Smith & Nephew FY20 Results Down, Maintains Dividend; Sees Growth In FY21 Margin, Underlying Revenue

Medical technology business Smith+Nephew Plc (SN.L,SNN) reported Thursday that its fiscal 2020 profit before taxation declined to $246 million from last year’s $743 million.

Earnings per share were 51.2 cents, down from 68.4 cents last year. Adjusted earnings per share were 64.6 cents, compared to 102.2 cents a year ago.

Trading profit declined 42 percent to $683 million from prior year’s $1.17 billion.

Trading profit margin was 15.0 percent, down from 22.8 percent last year, reflecting lower gross margins, negative leverage from SG&A costs and increased R&D investment.

Full- year revenue was $4.56 billion, down 11.2 percent from last year’s $5.14 billion. Underlying revenue dropped 12.1 percent.

In the fourth quarter, revenue was $1.33 billion, down 5.8 percent from last year’s $1.41 billion. Underlying revenues declined 7.1 percent as new COVID-19 restrictions impacted elective surgeries in many markets

Further, the company announced full -year 2020 dividend distribution of 37.5 cents per share, unchanged from 2019, reflecting confidence in the business and strength of the balance sheet.

Looking ahead, Smith & Nephew expects an improved profit margin performance in 2021 over the prior year. In terms of revenue, the company projects to deliver substantial underlying growth.

The company said its outlook reflects the likely continuation of COVID-19 impact during the first half of 2021 and the uncertainty regarding the timing and pace of recovery

Roland Diggelmann, Chief Executive Officer, said, “We start 2021 with three clear priorities: to return to top-line growth and recapture momentum; to drive further operational improvement; and to continue to respond effectively to COVID-19.”

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