Good morning everyone. And welcome to our Full Year Results Presentation. And here is Graham Baker, our CFO as you know now; Matt Stober, who's the President of the Global Operations; and the famous Phil Cowdy, at the end of the table. I will start by covering the highlights of the year in the last quarter and then talk about a topic close to my art innovation. I would then hand over to Graham and Matt to talk about the numbers and our program to strengthen our competitive position and drive further efficiency. And we'll conclude with a summary and we'll take question as usual at the end. So starting with a full year results, our underlying revenue growth in 2017 was 3%. There are many highlights including an improved performance meeting our guidance for full year, returning the emerging markets to strong double digit growth, our knee implant franchise consistently bidding the market and PICO strong growth continues transforming the way, negative pressure is used. There are also headwinds and areas we'll improve in 2018. We faced stronger competitive pressure in enabling technologies and we’re still working to return Advanced Wound Care in Europe to growth. Our trading profit was just over $1 billion giving a trading margin of 22%, a 20 basis point improvement compared to 2016. Adjusted earnings per share grew 14% to $0.0945 helped by the improvement in our tax rate including one off benefits. Our cash generation improved significantly with 90% cash conversion and our balance sheet remains strong. Our full year dividend is $0.35, up 14% year-on-year in line with adjusted earnings. In summary, we delivered better revenue growth in margin than in 2016 and I am confident that Smith & Nephew can do even better. Turning now to our Q4 trading performance, as…

Thanks Olivier. Good morning everyone. I'll cover two things, first the 2017 full year results and guidance. And second, the details of the business review we announced at Q3. I'll start with the income statement. Full year revenue in 2017 increased 3% on an underlying basis, excluding the impact of foreign exchange and M&A and 2% on a reported basis. Trading profit grew by 3% to over $1 billion and trading profit margin was 22%, an increase of 20 basis points. Both sales and margin growth were at the low end of the guided range as indicated in Q3. Moving further down the P&L. EPSA growth was substantially higher at 14%, mainly due to favorable movement in the tax rate on trading. Basic earnings per share was stable year-on-year and in this connection I remind you that 2016 benefited from the gain on disposal of the Gynaecology business. The lower tax rate on trading at 17% was mainly driven by a one-off tax provision release as announced at the first half year results, and further tax provision release says in the second half prompted by expiry of statutes of limitations time limits, and beneficial geographic mix. Moving on to the effects of U.S. tax reform, we have recognized a one-time benefit in 2017 of $32 million outside trading results principally arising from revaluation of U.S. deferred tax balances. Finally on EPS and EPSA, the average number of shares is 2% lower following the buyback program in the second half of 2016. Of course we remain focused on driving returns and our return on invested capital improved 280 basis points in 2017 to 14.3%. Now turning to cash, trading cash flow for the year was $940 million, a 23% increase on 2016 and trading cash conversion improved to 90%, well above…

Thank you, Graham. Good morning, ladies and gentlemen. So let me first start by introducing myself since this is the first time I’m speaking to everyone. I’m Matt Stober, and I head up our Global Operations function. I joined Smith & Nephew in October 2015 having held a similar role at Hospira. Prior to that, I worked in a number of manufacturing roles across GSK and Novartis. So I'd like to start with the scope of Global Operations at Smith & Nephew, what we've achieved over the last couple of years and then where we're going as part of the APEX program. So Global Operations is responsible for the manufacturer of our products, the purchasing of raw materials, the management of our suppliers, and the movement of finished products to our customers. We also ensure that the finished products meet the required quality standards and satisfy all regulatory bodies. Finally, we work hand-in-hand with R&D to make sure the product ideas can be manufactured. We have 20 manufacturing sites over 70 distribution centers in our supply chain, and nearly 8000 people working hard to make and deliver 70 million units per year. For the last couple of years we focused on getting the basics right. The SQDCP framework that you can see on the slide, with safety, quality, delivery, cost and people being the five dimensions is really operations 101. If you had any experience in Global Operations you'll certainly recognize it. It is important to do these things well because without focusing on the five pillars, we cannot achieve sustainable ongoing improvement. So you might ask why focus on the basics because I wanted to show you how we've strengthen the foundation to give you confidence that we can move on to something more ambitious. So looking at where…

Thank you Matt, thank you Graham. I will finish with the commercial effectiveness part of the APEX program. We're seeing our market and structure evolving permanently. On the one hand price pressure, increasing use of tenders and new entrants. On the other, opportunities for new technologies, new ways of offering broader value to our customer and greater insights from clinical data. And this is where extreme we're continuing to drive global commercial and sales force best practices. We have made progress on pricing and training and on sales force effectiveness. We have already made a start to this standardized metrics, redesigned incentive scheme, and sharing of best practices. Deeper analysis shows potential for optimizing our local sales organization efficiency. One example is in the U.K. Here we are sharpening our commercial organization in response to the more challenging market environment. We removed layers of management and streamlined local marketing, while increasing key account capabilities and reinforcing our tender response team. In terms of approach, we are moving to a disease-based model and one, we will be placing increased emphasis on selling our whole portfolio both our pioneering and more value oriented products. So in summary, we think we have stronger business today with structures and platforms we have built. The platforms enable us to deliver on our 2017 promises to improve the top and the bottom line. In 2018 I expect Smith & Nephew to build on 2017 delivering another year of improved performance from our strong corporate portfolio and our strong pipeline. Looking further ahead our greater focus on commercial execution gives us confidence we’ll outgrow our market and the new APEX program supports our expectation of improved trading margin into 2018 and beyond. So that end's our formal presentation, and we’ll now take question starting here with the audience. Please can I ask you to limit the number of questions to two per person. Thank you.

Veronika, first row.

Veronika Dubajova from Goldman Sachs. Good morning. My first question is on APEX program Graham. I think last year this was before your time, but when Olivier gave the medium-term margin guidance for ongoing margin improvement and he discussed 10 to 50 basis points is achievable. How should we think about that range in the context of the 160 million so that's my first question. And then my second question is for Olivier on the organic growth outlook. The range for this year is again 3% to 4% but looking at the business you've been far from 4 for a little while now. What do you think needs to happen for you to get to 4% organic growth this year and what’s your degree of confidence in your ability to achieve that? Thank you.

I’ll take the margin question first thanks Veronica. Obviously, I can't control what my boss said before I joined the organization. But look the APEX program we've clearly recognize that one of the questions that this business needs to answer is to deliver margin progression and margin improvement. We've maintained our margin guidance from medium-term margin improvement year-over-year. If we were talking about the bottom-end of that range coming for three to four years, that would not be what I would call meaningful margin progression, but I'm not upping the guidance for medium-term margin progression because as everybody knows the business faces ongoing headwinds at the topline. We have a cost base supporting our customer’s needs for service, quality we’re regulated industry and we operate in a competitive environment so to drive mid-term growth of the organization we have to maintain those investments at a competitive level and they're subject to inflation every year. But we are talking about meaningful margin progression. I hope that answers the question.

On the question of how can we grow for a 3% to a 4%, well the guidance is between 3% and 4%. I think there is number of things that we are going to build. First of all we see an extremely good dynamic in most of our portfolio and this will continue. Emerging market we continue to grow strongly, next year China will be a very key driver of the growth also. Latin America is boosting with excellent results in most of the geographies including the new comer Colombia. We have if you come back to franchises a very, very strong dynamic in wound care in the U.S. Wound devices will be strong everywhere including in the emerging market where we're launching the [TO] which is a between PICO and RENASYS which an emerging markets negative pressure where there will on time development next year will be stronger and stronger. This launches in new countries and we are extremely happy with the results of this. In terms of new business, we have the knee development in the XR, as well as a combination of XR in NAVIO which will be showcased in - at the [AWS] which I believe will be very strong. By the way we start to realize how important is the device NAVIO in the center we have placed or sold the robot. We see an increasing demand of the knee of our knees. So there is a correlation between placement and the knee expansion. So I think that's very important for the products. In Sports Medicine, not only we have this good dynamic of 6%, but we have also the launch of Rotation Medical which I remind you is a product which is a strong product which has been launched in the past and successfully…

Let me ask it differently, I mean are you confident - do you see 4% as a possibility this year?

It is. That’s why we gave 3% to 4%, it is.

Kyle Rose from Canaccord Genuity. Just wanted to see if we could get a little more color on the strength of the knee franchise and then just your thoughts on the global knee business more broadly I mean we've got and one of your competitors Stryker is talking about a cementless knee taking 25% of their overall mix just thoughts on the cementless portfolio and your potential there. But then also more broadly on NAVIO. When do you expect that will be able to get more metrics on your boxes place utilization and is 2018 really setting up to be maybe one of the breakout years for NAVIO to release or to be a market share driver?

Let me feel you'll talk about the recon as a whole in terms of market and what is happening. I can answer on NAVIO and on the portfolio of knee in general on worldwide basis. I mean NAVIO I think that we have decided not to disclose many data on NAVIO. But I mean I can give you few data. We have been growing almost at 50% CAGR, so things are exactly aligned with our expectation. Actually we disclosed that last year saying we are expecting 50%. We are almost there at the end. Remember MAKO has announced a training of 800 doctors, surgeons. We have been able to train in 2017 more than 500 surgeons with NAVIO, 500 surgeons. We have double utilization since introduction of the TKA so the link as I was mentioning of TKA and total knee and NAVIO is really, really tight. So we see fantastic development on this one. We see a huge development in the ex-U.S. countries actually U.K. is one of them. We're very ambitious about the U.K. development for NAVIO. We see an amazing performance also for NAVIO in the emerging market. India been the highlight of this country with a number of units sold at a very high price in India. So I'm very happy actually with what is happening with NAVIO and I do believe, I do believe as I said to you that having the NAVIO in the hospitals is generating a fantastic dynamic for our JOURNEY II business. So this is what I can tell. Now as I said, the knee business is growing as usual I would say as a whole in terms of market, you have seen the recon market this quarter is about 2% growth, Phil am I correct. It was zero the quarter previous quarter so it's always like this. We don't expect to see changes actually. We don't expect to see more price erosion, we don't expect to see a significant improvement in volume either. We are doing extremely strong well in the emerging market in the knee business, extremely well wherever we are in the high-tier or in the mid-tier with something. I mean off them is for me a second booster of the gross of the recon in the emerging market. So I see the portfolio as a whole is doing well. You will see at [AWS] the XR with NAVIO and I think you will be very impressed by this - by design I mean. So Phil if you want to about cementless and all these.

Yes, debate around cemented, uncemented preferred for many, many years. What we've seen is that new technologies I think are bringing the debate back about uncemented and stability get for it. So currently both our GENESIS and LEGION core systems do have an uncemented option, it’s not big part of the portfolio but it’s there. As you can imagine with the expertise we built in the 3D printing which offers some interesting technology. We're working on a next GEN uncemented knee that we will bring out in due course, it won’t be in 2018, but sometime after that, but it does remain a small part of the marketplace overall.

Patrick Wood from Citi, two from me please. The first will be thank you for the chart showing the sort of manufacturing cost per hour and how everything was going down in that way. Excluding the APEX cost savings program obviously the pricing environment remains relatively deflationary. Do you expect to continue to make those savings over time if you were to extend that internally in your forecast going forward to make those savings to offset that price deflationary environment excluding the APEX costs because it's quite hard to keep your mountain flat in that environment, this is the first question. The second one is being filled out earlier but appreciate it might be quite small. But if you were in our shoes, how would you interpret Hollister decision to dispose some of its firm assets. Why didn’t they took that choice and should we read anything against about that or is it just non-core from them? Thanks.

Let me answer Hollister, and then I will give you the floor on that. Hollister, what are we talking about $45 million of sales of divestment which is nothing okay. So it's a very tiny part of the business which usually has no interest especially for us, and it's very small many people believe that the start was big deal actually its nothing. So I think we should not focus on this one.

In terms of I mean I’ll seek support from Matt on the detail but I mean the reality is that job gets harder every year as you go by. I mean there is the bottomless pit of things that you can do - this like you said he is a relentless guys and he keeps his team under a lot of pressure. But eventually it becomes more and more difficult to achieve those things. So one of the reasons why tempting us it might have been to up the guidance around the APEX program, I’ve deliberately not done that, it’s an anticipation that life gets in the underlying business gets a little bit tougher each year. And so although a meaningful part of the benefits of the APEX program are going to drop to the bottom line, some will get swallowed up in the normal inflationary pressures that we face topline and through our cost space. Rest assured he isn’t ever going to give up and we’re not going to give up on those sorts of business as usual opportunities anywhere in our business but we think the APEX program is important for us to actually deliver on that guidance from margin progression which in reality we haven’t actually been able to show in the last two to three years. Matt is there anything you want to add?

Yes I mean I think Graham you covered it, we are working and we do every year work on we saw that cost trend line. Investments from a technology standpoint to try to drive down labor costs, we have procurement initiatives across the organization again to drive down spend that we got going on. Those things are not in the cost that you saw for APEX, those are our normal activities to offset inflation and ultimately improve the cost profiles. So you’ll see us continue to do those and because we have been doing and you see the trend, what we’ve done over the last four or five years. So it gets more difficult now we got to take some I’ll say bigger tougher decisions in order to deliver the savings numbers.

Yes.

Lisa Clive from Bernstein. First question on PICO, it’s been a great franchise for you, but there is some competition looming, you’ve had a competitor in the UK market in the past year and half or so and said competitors hoping to get FDA approval pretty imminently. Do you have enough of a lead in terms of clinical data just general market awareness of your product being particularly good product. It’s not just a category that people need to be in or does a new entrant that is a very similar product really represents something of a new competitive threat. I’m just trying to understand how you’ll adapt to that and particularly how you’ll adapt to that in the U.S. versus the EU. You’ve mentioned historically it’s very important to have a sort of comprehensive negative pressure portfolio, but in the U.S. because of the RENASYS withdrawal that’s a bit of a gap in the portfolio so perhaps not as helpful there. Second question on Hips, it has been obviously a frustrating business particularly with the implosion of BHR through no fault of Smith & Nephew's but really a market issue. But it is something of a lagging portfolio and just would be helpful to understand what initiatives are in place to get that business back on track?

Phil you want to take this one and I will come back on the PICO.

Yes I think in the Hip portfolio I think as we’ve said the last couple years the biggest gap in our hip portfolio was in revision. And we started to rollout our REDAPT our hip revision system, next generation state-of-the-art getting great feedback from customers. We’re really at the start of that. As you know there are many, many components to a full revision system and we’re just starting to rollout, and you will see more and more over the coming years. And I think what you’ve seen this year, as we move from a negative to a positive in the second half, a big contribution to that is now having that full portfolio. I think if you go back to the sort of primary hip system, yes there is some lifecycle management that we need to do to refresh part of it and that is in train. So all in all we are relatively comfortable that we’re at the hip portfolio is at the moment.

Thank you. So on PICO Lisa, there are number of good thing to say on PICO. The first one is, we have a very strong growth which is continuing. To give you an example in the U.S. actually, we have increased about 80% since 2016. So I mean it’s really a super dynamic. In terms of what can make a difference between I guess you were mentioning AVELLE. Well AVELLE and I’ve read some different papers on AVELLE issues actually we don’t see AVELLE popping up as I said before actually in the fields we have no, we have not found any evidence of danger with AVELLE at the contrary. I think that the PICO strengths is they have no clinical evidence. We have 65 published studies in clinical evidence we have a number of studies coming next year. We have for patients a number of identities also in terms of leakage, in terms of noise, it’s very quiet, it is very noisy and so on and so forth. So I think it’s for us not a big issue which doesn’t mean this will not change one day but for the moment we don’t see that as a threat. We just want to focus on our product and bringing more and more clinical evidence as value of these, the PICO 7 launched I think will be fantastic because it reduces the cost. So it’s exactly where it should be in the difficult environment that we are facing. It is not in the U.S. by the way yet, it is in Europe. We launch also the negative pressure of I mean part negative pressure with TO which is type of books a bit bigger than PICO and we’re using the emerging markets in the mid-tier. RENASYS is back on the market which is also important not because we want to make RENASYS a huge product but because I said many times we believe a lot that the sourcing effect of adding RENASYS in few places in KOL and so on is one of the best generator of sales for the portable negative pressure outside this field. And we also know that the changes we are managing on our PICO which is better pumps, better absorption, better all these will also be able to really compete with pressure – negative pressure in the future. And Tom and then we have questions from the phone please.

Tom Jones from Berenberg, two questions for Graham, one for Olivier. The first on the APEX program. Could you give us an idea of how much of that $160 million do you expect to reap from genuine cost reductions paying less for something, shutting something down et cetera, et cetera. And how much should we expect to come from efficiency savings, a term we heard quite a lot in the UK press, but I don’t think we have natural skepticism around. And the second question just on the 30 to 70 basis points of margin expansion you expect for this year. Could you give us some at least qualitative stairs to how much of that do you expect to come from the early gains under the APEX program. How much mix improvement, how much more pricing leverage, how much from favorable FX, unfavorable FX hedges rolling off that kind of thing. Just give us an idea of how much of it is kind of very predictable and how much of it requires better operational performance from Smith & Nephew.

Thanks Tom. I fear I’m going to disappoint you a little on the detail that you’re looking for there, but I will do my best. I think one of the things that Matt mentioned was that sort of procurement and our regular business as usual activities and not part of the APEX program. Our APEX program is driven by meaningful interventions to change the cost trajectory of our business. Now whether you count those as genuine cost reductions or efficiency savings, I’m not exactly sure what distinction you’re making there because all of our business is subject to inflationary cost pressure. We one of the defining features of this industry is well two of them are high quality you have, if you’re putting things into people’s bodies or onto people’s bodies they have to be consistently high standards of quality. And the second and this truly is differentiating is the level of service that we provide to our customers. There aren’t many industries left on the planet that have tight sales forces, servicing their customers day-to-day. And actually MedTech is different from pharma in this space because actually our customers want our people working with them. They’re not trying to scream them out from being with them and that of course means a lot of that cost are in headcount costs. So there is inflation pretty much everywhere in our business and there is downward pressure from payers on our topline. So at the end of the day, the composition of the savings within APEX doesn’t matter so much to me as the fact that we’re delivering margin progression at the bottom line which has been elusive for this business. And so I’m not going to get into a detail breakdown of distinctions between what is eliminating cost inflation and what’s genuinely year-over-year reducing costs I’m just going to say it’s going to feed through to real meaning margin progression.

I guess I was coming with it or from with it rather was [indiscernible] how much the $160 million comes from generating the same revenue of lower costs and how much comes from generating more revenue of the same costs?

Yes I mean again it’s a great question and I understand why you’re asking it. So I’m not going to shut it down completely, but one of the reasons why I’m not going out there with an eye grabbing headline figure. Is because of course, I can’t make our business completely immune to the realities of life and one of those is foreign exchange. We’ve seen in the past, another of them is that all businesses have some sort of natural leverage in them. The point to the APEX program is intended to give us the greater confidence in delivering that margin progression in a broader range of scenarios on our topline progression. But I can’t say that those savings and the quantum that falls to the bottom line is completely independent of how we do at the topline. So the program is intended to deliver meaningful margin progression. I believe it will do that, it build our confidence and a clear path delivery, to deliver of that medium term guidance but there are some realities out there in our business. I hope I’m coming close to the intent of your question. And in terms of the 30 to 70 basis points in 2018 how much of that comes from APEX, some but again I’m not going to give a specific answer. Again we’re in the early phases of the program. The benefits will build overtime, what actually will make a difference to margin progression year-on-year is how many incremental benefits we deliver year-over-year. So of course although the overall total of the benefits will be building actually what makes the difference to margin progression is the delta year-over-year on those benefits. So some but I’m afraid I’m not going to specify.

And I know it’s straight but I got a chance so I’m on the third one. You kind of if actually does know what the tax saving was in H1. You told us what the U.S. tax issue was but you haven’t quite quantified the provisional relationship in H2 on the tax side. I’m just wondering if you might do that?

And kind of might need to help ask a friend for help on the precise number and then perhaps you take it offline or mail.

Yes sure.

But I mean essentially it was the same nature of things. We had a favorable settlement that arose as a result of expiry of a statutory limitation on an audit. As well as that we had some favorable geographic mix and some of the benefits of our overall tax planning that came through slightly more strongly than we had expected. So those things that happened in the second half, we’re a little more complicated than just. We had a favorable settlement with the IRS but they came about as a result of – because of a statutory limitations and audit not happening. And therefore we’re able to release the provision for that and a little bit of it was due to geographic mix. Neil correct me if I’m wrong on that, that looks I’m not getting any scowling looks from my Tax Director, so it looks like I have got it right there.

Okay, thank you Tom. So let’s pick question from the phone please.

[Operator Instructions] We can now take our first question from Julien Dormois from Exane BNP Paribas. Please go ahead.

I have two and half the first two would actually relate to your business, the first one is on an area that you have not really touched upon in the release or in the discussion which is Bioactives. So which is to be presented as a star franchise and now we’re out of two years with no growth and I know the splits between OASIS and SANTYL. But do you expect that at some point you should recover in that space and deliver meaningful growth – in what we could expect over the next couple of years. And then the second question also relates to wound management and more specifically on wound care, here again we are out of two difficult years in wound care. I’m just curious if you could elaborate on the share of business in wound care that is coming from the U.S. which apparently is doing nicely. And on the opposite which is coming from Europe and give us a magnitude of what is the slowdown that we’re seeing in Europe. And the last half question is just about the CEO transition and it’s not that I mean hurry to see you leave Olivier but I was just wondering is there anything you would like to communicate at this stage?

Sorry, I didn’t get the last question, I'm sorry. Well, okay on this let’s start with Bioactives, Julien, thank you for the question. On the Bioactives, yes it’s a flat business in 2017, this is true. However as we have said, it’s too was growing actually, when each one was not growing, it was decreasing. I can give you thousands of explanation of this. What I can tell you is that, we are having more and more good data on SANTYL. We are confident that SANTYL will continue to grow in the future at a low single digit figures. So for us SANTYL is settling now to 10%, we are expecting it years ago. Actually the market is more and more difficult, the more and more cost conscious, and so we expect to have a good dynamic, mainly based on the good data that we get in terms of clinical evidence. So that's for the buyers. Now on the Wound Care, what is the split between the U.S. and U.K.? We don't disclose actually the few split of this. I mean U.S. is an important part obviously but, as you know it's not as developed in terms of Wound Care than what it is in Europe. In Europe we have very strong business of Wound Care and that's why we are struggling with a negative growth in two geographies for the market. In some geographies we really feel the gap of the market issue by a superb performance. Why I am confident in the future for the U.K.? Very simple, because in the U.K. with exactly the same portfolio than what we have in the U.S. and what we have in France, what we have in Italy, what we have in Germany. So there is no reason, except, by lack…

Have two more questions from the room. And the first one is, Alex Gibson from Morgan Stanley. Please go ahead.

Alex Gibson, Morgan Stanley. The first one is on APEX program. Is this program an internally designed program or did you use consultants help benchmark best practice?

So the answer is as a whole it's an internally designed program. Actually, when Graham came on board a year ago, I have asked him to work on this because I was a believer that we had a number of good opportunities. Then I asked Matt, to think about the manufacturing footprint and the manufacturing warehousing distribution. Why? Because Matt since 2015 has dramatically changed the quality of our operations and I didn't want to start a program of simplification. We felt having something strong good roots. And I think that, what Matt has done in manufacturing whether it is - because you are being very modest in terms of supply chain management, in terms of customer, in terms of quality. And you have mentioned, the quality of the FDA warning letters that we had in '14, '15. I mean this, touchwood, but I mean it's really, really good now. So once we have these then we can start an APEX. Now coming back to your point which is do we do that internally or do we use consultant? Most of it, I would say 90% of it is internal. We are using few consultants to help us on very specific things possibly in Matt’s area. But I mean, it is mainly internally driven.

And that's for the design. In terms of the execution is that as well going to be 90% internal?

Yes, absolutely.

And my second question is on the Enabling Technologies business. The ArthroCare acquisition was meant to restore growth in the business through new technology. But the business is still overall in a bit of a decline. Can you identify the two or three things that you think of what went wrong over since the acquisition was made and what's going to unfold over the next two or three years to hopefully improve that businesses growth rate?

It's funny you say that, because we did review yesterday with the board and the percent of our deals during the last five years including on this small emerging market business. I mean ArthroCare is extremely successful in terms of return for the company, in terms of value creation for the company, in terms of dynamic for the company. I just want to put the emphasis on two things, A, it has been for us a tremendous reservoir of portfolio opportunities. WEREWOLF for example is a good example of a fantastic product coming from ArthroCare. The COBLATION value frequency cold temperature is something which is obviously very strong thing not only for this but also for ENT also in our portfolio. I mean the joint repair as a whole is doing fantastically well with devices coming from ArthroCare and from our own portfolio. So I don't believe that it is not bringing us what we need. It has given us a lot of energy. It has given us in many countries including in the emerging market a very strong market share and a very strong position. I remind you we're are number two in the world for only arthritis, it is market share which is, correct me if I'm wrong feel now about 25%, 26%. So it's very strong dynamic here. Yes, we are facing issues with low cost competition. Okay, this is true in COBLATION RF. Yes we're facing issues in our own portfolio of product which is the mechanical resection with the blades. Yes that is true. So I think it is not - you cannot say it's a bad thing. Now, with the strengths we have, we have also the Rotation Medical acquisition which will, I believe be a very strong booster of the growth of Sports Medicine as a whole. So I'm confident that Sports Medicine will be high single digit margin business growth in the future. So for me it's not at all an issue, even if we have this slowdown in '18. So we have one more question I'm sorry Phil, just give me a paper. One more question on the phone then we go back to room.

Next question is from Yi-Dan Wang from Deutsche Bank. Please go ahead.

So just a couple of questions. The first question is on your new Head of R&D, not quite new anymore, but nevertheless a new addition to the team over the last year or so. Just commenting on, if you can comment on what attracted you to him and what progress he has made on your R&D initiatives, and when we could see some visible benefits of his work? Thank you. And I'll have another one after that.

So we have a great Head of R&D. Vasant has been able to bring this process, to bring his relations, when I say relations, internal relations. I mean R&D was very isolated within the divisions in the past. Now we have a global visible R&D working on not only as a silo but working with Matt Stober as Matt mentioned in terms of potential of development of the product and manufacturing capability of this. He is working with Brad Cannon our Head of Global Marketing very early stage to work on clinical evidence, to work on else outcome data and so on and so forth. So this is really the work and we have a very good process and global marketing also by the way. Now it has been able to give us more rigor in the management of the programs. So we have built actually a new committee, not that I like committees but this one I think is good one it’s called product innovation board that we meet every quarter. I chair this committee with Vasant as a Co-Chair. We are reviewing every quarter all the programs, all the new opportunities and Vasant has been able to work on the very strong now with finance actually on the NPVs of the project. On the timing we have clear explanations over delay, we have some project that we are boosting because we believe they are extremely strong. So we are pushing and putting more resource in that. So I mean, I think it’s a lot of things but globally professionalism, innovation mindset and I really think that Vasant came by the way from Medtronic's in the past, came to Smith & Nephew because I think he believe that there was a lot of things to do there and a…

So just a follow-up for that. When I look at your business - I have looked at your business obviously for many, many years and seeing a lot of new products come to market. Are most of those products other than PICO I think are actually products with just slight improvements versus the prior generation product. Do you see in your industry scope for more substantial innovations in new products that the company could introduce in the next 3 to 5 years or is it just function of the industry that we’ll kind of be somewhat limited to what we've been seeing in the past?

I am sorry I don't understand - I don’t fully agree with your statement. I think that we have obviously been able to launch life cycle management that would say products but I mean believe me and I can give you a number of examples. I am giving going to give them to you just to refresh your memory. We have been able to launch OXINIUM which is a fantastic coating which is a 30 years we claim that nobody else has. We have been able to launch PICO which was the first portable efficient negative pressure wound therapy. We have been able to launch JOUNEY II and JOURNEY II as I would say between the BCR, the CR and the XR and so. We have been also the inventor of new business models like the mid-tier in the emerging market which is doing very well. So and I can give you - and WEREWOLF is another one. So I mean it’s not only and I even don’t talk about the dressing, but I think it is not very visible maybe and maybe we don’t communicate enough on this one. But believe me we have been able to bring disruptive technology in the market and this is the start of the game. We are having in our portfolio today some fantastic products which will really bring disruptions in the market. So, I understand what you said but I think we should not just focus on lifecycle management but really what makes a difference and I think that JOURNEY II makes a big difference. We have today also been able to find this MolecuLight this solution agreement which I think is fantastic. We have been able to acquire and we’re the first one after Stryker and MAKO to go to Google technologies and start with the NAVIO system. NAVIO also which is today used for the knee is going also to extend its scope to potential Hip or potential Sports Medicine. I mean we have Leaf technology is another example of something which for [indiscernible] is changing the game. So, I’m going to stop here because we can talk hours about this, but it’s really something which I am very confident and think we are a disruptive company and we have disruptive technologies and we will have more and more disruptive technologies in the future because of the efficiency of our R&D and the great drive of our new Head of R&D.

Ines from Bank of America/Merrill Lynch. Just one last question. In order to achieve your sort of mid-term guidance would you ever or are you considering divestiture of businesses that you see underperforming even if they are small and not visible to us?

Well, we are first of all not to achieve our guidance that's not the point but we are permanently looking at the portfolio. You remember we did the spinoff of Biologic division years ago Bioventus. We did the spinoff recently of Gynecology business which was more than $300 million last year. So it is a permanent thing that we have in mind and we obviously looked at every single business we have from the recon to the wound to the ENT everything. So it’s a permanent process that we organize with the board because I think it’s very important thing to do. At this stage we do not think that there's anything in our business today which important thing that we need to divest. The ENT business is doing well, we're evaluating this as part of the global evaluation but we’re pretty happy with what is happening, we’re pretty happy with the portfolio of products coming on this one. So if things are going well, you know what there's no reason to do it. So for the moment it’s not in the air.

Okay, well thank you very much for your attention. And all the best, thank you.