Half Year 2025 Smith & Nephew PLC Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jack Reynolds-Clark - RBC Capital Markets Inc - Analyst : Jack Reynolds-Clark from RBC. I've three, please. The first is on revenue guidance. So with Q2 having been, I guess, stronger than I think people were expecting, does that imply that there's upside to the 5% target for the full year? Or are you expecting things to slow down elsewhere in the business? Then on margin guidance. So I appreciate you mentioned some kind of moving around of R&D and possibly some other expenses as well. But could you walk us through, John, the bridge in H2 margin and whether the upper end of the 19% to 20% margin range is possibly more achievable? And then the last question was on US Knees. So could you just run us through some more detail of the work you're doing there and how much of the weakness was driven by the market versus your own activities? And how you're thinking about growth versus margin in that segment going forward?

Question: Veronika Dubajova - Citibank Cameroon SA - Analyst : Hope you can hear me okay. I have three, please. First one is just Joint Repair. Again, another impressive quarter for you guys with double-digit growth, excluding China. Just curious, Deepak, if you could touch upon the drivers that are enabling you to deliver that growth and how sustainable you think that is not just into the back half of this year, but also as we think about 2026? My second question is just maybe if you can elaborate a little bit on the skin substitute exposure that you have and the risks that you might see there from the new proposal and maybe just give us a flavor for where your current pricing stands relative to the $125 that's been proposed by CMS. And then my final question is around the buyback. And just to what extent do you feel this year is giving us a good indication for your ongoing recurring future capacity to return cash to shareholders?

Question: Hassan Al-Wakeel - Barclays Services Corp - Analyst : I have three, please. Firstly, Deepak, if I can follow up on your comment on slowing procedures amongst more active surgeons in Knees. I wonder if you're seeing this beyond Knees. And separately, any color on the weaker OUS Hip performance and any key challenges faced here. And I guess, combined, what are your expectations here and in US Knees in the second half? And then secondly, if I can follow up on Skin subs. Was the stronger growth in the quarter supported by any physician behavior changes due to the LCD? And then on the proposed reimbursement, I appreciate behavior can change as can volumes. But what is the impact from the lower price in isolation? And what is your exposure to the hospital inpatient channel? And what are the mitigating actions that you could take? And then finally, how are you thinking about the pipeline of potential bolt-on deals, particularly as we look into next year given the buyback announced for this year?

Question: Robert Davies - Morgan Stanley & Co Ltd - Analyst : I have three. First one was just how you're thinking about the strategic position within Ortho, I guess, within the context of both the 12-Point Plan and within the context of -- you mentioned the constructive discussions with the activist. Maybe just provide us a little more color on that. The second question was around the trajectory for margins beyond 2025 and whether the savings plans that you've laid out has changed your views over the midterm profitability targets of the company? And then the final one was just around the sustainability of growth, I guess, and just getting a little more color on the future pipeline. You've obviously made a lot of comments over the last couple of years around the products you brought to market. I just wondered if you could provide some color around the pipeline looking forward over the next couple of years. Anything meaningful to look out for? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 7:30AM, SN.L - Half Year 2025 Smith & Nephew PLC Earnings Call

Question: Kane Slutzkin - Deutsche Bank AG - Analyst : Just quickly on US Recon, you're obviously still targeting the market growth rates by end of year, I would assume. I'm just wondering if anything has changed in your thinking there in terms of how you get there given the softer US Knees, but stronger Hips? And then just secondly, you obviously mentioned you're in the final year of the transformation. You're making good progress against this plan. Without being too sensational, I'm just wondering with the Sapient stake slowly building, could you just provide us with any confirmation or details of the nature of any discussions you've had with them, what their influence has been to date, if at all? And I guess, just how active have they been?

Question: Dylan van Haaften - Stifel, Nicolaus & Company Inc - Analyst : So just one clarification at the end for me. Baked into your tariff guide, are you using the Nairobi protocol for any of the, let's say, non-US for US business? And I'll stop there.