Smith & Nephew Q2 2025 Earnings Call Transcript: Company Reports 6.7% Underlying Growth, Maintains Full-Year Growth Target

Smith & Nephew plc reported Q2 2025 earnings, with revenue growing 6.7% YoY due to sequential acceleration across all regions and business units. Sports Medicine maintained momentum, Wound delivered double-digit growth, and Orthopaedics experienced growth. The company's Recon and Robotics business improved sequentially in the US. Profitability increased by 100 basis points in H1 2025.

Smith & Nephew plc, a global medical technology company, has announced its Q2 2025 earnings, showcasing robust performance across all business units and regions. The company reported revenue growth of 6.7% year-over-year (YoY) due to sequential acceleration in all regions and business units. This growth was driven by strong performance in Sports Medicine, Wound Management, and Orthopaedics, with the company's Recon and Robotics business improving sequentially in the US [1].

In the second quarter, Smith & Nephew's underlying revenue growth was 6.7%, with reported growth of 7.8% including a 110bps tailwind from foreign exchange. The company's second quarter revenue was $1,553 million, up from $1,441 million in the same period last year [2]. The first half of 2025 saw underlying revenue growth of 5.0%, with reported growth of 4.7% including a -30bps headwind from foreign exchange.

The company's profitability also improved significantly. Trading profit margin expanded by 100 basis points to 17.7% in the first half of 2025, up from 16.7% in the same period last year. Operating profit increased by 30.6% to $429 million, and cash generated from operations rose by 54.3% to $568 million [2].

Smith & Nephew's strong cash generation and balance sheet allowed the company to announce a $500 million share buyback in the second half of 2025. The company expects to maintain its leverage and growth plans without compromising its financial health.

Deepak Nath, Chief Executive Officer, commented on the company's performance, "I'm pleased with our strong performance in the first half of 2025. We are delivering sustained higher revenue growth, increased profitability, and better cash generation. As expected, revenue growth accelerated in the second quarter, with all regions and business units contributing. We saw a quarter-on-quarter improvement in our Orthopaedics business, and this was the fourth consecutive quarter of sequential improvement from US Reconstruction & Robotics on an average daily sales basis" [2].

Smith & Nephew's transformation program, implemented through the 12-Point Plan, has started to deliver substantial value, putting the company on track to meet its 2025 targets on revenue growth, profitability, and cash flow. The company expects to continue its higher cadence of product launches and clinical evidence to underpin further growth [2].

References:
[1] https://medwatch.com/News/medtech/article18408444.ece
[2] https://www.investegate.co.uk/announcement/rns/smith-nephew--sn./half-year-report/9027098