Smith & Nephew (SN) H1 2025 earnings summary

Executive summary

• Achieved 6.7% underlying revenue growth in Q2 2025, with all business units and regions accelerating sequentially and strong momentum in Joint Repair outside China.

• First-half trading margin expanded by 100 basis points to 17.7%, slightly ahead of expectations, driven by operational efficiencies and cost savings.

• Free cash flow increased to $244 million in H1 2025, up from $39 million in H1 2024, enabling a $500 million share buyback in H2 2025.

• Transformation initiatives and innovation pipeline drove improved profitability, productivity, and sustainable operational changes.

Financial highlights

• Q2 2025 revenue was $1,553 million, up 6.7% underlying and 7.8% reported, aided by a 110 bps FX tailwind.

• H1 2025 revenue reached $2,961 million, up 5.0% underlying and 4.7% reported year-over-year.

• Trading profit grew 11.2% to $523 million, with a margin of 17.7%, up 100 bps.

• IFRS operating profit rose 30.6% to $429 million; adjusted EPSA increased 14.1% to 42.9¢; interim dividend up 4.2% to 15.0¢ per share.

• Free cash flow surged to $244 million in H1 2025; trading cash conversion improved to 93% from 60% in H1 2024.

Outlook and guidance

• Full-year 2025 guidance unchanged: underlying revenue growth around 5.0%, trading profit margin expected between 19.0% and 20.0%.

• Margin expansion expected to accelerate in H2 2025, with free cash flow for the full year expected to exceed $600 million.

• Tariffs expected to be a $15–$20 million headwind, mainly impacting H2.

• Revenue and margin guidance maintained despite Q2 outperformance, due to macro uncertainty and tough Q4 comparators.

• Continued high cadence of product launches and clinical evidence to support growth.