LONDON (dpa-AFX) - Smith & Nephew Plc (SNN), a medical technology company, on Monday said it remains on track to meet its 2025 performance targets as it outlined a new strategic plan, updated 2026 guidance, and long-term 2028 goals at its Capital Markets Day in London. The medical technology company said its new framework, called RISE, is designed to accelerate growth, expand margins and improve operational efficiency to strengthen shareholder returns.
Smith & Nephew said it expects around 5% underlying revenue growth in 2025 and has raised its free cash flow guidance to about $800 million, from earlier expectations of more than $600 million. It also anticipates post-tax return on invested capital (ROIC) of more than 9% for the year, excluding the impact of portfolio rationalisation.
The company set out its 2028 objectives, including 6-7% underlying revenue CAGR, 9-10% trading profit CAGR, more than $1 billion in free cash flow and a post-tax ROIC of 12-13%, well above its cost of capital.
Looking to 2026, Smith & Nephew issued provisional guidance for around 6% underlying revenue growth, profit growth ahead of sales as operating leverage improves, free cash flow of roughly $800 million and post-tax ROIC above 10%.
RISE builds on the company's 12-Point Plan introduced in 2022 and focuses on four priorities: reaching more patients through wider adoption of its portfolio; accelerating innovation; scaling through disciplined capital allocation to high-return opportunities; and executing more efficiently to lift productivity and margins.
The company added that, under its new operating model and ongoing portfolio rationalisation, it has identified additional opportunities to simplify its product range-an effort expected to reduce gross inventory by about $500 million and lead to a non-cash provision of roughly $200 million in 2025. Together with an expanded Life Cycle Management process, these changes are expected to create a simpler portfolio, make its offerings easier for customers to navigate, and strengthen its ability to drive growth, margins and capital returns.
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