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Smith Nephew Second Quarter and First Half 2020 ResultsGroup well-positioned as markets recover29 July 2020Smith Nephew (LSE:SN, NYSE:SNN), the global medical technology business, reportsresults for the second quarter and first half ended 27 June 2020:Second Quarter Results1RevenueHalf Year Results1RevenueOperating/trading (loss)/profitOperating/trading (loss)/profitmargin (%)Cash generated fromoperations/trading cash flowEPS/ EPSA (cents)27 June2020 mReported29 June2019 mReportedgrowth%27 June2020 mTrading229 June2019 .412511.554335.32513.440545.8Highlights1,2 Trading in line with 1 July update as business was impacted by government-ledrestrictions to control COVID-19Performance improved across Q2 as elective surgeries restarted, with underlyingrevenue declines of c. -47% in April, -27% in May, and -12% in Juneo By quarter-end, elective procedures had resumed across the US and in mostEuropean countrieso China returned to growth for the second quarterOperating and trading profit margin lower year-on-year, in line with previousannouncementso COVID-impact reflected in lower gross margins including from increase inprovisions and factory underutilisation, and negative leverage from fixedSG&A costso Discretionary cost saving measures of approximately 150 million deliveredin the first half, out of programme to deliver up to 200 million in 2020Recently launched products performing strongly, including OR3O Dual Mobility HipSystem and EVOS in TraumaInvestment in R&D maintained, with significant new product introductions includingnew robotics platformInterim dividend of 14.4 in line with prior yearStrong balance sheet and good liquidity, with net debt (excluding lease liabilities)of 2.1 billion versus 3.4 billion of committed facilities2020 guidance remains withdrawn due to continuing uncertainty regarding impactof COVID-19

Roland Diggelmann, Chief Executive Officer, said:“I am proud of the way all at Smith Nephew have managed the pressure of theCOVID-19 crisis. We have continued to serve our customers throughout, and wereready as lockdown restrictions eased, delivering an improving performance across thesecond quarter.“At the same time, we have taken measures to ensure the Group emerges from thiscrisis as strongly as possible. These include maintaining our R&D investment,launching new products, protecting jobs, and managing our cost base.“There remain many uncertainties as countries continue to battle COVID-19, but withour unique portfolio, proven strategy, strong balance sheet and motivated workforcewe are ready to take advantage as markets recover.”Analyst conference callAn analyst conference call to discuss Smith Nephew’s second quarter and first half results will be held at 8.30am BST/ 3.30am EST on 29 July 2020, details of which can be found on the Smith Nephew website at orsAndrew SwiftSmith Nephew 44 (0) 1923 477433MediaCharles ReynoldsSmith Nephew 44 (0) 1923 477314Susan Gilchrist / Ayesha BharmalBrunswick 44 (0) 20 7404 5959Notes1.Unless otherwise specified as ‘reported’ all revenue growth throughout this document is ‘underlying’ afteradjusting for the effects of currency translation and including the comparative impact of acquisitions andexcluding disposals. All percentages compare to the equivalent 2019 period.‘Underlying revenue growth’ reconciles to reported revenue growth, the most directly comparable financialmeasure calculated in accordance with IFRS, by making two adjustments, the ‘constant currency exchange effect’and the ‘acquisitions and disposals effect’, described below. See Other Information on pages 31 to 34 for areconciliation of underlying revenue growth to reported revenue growth.The ‘constant currency exchange effect’ is a measure of the increase/decrease in revenue resulting from currencymovements on non-US Dollar sales and is measured as the difference between: 1) the increase/decrease in thecurrent year revenue translated into US Dollars at the current year average exchange rate and the prior revenuetranslated at the prior year rate; and 2) the increase/decrease being measured by translating current and prioryear revenues into US Dollars using the prior year closing rate.The ‘acquisitions and disposals effect’ is the measure of the impact on revenue from newly acquired materialbusiness combinations and recent material business disposals. This is calculated by comparing the current year,constant currency actual revenue (which includes acquisitions and excludes disposals from the relevant date ofcompletion) with prior year, constant currency actual revenue, adjusted to include the results of acquisitions andexclude disposals for the commensurate period in the prior year. These sales are separately tracked in theGroup’s internal reporting systems and are readily identifiable.2.Certain items included in ‘trading results’, such as trading profit, trading profit margin, tax rate on tradingresults, trading cash flow, trading profit to cash conversion ratio, EPSA and underlying growth are non-IFRSfinancial measures. The non-IFRS financial measures reported in this announcement are explained in OtherInformation on pages 31 to 34 and are reconciled to the most directly comparable financial measure prepared inaccordance with IFRS. Reported results represent IFRS financial measures as shown in the CondensedConsolidated Interim Financial Statements.2

Smith Nephew Second Quarter Trading and First Half 2020 ResultsSecond Quarter 2020 Trading UpdateOur second quarter revenue was 901 million (2019: 1,283 million). On a reportedbasis revenue declined -29.8%, including a 100bps benefit from acquisitions and-150bps foreign exchange headwind. On an underlying basis revenue was down-29.3%, in line with our announcement of 1 July 2020, as COVID-19 impacted ourmajor markets.Q2 2020 comprised 63 trading days, in line with Q2 2019.Second Quarter Consolidated Revenue AnalysisConsolidated revenue by franchiseOrthopaedicsKnee ImplantsHip ImplantsOther Reconstruction(iii)Trauma27 June202029 sitions/disposalsCurrencyimpact m 1.2-1.5-1.7Sports Medicine & ENTSports Medicine Joint RepairArthroscopic Enabling TechnologiesENT (Ear, Nose and 3.3-32.0-32.1-44.0--1.5-1.6-1.7-0.9Advanced Wound ManagementAdvanced Wound CareAdvanced Wound BioactivesAdvanced Wound 011,283-29.8-29.31.0-1.5Consolidated revenue bygeographyUSOther Established Markets(iv)Total Established MarketsEmerging .60.91.31.0-1.5-0.6-5.2-1.5(i)Included within the Q2 2019 analysis is a reclassification of 3 million of revenue formerly included in theAdvanced Wound Care franchise which is now included in the Advanced Wound Bioactives franchise in orderto present consistent analysis to the Q2 2020 results. There has been no change in total revenue for thequarter ended 29 June 2019(ii) Underlying growth is defined in Note 1 on page 2(iii) Other Reconstruction includes robotics capital sales, the joint reconstruction business acquired from Brainlaband cement(iv) Other Established Markets are Europe, Canada, Japan, Australia and New Zealand3

Overview of the second quarterPerformance improved across the quarter, with underlying revenue declines ofapproximately -47% in April, -27% in May, and -12% in June. Performance correlatedstrongly with the easing of lockdown restrictions as we stepped back up to servecustomers as elective surgeries resumed across our markets.Geographically, by the quarter-end elective procedures had resumed across the USand in most European countries. Overall our Established Markets declined -31.4%(-31.1% reported) in the second quarter, with the US down -31.8% (-30.7%reported) and Other Established Markets down -30.8% (-31.7% reported).China, the first market impacted by COVID-19, returned to growth for the quarter.Overall, Emerging Markets revenue was down -20.2% (-24.1% reported).By franchise, the impact of the COVID-19 pandemic was most pronounced on ourOrthopaedic Reconstruction, Sports Medicine and ENT businesses, driven by lowerlevels of elective surgery. Our Advanced Wound Management and Trauma businesseswere more resilient.OrthopaedicsRevenue declined -34.0% (-34.1% reported) in our Orthopaedics franchise in thesecond quarter. Within this, Knee Implants was down -46.9% (-47.8% reported)and Hip Implants down -26.9% (-28.1% reported). We saw a good performancefrom our recently launched OR3O Dual Mobility Hip System, and are now starting tomake this system available outside of the US. Other Reconstruction revenue wasdown -51.5% (-23.9% reported) as non-COVID-related capital investment was placedon hold in many healthcare facilities. The reported decline included the benefit ofacquisitions. Trauma, which is less exposed to elective surgery, experienced an-11.1% decline in revenue (-12.8% reported), with the EVOS System generatingdouble–digit growth.Sports Medicine & ENTRevenue from our Sports Medicine & ENT franchise was down -33.3% (-34.8%reported) in the quarter as procedures were deferred, with Sports Medicine JointRepair -32.0% (-33.6% reported), Arthroscopic Enabling Technologies-32.1% (-33.8% reported) and ENT -44.0% (-44.9% reported). During the quarterwe signed an agreement with Fiagon, a technology leader in electromagnetic surgicalnavigation solutions, to distribute its ENT portfolio in the Asia Pacific region.Advanced Wound ManagementRevenue from our Advanced Wound Management franchise declined -17.6%(-17.6% reported) driven in part by the deferral of elective surgery, but also by thetemporary closures of wound clinics and falling numbers in long term care facilities asthey closed to new residents during the crisis. Advanced Wound Care declined by-14.6% (-17.2% reported), Advanced Wound Bioactives by -18.7% (-13.9%reported) and Advanced Wound Devices by -23.7% (-25.8% reported).4

First Half 2020 Consolidated AnalysisSmith Nephew results for the first half ended 27 June 2020:RevenueOperating (loss)/profitAcquisition and disposal related itemsRestructuring and rationalisation costsAmortisation and impairment of acquisition intangiblesLegal and otherTrading profit(i)Earnings per share ('EPS')Acquisition and disposal related itemsRestructuring and rationalisation costsAmortisation and impairment of acquisition intangiblesLegal and otherUK tax litigationAdjusted Earnings per share ('EPSA')(i)(i)Half year2020 mHalf year2019 m -18.1-101-68-67-71See Other Information on pages 31 to 34First Half 2020 AnalysisOur first half revenue was 2,035 million (H1 2019: 2,485 million), down 18.1% ona reported growth basis including a foreign exchange headwind of 140bps and 200bpsbenefit from acquisitions. Revenue was down 18.7% on an underlying basis.The Group reported an operating loss of - 5 million (H1 2019: operating profit of 419 million) after restructuring and rationalisation costs, as well as acquisition anddisposal related items, amortisation of acquisition intangibles and legal and otheritems incurred in the first half (see Other Information on pages 31 to 34).Trading profit was 172 million in the first half (H1 2019: 532 million). The tradingprofit margin, at 8.5% (H1 2019: 21.4%), was down significantly year-on year aspreviously guided.The trading profit margin reflected a number of COVID-related factors, includingnegative leverage effect from the fixed components of our cost base and the impact ofreduced production volumes, as well as additional charges of approximately 50million to provisions for inventory excess and obsolescence and trade receivables (seeNote 1 to the Interim Financial Statements).These factors were partially offset by approximately 150 million of discretionary costsaving measures achieved in the first half, from our programme to realise up to 200million of savings in 2020 to offset the impact of COVID-19.The Accelerating Performance and Execution (APEX) programme and the Operationsand Commercial Excellence programme incurred restructuring costs of 56 million in5

the first half, with incremental benefits recognised of around 20 million compared toH1 2019.Each of the three global franchises contributed to the 2020 trading profit (see Note 2to the Interim Financial Statements).Cash generated from operations was 125 million (H1 2019: 543 million) and tradingcash flow was 25 million (H1 2019: 405 million) (see Other Information on pages31 to 34 for a reconciliation between cash generated from operations and trading cashflow). The trading profit to cash conversion ratio was 14% (H1 2019: 76%). Wecontinued to invest in capital expenditure as we improve our manufacturing site base.The working capital outflow of 153 million includes higher inventory, partially offsetby lower growth in receivables due to the decline in revenue in the period.The net interest charge within reported results was 21 million (H1 2019: 25 million)including 3 million from the application of IFRS 16 Leases (H1 2019: 2 million).Our reported tax for the period ended 27 June 2020 was a credit of 134 million (H12019 reported tax charge: 74 million) predominantly due to the successful outcomeof a legal tax case in the UK. The tax rate on trading results for the period ended 27June 2020 was 17.0% (H1 2019: 19.7%) (see Note 3 to the Interim FinancialStatements and Other Information on pages 31 to 34 for further details on taxation).Basic earnings per share (‘EPS’) was 11.5 (23.0 pe