Smith & Nephew SNATS Q4 Earnings Call Highlights

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• Group ROIC increased to 8.3%, or 9.9% excluding portfolio rationalization, which exceeded the cost of capital for the first time in several years

  80% confidence

• Skin substitutes business is around $200 million and modeled a 20% to 25% price reduction for its portfolio, with volumes expected to be broadly neutral to slightly positive

  80% confidence

• Plans to increase product launch cadence, with 16 new product launches expected in 2026

  80% confidence

• Underlying revenue rose 5.3% for the full year, with all three business units posting growth above 5%

  80% confidence

• Free cash flow increased 52.5% to $840 million, aided by improved working capital performance and lower restructuring and other costs

  80% confidence

• Knee growth is 850 basis points higher in accounts where CORI is established, which the company views as evidence of potential upside as utilization expands

  80% confidence

• Medium-term targets under RISE strategy include organic revenue CAGR of 6% to 7% and trading profit CAGR of 9% to 10%

  80% confidence

• AAOS guideline support for bioinductive implants in rotator cuff repair reinforces clinical confidence in REGENETEN

  80% confidence

• U.S. revenue grew 5.6%, other established markets rose 7.2%, and emerging markets increased 6.4%. Excluding China, underlying growth was 7.2%

  80% confidence

• Quarter included one extra trading day year-over-year; on an average daily sales basis, growth was 4.5%

  80% confidence

• Expects Integrity Orthopaedics acquisition to be marginally dilutive in 2026, broadly neutral in 2027, and accretive in 2028

  80% confidence

• Orthopedics delivered 7.9% underlying growth in the quarter, the strongest quarterly growth for the unit in more than two years

  80% confidence

• Adjusted EPS rose 21% to $1.02, helped by the $500 million buyback completed in the second half of 2025

  80% confidence

• Record year of core replacements globally and continued adoption of the company's robot-assisted platform

  80% confidence

• 2026 sales in greater China are expected to be similar to 2025, with an anticipated bounce in Sports Medicine tied to channel inventory actions offset by negative impacts from AET and ENT VBPs

  80% confidence

• Expects first-half revenue growth of roughly 4.5% to 5% and second-half growth of 7.5% to 8% in 2026

  80% confidence

• The joint repair business surpassed $1 billion in annual revenue for the first time

  80% confidence

• Expects around 6% organic revenue growth in 2026 and approximately 8% organic reported trading profit growth

  80% confidence

• Expects $60 million impact from tariffs in 2026 (up from $17 million in 2025) and $20 million to $40 million incremental impact from changes to wound reimbursement

  80% confidence

• Continued strength in Sports Medicine and ENT, particularly joint repair, and meaningful progress in U.S. Orthopedics including hips and trauma

  80% confidence

• Expects a $15 million to $20 million year-over-year reduction in China profit in 2026 related to AET and ENT VBPs

  80% confidence

• Fourth-quarter revenue of $1.7 billion, up 6.2% on an underlying basis and 8.3% reported, including a 210 basis point tailwind from foreign exchange

  80% confidence

• U.S. knees still require further improvement

  80% confidence

• 45% of CORI units deployed in the quarter went to ambulatory surgery centers (ASCs)

  80% confidence

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