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ALLEVYN Life
Advanced Foam Wound Dressings
PICO
Negative Pressure
Wound Therapy
AWC
RAPID RHINO
NASASTENT
Dissolvable
Nasal Dressing
AMBIENT SUPER
MULTIVAC
COBLATIION
Wand
AWD
JOURNEY II BCS
Bi-Cruciate
Stabilised Knee
System
AWB
Knees
Other Surgical
Businesses
Arthroscopic
Enabling
Technologies
Sports Medicine
Joint Repair
$4.6bn
revenues
(2015)
Hips
Trauma
REDAPT
Revision Femoral System
SUTUREFIX Ultra
Suture Anchor
TRIGEN INTERTAN
Intertrochanteric Antegrade Nail
Established
OUS (37%)
US
(48%)
Acelity
21%
Zimmer Biomet
35%
Other
37%
Stryker
19%
DePuy Synthes
21%
Stryker
11%
Arthrex
30%
Sports
Medicine*
23%
Linvatec
5%
Data: 2015 Estimates generated by Smith & Nephew based upon public sources and internal analysis
*Representing access, resection and repair products.
** A division of Johnson & Johnson
Advanced
Wound
Management
Coloplast
4% Convatec
8%
18%
Molnlycke
12%
Zimmer
Biomet
3%
DePuy Mitek**
15%
Technology
By 2050, the number
of people over the age of
65 around the world will
have tripled to nearly 1.5
billion
Lifestyle
Prevalence
Economics
Environment Complexities
JOURNEY II CR
Knee System
8
Our performance
Revenue
Trading profit
$4,634m
+4%*
4,617
4,634
4,351
4,137
2011
2012
2013
2014
2015
85.1c
+3%CAGR
83.2
74.5
75.7
961
965
2011
2012
838
2013
30.8c
2014
2015
27.4
2011
2012
2013
2012
2013
2014
2015
29.6
$1,361m
1,613
30.8
1,361
17.4
138
2011
936
781
Net Debt
+15%CAGR
85.1
76.9
877
987
26.1
+3%CAGR
999
1,099
1,055
4,270
$936m
2014
2015
2011
2012
2013
2014
2015
2011
288
253
2012
2013
2014
2015
9
* Underlying growth percentage after adjusting for the effect of currency translation, acquisitions and disposals.
Our customers
Retail
consumers,
Patients
Nurses,
Nurse
specialists
Physicians,
GPs
Payers,
Administrators
Healthcare
systems,
Procurement
groups
Surgeons
10
Strategic Priorities
Winning in Established Markets
Accelerating development in Emerging Markets
Innovating for value
Progressive
dividend
policy
Acquisitions
in line with
strategy
Return
excess to
shareholders
Future
Lower
Growth
65%
Higher
Growth
67%
Improving
Strengthening
Creating
Higher
Growth
35%
Lower
Growth
33%
Proportion of Revenue
Higher Growth: Sports Medicine Joint Repair, ArthroCare, Trauma & Extremities,
Gynaecology, Advanced Wound Bioactives and Devices, Emerging markets (all franchises)
Lower Growth: Arthroscopic Enabling Technologies, Reconstruction and Advanced Wound
Care (all Established markets)
13
Driving
Procurement Savings
Simplifying
Operating Model
Optimising
Locations
Increasing
overall
efficiency /
agility
Liberating
resources to
re-invest in
critical areas to
drive growth
Benefits
Restructuring costs
16
Revenue split
Sports Medicine
Joint Repair
5%
US
7%
Arthroscopic
Enabling Tech
0%
2%
Trauma &
Extremities
Other Surgical
10%
Knees
1%
Est OUS
5%
Hips
0%
8%
AWC
11%
0%
4%
8%
12%
Emerging
AWB
AWD
7%
-3%
-5%
5%
15%
Note: Est OUS is Australia, Canada, Europe, Japan and New Zealand, Other Surgical includes Gynaecology and ENT,
17
Revenue split
Sports Medicine
Joint Repair
8%
US
11%
Arthroscopic
Enabling Tech
Trauma &
Extremities
Other Surgical
4%
-7%
19%
9%
Knees
4%
Est OUS
4%
Hips
0%
AWC
Emerging
-6%
-10%
-5%
0%
5%
10%
-4%
AWB
AWD
11%
-10%
0%
10%
20%
18
Emerging Markets
Innovation
Simplification
Acquisitions
Shareholder Value
Established Markets
Revenue growth
Emerging
Markets
Innovation
Simplification
Optimising
Cash
Delivering
returns
through
capital
allocation
framework
Acquisitions
Continued tax rate improvement
20
Strategic Updates:
M&A, Innovation, Blue Belt Technologies
Acquisition, Recon, Syncera and Emerging Markets
21
Integration completed
FUTURE:
Accelerate growth with
disruptive innovations
and solutions
Wound
VERILAST
technology
JOURNEY II family
ZUK uni knee
ALLEVYN Life
PICO
SANTYL
Rotator Cuff
Solution
WEREWOLF
Regenerative e.g.
BST-CarGel
Syncera model
NAVIO system
REDAPT revision
hip
RENASYS TOUCH
Solutions based
models
Segment-leading
growth
Segment-leading
growth
Segment-leading
growth
23
Note: excludes mid-tier, ENT, GYN and Trauma & Extremities portfolios
Prevention
Diagnosis
& Detection
Deep tissue
injury detection
Point of care
diagnostics
Biosensors
Risk
stratification
tools
Treatment
Care
Coordination
& Monitoring
Healing
technologies
Clinical
algorithms
Bioactive
debridement
Outcomes
tracking
Anti-infectives
Products
designed for
patient
transition
Next
Generation
negative
pressure
Data Driven
Healthcare
Best-in-class
medical education
Data-driven
best practices
Real-world cost
effectiveness
models
24
Navigation camera +
proprietary computer cart
Robotic-controlled handpiece
25
R&D
programme
Medium-term
opportunities
Navio System
Revision knee
Pioneering products
Differentiated marketing
Widening access
Disruptive model
Syncera
JOURNEY II
Active Knee Solutions
27
Clinically proven
Automation
Full support
Attractive economics
4
5
28
30%
FY 2015
15%
Q1
2010
8%
economic growth
mid-tier strategy
medical education
further acquisitions
25%
20%
15%
10%
5%
0%
2010
2011
2012
2013
2014
2015
29
Dedicated
leadership
Manufacturing &
design efficiency
Different service
model
Streamlined
sales & marketing
Common shared
services
Different business
model
Different brand
Separate sales
channels
Collaboration with
premium-tier
organisation
30
Appendices
31
Q2
Q3
2016
Q4
Full
Year
Growth
Q1
Revenue Growth
$m
468
141
11
(2)
(2)
156
114
(7)
11
10
13
10
57
19
Reconstruction
387
Knee Implants
234
Hip Implants
(1)
(2)
153
282
12
171
16
72
(4)
(27)
(9)
17
14
(3)
39
11
1,137
32
Q2
Q3
2016
Q4
Full
Year
Q1
Revenue Growth
$m
563
(2)
421
984
Emerging Markets
22
14
11
153
(6)
Group
1,137
Geographic regions
US
Other Established Markets
Established Markets
Other Established Markets is Australia, Canada, Europe, Japan and New Zealand.
All revenue growth rates are on an underlying basis
33
H2
Full Year
2015
2014
2015
2014
2015
2014
$m
$m
$m
$m
$m
$m
2,272
2,220
2,362
2,397
4,634
4,617
(566)
(538)
(577)
(589)
(1,143)
(1,127)
Gross profit
1,706
1,682
1,785
1,808
3,491
3,490
75.1%
75.8%
75.6%
75.4%
75.3%
75.6%
(1,084)
(1,078)
(1,086)
(1,122)
(2,170)
(2,200)
(110)
(120)
(112)
(115)
(222)
(235)
Trading profit
512
484
587
571
1,099
1,055
22.5%
21.8%
24.9%
23.8%
23.7%
22.9%
Revenue
34
H2
Full Year
2015
2014
2015
2014
2015
2014
$m
$m
$m
$m
$m
$m
512
484
587
571
1,099
1,055
13
(23)
(11)
(24)
(17)
(47)
(28)
(7)
(5)
(5)
(6)
(13)
(11)
(3)
(2)
(2)
(5)
(2)
481
473
559
554
1,040
1,027
Taxation
(131)
(133)
(148)
(151)
(279)
(284)
350
340
411
403
761
743
894
893
894
893
894
893
39.1
38.1
46.0
45.1
85.1
83.2
33.0
26.8
12.9
29.3
45.9
56.1
Trading profit
Interest receivable
Interest payable
35
H2
Full Year
2015
2014
2015
2014
2015
2014
$m
$m
$m
$m
$m
$m
512
484
587
571
1,099
1,055
13
16
16
16
29
32
148
140
159
170
307
310
Capital expenditure
(161)
(161)
(197)
(214)
(358)
(375)
(130)
(222)
(11)
(19)
(141)
(241)
382
257
554
524
936
781
75%
53%
94%
92%
85%
74%
36
(37)
(127)
(158)
(91)
(195)
418
220
427
366
845
586
(17)
(12)
(19)
(21)
(36)
(33)
Taxation paid
(72)
(136)
(65)
(109)
(137)
(245)
329
72
343
236
672
308
Trading profit
Share based payment
Restructuring, rationalisation,
acquisition & other
36
Full year
Restructuring costs
c. $50m
c. $10m
c. $140m
Slightly negative
Interest payable(1)
~ 3%
(1)
c. $10m
26.5% or slightly lower
Long term borrowings were $1,434m at the end of 2015, pre Blue Belt.
37
Management
Olivier Bohuon
Chief Executive Officer
Olivier joined the Board and was appointed Chief Executive Officer in April 2011. Olivier has had
extensive international experience within a number of pharmaceutical and healthcare companies.
Prior to joining Smith & Nephew, he was President of Abbott Pharmaceuticals, a division of Abbott
Laboratories based in the US, where he was responsible for the entire business, including R&D,
Global Manufacturing and global support functions. Olivier has extensive international healthcare
leadership experience within a number of significant pharmaceutical and healthcare companies. His
global experience provides the skillset required to innovate a FTSE100 company with a deep
heritage and provide inspiring leadership. He is a Non-executive Director of Virbac group and Shire
plc.
Julie Brown
Chief Financial Officer
Julie joined the Board as Chief Financial Officer in February 2013. Julie is a Chartered
Accountant and Fellow of the Institute of Taxation with international experience and a deep
understanding of the healthcare sector. She trained with KPMG and then worked for
AstraZeneca plc, where she served as Vice President Group Finance and more recently, as
Interim Chief Financial Officer. She has previously held positions of Regional Vice President
Latin America, Marketing Company President AstraZeneca Portugal and Vice President
Corporate Strategy and Research and Development Chief Financial Officer. She is nominated
for election as a new member of the Board of Directors of Roche Holding Ltd and Chair of the
Audit Committee at the Annual General Meeting on 1 March 2016.
38
Kate Gibbon
Investor Relations Manager
E: kate.gibbon@smith-nephew.com
T: +44 (0) 207 960 2339
39