Smith & Nephew (SN) investor relations material

Strategic Vision and Financial Guidance

• RISE strategy targets 6-7% organic revenue CAGR and 9-10% trading profit CAGR through 2028, aiming for over $1 billion in free cash flow and 12-13% ROIC, all significantly above historical averages.

• Ortho 360 operational model and productivity initiatives are set to unlock 300-400 basis points of margin expansion in Orthopaedics by 2028, with a goal of 20% Ortho margin by 2030.

• Growth is expected to be balanced across business units, with Sports Medicine and Wound leading innovation and execution for above-market growth, and Orthopaedics focused on margin expansion.

• Strong cash generation will provide flexibility for strategic M&A to reinforce success, with disciplined focus on high-growth, high-return opportunities.

• Portfolio rationalisation will simplify offerings, reduce inventory by $500 million, and lower capital requirements, with a $200 million non-cash provision in 2025.

Innovation and Product Pipeline

• Over 75 new product launches in the past five years, with more than 18 new orthopaedics launches expected in the next 18 months, including the Landmark knee and TESSA spatial surgery platform.

• Accelerated new product launches and scaling of innovation platforms are central to the strategy, focusing on advanced enabling technologies such as robotics and spatial surgery systems.

• PICO, a single-use negative pressure wound therapy device, has achieved double-digit growth for a decade, is supported by strong clinical evidence and NICE guidance, and is proven to reduce surgical site infections by 63%.

• REGENETEN bioinductive implant and CartiHeal Agili-C are highlighted as category-defining technologies in sports medicine, with TESSA pending FDA review and AGILI-C gaining a new reimbursement code effective 2027.

• CORI robotic system is expanding to support knees, hips, and shoulders, with a small footprint, cost-effective model ideal for ASCs, and is the only FDA-approved robotic system for revision TKR.

Market Positioning and Business Development

• The company operates in a $50 billion global medtech market, with leading positions in sports medicine, wound care, and differentiated technology in orthopaedics.

• ASC (Ambulatory Surgery Center) segment is a key growth area, with 35% of CORI robots placed in ASCs and tailored solutions for efficiency, cost, and data integration.

• Strategic focus on expanding market access, especially for new technologies like Agili-C, with CPT code implementation in 2027 expected to drive future revenue.

• Commercial model has been rewired for ASC customers, with dedicated teams and flexible financing to deliver turnkey solutions and accelerate growth.

• Streamlined instrument trays reduce OR space and reprocessing needs by up to 70%, supporting ASC efficiency.