EX-99.3 4 dex993.txt ANALYST PRESENTATION Exhibit 99.3 Smith & Nephew First Choice in Medical Devices Chris O'Donnell Chief Executive 2 Smith & Nephew - maintaining momentum . Well positioned in sustainable markets . Three main businesses performing strongly . Orthopaedics . Endoscopy . Wound Management . Accelerating sales & profit growth . underlying sales growth up to 13% . ongoing profit growth 19% . 15% EPS growth before 4% restructuring dilution . 15% sales team expansion contributing to performance . Continued investment in new products 3
Trading results 2000 2001 (pound)m (pound)m Group Sales - ongoing 835 1013 +21% - divested/discontinued 300 69 ----------- ----------- (pound)1135 (pound)1082 ----------- ----------- Operating profit - ongoing 144 171 +19% - divested/discontinued 35 4 ----------- ----------- (pound)179 (pound)175 - Joint Venture - 13 Interest (7) (17) ----------- ----------- Profit before taxation (pound)172 (pound)171 ----------- ----------- Ordinary taxation (FRS 19 basis) 31% 31% EPS before exceptionals 11.52p 12.83p +11% Dividend 4.5p 4.65p Exceptional gains (net) (pound)93m (pound)23m
4 Sales growth
Underlying Acquisitions Currency Reported % % % % Orthopaedics 18 - 3 21 Endoscopy 11 3 3 17 Advanced Wound Management 11 18 - 29 Rehabilitation 6 - 4 10 -- -- -- -- Ongoing 13 6 2 21 == == == ==
5 Smith & Nephew - maintaining momentum . Market growth increasing particularly orthopaedics and advanced wound management . Strong product/technology platform for growth . Key businesses performing strongly . Future growth secured by investment in sales forces and new products . Successful acquisitions strategy to continue . ORATEC brings technology and market leadership in RF 6 Larry Papasan President Smith & Nephew Orthopaedics 7 Highlights of 2001 Performance . Fastest-growing orthopaedic implant company - third straight year . Grew sales at nearly twice the rate of an accelerated market . Gained market share in all core segments . Revitalized core Trauma business . Continued margin improvement [Graphic] 8 2001 Global Orthopaedic Market Competitor Analysis S&N Served Markets [Pie Chart] Stryker 19% DePuy 19% Zimmer 14% Biomet 11% Synthes 9% Smith & Nephew 8% Sulzer 7% Other 13% 9 Served Market Growth Compared to Competition (Excluding Spine) Overall Market Growth 10% [Bar Chart] Sulzer 0.5% Depuy 11.3% Stryker 12.5% Biomet 14.6% Synthes 15.6% Zimmer 17.5% S&N 18% Full-year adjusted for spine. 10 Growth Market Drivers . Demographics and aging population . Quality of life expectations . New, longer-lasting materials and technologies . Less-invasive procedures . Better informed patients [Graphic] 11 Maintaining momentum . Drive core hips, knees and trauma . Develop high-growth segments . Introduce less-invasive, more efficient procedures . Pursue transformational technologies (CAS, Oxinium) . Leverage growth to enhance margins . Continue operational excellence [Graphic] 12 2002 Product Rollout Plans 13 Knees . New Products . PS Gen II Oxinium . Macrotextured Profix Oxinium . Accuris unicompartmental knee system Market Growth: +12% S&N 2001 Growth: +26% Market Share Gain: [Graphic] 14 Hips . New Products . Synergy HA/Porous . CPCS . Continued XLPE . Reflection Roughcoat . Image Porous Market Growth: +8% S&N 2001 Growth: +20% Market Share Gain: +1/2% [Graphic] 15 Trauma . New Products . JAX bone graft substitute . Trigen TAN . JetX External Fixator . OrthoGuard AB Market Growth: + 9% S&N Sales Growth: +12% Market Share Gain: +1/2% [Graphic] 16 Clinical Therapies . Supartz joint fluid therapy J-code reimbursement approval . New Products: . Exogen 2000+ non-invasive ultrasound therapy . Exogen 3000 . Dedicated clinical sales team [Graphic] 17 Strong Future Prospects . Within an accelerating market, Smith & Nephew continues to expand sales team by 10%+ per year . Strong product portfolio in core hip, knee and trauma segments . Strong performance in high margin clinical therapies segments such as HA and bone stimulation . New technology acceptance 18 Ron Sparks President Smith & Nephew Endoscopy 19 2001 Review . 14% sales growth . Increased arthroscopic repair business by 30% - new market leader . New products contributed 15% of total sales - twice as much as 2000 . Continued acceptance of TriVex - $8 million current run-rate . Double-digit share in arthroscopic shoulder repair . Endoscopic sales, excluding arthroscopy, tripled between 1998-2001 [Graphic] 20 Future Paradigm of Technologies [Graphic] Integration - Miniaturization - Repair - Wireless - Radiofrequency 21 Focus 2002 . Improving Endoscopy Market Position . ORATEC acquisition . Increased revenue from new techniques . Digital OR - breaking new ground . Expanding leadership in resection . Innovation leadership in repair 22 ORATEC . RF focus arthroscopic and spine segments . Sales of $48 million in 2001 . Products leverage unique advantage in temperature control and feedback . Strong IP . Innovator in tissue shrinkage applications [Pie Chart] 2001 Global Arthroscopy RF Market $122M Arthrocare 52% $63M ORATEC 22% $27M Mitek 25% $30M Other 2% $2M [Graphic] 23 Minimally Invasive Spine . One of the fastest growing specialties in the endoscopic market . SpineCATH/TM/IntraDiscal ElectroThermal Therapy (IDET/TM/) . Controlled heat to modify tissue in the disc wall . Direct spine sales force . Clinical studies to drive reimbursement ORA-50 ElectroThermal Spine Generator SpineCATH/R/ Catheter ORAflex/TM/ probe with deflectable tip [Graphic] 24 Acquisition Synergies Technology - One of the broadest RF technology portfolios in the world Sales - Global endoscopy market coverage and capabilities Operations - Industry leading cost, quality and service New Techniques - Expanded offering in rapidly growing procedure segments [graphic] 25 Technology Synergy Broader Technology Portfolio ---------------------------- [graphic} Monopolar Bipolar Electromechanical RF Coagulation Shrinkage Ablation Temperature Control Generators Probes &Tips Design RF Catheters for Spine Suction Foot Control Hand Control Voice Control Central Control Competitive Position -------------------- . Only company to offer RF cutting, ablation, shrinkage and mechanical resection combined in bipolar format . Only company providing temperature control with feedback . Broad generator knowledge base . #1 position in minimally invasive spine procedures . Complete line of arthroscopic tips . Able to transfer Catheter capability to new techniques / specialties . Opportunity to be 1st to market with RF Central & Voice Control 26 Contribution of New Products to Total Revenue [Bar Chart] % of total revenue ------------------ 2000 8% 2001 15% 2002 20% Note: New products launched within last three years 27 Digital OR . An integrated and fully functional operating room suite that will enable hospitals and surgical centers to maximize performance through innovative medical technologies . Centralized and voice control - alliance with Computer Motion . Information and Image Management Solutions . Digital Video (DV) and multi-media network applications . Mounting solutions . Endoscopic equipment. [Graphic] 28 Image Management Solutions Dyonics(R) Vision 635 Digital OR capture system . First to market with broadcast quality mpeg2 video and DICOM compatible images . Key element of electronic patient records . Launched 4th quarter 2001 . $50 million market by 2004 . Project $2.5 million for 2002 [Graphic] 29 Digital Video Output Camera Dyonics(R) Vision 325Z DV Camera System with Digital Output . First high-performance endoscopic camera with digital output for the global market . Provides for direct downloading of endoscopic images to most computer and network systems . Launched 2001 . Superior image quality . Real-time video output . Nearly $2 million in sales in 2001. Projected $4 million in 2002 . PAL version to launch Q1 2002 [graphic] 30 Autoclavable Camera System Dyonics(R) Vision 337 Autoclavable Camera System . Designed to be the most reliable 3-chip autoclavable camera in the market . Launch Q1 2002 . Target market size >$150 million . Project $10 million in revenue by end 2002 [Graphic] 31 ElectroMechanical Resection Dyonics(R) Series 9000 Resector . Combines bipolar RF with traditional blade technology to provide simultaneous mechanical resection with coagulation . Resects smooth tissue . Direct connect to standard electrosurgical generators . Creates new market - $50 million by 2005 . Launch Q1, 2002 . Project $2.6 million in sales by end 2002 [Graphic] 32 Innovation Leadership in Repair TwinFix/TM/ for the Shoulder . TwinFix/TM/ AB 5.0 . Quick T 5.0 . TwinFix AB - bioabsorbables have become the preferred choice of physicians . Quick T provides world's first knotless anchoring for the shoulder . Q2 2002 launch dates for both . Collective target markets of $50 million . Project collective $2 million in revenue by end 2002. [Graphic] 33 2002 Objectives . Continue sales growth momentum . Integrate ORATEC arthroscopy sales - Vulcan(TM) . Enter minimally invasive spine - IDET(TM) . Combine R&D skill base Endoscopy/ORATEC . Global roll-out of ORATEC RF products . Roll-out Digital OR technology 34 Smith & Nephew First Choice in Medical Devices