Smith & Nephew (SN) Q4 2025 earnings summary

Executive summary

• Achieved strong FY2025 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.

• Completed the 12-Point Plan, delivering consistent annual targets and positioning for accelerated growth under the new RISE strategy.

• Innovation drove growth, with 44 new products launched in three years and a robust pipeline for 2026 and beyond.

• Acquisition of Integrity Orthopaedics strengthens the sports medicine and shoulder portfolio, expected to be accretive from 2028.

Financial highlights

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

• Trading profit reached $1.2 billion, with a 160 bps margin expansion to 19.7%.

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

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

• Dividend per share increased 4.3% to 39.1¢.

Outlook and guidance

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

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

• Free cash flow for 2026 expected at ~$800 million; ROIC to exceed 10% excluding Integrity.

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

• Continued focus on margin expansion, operational efficiency, and innovation under the RISE strategy.