Smith & Nephew (SN) Q1 2026 TU earnings summary

Executive summary

• Q1 2026 revenue grew 3.1% underlying (4.7% adjusted daily) and 6.6% reported, with strong performance in Sports Medicine and resilient Advanced Wound Management, offsetting softness in US knees.

• Over half of growth was driven by innovation and products launched in the last five years, including CATALYSTEM, AETOS, Q-FIX, REGENETEN, CARTIHEAL AGILI-C, FASTSEAL, OASIS, and LEAF.

• Announced a $500 million share buyback, fully funded by free cash flow and cash balances, to be completed over 12 months.

• Leadership transition in Orthopaedics with Nathan Folkert appointed as President.

• The RISE strategy is progressing, supported by new clinical data, product launches, and the acquisition of Integrity Orthopaedics.

Financial highlights

• Q1 2026 revenue: $1,501 million (+3.1% underlying, +6.6% reported), with a 350bps FX tailwind.

• Sports Medicine & ENT revenue: $491 million (+6.7% underlying, +10.4% reported); Advanced Wound Management: $411 million (+2.2% underlying, +6.6% reported); Orthopaedics: $599 million (+0.8% underlying, +3.7% reported).

• U.S. revenue grew 2.1%, other established markets 1%, emerging markets 10.5% underlying (16.0% reported).

• Advanced wound care up 4.9%, bioactives down 1.7% due to U.S. reimbursement headwinds.

• Trading profit guidance impact from U.S. skin substitutes expected at $20–40 million for the year.

Outlook and guidance

• Full-year 2026 guidance unchanged: ~6% underlying revenue growth, ~8% trading profit growth, ~$1.3 billion trading profit, ~$800 million free cash flow, and ROIC above 10%.

• Revenue and profit growth expected to be stronger in the second half, driven by product launches, stabilization in skin substitutes, improving US knees, and an extra trading day in Q4.

• China expected to be neutral to growth for the first time since 2021.

• $500 million share buyback to be completed over the next 12 months.