Smith & Nephew boosts guidance as it unveils new strategy
By Abigail Townsend
Date: Monday 08 Dec 2025
(Sharecast News) - Medical devices group Smith & Nephew unveiled plans to downsize its portfolio on Monday, as it boosted full-year guidance.
Updating shareholders ahead of a capital markets day in London, S&N unveiled its latest strategy, dubbed Rise, which it said would boost both its financial and operational performance as well as improving shareholder returns.
As part of the strategy, the blue chip will now embark on plans to "simplify" its product range.
"This will reduce the need for inventory and capital employed in the business, provide a simpler and more efficient offer to our customers and will also allow us to focus on migrating them to our latest technology products," the group explained.
Long-term, the rationalisation is forecast to reduce gross inventory by around $500m and lead to a "significant" reduction in capital requirements.
S&N will take a non-cash provision in the 2025 accounts of $200m as a result of the portfolio shake-up.
However, it reiterated its full-year outlook, despite the provision.
The group is forecasting revenue growth of around 5%, with a full-year trading profit margin of at least 19.5%, in the middle of its forecast range of between 19% and 20%.
Free cash flow is anticipated to come in at $800m, up from original guidance of $600m, on the back of good working capital discipline.
Looking further ahead, underlying revenue growth for 2026 was forecast to be around 6%, with profit growth ahead of that.
Longer-term targets included an underlying compound annual growth rate (CAGR) of between 6% and 7%, trading profit CAGR of between 9% and 10%, and more than $1bn in free cash flow in 2028.
Deepak Nath, chief executive, called Rise an "ambitious but achievable new chapter".
He continued: "Over the next three years, every business unit will contribute uniquely to our value creation.
"Sports medicine, advanced would management and ENT will drive above-market growth, through innovation and disciplined execution, while orthopaedics - operating in a more mature segment - will return to delivering market-level growth."
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