SMITH & NEPHEW PLC | CIK:0000845982 | 3

  • Filed: 3/5/2018
  • Entity registrant name: SMITH & NEPHEW PLC (CIK: 0000845982)
  • Generator: Merrill
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/845982/000155837018001490/0001558370-18-001490-index.htm
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  • ifrs-full:DisclosureOfExpensesExplanatory

     

     

    2017

     

    2016

     

    2015

     

     

        

    $ million

        

    $ million

        

    $ million

     

    Revenue

     

    4,765

     

    4,669

     

    4,634

     

    Cost of goods sold

     

    (1,248)

     

    (1,272)

     

    (1,143)

     

    Gross profit

     

    3,517

     

    3,397

     

    3,491

     

    Research and development expenses

     

    (223)

     

    (230)

     

    (222)

     

    Selling, general and administrative expenses:

     

      

     

      

     

      

     

    Marketing, selling and distribution expenses

     

    (1,781)

     

    (1,712)

     

    (1,735)

     

    Administrative expenses1,2,3,4

     

    (579)

     

    (654)

     

    (906)

     

     

     

    (2,360)

     

    (2,366)

     

    (2,641)

     

    Operating profit

     

    934

     

    801

     

    628

     

     

    1

    2017 includes $62m of amortisation of software and other intangible assets (2016: $61m, 2015: $66m).

    2

    2017 includes $140m of amortisation and impairment of acquisition intangibles (2016: $62m of restructuring and rationalisation expenses and $178m of amortisation and impairment of acquisition intangibles, 2015: $65m of restructuring and rationalisation expenses and $204m of amortisation and impairment of acquisition intangibles).

    3

    2017 includes $16m credit relating to legal and other items (2016: $30m credit, 2015: $190m charge).

    4

    2017 includes $10m credit of acquisition-related costs (2016: $9m charge, 2015: $12m charge).

     

    Note that items detailed in 2, 3, 4 are excluded from the calculation of trading profit, the segment profit measure.

    Operating profit is stated after charging/(crediting) the following items:

     

     

     

     

     

     

     

     

     

     

    2017

     

    2016

     

    2015

     

     

        

    $ million

        

    $ million

        

    $ million

     

    Other operating income

     

    (66)

     

    (25)

     

    (41)

     

    Amortisation of intangibles

     

    192

     

    191

     

    219

     

    Impairment of intangible assets

     

    10

     

    48

     

    51

     

    Depreciation of property, plant and equipment

     

    243

     

    224

     

    226

     

    Loss on disposal of property, plant and equipment and intangible assets

     

    13

     

    15

     

    15

     

    Operating lease payments for land and buildings

     

    36

     

    39

     

    37

     

    Operating lease payments for other assets

     

    21

     

    19

     

    20

     

    Advertising costs

     

    102

     

    88

     

    91

     

    In 2017 other operating income primarily relates to a gain relating to patent litigation (2016: insurance recovery relating to metal-on-metal claims, 2015: net gain relating to patent litigation).

    3 OPERATING PROFIT continued

    3.1 Staff costs and employee numbers

    Staff costs during the year amounted to:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    2017

     

    2016

     

    2015

     

     

        

    Notes

        

    $ million

        

    $ million

        

    $ million

     

    Wages and salaries

     

      

     

    1,157

     

    1,227

     

    1,193

     

    Social security costs

     

      

     

    178

     

    129

     

    135

     

    Pension costs (including retirement healthcare)1

     

    18

     

    64

     

    23

     

    58

     

    Share-based payments

     

    23

     

    31

     

    27

     

    30

     

     

     

      

     

    1,430

     

    1,406

     

    1,416

     

     

    1 In 2016, pension costs include the past service cost credit of $49m arising primarily from the closure of the UK defined benefit scheme to future accrual.

    During the year ended 31 December 2017, the average number of employees was 16,333 (2016: 15,584, 2015: 14,686).

    3.2 Audit Fees – information about the nature and cost of services provided by the auditor

     

     

     

     

     

     

     

     

     

     

    2017

     

    2016

     

    2015

     

     

        

    $ million

        

    $ million

        

    $ million

     

    Audit services:

     

      

     

      

     

      

     

    Group accounts

     

    2.4

     

    2.0

     

    2.1

     

    Local statutory audit pursuant to legislation

     

    2.0

     

    2.0

     

    2.0

     

    Other services:

     

      

     

      

     

      

     

    Non-audit services

     

    0.1

     

    0.5

     

    0.5

     

    Taxation services:

     

      

     

      

     

      

     

    Compliance services

     

     –

     

    0.1

     

    0.5

     

    Advisory services

     

     –

     

     –

     

     –

     

    Total auditor’s remuneration

     

    4.5

     

    4.6

     

    5.1

     

    Arising:

     

      

     

      

     

      

     

    In the UK

     

    2.5

     

    2.5

     

    2.5

     

    Outside the UK

     

    2.0

     

    2.1

     

    2.6

     

     

     

    4.5

     

    4.6

     

    5.1