Investor presentation March – April 2026 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 id ...

Financial Data and Key Metrics Changes - The company reported record performance for 2025, with sales increasing by 6% to a record $4.2 billion, driven by acquisitions and price increases [5] - Adjusted EPS rose to a record $9.87, and the company maintained last year's record adjusted operating income margin [5] - The effective tax rate increased to 21.2%, reflecting a special item tax expense [13] Business Line Data and Key Metrics Changes - Americas Welding sales increased by approximately 4%, driven by a 10.4% price increase, while volumes declined by approximately 7% [14] - International Welding segment sales increased by approximately 7%, with a 5% benefit from an acquisition and a 5% favorable foreign exchange translation, but volumes decreased by 4% [16] - Harris Products Group sales increased by 11%, driven by an 18% price increase, while volumes compressed by 9% [18] Market Data and Key Metrics Changes - Three of the five end markets grew, with notable acceleration in December, particularly in Americas Welding [8] - The Energy sector outperformed due to strong project activity in both Americas and Asia Pacific [9] - The Automotive and Heavy Industries sectors faced challenges, with transportation growth driven by consumable demand for vehicle production [10] Company Strategy and Development Direction - The company is transitioning to a new strategy named RISE, focusing on efficiency, agility, and innovation to drive growth [25][30] - The 2030 financial targets include maintaining a high single-digit to low double-digit sales growth rate, with a focus on organic sales and acquisitions [28][39] - The company aims to achieve a peak consolidated operating income margin of over 20% and an average operating income margin of 19% across the cycle [35] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about an early-stage industrial recovery, supported by OEM commentary on capital spending plans [19] - The company expects volume growth rates to improve starting in the second quarter of 2026, with a balanced approach to pricing and volume [20] - Management highlighted the importance of maintaining a neutral price-cost posture while targeting incremental operating income margin improvements [21] Other Important Information - The company generated strong cash flows from operations, with an adjusted return on invested capital of 21.3% [18] - A balanced capital allocation strategy was emphasized, with approximately 48% invested in growth and 52% returned to shareholders [38] Q&A Session Summary Question: Long-term dynamics regarding incremental margins - Management indicated that improvements in incremental margins will be driven by volume growth and enterprise initiatives, with benefits expected to flow steadily over the five-year period [42][45] Question: Expectations for organic growth and order trends - Management expects mid-single-digit organic growth, split 50/50 between price and volume, with confidence in order levels and backlog, particularly in automation [47][49] Question: Automation business expectations for 2026 - The automation business is expected to recover with a mid-single-digit growth trajectory based on order levels and backlog, with a focus on achieving a non-dilutive margin profile [58][74] Question: Impact of metal inflation on pricing - Management confirmed that pricing actions will be taken as market conditions require, with a mechanical adder in pricing methodology to address metal cost inflation [66][68] Question: Margin expansion in international markets - Management emphasized focusing on regions with favorable macroeconomic conditions for growth, with cautious expectations for core Europe [89]

Financial Data and Key Metrics Changes - The company reported record sales of $4.2 billion for 2025, a 6% increase from the previous year, driven by acquisitions and price increases [4] - Adjusted EPS rose to a record $9.87, with strong cash flows from operations leading to record cash returns to shareholders [4] - The adjusted operating income margin remained consistent with the previous year, and the company achieved top-quartile ROIC and total shareholder return performance compared to peers [4] Business Line Data and Key Metrics Changes - Americas Welding sales increased approximately 4%, driven by a 10.4% price increase, while volumes declined about 7% due to challenges in the automation portfolio [13] - International Welding segment sales rose approximately 7%, aided by a 5% benefit from an acquisition and favorable foreign exchange, despite a 4% decline in volumes [14] - Harris Products Group saw an 11% increase in sales, primarily due to an 18% rise in prices, although volumes compressed by 9% [15] Market Data and Key Metrics Changes - Three of the five end markets experienced growth, particularly in energy and general industries, while automotive and heavy industries faced challenges [6][8] - The company noted a return to more normalized customer production activity and an acceleration in capital spending plans for 2026, indicating potential early stages of an industrial recovery [7] Company Strategy and Development Direction - The company is transitioning to a new strategy named RISE, focusing on efficiency, agility, and innovation to drive growth and value for stakeholders [24][27] - The 2030 targets include maintaining a high single-digit to low double-digit sales growth rate, with a focus on organic sales and strategic acquisitions [27][37] - The company aims to achieve a peak operating income margin of over 20% and expects to generate over $3.7 billion in cash flows from operations by 2030 [35][37] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the industrial sector recovery, driven by increased capital spending and improved customer confidence [17] - The company anticipates mid-single-digit sales growth for 2026, with expectations for volume growth to improve starting in the second quarter [18] - Management highlighted the importance of maintaining a neutral price-cost posture while targeting incremental operating income margins in the mid-20% range [19] Other Important Information - The company generated solid cash flows from operations, with a focus on disciplined capital allocation strategies, including investments in growth and returning capital to shareholders [35][36] - The effective tax rate for the quarter was reported at 21.2%, reflecting a special item tax expense related to recent legislative changes [12] Q&A Session Summary Question: Long-term dynamics regarding incremental margins - Management indicated that improvements in incremental margins will be driven by volume growth and enterprise initiatives, with benefits expected to flow steadily over the five-year period [40][42] Question: Expectations for organic growth and order trends - Management clarified that the mid-single-digit growth expectation is split 50/50 between price and volume, with confidence in order levels and backlog, particularly in automation [45][46] Question: Automation business expectations for 2026 - The automation business is expected to recover with a mid-single-digit growth trajectory based on order levels and backlog, with a focus on returning to non-dilutive margins [56][57] Question: Center-led functions and operational structure - Management explained that the shift to center-led functions aims to standardize processes while retaining local agility, enhancing efficiency across the organization [58][60] Question: Impact of metal inflation on pricing and margins - Management confirmed that pricing actions will be responsive to market conditions, with a mechanical pricing methodology in place to address metal cost inflation [62][66]

Summary of Smith & Nephew Capital Markets Day Company Overview - **Company**: Smith & Nephew (NYSE: SNN) - **Event**: 2025 Capital Markets Day held on December 11, 2025 - **Industry**: Medical Technology Key Messages and Strategies - **12-Point Plan**: Actions taken under this plan have strengthened the business significantly over the past three years, setting a foundation for future growth [2][3] - **New Strategy - RISE**: Aims to accelerate growth and improve returns, targeting 6%-7% organic growth and 9%-10% trading profit over the next three years [3][11] - **Financial Goals**: Expected to generate $1 billion in free cash flow by 2028 and achieve a 12%-13% Return on Invested Capital (ROIC) [3] Market Position and Growth Opportunities - **Total Addressable Market**: $50 billion, growing at approximately 6% [5] - **Sports Medicine Market**: $7 billion, with Smith & Nephew as the second-largest player [5] - **Wound Care Market**: $13 billion, also with a significant position in biologics and single-use negative pressure wound therapy [5][6] - **Orthopedics Market**: Smaller position but with differentiated technology for future growth [6] Product Innovations and Launches - **New Product Launches**: Over 75 new products introduced in the last five years, with more expected in the next 18 months [11][12] - **ALLEVYN Dressing**: Launched to prevent pressure injuries, showing a 94% effectiveness rate [16] - **PICO Device**: A single-use negative pressure wound therapy device that reduces surgical site complications by up to 63% [22][41] Operational Improvements - **Manufacturing Efficiency**: Closed five facilities to better match demand and improved operational efficiency at the Memphis site [8][10] - **Inventory Management**: Positive steps taken to align supply and demand, with further margin improvements anticipated [10] Leadership and Team Strength - **Executive Team**: Composed of industry leaders with extensive experience, positioned to drive the company's strategy forward [6][8] Financial Projections and Market Share Goals - **Patient Reach**: Targeting to increase the number of patients treated from 15 million to 20 million by 2028 [11] - **Market Leadership**: Aiming to transition from category leader to market leader in sports and wound care [13] Challenges and Areas for Improvement - **Product Gaps**: Some areas did not meet growth ambitions due to shifting market trends [9] - **Inventory Alignment**: Currently about a year behind in inventory reduction goals [10] Conclusion - Smith & Nephew is positioned for significant growth through its RISE strategy, innovative product offerings, and operational improvements, with a strong focus on enhancing patient outcomes and expanding market share in the medical technology sector [3][11][12]

Summary of Smith & Nephew Capital Markets Day 2025 Company Overview - **Company**: Smith & Nephew (NYSE: SNN) - **Industry**: Medical Technology - **Event**: Capital Markets Day 2025 - **Date**: December 08, 2025 Key Points and Arguments New Strategy: RISE - Smith & Nephew introduced a new strategy called RISE aimed at achieving 6%-7% organic growth and 9%-10% trading profit growth over the next three years [3][4][21] - The strategy focuses on reaching more patients, innovating to enhance care standards, scaling through strategic investments, and executing efficiently [22] Financial Targets - Expected free cash flow to reach $1 billion by 2028 [4][35] - Return on Invested Capital (ROIC) projected to improve to 12%-13% by 2028 [4][35] - Trading margin expanded from 17.3% in 2022 to at least 19.5% in 2025 [19] Market Position and Growth Potential - Addressable market exceeds $50 billion, growing at approximately 6% [7] - Smith & Nephew is the second-largest player in the global Sports Medicine market valued at $7 billion and the second-largest in the global wound market worth $13 billion [7][9] - The company has a diversified portfolio with over 50% of revenues from the U.S. and nearly a third from developed international markets [9] Product Innovations - Key products include REGENETEN for tendon repair, AGILI-C for cartilage repair, PICO for negative pressure wound therapy, and CORI for robot-assisted orthopedic surgery [25][26] - More than 75 product launches in the last five years, contributing significantly to revenue growth [39] Operational Improvements - Implementation of a 12-Point Plan to address operational inefficiencies, including closing five manufacturing facilities and improving inventory alignment [12][14] - Transition to a simpler business unit structure to enhance accountability and decision-making [15][16] Focus on Cash and Cost Management - Achieved an 8% reduction in central costs and initiated a $200 million savings program [17] - Aiming for gross cost benefits of $325-$375 million, with significant savings expected from manufacturing and procurement [18] Innovation and R&D - Continued investment in R&D, maintaining around 5% of revenue, with plans to increase investment in 2026 [38] - Focus on two key innovation platforms: MTEC (musculoskeletal technologies) and biologics, aimed at enhancing surgical outcomes and patient care [40][42] M&A Strategy - Strategic focus on high-returning, high-growth opportunities, with recent successful acquisitions like CartiHeal [29] - New leadership in corporate strategy to drive M&A efforts aligned with the company's strengths [29] Patient-Centric Approach - Emphasis on improving patient outcomes and experiences through innovative products and technologies [55] - Commitment to addressing unmet needs in healthcare, enhancing the quality of life for patients [56] Additional Important Insights - The company aims to increase patient reach from 15 million to 20 million by 2028 [23] - The sports medicine market is valued at $6.6 billion, with a focus on minimally invasive procedures and rapid recovery [57] - Smith & Nephew has a strong track record of innovation, with many products becoming industry standards [58] This summary encapsulates the key points discussed during the Smith & Nephew Capital Markets Day 2025, highlighting the company's strategic direction, financial targets, market position, product innovations, operational improvements, and commitment to patient care.