Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to the author's positions and affiliations [1][2]. Summary by Categories - **Company Analysis**: No specific company analysis or insights are provided in the article [1][2]. - **Industry Insights**: The article lacks any detailed industry insights or trends [1][2].

[Smith+Nephew Second Quarter and First Half 2025 Results](index=4&type=section&id=Smith%2BNephew%20Second%20Quarter%20and%20First%20Half%202025%20Results) [Financial and Operational Highlights](index=4&type=section&id=Financial%20and%20Operational%20Highlights) The company reported strong H1 2025 results with accelerated revenue growth, margin expansion, and improved cash flow H1 & Q2 2025 Key Financial Metrics | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $2,961m | $2,827m | 4.7% (Reported) | | Underlying Revenue Growth | 5.0% | - | - | | Trading Profit | $523m | $471m | 11.2% | | Trading Profit Margin | 17.7% | 16.7% | +100 bps | | EPSA (cents) | 42.9¢ | 37.6¢ | 14.1% | | Free Cash Flow | $244m | $39m | 528.3% | | **Metric** | **Q2 2025** | **Q2 2024** | **Change (%)** | | Revenue | $1,553m | $1,441m | 7.8% (Reported) | | Underlying Revenue Growth | 6.7% | - | - | - The company announced a **$500 million share buyback** to be conducted in the second half of 2025, reflecting strong cash generation and balance sheet health[16](index=16&type=chunk)[28](index=28&type=chunk) - Full-year 2025 guidance remains unchanged, with expected underlying revenue growth of **around 5.0%** and a trading profit margin between **19.0% and 20.0%**[16](index=16&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - The 12-Point Plan transformation is delivering sustained higher revenue growth, increased profitability, and better cash generation[14](index=14&type=chunk)[16](index=16&type=chunk) [Detailed Performance Review](index=8&type=section&id=Detailed%20Performance%20Review) Performance was driven by the 12-Point Plan and new products, leading to margin expansion and strong cash flow - Products launched in the last five years contributed to **three-quarters of the revenue growth** in the first half of 2025[15](index=15&type=chunk)[29](index=29&type=chunk) - The 12-Point Plan has driven operational improvements, leading to a **100bps trading profit margin expansion to 17.7%** in H1 2025[21](index=21&type=chunk)[25](index=25&type=chunk) - Cash generation significantly improved, with H1 trading cash flow **up 71.5% to $487 million** and free cash flow increasing to **$244 million** from $39 million in H1 2024[26](index=26&type=chunk)[27](index=27&type=chunk) - Inventory management improved, with Day Sales of Inventory (DSI) **reduced by 46 days** year-on-year, resulting in a **$69 million reduction** in inventory value on a constant currency basis[27](index=27&type=chunk)[69](index=69&type=chunk) [Innovation and Clinical Evidence](index=10&type=section&id=Innovation%20and%20Clinical%20Evidence) - Key product launches in H1 2025 included the LEGION medial stabilised inserts for knees, TRIGEN MAX Tibia Nailing System, and ALLEVYN Ag+ SURGICAL for wound management[30](index=30&type=chunk)[34](index=34&type=chunk) - Received FDA clearance for CORIOGRAPH Pre-Operative Planning for total shoulder replacement, expanding the CORI Surgical System's capabilities to all major joint replacements[31](index=31&type=chunk) - Expanded the indication for the REGENETEN Bioinductive Implant to include extra-articular ligament injuries in the US, starting with hip capsule repair[32](index=32&type=chunk) - Published new clinical evidence supporting key products, including superior 20-year survivorship for OXINIUM Technology in hip replacements and lower re-tear rates with REGENETEN in rotator cuff repairs[36](index=36&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) [Q2 2025 Business Unit and Geographic Performance](index=12&type=section&id=Q2%202025%20Business%20Unit%20and%20Geographic%20Performance) Q2 2025 Underlying Revenue Growth by Business Unit | Business Unit | Q2 2025 Underlying Growth (%) | | :--- | :--- | | Orthopaedics | 5.0% | | Sports Medicine & ENT | 5.7% | | Advanced Wound Management | 10.2% | | **Total** | **6.7%** | - Orthopaedics growth was driven by a sequential improvement in Reconstruction (**3.1% underlying growth**) and strong performance in Other Reconstruction (**39.8% underlying growth**) from CORI Surgical System sales[44](index=44&type=chunk)[45](index=45&type=chunk)[48](index=48&type=chunk) - Sports Medicine & ENT grew **10.2% (underlying)** excluding China, which was impacted by Volume Based Procurement (VBP); Sports Medicine Joint Repair grew **13.7%** outside of China[50](index=50&type=chunk)[51](index=51&type=chunk) - Advanced Wound Management saw strong double-digit growth, led by a rebound in Advanced Wound Bioactives (**18.6% underlying growth**) and continued strength in Advanced Wound Devices (**12.7% underlying growth**)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) Q2 2025 Underlying Revenue Growth by Geography | Geography | Q2 2025 Underlying Growth (%) | | :--- | :--- | | US | 8.7% | | Other Established Markets | 7.4% | | Emerging Markets | -0.2% | [First Half 2025 Consolidated Analysis](index=18&type=section&id=First%20Half%202025%20Consolidated%20Analysis) The company achieved 5.0% underlying revenue growth and a 100bps trading profit margin expansion to 17.7% H1 2025 Profit Reconciliation ($m) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 2,961 | 2,827 | | Operating profit | 429 | 328 | | **Trading profit** | **523** | **471** | H1 2025 Earnings Per Share Reconciliation (cents) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | EPS (Basic) | 33.5 | 24.5 | | **EPSA (Adjusted)** | **42.9** | **37.6** | - The H1 trading profit margin **increased by 100bps to 17.7%**, driven by revenue leverage and savings from the 12-Point Plan, partially offset by inflation and China VBP[62](index=62&type=chunk) - By business unit, H1 trading profit margin **increased 230bps in Orthopaedics**, declined 130bps in Sports Medicine & ENT (due to China VBP), and increased 160bps in Advanced Wound Management[63](index=63&type=chunk) - Group net debt was stable at **$2.7 billion** as of June 28, 2025, with a net debt to adjusted EBITDA ratio of **1.8x**[70](index=70&type=chunk) [Capital Allocation, Dividend and Outlook](index=20&type=section&id=Capital%20Allocation%2C%20Dividend%20and%20Outlook) The company announced a dividend increase and a $500 million share buyback while maintaining its full-year 2025 outlook - The interim dividend for 2025 is **15.0¢ per share**, a **4.2% increase** from the prior year[16](index=16&type=chunk)[72](index=72&type=chunk) - A share buyback of **$500 million** is planned for the second half of 2025, enabled by strong cash generation[73](index=73&type=chunk)[74](index=74&type=chunk) Full Year 2025 Guidance (Unchanged) | Metric | FY 2025 Guidance | | :--- | :--- | | Underlying Revenue Growth | ~5.0% | | Reported Revenue Growth | ~5.5% | | Trading Profit Margin | 19.0% to 20.0% | - The outlook includes an expected net negative impact of approximately **$15 to $20 million** from tariffs in 2025[77](index=77&type=chunk) [2025 Half Year Consolidated Interim Financial Statements](index=26&type=section&id=2025%20HALF%20YEAR%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) [Unaudited Financial Statements](index=26&type=section&id=Unaudited%20Financial%20Statements) The interim statements show increased profit, stable total assets, and significantly improved operating cash flow - The Group Income Statement reports a **profit of $293 million** for H1 2025, compared to $214 million for H1 2024[85](index=85&type=chunk) - The Group Balance Sheet shows **total assets of $10,692 million** and **total equity of $5,536 million** as of June 28, 2025[87](index=87&type=chunk) - The Group Cash Flow Statement indicates net cash inflow from operating activities was **$396 million** in H1 2025, up from $238 million in H1 2024[88](index=88&type=chunk) - The Group Statement of Changes in Equity shows total equity increased from $5,265 million at the start of the year to **$5,536 million** at the end of H1 2025[90](index=90&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=30&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Basis of Preparation and Segment Information](index=30&type=section&id=Basis%20of%20Preparation%20and%20Segment%20Information) Financials are prepared under IAS 34 on a going concern basis, with results reported across three business segments - The interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting[93](index=93&type=chunk) - The Directors have adopted the going concern basis of accounting, concluding the Group has sufficient resources for at least 12 months from the approval date[94](index=94&type=chunk)[96](index=96&type=chunk) H1 2025 Revenue by Reportable Segment ($m) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Orthopaedics | 1,193 | 1,149 | | Sports Medicine & ENT | 923 | 888 | | Advanced Wound Management | 845 | 790 | | **Total** | **2,961** | **2,827** | H1 2025 Segment Trading Profit ($m) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Orthopaedics | 151 | 119 | | Sports Medicine & ENT | 213 | 217 | | Advanced Wound Management | 187 | 162 | | **Total Segment Trading Profit** | **551** | **498** | [Key Financial Notes (Tax, Dividends, Debt)](index=38&type=section&id=Key%20Financial%20Notes%20(Tax%2C%20Dividends%2C%20Debt)) The effective tax rate was 19.1%, an interim dividend was approved, and net debt remained stable at $2.75 billion - The reported tax charge for H1 2025 was $69m, with an **effective tax rate of 19.1%**; the Group forecasts a Pillar Two current tax charge of approximately **$27m** for the full year 2025[121](index=121&type=chunk)[122](index=122&type=chunk) - An interim dividend of **15.0 US cents per ordinary share** was approved by the Board on July 30, 2025, payable on November 7, 2025[124](index=124&type=chunk) - Net debt as of June 28, 2025 was **$2,747 million**, including lease liabilities; the company has committed facilities of **$4.2 billion**[95](index=95&type=chunk)[133](index=133&type=chunk) - The company was in compliance with its principal financial covenant (leverage ratio <3.5x) on its private placement debt as of June 28, 2025[135](index=135&type=chunk) [Other Information](index=50&type=section&id=Other%20Information) [Non-IFRS Financial Measures](index=50&type=section&id=Non-IFRS%20Financial%20Measures) This section defines and reconciles non-IFRS measures used by management to assess like-for-like performance - Underlying revenue growth adjusts reported revenue for constant currency exchange effects and the impact of acquisitions and disposals[166](index=166&type=chunk) - Trading profit is defined as operating profit excluding items such as acquisition-related costs, restructuring charges, and significant legal expenses[166](index=166&type=chunk) - A detailed reconciliation table is provided, showing the adjustments from IFRS measures (Operating Profit, Profit Before Tax, EPS) to their non-IFRS 'Trading' equivalents (Trading Profit, Trading Profit Before Tax, EPSA)[171](index=171&type=chunk) - Free cash flow is reconciled from 'cash generated from operations' by adjusting for capital expenditure, interest, lease payments, and taxes[183](index=183&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenue of $3 billion in the first half, reflecting a 5% underlying growth compared to the same period in 2024, with reported revenue up 4.7% [22][24] - Gross profit was £2.1 billion, resulting in a gross margin of 70.5%, a 40 basis point increase from the prior year [24] - Profit grew 11.2% to £523 million, with a margin of 17.7%, up 100 basis points [25][32] - Free cash flow increased over 500% to £244 million, with expectations to exceed £600 million for the full year [36][38] Business Unit Performance Changes - Orthopedics grew 4.1%, while Sports Medicine and ENT also grew 4.1%, with underlying growth excluding China at 9% [23] - Advanced Wound Management grew 7.1%, with notable contributions from bioactives and single-use negative pressure platforms [19][20] - The robotics segment in orthopedics saw a growth of 39.8%, reflecting strong placements in the U.S. [13] Market Performance Changes - The U.S. market grew 8.7%, while other established markets grew 7.4%. Emerging markets saw a slight decline of 0.2%, but excluding China, they grew by 12.2% [7][8] - The company expects the headwinds from China to ease in the second half of the year as distributor destocking reduces [10][39] Company Strategy and Industry Competition - The company is focused on maintaining a higher growth trajectory, with 75% of growth in H1 coming from products launched in the last five years [44][46] - The 12 plan aims to enhance operational efficiencies and drive accountability, with a target of £325 to £375 million in savings from 2023 to 2027 [30][31] - The company plans to launch new products and expand its offerings in robotics and sports medicine, enhancing its competitive position [45][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year growth targets despite uncertainties, including tariff impacts and market conditions [4][53] - The company anticipates a step-up in margin in the second half, driven by operational savings and easing headwinds from China [27][38] - Management highlighted the importance of innovation and product launches in sustaining revenue growth [43][44] Other Important Information - The company announced a $500 million share buyback program for 2025, funded by operational efficiencies and cash flow [5][37] - Inventory management has improved, with a reduction in days of inventory to 506 days, aligning with the company's focus on operational efficiency [32][34] Q&A Session Summary Question: Is there upside to the 5% revenue target for the full year? - Management feels good about guidance for the full year, acknowledging both positives and negatives affecting revenue [51][52] Question: Can you provide details on margin guidance and the potential for achieving the upper end of the margin range? - Management expects a step-up in margin in the second half, with operational savings and tariff impacts balancing out [53][59] Question: What is being done to address the softness in U.S. knees? - Management noted a focus on higher volume accounts and portfolio rationalization, which may impact top-line growth but improve margins [54][56]

Financial Data and Key Metrics Changes - The company reported a revenue of $1.6 billion for the quarter, reflecting a 6.7% underlying growth and a 7.8% reported growth, aided by a 110 basis point tailwind from foreign exchange [5][21] - Gross profit was £2.1 billion, resulting in a gross margin of 70.5%, which is a 40 basis point increase from the prior year [23] - Profit grew 11.2% to £523 million with a margin of 17.7%, up 100 basis points [24] - Trading cash flow increased by 70% with almost $250 million of free cash flow in the first half [4][33] - Earnings per share grew 37% to 33.5¢, and adjusted earnings per share grew 14% to 42.9¢ [31] Business Unit Performance Changes - Orthopedics grew 5.5% underlying, with total reconstruction robotics growing 5.2% [7] - Sports Medicine and ENT grew 5.7% in the quarter, with joint repair growth at 8.4% [13] - Advanced Wound Management saw growth increase to 10.2%, driven by a rebound in bioactives [16] - Trauma and extremities grew 4.4%, with the ATOS growth contribution steadily increasing [12] Market Performance Changes - The US market grew 8.7%, while other established markets grew 7.4% [6] - Emerging markets declined by 0.2%, but excluding China, they grew by 12.2% [6] - The company expects the headwind from China to ease in the second half of the year [6][8] Company Strategy and Industry Competition - The company is focused on maintaining a higher growth trajectory, with a target of 5% growth for the full year [50] - A $500 million share buyback is planned for 2025, funded by operational efficiencies [4][35] - The company is undergoing a transformation plan aimed at improving operational efficiencies and margin expansion [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year margin guidance of 19% to 20%, despite uncertainties related to tariffs [3][36] - The company anticipates a step-up in margin in the second half, driven by cost savings and reduced headwinds from China [36] - Management noted that the impacts of volume-based procurement in China are expected to ease [6][36] Other Important Information - The company has implemented a zero-based budgeting approach, targeting gross run rate savings of £325 to £375 million from 2023 through 2027 [29] - Inventory management has improved, with a reduction in days of inventory to 506 days [32] Q&A Session Summary Question: Is there upside to the 5% revenue target for the full year? - Management feels good about guidance for the full year, noting both positives and negatives in the outlook [50][52] Question: Can you walk us through the bridge in H2 margin? - Management expects a step-up in margin in the second half, with various factors influencing the margin guidance [61] Question: What is being done regarding US knees? - Management highlighted sequential improvement in US orthopedics and discussed efforts to refocus on higher volume accounts [54][56] Question: What are the drivers of operating savings in H2? - Savings are coming from procurement, warehousing, distribution, and other areas, with visibility on achieving these savings [76] Question: What is the outlook for inventory levels? - Management expects continued improvement in inventory levels, particularly in orthopedics, with good progress noted [92]

Financial Performance - Total revenue for Q2 2025 was $1,553 million, with underlying revenue growth of +6.7% and reported growth of +7.8%[13] - H1 2025 revenue reached $2,961 million, a 4.7% reported growth compared to $2,827 million in H1 2024[36] - H1 2025 trading profit margin was 17.7%, a +100 bps expansion compared to 16.7% in H1 2024[36] - Adjusted Earnings Per Share (EPSA) for H1 2025 was 42.9¢, a 14.1% increase from 37.6¢ in H1 2024[47] - Free cash flow for H1 2025 was $244 million, significantly improved from $39 million in H1 2024[53] Business Segment Performance - Orthopaedics revenue in Q2 2025 was $615 million, with underlying growth of +5.0%[16] - Sports Medicine & ENT revenue in Q2 2025 was $479 million, with underlying growth of +5.7%[19] - Advanced Wound Management (AWM) revenue in Q2 2025 was $459 million, with underlying growth of +10.2%[27] Regional Performance - US revenue in Q2 2025 grew by +8.7% to $827 million[13] - Emerging Markets revenue in Q2 2025 decreased by -0.2% to $256 million, but grew +12.2% excluding China[13] Strategic Initiatives - A $500 million share buyback is planned for H2 2025, funded by 2025 cash flow and existing balances[9] - The company is targeting total gross run-rate savings of approximately $325-375 million in 2027 through efficiency opportunities[44]

Core Insights - Smith & Nephew (SNN) is currently rated as a better value opportunity compared to Stryker (SYK) based on various financial metrics and rankings [1][7] Valuation Metrics - SNN has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while SYK has a Zacks Rank of 3 (Hold) [3] - The forward P/E ratio for SNN is 16.03, significantly lower than SYK's forward P/E of 30.22, suggesting SNN is undervalued [5] - SNN's PEG ratio is 0.97, while SYK's PEG ratio is 2.99, further indicating SNN's better value proposition [5] - SNN has a P/B ratio of 2.63 compared to SYK's P/B of 7.36, reinforcing SNN's favorable valuation metrics [6] - These metrics contribute to SNN's Value grade of A and SYK's Value grade of D, highlighting the disparity in their valuation [6]

Core Insights - The article compares two stocks in the Medical - Products sector: Smith & Nephew (SNN) and EssilorLuxottica Unsponsored ADR (ESLOY) to determine which is more attractive to value investors [1] Valuation Metrics - Smith & Nephew has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while EssilorLuxottica has a Zacks Rank of 3 (Hold) [3] - SNN has a forward P/E ratio of 15.83, significantly lower than ESLOY's forward P/E of 35.31, suggesting SNN may be undervalued [5] - The PEG ratio for SNN is 0.96, while ESLOY's PEG ratio is 4.52, indicating SNN's expected earnings growth is more favorable [5] - SNN's P/B ratio is 2.58 compared to ESLOY's P/B of 3.01, further supporting SNN's valuation attractiveness [6] - SNN has a Value grade of A, while ESLOY has a Value grade of D, highlighting SNN's superior valuation metrics [6]

Core Viewpoint - The article highlights the importance of value investing and identifies Smith & Nephew (SNN) as a strong value stock based on various valuation metrics [2][4][7]. Valuation Metrics - Smith & Nephew holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock has a P/E ratio of 14.59, significantly lower than the industry average of 21.05, suggesting it may be undervalued [4]. - SNN's Forward P/E has fluctuated between 11.60 and 16.17 over the past year, with a median of 13.91 [4]. - The PEG ratio for SNN is 0.88, compared to the industry average of 2.00, indicating favorable growth expectations relative to its price [5]. - Over the past 52 weeks, SNN's PEG has ranged from 0.67 to 1.47, with a median of 1.12 [5]. - The P/B ratio for SNN is 2.55, which is attractive compared to the industry average of 5.15, further supporting the undervaluation thesis [6]. - SNN's P/B has varied between 1.98 and 2.66 over the past year, with a median of 2.37 [6]. Investment Outlook - The combination of these metrics suggests that Smith & Nephew is likely undervalued, making it a strong candidate for value investors [7].

Core Insights - Smith+Nephew will support select players at The Championships, Wimbledon in 2025, continuing its commitment to showcase its Sports Medicine product portfolio and the purpose of 'Life Unlimited' [1][6] - The company had a successful inaugural sponsorship during Wimbledon 2024, highlighting its brand and technology aimed at aiding athletes in recovery and performance [3] Product Portfolio - The REGENETEN Bioinductive Implant has been used in over 150,000 procedures globally since 2014, showing lower re-tear rates for rotator cuff surgeries compared to conventional methods [4] - The CARTIHEAL AGILI-C Cartilage Repair Implant is the only device approved for treating knee cartilage and osteochondral defects in patients with mild to moderate osteoarthritis, demonstrating significant post-operative improvements [4] - The Q-FIX KNOTLESS All-Suture Anchor offers enhanced fixation strength and aims to set a new benchmark for soft tissue security in joint repair [4] Company Overview - Smith+Nephew, founded in 1856 in Hull, UK, operates in around 100 countries and generated annual sales of $5.8 billion in 2024 [7] - The company focuses on the repair, regeneration, and replacement of soft and hard tissue, with a mission to restore patients' bodies and self-belief through innovative technologies [6]

Core Insights - The article compares Smith & Nephew (SNN) and GE HealthCare Technologies (GEHC) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Smith & Nephew has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while GE HealthCare Technologies has a Zacks Rank of 5 (Strong Sell) [3] - The improving analyst outlook for SNN suggests a more favorable investment opportunity compared to GEHC [3][7] Group 2: Valuation Metrics - SNN has a forward P/E ratio of 15.21, while GEHC has a forward P/E of 17.91, indicating SNN may be undervalued [5] - The PEG ratio for SNN is 0.92, compared to GEHC's PEG ratio of 2.43, further suggesting SNN's better valuation relative to its expected EPS growth [5] - SNN's P/B ratio is 2.48, while GEHC's P/B ratio is 3.58, reinforcing SNN's position as a more attractive value option [6] Group 3: Value Grades - SNN has a Value grade of A, while GEHC has a Value grade of C, highlighting SNN's stronger valuation metrics [6]