Smith & Nephew Reports H1 2026 Profit Growth Amid Softer Revenue

The Tip Desk · August 4, 2026 · 1 min read

Trading profit rose 8.1% to $566 million as efficiency savings and tariff refunds offset softer revenue growth and acquisition dilution.

Smith & Nephew Plc reported first-half 2026 revenue of $3,097 million, representing underlying growth of 2.3% and reported growth of 4.6%, the latter aided by a 230bps foreign exchange tailwind [1, 4]. On an average daily sales (ADS) basis, underlying revenue growth was 3.1% [1, 4]. For the second quarter, revenue reached $1,597 million, with underlying growth of 1.6% [4, 10].

Profitability increased during the period, with reported operating profit rising 4.3% to $448 million [1, 4]. Trading profit grew 8.1% on a reported basis to $566 million, despite 90bps dilution from the acquisition of Integrity Orthopaedics [1, 4]. The trading profit margin increased 60bps to 18.3%. Gross profit rose 5.0% to $2,196 million, with the gross profit margin increasing 30bps to 70.9%.

Earnings per share (EPS) grew 6.2% to 35.6¢, while adjusted EPS (EPSA) increased 11.0% to 47.7¢ [4, 10]. Free cash flow for the first half was $231 million, which is $13 million lower than H1 2025 [4, 10]. This decrease included a $51 million increase in capex for IT upgrades and the construction of a new UK Wound factory.

The company realized $130 million in efficiency savings in the first half, including $50 million from zero-based budgeting (ZBB) and 12-Point Plan activities. Cumulative savings from these initiatives have reached $330 million against a 2024 target of $325 million to $375 million by 2027.

Smith & Nephew stated it is on track to meet its guidance for free cash flow, ROIC, and trading profit. The company previously established 2028 financial targets under its RISE strategy, including a 9-10% trading profit CAGR and a 6-7% organic revenue CAGR.