Smith & Nephew Reports Q2 Earnings: Non-GAAP EPS $0.43, Revenue $2.96B, Reaffirms FY Outlook

Smith & Nephew reported H1 non-GAAP EPS of $0.43 and revenue of $2.96B, a 4.6% YoY increase. Underlying revenue growth was 5.0%. The company reaffirmed its FY outlook. Strong cash generation was driven by a trading cashflow of $487 million and trading cash conversion of 93%.

Smith & Nephew (NYSE: SNN) has reported robust first-half (H1) 2025 results, with non-GAAP EPS of $0.43 and revenue of $2.96 billion, representing a 4.6% year-over-year (YoY) increase. The company's underlying revenue growth stood at 5.0% for the period, driven by strong cash generation and favorable working capital movements [1].

The company's trading cash flow reached $487 million, an increase of $104 million compared to H1 2024. Trading cash conversion improved by 33 percentage points to 93%, reflecting efficient working capital management. Free cash flow increased to $244 million, up from $39 million in H1 2024, driven by lower restructuring charges and strong cash generation [1].

Smith & Nephew's operating profit margin expanded to 14.5% from 11.6% in H1 2024, while trading profit margin increased to 17.7% from 16.7%. EPSA (earnings per share on a non-GAAP basis) grew by 14.1% to 42.9 cents, and EPS (earnings per share) increased by 36.6% to 33.5 cents [2].

The company's second quarter (Q2) results showed an acceleration in underlying revenue growth to 6.7%, with reported growth of 7.8% including a 110 basis points foreign exchange tailwind. All regions and business units contributed to the growth, with Orthopaedics, Sports Medicine & ENT, and Advanced Wound Management showing strong performance [2].

Smith & Nephew's Chief Executive Officer, Deepak Nath, highlighted the company's transformation efforts under the 12-Point Plan, which are translating into better financial performance. The company announced an additional return of $500 million to shareholders via a share buyback in the second half of 2025, reflecting its strong cash generation and balance sheet [1, 2].

The company left its full-year 2025 guidance unchanged, expecting underlying revenue growth to be around 5.0% and trading profit margin to expand to between 19.0% and 20.0%. The outlook includes an expected net impact of $15 to $20 million from tariffs in 2025 [1].

References:
[1] https://seekingalpha.com/news/4478175-smith-nephew-non-gaap-eps-of-043-revenue-of-296b-reaffirms-fy-outlook
[2] https://www.directorstalkinterviews.com/smith-nephew-plc-delivers-strong-h1-with-profit-up-31/4121210748