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Smith+Nephew Fourth Quarter and Full Year 2025 Results

2 March 2026

Smith+Nephew Fourth Quarter and Full Year 2025 Results

Strong finish to 12-Point Plan delivering step up in performance; poised for acceleration in growth and returns

Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology business, reports results for the fourth quarter and full year ended 31 December 2025:

 

 

 

 

 

 

 

 

 

 

 

31 December

 

31 December

 

Reported

 

Underlying

 

 

2025

 

2024

 

growth

 

growth

 

 

$m

 

$m

 

%

 

%

Fourth Quarter Results1,2

 

 

 

 

 

 

 

 

Revenue

 

1,702

 

1,571

 

8.3

 

6.2

 

 

 

 

 

 

 

 

 

Full Year Results1,2

 

 

 

 

 

 

 

 

Revenue

 

6,164

 

5,810

 

6.1

 

5.3

Operating profit

 

794

 

657

 

20.7

 

 

Operating profit margin (%)

 

12.9

 

11.3

 

 

 

 

EPS (cents)

 

72.1

 

47.2

 

52.8

 

 

Cash generated from operations

 

1,549

 

1,245

 

24.4

 

 

 

 

 

 

 

 

 

 

 

Trading profit

 

1,211

 

1,049

 

15.5

 

 

Trading profit margin (%)

 

19.7

 

18.1

 

 

 

 

EPSA (cents)

 

102.0

 

84.3

 

21.0

 

 

Free cash flow

 

840

 

551

 

52.5

 

 

 

Download the full announcement

Deepak Nath, Chief Executive Officer, said:

“I am pleased that a strong fourth quarter helped us meet or exceed our 2025 targets for revenue growth, profitability and cash generation. During the year, newer products drove strong broad-based performance, with underlying revenue growth above 5% for all three business units, and we look forward to a strong cadence of further new product introductions in 2026.

“This also marks the completion of our 12-Point Plan, through which we have successfully transformed Smith+Nephew into a fundamentally stronger business. Our new RISE strategy, launched in December, is the start of an ambitious and achievable next phase of growth. It is our roadmap to Reach more patients, unlock new categories of Innovation, Scale through strategic investment, and Execute efficiently. Together, it will allow us to step-up performance towards new 2028 financial targets.

“2026 is the first step in that journey and we are confident in delivering an acceleration in growth and returns. With our strengthened foundations and new strategy, we are well set to expand our leadership in healthcare innovation and realise sustainable value for shareholders, while continuing to deliver for customers, employees and communities into the future.”

Strategic Highlights1,2

Full Year 2025 Highlights1,2

Q4 2025 Trading Highlights1,2

2026 Outlook1,2

 

Analyst conference call

An analyst conference call to discuss Smith+Nephew’s fourth quarter and full year results will be held 8.30am GMT / 3.30am EST on 2 March 2026, details of which can be found on the Smith+Nephew website at www.smith-nephew.com/en/who-we-are/investors

Enquiries

Investors

Emily Heaven

+44 (0) 7811 919437

Craig Bijou

+1 (475) 850-8282

Smith+Nephew

 

Media

Charles Reynolds

+44 (0) 1923 477314

Smith+Nephew

 

Susan Gilchrist / Ayesha Bharmal

+44 (0) 20 7404 5959

Brunswick

 

Notes

  1. Unless otherwise specified as ‘reported’ all revenue growth throughout this document is ‘underlying’ after adjusting for the effects of currency translation and including the comparative impact of acquisitions and excluding disposals. All percentages compare to the equivalent 2024 period.

     

    ‘Underlying revenue growth’ reconciles to reported revenue growth, the most directly comparable financial measure calculated in accordance with IFRS, by making two adjustments, the ‘constant currency exchange effect’ and the ‘acquisitions and disposals effect’, described below. See Other Information on pages 35 to 41 for a reconciliation of underlying revenue growth to reported revenue growth.

     

    The ‘constant currency exchange effect’ is a measure of the increase/decrease in revenue resulting from currency movements on non-US Dollar sales and is measured as the difference between: 1) the increase/decrease in the current year revenue translated into US Dollars at the current year average exchange rate and the prior revenue translated at the prior year rate; and 2) the increase/decrease being measured by translating current and prior year revenues into US Dollars using the same exchange rate.

     

    The ‘acquisitions and disposals effect’ is the measure of the impact on revenue from newly acquired material business combinations and recent material business disposals. This is calculated by comparing the current year, constant currency actual revenue (which includes acquisitions and excludes disposals from the relevant date of completion) with prior year, constant currency actual revenue, adjusted to include the results of acquisitions and exclude disposals for the commensurate period in the prior year. These sales are separately tracked in the Group’s internal reporting systems and are readily identifiable.

     

  2. Certain items included in ‘trading results’, such as trading profit, trading profit margin, tax rate on trading results, trading cash flow, trading profit to trading cash conversion ratio, free cash flow, adjusted ROIC, EPSA, leverage ratio and underlying growth are non-IFRS financial measures. The non-IFRS financial measures reported in this announcement are explained in Other Information on pages 35 to 41 and are reconciled to the most directly comparable financial measure prepared in accordance with IFRS. Reported results represent IFRS financial measures as shown in the Condensed Consolidated Financial Statements.

 

Smith+Nephew Fourth Quarter Trading and Full Year 2025 Results

2025 represents the culmination of work that began three years ago under the 12-Point Plan: strengthening our operational foundations, restoring performance in Orthopaedics, accelerating our Sports Medicine and Advanced Wound Management businesses, improving productivity, and embedding a culture of accountability, discipline and continuous improvement across the Group.

Our 2025 financial results demonstrate clear operational progress and a sustained step up in performance across each of our three global business units.

Building on this progress, our new RISE strategy, launched in December 2025, is designed to drive stronger returns by elevating Smith+Nephew’s financial and operational performance to new levels.

 

2025 performance

Group revenue for 2025 was $6,164 million (2024: $5,810 million), reflecting underlying revenue growth of 5.3%, ahead of our 2025 guided target of around 5%. Reported growth of 6.1% included an 80bps tailwind from foreign exchange, primarily due to the strength of the Euro. Underlying revenue growth excluding China was 7.0% (reported growth excluding China 7.8%). Each of our three global business units delivered underlying revenue growth above 5%.

We achieved a good finish to the year, with fourth quarter revenue of $1,702 million (2024: $1,571 million) representing underlying revenue growth of 6.2%. Fourth quarter reported revenue growth was 8.3% after a 210bps foreign exchange tailwind, also primarily due to the strength of the Euro. Orthopaedics delivered its best quarter of growth for more than two years, Sports Medicine & ENT delivered a strong performance outside China, while Advanced Wound Management’s solid growth reflected a strong comparable period and weakness in skin substitutes ahead of reimbursement changes in 2026.

Trading profit for 2025 was up 15.5% to $1,211 million (2024: $1,049 million). The trading profit margin was 19.7% (2024: 18.1%), a 160bps improvement on the prior year. Operating profit increased 20.7% to $794 million (2024: $657 million).

Cash generated from operations was up 24.4% to $1,549 million (2024: $1,245 million) and trading cash flow, at $1,236 million (2024: $999 million), was up 23.7%, with 102% trading cash conversion (2024: 95%). Free cash flow increased by 52.5% to $840 million (2024: $551 million), including the benefit of a one-off $26 million property transaction, well ahead of our initial 2025 guidance of more than $600 million.

We also improved adjusted ROIC, which was up 90bps to 8.3% despite a -160bps headwind from the portfolio rationalisation programme announced in December 2025. The improvement in adjusted ROIC reflected our continued progress under the 12‑Point Plan and the stronger operational discipline now embedded across the organisation.

Given our strong cash generation, and in line with our capital allocation policy, we completed a share buyback in the second half of 2025, returning $500 million to shareholders while maintaining our leverage ratio, and without compromising our growth plans.

 

Three years of stronger financial performance

Over the last three years we have significantly improved Smith+Nephew’s financial performance through the 12-Point Plan and related initiatives, meeting our guidance each year.

Through our actions we have changed Smith+Nephew revenue growth profile from an historically low single digit revenue growth company to one consistently delivering mid-single digit growth, with a reported CAGR of 5.7% over the last three years.

We have expanded trading margin by 240bps, from 17.3% in 2022 to 19.7% in 2025, whilst also overcoming around 1,000bps of macro challenges including from Volume Based Procurement in China, foreign exchange and higher inflation. Operating profit margin has expanded by 430bps from 8.6% in 2022 to 12.9% in 2025.

Our increased focus on cash and capital returns has yielded a fifteen-fold increase in free cash flow, from $56 million in 2022 to $840 million in 2025. Following our ongoing focus on improving this measure, adjusted ROIC has increased 170bps to 8.3% (2022: 6.6%) despite the -160bps portfolio rationalisation headwind.

 

12-Point Plan transformation

In 2022, Smith+Nephew initiated a 12-Point Plan to transform performance. This plan had three pillars designed to fix our underperforming Orthopaedics business, improve overall productivity, and accelerate our leading Sports Medicine and Wound businesses. We have made demonstrable progress across each of these pillars, delivering a step-change in financial and operational performance.

Within Orthopaedics, we have addressed supply issues and right-sized capacity,  returned Trauma and Hip Implants growth to market levels or higher, and accelerated the underlying revenue growth of our Orthopaedics business unit from 1.9% in 2022 to 5.1% in 2025 (reported growth was -2.0% in 2022 and 5.7% in 2025). We continue to prioritise improving performance in US Knee Implants, which represents less than 9% of Group revenue. We expect the launch of our new LANDMARK◊ Knee System in the second half of the year. LANDMARK will bring the proven clinical benefits of our knee portfolio into a single platform that combines advanced kinematics with personalisation, robotic enablement, and ease of implantation, while unlocking capital efficiency by leveraging on existing instrumentation. With it, we will be able to address key surgeon preferences and participate in all key segments across all sites of care. It will also feature best‑in‑class tray efficiency, making it particularly suitable for Ambulatory Surgery Centers.

We continued to deliver strong results from our faster growth, higher margin Sports Medicine and Advanced Wound Management businesses throughout the period.

Smith+Nephew’s innovation pipeline has been a significant contributor to our transformation. In 2025, more than 60% of underlying revenue growth came from products launched in the last five years, and we improved our portfolio with 15 new platforms and product enhancements across all global business units.

 

Significantly strengthened the business

The 12-Point Plan was designed not only to deliver on specific actions in the short-term, but also to embed fundamental, lasting changes in our behaviours, operations and performance, and raise the standard on how we deliver for our patients, customers and shareholders.

In 2023, we moved our commercial operations from a complex matrix-based model across franchises and regions to a simpler global business unit structure, with vertical teams for each of Orthopaedics, Sports Medicine & ENT and Advanced Wound Management. This is driving greater accountability, faster decision making and execution, and has allowed us to increase customer focus across the portfolio.

We have also focused on improving cash, capital returns and efficiency through a number of initiatives. The move to allocate central costs attributable to business units to each business unit is driving greater accountability and efficiency, with each having full profit and loss and capital accountability. We also introduced much greater rigour and discipline in capital allocation, improving inventory set turn by deploying sets to more productive accounts.

Portfolio rationalisation was an area of opportunity identified through the 12-Point plan, in particular in Orthopaedics. An initial 19 product families, mainly in knees and hips, were identified for phase out in a gradual process to protect revenue which we are about halfway through. During the fourth quarter of 2025, we commenced a second wave of rationalisation, identifying a further 50 families to phase out, predominantly in Trauma. We expect to complete this process over the next three to five years, by which time we will have just 59 Orthopaedics product families, a reduction of 54% since the beginning of the 12-Point Plan. We anticipate that this second wave will reduce gross inventory by about $500 million. To achieve this significant and on-going reduction in the capital requirements, the Group recognised a $159 million non-cash excess and obsolescence provision in 2025 included in legal and other items. This will leave our portfolio simpler, easier for customers to understand, and puts the company in a stronger position to drive growth, improve margins and improve capital returns.

We are on track to deliver the $325 to $375 million of gross cost savings we targeted by 2027, achieving $280 million in cumulative savings to the end of 2025, with the largest savings coming from manufacturing and procurement across the programme. As outlined in December, we anticipate a further $150 million of savings to flow through in 2026, with around half from 12-Point Plan and related activities and half from new opportunities above and beyond these.

 

Our new RISE strategy and 2028 financial targets

In December we announced RISE, our new strategy to elevate Smith+Nephew. RISE builds on the progress made through the 12-Point Plan and positions us for success over the next three years.

RISE has four clear aims:

The delivery of the RISE strategy will be built upon our purpose of Life Unlimited and strong corporate culture. This culture is built upon pillars of Care, Collaboration and Courage and drives our Way to Win by being better, every day, through a continuous improvement mindset and behaviours.

Alongside the RISE strategy we also announced 2028 financial targets, including:

These targets reflect both the strength of our core business and the opportunity created through the transformation of the last three years.

 

Acquisition of Integrity Orthopaedics

Within RISE, we see the opportunity for acquisitions to support our strategy to scale by building on our areas of strength and underpinned by our strong balance sheet.

This approach was demonstrated in January 2026 with the acquisition of Integrity Orthopaedics, an important building block in our ambition to become the global leader in Sports Medicine.

Integrity Orthopaedics is a US‑based early‑stage commercial developer of TENDON SEAM◊, an innovative rotator cuff repair (RCR) system designed to significantly reduce re‑tear rates and improve patient outcomes.

Tendon Seam strongly complements our REGENETEN Bioinductive Implant, giving us a unique, differentiated and disruptive RCR portfolio, and enhances our extensive shoulder offering, which spans technologies for both replacement and repair.

The acquisition was completed for an initial cash payment of US$225 million plus additional performance-based payments of up to US$225 million over the next five years.

 

Fourth Quarter 2025 Trading Update

Our fourth quarter revenue was $1,702 million (2024: $1,571 million), with underlying revenue growth of 6.2% which includes the benefit of one extra trading day offset by-100bps headwind from China (reported growth of 8.3% after 210bps foreign exchange tailwind primarily due to the strength of the Euro). There were 63 trading days in the quarter.

Geographically, our Established Markets underlying revenue growth was 6.2% (reported growth 8.0%). Within this, the US underlying revenue growth was 5.6% (reported growth 5.6%) and Other Established Markets underlying revenue growth was 7.2% (reported growth 12.8%). Emerging Markets revenue was up 6.4% (reported growth 10.0%), as growth was tempered by the headwinds in China in Sports Medicine & ENT.

 

Fourth Quarter Consolidated Revenue Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December

 

31 December

 

Reported

 

Underlying

 

Acquisitions

 

Currency

 

 

 

2025

 

2024(i)

 

growth

 

growth(ii)

 

/disposals

 

impact

 

Consolidated revenue by business unit by product

 

$m

 

$m

 

%

 

%

 

%

 

%

 

Orthopaedics

 

667

 

608

 

9.8

 

7.9

 

-

 

1.9

 

Knee Implants

 

275

 

255

 

8.1

 

6.1

 

-

 

2.0

 

Hip Implants

 

174

 

161

 

7.9

 

5.7

 

-

 

2.2

 

Other Reconstruction(iii)

 

43

 

30

 

43.2

 

40.8

 

-

 

2.4

 

Trauma & Extremities

 

175

 

162

 

8.1

 

6.9

 

-

 

1.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sports Medicine & ENT

 

541

 

494

 

9.5

 

7.3

 

-

 

2.2

 

Sports Medicine Joint Repair

 

302

 

267

 

13.2

 

10.9

 

-

 

2.3

 

Arthroscopic Enabling Technologies

 

183

 

173

 

5.7

 

3.4

 

-

 

2.3

 

ENT (Ear, Nose and Throat)

 

56

 

54

 

3.6

 

2.3

 

-

 

1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Wound Management

 

494

 

469

 

5.3

 

2.8

 

-

 

2.5

 

Advanced Wound Care

 

203

 

187

 

8.6

 

4.4

 

-

 

4.2

 

Advanced Wound Bioactives

 

179

 

179

 

(0.2)

 

(0.5)

 

-

 

0.3

 

Advanced Wound Devices

 

112

 

103

 

8.7

 

5.4

 

-

 

3.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

1,702

 

1,571

 

8.3

 

6.2

 

-

 

2.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated revenue by geography

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

931

 

881

 

5.6

 

5.6

 

-

 

-

 

Other Established Markets(iv)

 

510

 

453

 

12.8

 

7.2

 

-

 

5.6

 

Total Established Markets

 

1,441

 

1,334

 

8.0

 

6.2

 

-

 

1.8

 

Emerging Markets

 

261

 

237

 

10.0

 

6.4

 

-

 

3.6

 

Total

 

1,702

 

1,571

 

8.3

 

6.2

 

-

 

2.1

 

 

(i)   Robotics consumables revenue has been reclassified from Other Reconstruction to Knee and Hip implants.

(ii)  Underlying growth is defined in Note 1 on page 3

(iii)  Other Reconstruction includes robotics capital sales and bone cement

(iv) Other Established Markets are Europe, Japan, Australia, Canada and New Zealand

 

Fourth Quarter Business Unit Performance

Orthopaedics

Our Orthopaedics business unit delivered underlying revenue growth of 7.9% (reported growth 9.8%) in the quarter.

Knee Implants global underlying revenue growth was 6.1% (reported growth 8.1%). In the US, Knee Implants underlying revenue growth was 3.6% (reported growth 3.6%), an improvement over the third quarter and driven by our LEGION◊ Total Knee System including the recently launched medial stabilized inserts, and the LEGION CONCELOC◊ Cementless Total Knee System. Outside the US, Knee Implants delivered strong underlying revenue growth of 9.4% (reported growth 14.2%) also driven by our LEGION platform.

Hip Implants global underlying revenue growth was 5.7% (reported growth 7.9%). US Hip Implants underlying revenue growth was 7.5% (reported growth 7.5%) and growth outside the US was 3.2% (reported growth 8.4%). Hip Implants growth was led by our R3◊ Acetabular System, OR3O◊ Dual Mobility System and recently launched CATALYSTEM◊ Primary Hip System.

Other Reconstruction delivered another good quarter of growth, with underlying revenue growth of 40.8% (reported growth 43.2%). This included strong growth from our CORI Surgical System this year and from robotics service and disposables. By the end of 2025 we had more than 1,100 CORIs installed worldwide. We are pleased with the deployment in Ambulatory Surgery Centers, increasing placement in Teaching Institutes and with the percentage of CORIs deployed in competitive accounts. In the US, we finished the year with 36% of knee implants completed on a CORI and 63% overall utilisation, our strongest levels to date. This is important as US knee implants growth is significantly higher in CORI accounts than in non-CORI accounts.

During the quarter we launched CORIOGRAPH◊ Pre-Operative Planning and Modelling Services in total shoulder replacement, expanding the offering to now cover knee, hip and shoulder joint replacement procedures. Offering both image-free and image-based registration, CORIOGRAPH is another element in our approach of supporting a range of procedures and surgeon preferences on CORI.

Trauma & Extremities underlying revenue growth was 6.9% (reported growth 8.1%), reflecting continued good growth from the EVOS◊ Plating System, TRIGEN◊ MAX Tibia and AETOS◊ Shoulder System.

Sports Medicine & ENT

Our Sports Medicine & ENT business unit delivered underlying revenue growth of 7.3% including a -250bps headwind from China (reported growth 9.5%). The overall headwind from China is reducing as we lap the implementation of Volume Based Procurement (VBP) in Sports Medicine Joint Repair. VBPs in Arthroscopic Enabling Technologies and ENT are expected in 2026, but we expect the headwinds to be much smaller given the relative size of these businesses. We have taken actions to manage our inventory ahead of implementation.

Sports Medicine Joint Repair underlying revenue growth was 10.9% including a -200bps headwind from China (reported growth 13.2%), with double-digit growth from our shoulder repair portfolio led by strong growth from the REGENETEN Bioinductive Implant. The launches of our new Q-FIX KNOTLESS◊ All-Suture Anchor for soft tissue-to-bone fixation and recently acquired CARTIHEAL◊ AGILI-C◊ Cartilage Repair Implant are both going well.

During the quarter we announced new evidence and market updates that highlight the clinical performance of the REGENETEN Bioinductive Implant and support its further adoption including a Strong Recommendation from the American Academy of Orthopaedic Surgeons. We also announced that the American Medical Association had established a Category I Current Procedural Terminology (CPT) code for procedures involving the CARTIHEAL AGILI-C Implant, effective January 1, 2027. The Category I CPT code will streamline reimbursement processes for providers and payers, supporting its integration into standard clinical practice.

Arthroscopic Enabling Technologies underlying revenue growth was 3.4% including a -200bps headwind from China (reported growth 5.7%), with good growth from our WEREWOLF◊ FASTSEAL 6.0 Hemostasis Wand and our mechanical resection range offset by performance in China where the sector is preparing for a VBP process.

ENT underlying revenue growth was 2.3% including a -530bps headwind from China as this sector also prepares for VBP (reported growth 3.6%). Growth was led by our nose business including strong double-digit growth from the ARIS◊ COBLATION turbinates wand, offsetting continued softness in the US tonsils and adenoids market. China was a headwind in the quarter as the sector prepares for VBP.

Advanced Wound Management

Our Advanced Wound Management business unit delivered underlying revenue growth of 2.8% (reported growth 5.3%).

Advanced Wound Care underlying revenue growth was 4.4% (reported growth 8.6%) with good growth outside the US across foam dressings, infection management and films. In the US, we are at the early stages of launching the ALLEVYN COMPLETE CARE Foam Dressing and announced new evidence demonstrating its pressure injury prevention mechanism of action and ability to absorb and dissipate friction and shear forces.

Advanced Wound Bioactives delivered underlying revenue decline of -0.5% (reported decline -0.2%). The growth rate reflects a strong comparator period from the launch on GRAFIX◊ PLUS in Q4 2024 and softness in skin substitutes ahead of the implementation of reimbursement changes in 2026, as previously disclosed. We delivered mid-single digit growth from SANTYL◊.

Advanced Wound Devices underlying revenue growth was 5.4% (reported growth 8.7%), also reflecting a strong comparator period. Growth was driven by our single-use PICO◊ Negative Pressure Wound Therapy System (sNPWT) and the LEAF◊ Patient Monitoring System as we deliver on our pressure injury prevention strategy. In the US our traditional RENASYS NPWT System continues to be impacted by softness in the acute care channel, while performance outside the US remained strong.

During the quarter we announced new evidence showing that PICO sNPWT significantly reduces the risk of wound dehiscence, hospital length of stay, and overall healthcare costs compared to a competitor device.

Full Year Trading

Group revenue in 2025 was $6,164 million (2024: $5,810 million), with underlying revenue growth of 5.3%. Reported growth of 6.1% included an 80bps tailwind from foreign exchange primarily due to the strength of the Euro.

Geographically, our Established Markets underlying revenue growth was 5.9% (reported growth 6.8%). Within this, US underlying revenue growth was 5.9% (reported growth 5.9%) and Other Established Markets underlying revenue growth was 5.9% (reported growth 8.6%). Emerging Markets underlying revenue growth of 2.5% (reported growth 2.4%) included the impacts of the China headwinds described above.

Excluding China, 2025 Group underlying revenue growth was 7.0% (reported growth 7.8%).

 

Full Year Consolidated Revenue Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31 December

 

31 December

 

Reported

 

Underlying

 

Acquisitions

 

Currency

 

 

 

2025

 

2024(i)

 

growth

 

growth(ii)

 

/disposals

 

impact

 

Consolidated revenue by business unit by product

 

$m

 

$m

 

%

 

%

 

%

 

%

 

Orthopaedics

 

2,437

 

2,305

 

5.7

 

5.1

 

-

 

0.6

 

Knee Implants

 

1,011

 

977

 

3.5

 

2.9

 

-

 

0.6

 

Hip Implants

 

641

 

619

 

3.5

 

2.9

 

-

 

0.6

 

Other Reconstruction(iii)

 

136

 

101

 

35.4

 

33.8

 

-

 

1.6

 

Trauma & Extremities

 

649

 

608

 

6.7

 

6.3

 

-

 

0.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sports Medicine & ENT

 

1,934

 

1,824

 

6.0

 

5.2

 

-

 

0.8

 

Sports Medicine Joint Repair

 

1,067

 

982

 

8.6

 

7.8

 

-

 

0.8

 

Arthroscopic Enabling Technologies

 

647

 

632

 

2.4

 

1.6

 

-

 

0.8

 

ENT (Ear, Nose and Throat)

 

220

 

210

 

4.8

 

4.4

 

-

 

0.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Wound Management

 

1,793

 

1,681

 

6.7

 

5.6

 

-

 

1.1

 

Advanced Wound Care

 

766

 

735

 

4.3

 

2.6

 

-

 

1.7

 

Advanced Wound Bioactives

 

621

 

581

 

6.9

 

6.8

 

-

 

0.1

 

Advanced Wound Devices

 

406

 

365

 

11.1

 

9.8

 

-

 

1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

6,164

 

5,810

 

6.1

 

5.3

 

-

 

0.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated revenue by geography

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

3,306

 

3,123

 

5.9

 

5.9

 

-

 

-

 

Other Established Markets(iv)

 

1,855

 

1,707

 

8.6

 

5.9

 

-

 

2.7

 

Total Established Markets

 

5,161

 

4,830

 

6.8

 

5.9

 

-

 

0.9

 

Emerging Markets

 

1,003

 

980

 

2.4

 

2.5

 

-

 

(0.1)

 

Total

 

6,164

 

5,810

 

6.1

 

5.3

 

-

 

0.8

 

 

(i)   Robotics consumables revenue has been reclassified from Other Reconstruction to Knee and Hip implants.

(ii)  Underlying growth is defined in Note 1 on page 3

(iii)  Other Reconstruction includes robotics capital sales and bone cement

(iv) Other Established Markets are Europe, Japan, Australia, Canada and New Zealand

 

Full Year Business Unit Performance

Orthopaedics

Our Orthopaedics business unit delivered underlying revenue growth of 5.1% (reported growth 5.7%) for the full year.

Knee Implants underlying revenue growth was 2.9% (reported growth 3.5%) and Hip Implants underlying revenue growth was 2.9% (reported growth 3.5%). Knee Implants growth was strongest outside the US led by our JOURNEY II Total Knee System and ANTHEM Total Knee System. Hip Implant performance was driven by the US launch of the CATALYSTEM◊ Primary Hip System and strong growth from OR30 Dual Mobility System.

Other Reconstruction underlying revenue growth was 33.8% (reported growth 35.4%) for the full year reflecting sales of our CORI Surgical System and consumables.

Trauma & Extremities underlying revenue growth was 6.3% (reported growth 6.7%) for the full year as this business continued to be a significant growth driver following its turnaround in 2023. Growth was driven by the EVOS Plating System, our patient-positioning portfolio and the successful launch of the AETOS Shoulder System.

Sports Medicine & ENT

Our Sports Medicine & ENT business unit delivered underlying revenue growth of 5.2% including a -400bps headwind from China, where the implementation of VBP was a headwind, as noted above (reported growth 6.0%).

Sports Medicine Joint Repair underlying revenue growth was 7.8% including a -480bps headwind from China (reported growth 8.6%). Outside of China, Sports Medicine Joint Repair had another strong year driven by our shoulder repair portfolio and the REGENETEN Bioinductive Implant.

Arthroscopic Enabling Technologies underlying revenue growth was 1.6% (reported growth 2.4%) including good growth from the WEREWOLF◊ FASTSEAL 6.0 Hemostasis Wand and patient-positioning portfolio offset by video technologies.

ENT underlying revenue growth was 4.4% (reported growth 4.8%). Growth was led by our nose business offset by some softness in the US tonsils and adenoids market.

Advanced Wound Management

Our Advanced Wound Management business unit delivered underlying revenue growth of 5.6% (reported growth 6.7%) in 2025.

Advanced Wound Care underlying revenue growth was 2.6% (reported growth 4.3%) including good growth in foam dressings and films offsetting a weaker performance in infection management.

Advanced Wound Bioactives underlying revenue growth was 6.8% (reported growth 6.9%). Performance was led by good growth from SANTYL and a strong first half for our skins substitutes portfolio ahead of the reimbursement changes referred to above.

Advanced Wound Devices underlying revenue growth was 9.8% (reported growth 11.1%). This was driven by both our single-use PICO Negative Pressure Wound Therapy System and traditional RENASYS◊ Negative Pressure Wound Therapy System, as well as our LEAF Patient Monitoring System.

Full Year 2025 Consolidated Analysis

Smith+Nephew results for the year ended 31 December 2025:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

 

 

 

2025

 

2024

 

growth

 

 

 

$m

 

$m

 

%

 

Revenue

 

6,164

 

5,810

 

6.1

 

Operating profit

 

794

 

657

 

20.7

 

Acquisition and disposal related items

 

32

 

94

 

 

 

Restructuring and rationalisation costs

 

47

 

123

 

 

 

Amortisation and impairment of acquisition intangibles

 

176

 

187

 

 

 

Legal and other

 

162

 

(12)

 

 

 

Trading profit(i)

 

1,211

 

1,049

 

15.5

 

 

 

¢

 

¢

 

 

 

Earnings per share ('EPS')

 

72.1

 

47.2

 

 

 

Acquisition and disposal related items

 

(3.6)

 

11.2

 

 

 

Restructuring and rationalisation costs

 

4.0

 

10.8

 

 

 

Amortisation and impairment of acquisition intangibles

 

15.6

 

16.6

 

 

 

Legal and other

 

13.9

 

(1.5)

 

 

 

Adjusted Earnings per share ('EPSA')(i)

 

102.0

 

84.3

 

21.0

 
  1. See Other Information on pages 35 to 41

Full Year 2025 Analysis

Group revenue for 2025 was $6,164 million (2024: $5,810 million), reflecting underlying revenue growth of 5.3%. Reported growth of 6.1% reflected an 80bps tailwind from foreign exchange.

The gross profit was $4,192 million (2024: $4,046 million) with a gross profit margin of 68.0% (2024: 69.6%), with the decrease reflecting non-trading items, primarily a $159 million non-cash excess and obsolescence provision related to the portfolio rationalisation programme (see Note 2 to the Financial Statements). Trading gross profit, which excludes these items, was $4,368 million (2024: $4,085 million), and trading gross margin increased 60bps to 70.9% (2024: 70.3%).

Operating profit increased 20.7% on a reported basis to $794 million primarily due to operating leverage and productivity savings across the Group (2024: $657 million).

Trading profit was up 15.5% on a reported basis to $1,211 million (2024: $1,049 million). A reconciliation of the $417 million (2024: $392 million) of adjustments between operating profit and trading profit is included in Other Information on pages 35 to 41.

We delivered a 160bps expansion in trading profit margin, which increased to 19.7% (2024: 18.1%). We continued to deliver year-on-year expansion in our trading profit margin, reflecting operating leverage, continued benefits from the 12-Point Plan and productivity savings across the Group, more than offsetting headwinds including a $17 million impact from tariffs.

Orthopaedics trading profit was up 36.9% on a reported basis to $363 million (2024: $265 million) and trading profit margin increased 340bps to 14.9%, reflecting favourable price/mix and 12-Point Plan transformation initiatives including manufacturing savings from network optimisation, ongoing productivity initiatives and disciplined cost control. Sports Medicine & ENT trading profit was up 5.6% on a reported basis to $461 million (2024: $437 million) and trading profit margin declined -20bps to 23.8% driven by the China VBP headwind in ENT. Advanced Wound Management trading profit was up 12.0% on a reported basis to $447 million (2024: $399 million) and trading profit margin increased 120bps to 24.9%, driven by favourable product mix and productivity in operations (see Note 2 to the Financial Statements for global business unit trading profit).

Reported profit before tax was $779 million (2024: $498 million), reflecting the improvement in operating profit and a $109 million reversal of an impairment charge relating to Bioventus (see Other Information on pages 35 to 41).

Reported tax for the year to 31 December 2025 was a charge of $154 million (2024: $86 million). The increase in the reported tax charge can principally be attributed to the increases in profit before tax since 2024 and the jurisdictional profit mix. The tax rate on trading results was 19.4% (in line with our guidance of 19-20%) (2024: 19.1%) (see Note 3 to the Financial Statements and Other Information on pages 35 to 41 for further details on taxation). The net interest charge was $112 million (2024: $121 million) mostly reflecting higher cash balances.

Adjusted earnings per share (‘EPSA’) increased 21.0% to 102.0¢ (204.0¢ per ADS) (2024: 84.3¢ per share), reflecting improved trading performance. Basic earnings per share (‘EPS’) increased 52.8% to 72.1¢ (144.2¢ per ADS) (2024: 47.2¢ per share), reflecting restructuring costs, acquisition and disposal related items, amortisation and impairment of acquisition intangibles and legal and other items incurred.

Cash generation improved significantly in 2025, driven by strong working capital discipline and lower restructuring costs. As a result, cash generated from operations improved by 24.4% to $1,549 million (2024: $1,245 million) and trading cash flow was up 23.7% at $1,236 million (2024: $999 million) (see Other Information on pages 35 to 41 for a reconciliation between cash generated from operations and trading cash flow). As a result of the working capital movement, the trading profit to cash conversion ratio improved to 102% (2024: 95%). We delivered a significant improvement in free cash flow which was up 52.5% to $840 million (2024: $551 million), including a $26 million benefit from a property transaction.

We continued to make progress addressing our high inventory, reducing Day Sales of Inventory (DSI) by 21 days year-on-year, with DSI down across all business units. As a result of the further Group-wide inventory portfolio rationalisation programme announced in December 2025, DSI decreased by 51 days year-on-year.

2025 adjusted ROIC increased by 90bps to 8.3% despite the -160bps portfolio rationalisation headwind (2024: 7.4%).

Each business unit contributed to the expansion in adjusted ROIC, reflecting continued progress under the 12‑Point Plan and the stronger operational discipline now embedded across the Group. Orthopaedics adjusted ROIC increased to 4.8% (2024: 3.1%), Advanced Wound Management increased to 14.1% (2024: 11.6%) and Sports Medicine & ENT was flat at 9.4% (2024: 9.4%). The impact  of the headwinds from the portfolio rationalisation programme was most significant in Orthopaedics and Sports Medicine. The allocation of directly attributable central costs to business units, introduced in 2024 to reinforce ownership of performance, has enhanced accountability and focus on returns. This action, alongside a higher trading profit margin, lower non‑trading costs and improved capital efficiency contributed to the increase in adjusted ROIC for the year. Group ROIC based on the closest equivalent IFRS measures was 7.3% (2024: 4.9%).

The Group’s net debt, including lease liabilities, was $2,759 million at 31 December 2025 (2024: $2,709 million), with access to committed facilities of $4.1 billion (see Note 6 to the Financial Statements). Our adjusted net debt/EBITDA leverage ratio for 2025 was 1.7x.

Dividend

The Board is recommending a Final Dividend of 24.1¢ per share (48.2¢ per ADS) (2024: 23.1¢ per share). Together with the Interim Dividend of 15.0¢ per share (30.0¢ per ADS) (2024: 14.4¢), this will give a total distribution of 39.1¢ per share (78.2¢ per ADS), a 4.3% increase from 2024. The 38% payout ratio is in line with the 35-40% indicated in our capital allocation framework.

2026 Outlook

Building on our momentum, for 2026 we are targeting further progress in revenue growth, trading profit and adjusted ROIC, and sustained strong cash generation, as outlined in our provisional guidance at our Capital Markets Day in December 2025.

We continue to expect underlying revenue growth to further accelerate to around 6% for the full year. This is expected to include continued good growth in Orthopaedics, Sports Medicine (excluding Arthroscopic Enabling Technologies and ENT in China) and Advanced Wound Management, particularly in Advanced Wound Care and Advanced Wound Devices. In Orthopaedics, we expect to continue to close the gap versus US Reconstruction market growth. We expect US Hip Implants to track in line with or ahead of market growth and we expect US knee performance to start with a softer first quarter, reflecting our continuing and deliberate trade-offs to balance growth and profit and asset efficiency. We will then build towards market growth in Q4, supported by the launch of the cementless version of our new LANDMARK Knee System in the second half of the year. In Advanced Wound Management, whilst we expect headwinds in our skin substitutes business, we still expect Advanced Wound Bioactives to grow, supported by the ongoing strength of SANTYL and growth in skin substitutes outside of the physician office and mobile channel. The guidance equates to reported revenue growth of around 7.8% based on exchange rates prevailing on 24 February 2026.

We expect trading profit growth on an organic basis of around 8% despite the significant headwinds to profit in 2026, as outlined in December. These include inventory revaluation, tariffs, the impact of changes to reimbursement in our US Advanced Wound Management business, and ENT VBP in China. There are no changes to any of our assumptions regarding these headwinds. We still expect around $60 million impact from tariffs ($17 million in 2025) and $20 to $40 million incremental impact from changes to wound reimbursement. We continue to expect revenue leverage and operational savings to more than offset these headwinds to drive trading profit growth ahead of revenue growth before acquisitions.

We expect a stronger second half to the year compared to the first half for both revenue and profit growth, in keeping with normal phasing. We have one fewer trading day in Q1 2026 versus 2025 and one more in Q4. Trading days typically have a more pronounced impact on our Orthopaedics business.

Since providing our provisional guidance we have completed the acquisition of Integrity Orthopaedics. This acquisition is expected to be marginally dilutive to trading profit in 2026, broadly neutral in 2027 and accretive in 2028. Including this dilution, we expect 2026 trading profit to be around $1.3 billion based on current forecast exchange rates.

We expect around $800 million in free cash flow and greater than 10% adjusted ROIC, excluding the impact of Integrity Orthopaedics.

The tax rate on trading results for 2026 is forecast to be in the range of 19.0% to 20.0%, subject to any material changes to tax law or other one-off items.

Forward calendar

The Q1 2026 Trading Report will be released on 6 May 2026.

About Smith+Nephew

Smith+Nephew is a portfolio medical technology business focused on the repair, regeneration and replacement of soft and hard tissue. We exist to restore people’s bodies and their self-belief by using technology to take the limits off living. We call this purpose ‘Life Unlimited’. Our 17,000 employees deliver this mission every day, making a difference to patients’ lives through the excellence of our product portfolio, and the invention and application of new technologies across our three global business units of Orthopaedics, Sports Medicine & ENT and Advanced Wound Management.

Founded in Hull, UK, in 1856, we now operate in around 100 countries, and generated annual sales of $6.2 billion in 2025. Smith+Nephew is a constituent of the FTSE100 (LSE:SN, NYSE:SNN). The terms ‘Group’ and ‘Smith+Nephew’ are used to refer to Smith & Nephew plc and its consolidated subsidiaries, unless the context requires otherwise.

For more information about Smith+Nephew, please visit www.smith-nephew.com and follow us on X, LinkedIn, Instagram or Facebook.

 

Forward-looking Statements

This document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading profit margins, market trends and our product pipeline are forward-looking statements. Phrases such as "aim", "plan", "intend", "anticipate", "well-placed", "believe", "estimate", "expect", "target", "consider" and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. For Smith+Nephew, these factors include: conflicts in Europe and the Middle East, economic and financial conditions in the markets we serve, especially those affecting healthcare providers, payers and customers; price levels for established and innovative medical devices; developments in medical technology; regulatory approvals, reimbursement decisions or other government actions; product defects or recalls or other problems with quality management systems or failure to comply with related regulations; litigation relating to patent or other claims; legal and financial compliance risks and related investigative, remedial or enforcement actions; disruption to our supply chain or operations or those of our suppliers; competition for qualified personnel; strategic actions, including acquisitions and disposals, our success in performing due diligence, valuing and integrating acquired businesses; disruption that may result from transactions or other changes we make in our business plans or organisation to adapt to market developments; relationships with healthcare professionals; reliance on information technology and cybersecurity; disruptions due to natural disasters, weather and climate change related events; changes in customer and other stakeholder sustainability expectations; changes in taxation regulations; effects of foreign exchange volatility; and numerous other matters that affect us or our markets, including those of a political, economic, business, competitive or reputational nature. Please refer to the documents that Smith+Nephew has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Smith+Nephew's most recent annual report on Form 20-F, which is available on the SEC’s website at www. sec.gov, for a discussion of certain of these factors. Any forward-looking statement is based on information available to Smith+Nephew as of the date of the statement. All written or oral forward-looking statements attributable to Smith+Nephew are qualified by this caution. Smith+Nephew does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in Smith+Nephew's expectations.

 

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