers will succeed Anne-Francoise as Chief Financial Officer in the first quarter of next year after the publication of our annual report and accounts.
John is an experienced FTSE-100 CFO, having held the post at WPP and Sainsbury's, and I have no doubt his financial acumen and expertise in leading transformation programs will be tremendous assets to us.
As I've said before, I'm very grateful Anne-Francoise for the time she has given us to ensure an orderly handover and her continued support as we close out 2023 and complete this new transition.
So now let me turn to our Q3 results. I'm pleased to report another good quarter, which maintains our momentum from the first half. Orthopedics growth has stepped up as expected with one of the highest growth quarters for many years. And importantly, the strong underlying performance in Sports Medicine and Advanced Wound Management has also continued. There are puts and takes across the portfolio as you'd expect, but the overall picture is of strong innovation driven growth backed by improving execution.
We're also advancing the 12-point plan with encouraging signs of delivery on outcomes. Our operational improvements under the plan are continuing to drive key metrics toward their targets, particularly around product availability. In Orthopedics, you can see that translating to better revenue growth for more lines of the business. Our productivity measures are also progressing. We've made cost savings as planned for 2023, and for the longer term, we announced the closure of two of our smaller factories within our network.
With nine months done, we're refining our guidance for the full year. We now expect revenue growth to be towards the higher end of our 6% to 7% guidance range, reflecting our good momentum and improving execution. And on profitability, we're seeing the expected step-up in the second half with the seasonal uplift and cost improvements coming through. There is some additional headwind in China as well and we're reflecting that with trading margin guidance now of around 17.5%.