Smith & Nephew (NYSE:SNN) 2025 Capital Markets Day Transcript

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]