Smith & Nephew : Q2 results presentation 29 July 2021 (pdf)

Second Quarter and First Half 2021 Results

Forward looking statements and non-IFRS measures

This document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading profit margins, market trends and our product pipeline are forward-looking statements. Phrases such as "aim", "plan", "intend", "anticipate", "well-placed", "believe", "estimate", "expect", "target", "consider" and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. For Smith+Nephew, these factors include: risks related to the impact of COVID, such as the depth and longevity of its impact, government actions and other restrictive measures taken in response, material delays and cancellations of elective procedures, reduced procedure capacity at medical facilities, restricted access for sales representatives to medical facilities, or our ability to execute business continuity plans as a result of COVID; economic and financial conditions in the markets we serve, especially those affecting health care providers, payers and customers (including, without limitation, as a result of COVID); price levels for established and innovative medical devices; developments in medical technology; regulatory approvals, reimbursement decisions or other government actions; product defects or recalls or other problems with quality management systems or failure to comply with related regulations; litigation relating to patent or other claims; legal compliance risks and related investigative, remedial or enforcement actions; disruption to our supply chain or operations or those of our suppliers (including, without limitation, as a result of COVID); competition for qualified personnel; strategic actions, including acquisitions and dispositions, our success in performing due diligence, valuing and integrating acquired businesses; disruption that may result from transactions or other changes we make in our business plans or organisation to adapt to market developments; relationships with healthcare professionals; reliance on information technology and cybersecurity; and numerous other matters that affect us or our markets, including those of a political, economic, business, competitive or reputational nature. Please refer to the documents that Smith+Nephew has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Smith+Nephew's most recent annual report on Form 20-F, for a discussion of certain of these factors. Any forward-looking statement is based on information available to Smith+Nephew as of the date of the statement. All written or oral forward-looking statements attributable to Smith+Nephew are qualified by this caution. Smith+Nephew does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in Smith+Nephew's expectations. The terms 'Group' and 'Smith+Nephew' are used for convenience to refer to Smith & Nephew plc and its consolidated subsidiaries, unless the context requires otherwise.

Certain items included in 'trading results', such as trading profit, trading profit margin, tax rate on trading results, trading cash flow, trading profit to cash conversion ratio, EPSA, leverage ratio, and underlying growth are non-IFRS financial measures. The non-IFRS financial measures in this announcement are explained and reconciled to the most directly comparable financial measure prepared in accordance with IFRS in our Second Quarter and Half Year 2021

Results announcement dated 29 July 2021.	2

Key messages

Improved growth in Q2, as end markets continue to recover

On track for 2021 revenue and margin guidance

Delivering on our 2021 priorities:

• returning to top-line growth and recapturing momentum
• driving further operational improvement
• continuing to respond effectively to COVID

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H1 2021 highlights

Revenue	Trading profit
$2,599m	$459m
21.3% underlying growth*	17.6% margin
27.8% reported growth	2020: $172m

EPSA	DPS
38.8¢	14.4¢
2020: 13.4¢	2020: 14.4¢

*Underlying growth is a non-IFRS measure. Please see page 30 of this presentation for a	4
reconciliation of underlying revenue growth to reported revenue growth.

Q2 revenue by region

$1,335m, 40.3% underlying, 48.2% reported

Quarterly underlying sales development by region

US	Other established markets
$677m	$422m

					51.3%
											40.1%
		0.9%		7.1%
-4.7%			-4.9%			-6.3%		-6.2%	-6.2%	-1.8%
	-31.8%						-30.8%
1Q20	2Q20	3Q20	4Q20	1Q21	2Q21	1Q20	2Q20	3Q20	4Q20	1Q21	2Q21

Emerging markets

$236m

21.8% 16.2%

-17.9%-20.2% -14.5% -14.9%

1Q20 2Q20 3Q20 4Q20 1Q21 2Q21

• Procedure volumes continued to recover as remaining restrictions lifted
• Surgical activity moving closer to normal, with variation by region

• Europe surgery volumes improved, despite restrictions early in the quarter
• Japan and Australia volumes slowing, with rising infection rates

• China end market volumes reflect maintained recovery, offset by distributor ordering patterns
• India, LatAm, Middle East volumes remain significantly COVID-affected

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