Smith & Nephew (SN) Q4 2025 earnings summary

Executive summary

• FY2025 delivered strong results at the high end of guidance, with underlying revenue growth of 5.3% and all business units growing over 5%; over 60% of growth came from products launched in the last five years.

• Trading profit margin improved to 19.7%, up 160 bps year-over-year, and free cash flow rose 52.5% to $840 million, including a $26 million one-off property transaction.

• The 12-Point Plan was completed, achieving consistent annual targets and positioning the business for accelerated growth under the new RISE strategy.

• Adjusted ROIC was 8.3%, or 9.9% excluding a 160 bps headwind from portfolio rationalization.

• 2026 guidance targets ~6% underlying revenue growth and ~8% trading profit growth, with trading profit expected at ~$1.3 billion, including the Integrity Orthopaedics acquisition.

Financial highlights

• FY2025 underlying revenue grew 5.3% to $6.2 billion; reported growth was 6.1%.

• Trading profit reached $1.2 billion, up 15.5% year-over-year, with a margin of 19.7%.

• Adjusted EPS increased 21% to $1.02; reported EPS rose 52.8% to 72.1¢.

• Free cash flow was $840 million, up 52.5% year-over-year; trading cash conversion improved to 102%.

• Dividend per share increased 4.3% to $0.391.

Outlook and guidance

• 2026 organic revenue growth expected around 6%, with all business units contributing.

• Trading profit guidance for 2026 is ~$1.3 billion, including dilution from the Integrity Orthopaedics acquisition.

• Trading profit growth expected at 8% before M&A, with stronger H2 performance.

• Free cash flow for 2026 guided at ~$800 million.

• Integrity Orthopaedics acquisition expected to be marginally dilutive in 2026, neutral in 2027, and accretive in 2028.