SOURCE: Smith & Nephew PLC

February 12, 2009 02:28 ET

Smith & Nephew Plc Announces Final Results

LONDON--(Marketwire - February 12, 2009) -

Smith & Nephew 2008 Preliminary results - a year of sound progress

Smith & Nephew plc (LSE: SN) (NYSE: SNN), the global medical
technology business, announces its results for the fourth quarter
ended 31 December 2008.

                  3 months* to                12 months to
            -------------------------  -------------------------
            31 Dec  31 Dec             31 Dec  31 Dec
             2008    2007  Underlying   2008    2007  Underlying
             USDm    USDm  increase %   USDm    USDm  increase %

Revenue       960     967      7       3,801   3,369      6

Profit(2)     222     222      8         776     706      6

Profit(2)(5)  179     150                630     493

margin (%)   23.2    23.1               20.4    21.0

 (cents)(3)  16.6    16.6               55.6    52.0

 (cents)(5)  13.3    10.4               42.6    34.2

Business Unit

Orthopaedics  550     550      6       2,158   1,858      5

Endoscopy     206     201      9         800     732      8

Management    204     216      7         843     779      7

* Q4 2008 comprises 63 trading days (2007 - 61 trading days)

Q4 Commentary

  - Underlying Group revenue grew by 7%
  - Orthopaedics revenues increased by 6%, reflecting a strong US
  - Endoscopy delivered another good result growing revenues by 9%
  - Advanced Wound Management grew revenues by 7%, driven by a
    strong European and rest of the world performance
  - Trading margin of 23.2%, marginally up on last year, impacted
    by NPWT investment, Plus and compliance costs
  - EPSA was maintained at 16.6c

Full Year Highlights

  - Group reported revenue up 13% to USD3.8 billion, underlying
    growth of 6%
  - Trading profit up 10% to USD776 million, up 6% underlying
  - EPSA increased 7% to 55.6c
  - Orthopaedics revenues grew at 5% (8% excluding Plus impact(4))
  - Endoscopy finished the year with 8% growth. Our actions
    leading to an improving US performance trend
  - Advanced Wound Management, at 7% growth, delivered its best
    growth performance for 5 years
  - Trading margin at 20.4%, masking the longer term operating
    efficiency improvements we have made to our businesses
  - Second interim dividend up 10% to 8.12c per share

Commenting on the full year, David Illingworth, Chief Executive of
Smith & Nephew, said: "We finished the year in a positive frame of
mind. We grew underlying sales for the year by 6%, with a similar
increase in trading profit. All of our businesses reported
underlying sales growth. These achievements are particularly
notable against the backdrop of the slowdown in the global economy
and a number of industry-wide and company specific issues.

"We remain alert to any changes in the near-term outlook in our
businesses and believe that our company-wide Earnings Improvement
Programme, which we started two years ago, gives us a head start
in dealing with any tougher operating climate.

"We are focused on extending our track record of delivering
innovative products, bringing clinical benefits to patients and
economic benefits to healthcare providers. We put our customers
first, listen to their needs and deliver on our promises. The
Board has continued its policy of increasing, by 10%, the dividend
which is declared in US dollars, creating a significant additional
benefit for sterling-based shareholders. I am confident we will
continue to deliver sustainable long-term growth for our

Analyst presentation and conference call

An analyst presentation and conference call to discuss Smith &
Nephew's fourth quarter results will be held at 9.00am GMT/4.00am
EST today, Thursday 12 February. This will be broadcast live on
the company's website and will be available on demand shortly
following the close of the call at
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 8322 2048 in the UK or 
+1 866 432 7175 in the US. Analysts should contact Samantha Hardy 
on +44 (0)20 7960 2257 or by email at for conference details.

(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) Adjusted earnings per ordinary share ("EPSA") growth is as
    reported, not underlying, and is stated before restructuring
    and rationalisation costs, acquisition related costs,
    amortisation and impairment of acquisition intangibles,
    legal settlement (in 2007) and taxation thereon. See note 2
    to the financial statements.
(4) Adjusted for the impact of Plus sales lost following the
    harmonisation of sales practices in parts of Europe.
(5) Operating profit and earnings per share for the comparative
    3 months and 12 months ended 31 December 2007 have been
    adjusted for the finalisation of IFRS 3 acquisition
    accounting for Plus. See note 12 to the financial statements.
(6) All numbers given are for the quarter ended 31 December 2008
    unless stated otherwise.


Liz Hewitt           +44 (0) 20 7401 7646
Phil Cowdy
Smith & Nephew
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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