Smith & Nephew PLC at JPMorgan Healthcare Conference Transcript

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

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : So I'll maybe kick off here with a couple of questions to get us going. [You'll see] that decision back at Q3 to take down margin guidance for '24 and '25. What changed between Q2 and Q3 for you to do that? And as you're sitting here today, how comfortable are you with that margin progression in '25? And do you think that's been derisked with that new guidance?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Perfect. And next one, now, this year you still have a decent uplift in that margin. Is there still further potential beyond that 19% to 20% beyond 2025 (multiple speakers) --?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Perfect. And then just focusing on ortho. One of the questions I've been getting for now over two decades is how can you be competitive, given your market share relative to some of your much larger peers? I've been saying it 'til I'm blue in the face. But do you think you have the scale to remain competitive?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst :

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Whereas although, it's still quite long way, obviously below. Is there anything that struck you that's changed in the business, that means you can't get back to pre-COVID levels of margins?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Perfect. And then just on wound has been continued good growth across the business. In biologics, through last year, obviously a lot of noise around LCD and we've now got full visibility on that. Quite a few of your competitors are now not going to be reimbursed. I assume it's going to be a tailwind to biologics growth for this year?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : And then one of the conversations I have with investors for quite a long time has been cash flow and cash conversion. It's never quite as good as you hoped. You touched on in your presentation in terms of obviously reduction in inventory working capital. What sort of time frame are you expecting to see that improvement come through?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : And then following on from that. As that cash begins to come in and you deleverage, how should we think about capital allocation?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Perfect. And I've been asking this question of all the companies I've been with so far, but with respect to tariffs, I think you're probably more better placed than a lot of -- some companies. Any concerns for you as you look at your business from the (multiple speakers)

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Great. Thank you. Any questions on the floor? Unidentified Participant Thank you very much for your presentation. It has been a year now that you acquired Agili-C. Could you elaborate a little bit on the experience you have with that product?

Question: David Adlington - J.P. Morgan Securities PLC - Analyst : Great. Well, I don't want to stand between everyone and the bar. So thanks very much, everybody.