2016 First Quarter Trading Report

Forward looking statements

This document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and trading margins, market trends and our product pipeline are forward-looking statements. Phrases such as "aim", "plan", "intend", "anticipate", "well-placed", "believe", "estimate", "expect", "target", "consider" and similar expressions are generally intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. For Smith & Nephew, these factors include: economic and financial conditions in the markets we serve, especially those affecting health care providers, payers and customers; price levels for established and innovative medical devices; developments in medical technology; regulatory approvals, reimbursement decisions or other government actions; product defects or recalls or other problems with quality management systems or failure to comply with related regulations; litigation relating to patent or other claims; legal compliance risks and related investigative, remedial or enforcement actions; disruption to our supply chain or operations or those of our suppliers; competition for qualified personnel; strategic actions, including acquisitions and dispositions, our success in performing due diligence, valuing and integrating acquired businesses; disruption that may result from transactions or other changes we make in our business plans or organisation to adapt to market developments; and numerous other matters that affect us or our markets, including those of a political, economic, business, competitive or reputational nature. Please refer to the documents that Smith & Nephew has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Smith & Nephew's most recent annual report on Form 20-F, for a discussion of certain of these factors. Any forward-looking statement is based on information available to Smith & Nephew as of the date of the statement. All written or oral forward-looking statements attributable to Smith & Nephew are qualified by this caution. Smith & Nephew does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in Smith & Nephew's expectations. 2

Chief Financial Officer

Julie Brown

4%

8%

-10% -5% 0% 5% 10%

Emerging

Est OUS

US

AWD

AWB

AWC

Hips

Knees

Arthroscopic Enabling Tech

Sports Medicine Joint Repair

Trauma & Extremities

Other Surgical

-4%

0%

4%

9%

19%

-7%

4%

11%

-10% 0% 10% 20%

Q1 revenue growth of 4% underlying

4

Geographical growth Product franchise growth Revenue split

Underlying change (%) Underlying change (%)

Note: ‘Est OUS’ is Australia, Canada, Europe, Japan and New Zealand

11% -6%

Chief Commercial Officer

Mike Frazzette

Sports Medicine, Trauma & OSB

• Q1 Revenue performance

‐ Sports Medicine Joint Repair +11% ($141m)

‐ Arthroscopic Enabling Technologies (AET) +4% ($156m)

‐ Trauma & Extremities -7% ($114m)

‐ Other Surgical Businesses* +19% ($57m)

• Commentary

‐ shoulder portfolio and product launches drive strong growth in Joint Repair

‐ Trauma & Extremities growth of +8% in US offset by China and weakness in oil-dependent Gulf States

‐ continued strong growth in ENT

6

* ‘Other Surgical Businesses’ includes ENT, Gynaecology and robotics sales (excluding implant sales)

FIRSTPASS◊ Suture Passer

• Q1 Revenue performance

‐ Knees: global +9%*, US +10%*, OUS +8%* ($234m)

‐ Hips: global +4%, US +6%, OUS +2% ($153m)

• Commentary

‐ continued good growth in global Knees

‐ sales synergies from ZUK◊ acquisition

‐ robust growth in Emerging Markets

Reconstruction

7 * Excludes the effect of ZUK product acquisition

REDAPT◊ Revision Acetabular Fully Porous Cup with CONCELOC◊ Technology

Advanced Wound Management

• Q1 Revenue performance

‐ Advanced Wound Care +0% ($171m)

‐ Advanced Wound Bioactives -4% ($72m)

‐ Advanced Wound Devices +11% ($39m)

• Commentary

‐ sustained improvement in US AWC trend, offset by China

‐ weak first quarter in AWB as expected

‐ PICO drives growth and account conversions in AWD

8

ALLEVYN◊ Life Foam Dressings

Chief Financial Officer

Julie Brown

Summary and guidance

• Q1 continues positive trends of 2015

‐ sustained good performance in franchises and regions

‐ smooth integration of acquisitions

‐ market challenges in China and Gulf region

• Outlook

‐ translational foreign exchange impact slightly improved to 0% to -1%

‐ full year guidance unchanged

10

Questions

Appendices

2016 Technical guidance (unchanged)

13

Guidance Full year

Restructuring costs c. $50m

Acquisition and integration costs c. $10m

Amortisation of acquisition intangibles c. $140m

Income from associates Slightly negative

Interest payable(1) ~ 3%

Other finance costs c. $10m

Tax rate on Trading result 26.5% or slightly lower

(1) Long term borrowings were $1,434m at the end of 2015, pre Blue Belt.

Q1 2016(1)

Revenue growth reconciliation

(1) Q1 2016 comprises 64 trading days (2015 – 61 trading days) (2) Constant exchange rates (3) Based on FX rates on 29 April 2016

Growth %

Underlying

Acquisitions

CER(2)

Currency

Reported

4%

2%

6%

-3%

3%

14

FX guidance(3)

Translational effect on revenue growth: Full year impact of 0% to -1% Q2 impact of 0% to -1%

Franchise revenue analysis

15 All revenue growth rates are on an underlying basis * ‘Other Surgical Businesses’ includes ENT, Gynaecology and robotics sales (excluding implant sales)

2015 2016

Q1 Q2 Q3 Q4 Full Year

Q1

Growth Growth Growth Growth Growth Revenue Growth

% % % % % $m %

Sports Medicine, Trauma & OSB

5 4 2 5 4 468 5

Sports Medicine Joint Repair 9 7 4 9 7 141 11

Arthroscopic Enabling Technologies

(2) 1 (2) 3 - 156 4

Trauma & Extremities 5 2 2 - 2 114 (7)

Other Surgical Businesses* 11 7 10 13 10 57 19

Reconstruction 1 4 3 4 3 387 7

Knee Implants 2 7 6 6 5 234 9

Hip Implants (1) 1 (2) 1 - 153 4

Advanced Wound Management 1 7 6 8 6 282 -

Advanced Wound Care 9 12 6 4 8 171 -

Advanced Wound Bioactives 5 6 2 16 7 72 (4)

Advanced Wound Devices (27) (9) 17 14 (3) 39 11

Group 3 5 4 5 4 1,137 4

Reclassification of Patient Positioning products

2015

Q1 Q2 Q3 Q4 Full Year

Previous reporting

Restated Previous reporting

Restated Previous reporting

Restated Previous reporting

Restated Previous reporting

Restated

$m $m $m $m $m $m $m $m $m $m

Sports Medicine Joint Repair 144 131 150 135 143 130 169 152 606 548

Arthroscopic Enabling Technologies

140 153 142 157 132 145 159 176 573 631

16

Certain patient positioning products formerly included in the Sports Medicine Joint Repair franchise have been reclassified to the Arthroscopic Enabling Technologies franchise. This is in line with changes to global marketing and product development, which have been aligned to our global franchises.

The comparative impact on each franchise is shown in the table below.

Regional revenue analysis

17

‘Other Established Markets’ is Australia, Canada, Europe, Japan and New Zealand. All revenue growth rates are on an underlying basis

2015 2016

Q1 Q2 Q3 Q4 Full Year

Q1

Growth Growth Growth Growth Growth Revenue Growth

% % % % % $m %

Geographic regions

US 1 4 4 9 5 563 8

Other Established Markets (2) 3 1 2 1 421 4

Established Markets - 3 3 6 3 984 6

Emerging Markets 22 14 8 2 11 153 (6)

Group 3 5 4 5 4 1,137 4

Business days per quarter

18

Q1 Q2 Q3 Q4 Full Year

2015 61 63 63 64 251

2016 64 64 63 60 251

Year-on-year differences in the number of trading days typically impacts our surgical businesses in the Established Markets more than our wholesaler and distributor-supported businesses.

Exchange rates

19

Q1/15 FY/15 Q1/16

$:€

Period end 1.09 1.09 1.14

Average 1.13 1.11 1.10

$:£

Period end 1.49 1.48 1.42

Average 1.51 1.53 1.43