Smith & Nephew PLC reported a strong finish to 2025, with profits and cash flow rising as it completed its three-year turnaround plan and set out ambitions for faster growth.
Fourth quarter revenue rose 8.3% to $1.7 billion, or 6.2% on an underlying basis, meaning full-year revenue increased 6.1% to $6.2 billion, with underlying growth of 5.3%.
Operating profit climbed 20.7% to $794 million and trading profit rose 15.5% to $1.2 billion, with trading margins rising to 19.7% from 18.1%.
With free cash flow increasing 52.5% to $840 million, the full year dividend was lifted 4.3% to 39.1 cents per share, and a $500 million share buyback was completed in the second half.
Chief executive Deepak Nath said: “I am pleased that a strong fourth quarter helped us meet or exceed our 2025 targets for revenue growth, profitability and cash generation.”
He said completion of the previous strategy had “successfully transformed Smith+Nephew into a fundamentally stronger business” and that its new RISE strategy unveiled in December marked “an ambitious and achievable next phase of growth”.
For the 2026 financial year, the group expects underlying revenue growth of around 6%, organic trading profit growth of around 8% and free cash flow of around $800 million.
Since providing provisional guidance, the acquisition of Integrity Orthopaedics has been completed, which is expected to be marginally dilutive to trading profit this year, broadly neutral in 2027 and accretive in 2028, meaning trading profit is now expected to be around $1.3 billion.