AUS
NZ
UK
CA
USA
IND
Highlights
- Revenue Growth: 2024 revenue reached $5.81 billion, reflecting a 5.3% underlying growth despite inflation and challenges in China.
- Profit Expansion: Trading profit surged 8.2% to $1.05 billion, with an improved 18.1% profit margin.
- Optimistic Outlook: The company forecasts continued revenue growth and higher margins in 2025, despite ongoing China-related headwinds.
Smith+Nephew (LSE:SN, NYSE:SNN), a global leader in medical technology, has reported a solid financial performance for the fourth quarter and full year ending December 31, 2024. The company demonstrated resilience in navigating economic headwinds, including inflationary pressures and challenges in China, while continuing its growth trajectory.
The company’s 2024 revenue stood at $5.81 billion, marking a 5.3% underlying growth. While foreign exchange fluctuations posed a 60 basis points (bps) headwind, reported revenue growth was 4.7%. Smith+Nephew's 12-Point Plan played a crucial role in driving revenue expansion for the second consecutive year while enhancing trading margins.
The company achieved cost savings of approximately 410 basis points, resulting in a nearly 9% reduction in total workforce across 2023 and 2024. Product innovation was another key factor contributing to growth, with several recent launches making a sigificant impact and more products in the pipeline.
Trading profit showed a robust 8.2% increase, reaching $1.05 billion, with a trading profit margin of 18.1%, up by 60 bps compared to the previous year. Reported operating profit also rose significantly to $657 million, up from $425 million in 2023.
Q4 Performance
Smith+Nephew concluded the year on a high note, reporting Q4 revenue of $1.57 billion, reflecting 8.3% underlying growth. However, reported growth was 7.8%, affected by a 50bps foreign exchange headwind.
The company delivered a positiveperformance across all regions except China, where persistent economic headwinds affected sales, particularly in Sports Medicine Joint Repair and Reconstruction. The challenges in China reduced the group’s overall revenue growth rate by 280bps.
Despite this, US Reconstruction saw continued improvement, with 5.4% growth in Knee Implants and 7.6% in Hip Implants. The company remains optimistic about long-term expansion in key markets.
2025 Outlook
Looking ahead, Smith+Nephew is targeting another year of solid revenue growth in 2025, despite continued China-related challenges. The company expects underlying revenue growth of around 5% and reported growth of approximately 4.8%.
In Q1 2025, the company anticipates a moderate start, with 1%-2% revenue growth, primarily due to continued weakness in China and one fewer trading day. However, an acceleration is expected throughout the year.
The trading profit margin is projected to rise to 19.0%-20.0%, with positive margins expected in the second half of the year as China’s impact eases and operational savings materialize. Beyond 2025, Smith+Nephew anticipates further margin expansion, driven by efficiency improvements and continued revenue growth.
