SNN · Smith & Nephew plc

Smith & Nephew's first quarter performance aligns with management's expectations, showcasing portfolio resilience as strong growth in Sports Medicine & ENT (up 6.7% underlying) and solid performance in Advanced Wound Management (up 2.2%) offset a significant decline in US Knee Implants (down 10.3% underlying). The Sports Medicine division has become the company's largest business unit, surpassing Orthopaedic Reconstruction and Robotics, driven by double-digit growth in key platforms like REGENETEN and Q-FIX. The decline in US Knee Implants was anticipated and attributed to deliberate strategic trade-offs aimed at optimizing the customer base and asset efficiency ahead of the launch of the new LANDMARK Knee System, expected to bolster competitiveness, particularly with a cementless version launching in Q3 2026. The company continues to execute its RISE strategy, highlighted by the acquisition of Integrity Orthopaedics and expansion of the CATALYSTEM Hip System into Japan. Management affirmed full-year 2026 guidance, projecting around 6% underlying revenue growth and approximately $800 million in free cash flow, with performance weighted towards the second half due to product launches and seasonal factors. The announcement of a new $500 million share buyback program underscores confidence in the balance sheet and future cash generation, complementing ordinary dividends to target over $835 million in total shareholder returns over the next twelve months.