SOURCE: Smith & Nephew PLC

August 07, 2008 06:00 ET

Smith & Nephew announces Interim Results

LONDON--(Marketwire - August 7, 2008) -



Smith & Nephew Interim Results - delivering across all our businesses
as Q2 revenues reach USD1 billion


7 August 2008


Smith & Nephew plc (LSE: SN, NYSE: SNN), the global medical technology
business, announces its results for the second quarter and first half
ended 28 June 2008.


                          3 months* to             6 months** to
                  28 June 30 June underlying 28 June 30 June underlying
                     2008    2007   increase    2008    2007   increase
                     USDm    USDm       %       USDm    USDm      %

Revenue1            1,000     813       8      1,911 1,557        5

Trading profit2       198     167       8        380   315        7

Operating profit2 6   174     148                316   275Trading margin3
19.8    20.5   5 bps       19.9  20.2   40 bps

EPSA (cents)4        14.0    12.4               26.8  23.6

EPS (cents)6         11.6    11.0               20.9  20.7

Business Unit Revenue1
Orthopaedic
 - Reconstruction     396     291       8        773   553        5
 - Trauma & CT        171     150       5        322   286        3
Endoscopy             205     178      10        399   355        7
Advanced Wound
 Management           228     194       9        417   363        6


*  Q2 2008 comprises 64 trading days (2007 - 63 trading days)
** H1 2008 comprises 126 trading days (2007 - 127 trading days)


Q2 Commentary

  - Reported revenue up 23% to USD1 billion, underlying growth up 8% (10%
    excluding Plus impact5)

  - Reported trading profit USD198 million up 19%

  - EPSA up by 13% to 14.0 cents

  - Orthopaedic Reconstruction achieved revenue growth of 8% (11%
    excluding Plus impact) with strong contributions from both hip and
    knee revenues

  - Orthopaedic Trauma improved with 5% revenue growth (10% excluding
    Plus impact). US fixation revenues improved as management actions
    started to deliver benefits

  - Endoscopy returned to double digit revenue growth

  - Advanced Wound Management outperformed the market globally and
    gained traction with Negative Pressure Wound Therapy

  - Plus Orthopedics sales practices impact confirmed, management
    focused on realising acquisition benefits



Commenting on the second quarter, David Illingworth, Chief Executive of
Smith & Nephew, said:"We have generated quarterly revenues of USD1 billion
for the first time,
as a result of a very solid performance across all of our businesses.
In Reconstruction we have seen good growth in both our hip and knee
product lines; in Trauma the actions we have taken in sales management
have begun to pay off; Endoscopy has delivered double digit revenue
growth and in Advanced Wound Management we have outperformed the
market. We are confirming our guidance for the full year and we believe
that the long term outlook for our business is excellent".


Analyst presentation


An analyst presentation and conference call to discuss Smith & Nephew's
second quarter results will be held at 12.30pm BST /7.30am EST today,
Thursday 7 August.  This will be broadcast live on the company's
website and will be available on demand shortly following the close of
the call at http://www.smith-nephew.com/Q208. A podcast will also be
available at the same address. If interested parties are unable to
connect to the web, a listen-only service is available by calling +44
(0)20 7806 1957 in the UK or +1 (718) 354 1388 in the US. Analysts
should contact Samantha Hardy on +44 (0)20 7960 2257 or by email at
samantha.hardy@smith-nephew.com for conference details.


Notes


1 Unless otherwise specified as 'reported', all revenue increases
  throughout this document are underlying increases after adjusting for
  the effects of currency translation and acquisitions. See note 3 to
  the financial statements for a reconciliation of these measures to
  results reported under IFRS.

2 A reconciliation from operating profit to trading profit is given in
  note 4 to the financial statements. The underlying increase in
  trading profit is the increase in trading profit after adjusting for
  the effects of currency translation and acquisitions.

3 The underlying trading profit margin is the increase in trading
  profit margin after adjusting for the effects of currency translation
  and acquisitions. Unless specified as "reported" all trading profit
  margin increases throughout this document are underlying.

4 Adjusted earnings per ordinary share ("EPSA") growth is as reported,
  not underlying, and is stated before restructuring and
  rationalisation costs, acquisition related costs, amortisation of
  acquisition intangibles and taxation thereon. See note 2 to the
  financial statements.

5 Adjusted for the impact of Plus sales lost due to unacceptable sales
  practices in parts of Europe.

6 Operating profit for the comparative 3 months and 6 months ended 30
  June 2007 have been adjusted for the finalisation of IFRS 3
  acquisition accounting for Plus and BlueSky. See note 1 to the
  financial statements.

7 All numbers given are for the quarter ended 28 June 2008 unless
  stated otherwise.



Enquiries

Investors
Liz Hewitt                                  +44 (0) 20 7401 7646
Group Director Corporate Affairs
Smith & Nephew

Media
Jon Coles                                   +44 (0) 20 7404 5959
Justine McIlroy
Brunswick - London

Cindy Leggett-Flynn                            +1 (212) 333 3810
Brunswick - New York


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          The company news service from the London Stock Exchange

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