Smiths Group Plc · LSE:SMIN
Smiths — Investor Day (June 2011)
37 slides from Smiths's investor day presentation, Jun 28, 2011
Slide 1: Flex-Tek Investor Day, New York, 28 June 2011
Flex-Tek New York 28 June 2011 www.smiths-medical.com FlexTek Investor© Day, New 2011 by York Smiths – June Medical: 2011 Data Proprietary | 1
Slide 2: Forward-looking statements
This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other thin
Slide 3: Tedd Smith, President, Flex-Tek
Tedd Smith President, Flex-Tek Flex-Tek Investor Day, New York – June 2011 | 3
Slide 4: Flex-Tek
Flex-Tek Flex-Tek provides engineered components that heat and move fluids and gases for the aerospace, medical, industrial, construction and domestic markets. Flex-Tek Investor Day, New York – June 2011 | 4
Slide 5: Observations on Flex-Tek: an attractive business model
Observations on Flex-Tek: an attractive business model Leading brands in four distinct markets have enabled us achieve share gains and growth ahead of the market Expertise in lean manufacturing is delivering margin improvement from restructuring initiatives Margins are strongly leveraged to recovery
Slide 6: Flex-Tek at a glance
Flex-Tek at a glance 2010 Full year figures 15% Sales £212m / $354m 30% Operating Margin 11.0% 25% ROCE 18.1% 30% Fluid Heat Construction Flexible Management Solutions Products Solutions Market leader within World’s largest Market leading CSST Broad range of hose & specialty flexible and rigid manuf
Slide 7: Flex-Tek Historic Performance
Flex-Tek Historic Performance Sales and profit down 6% and 27% respectively against a backdrop of: • 73% drop in US single family housing starts from 2005 • Construction sales down 32% or £23m • Economic recession • Exited £25m of sales in low margin, mass market segments where little value exists.
Slide 8: Core markets: Aerospace
Core markets: Aerospace 30% of revenue Key Market Drivers: Fuel efficiency / Passenger traffic / Maintenance costs • The global market demand remains solid with the backlog for large commercial jets at seven years • The general aviation market is showing slight improvement after a 50% drop from 2008
Slide 9: Core markets: Domestic appliances
Core markets: Domestic appliances 30% of revenue Key Market Drivers: Energy efficiency / User friendly features / Consumer spending • The global market for household appliance heating elements is in excess of $1bn • New technology, faster cycle times and energy efficiency driving growth in developed
Slide 10: Core markets: US residential construction
Core markets: US residential construction 25% of revenue Core products for moving air and transferring gas efficiently in homes • Housing statistics remain uncertain • We have gained market share during the downturn • Foreclosures remain high due to alignment with key market leading customers • US m
Slide 11: Shan Hood, Vice President - Business Development
Shan Hood Vice President - Business Development Flex-Tek Flex-Tek Investor Day, New York – June 2011 | 11
Slide 12: Fluid Management
Fluid Management Flex-Tek Investor Day, New York – June 2011 | 12
Slide 13: Markets
Markets Fluid Management represents RoW Asia USA 30% of Flex-Tek revenue EU Automotive Industrial Sales by geography Commercial Aerospace Government / Military Business Jets Flex-Tek Investor Day, New York – June 2011 | 13
Slide 14: Products and capabilities
Products and capabilities Engine and Airframe fluid management tubing • Flexible and rigid tubing, assemblies, and fittings • Applications include hydraulics, fuel, oxygen, and lubrication • Space applications include launch vehicles and space station Overhaul & Repair • A world leader in the overha
Slide 15: Customers and competitive position
Customers Competitive position • Very high barriers to entry • Parker and Eaton are able to leverage their position as a complete system integrator • We have the broadest range of technology for complex hoses assemblies for rigid and flexible applications • Superior ratings for service and quality •
Slide 16: Summary
Summary • Technical leader in critical design flexible and rigid fluid management tubing • Globally positioned to address a global market • High barriers to entry include: - Investment & Certification - Technical knowledge, highly complex PTFE extrusion, fluid engineering - Pedigree / reputation • S
Slide 17: Heat Solutions
Heat Solutions Flex-Tek Investor Day, New York – June 2011 | 17
Slide 18: Markets and products
Markets and products Heat Solutions represents 30% of Flex-Tek revenue comprised as follows: HVAC systems - 50% • Electrical resistance open coil heating elements • Our Tutco brand is the #1 recognised brand name worldwide in open coil heating • UL, CSA, ETL certified test laboratory Clothes dryers
Slide 19: Customers and competitive position
Customers Competitive position • Market leading position in North America for open coil convection heating elements • Well recognised brand name for quality, service, engineering, and support • Zoppas, Kawai, and Emerson, offer a broader range of heating elements • Technology and competition varies
Slide 20: Summary
Summary • Our strong market position in North America can be leveraged globally with customers in developing markets • Low cost manufacturing in China and Mexico can be leveraged for further margin enhancement • Significant barriers to entry due to certification, testing, & working capital • Continu
Slide 21: Construction Products
Construction Products Flex-Tek Investor Day, New York – June 2011 | 21
Slide 22: Overview
Overview • Leading manufacturer of flexible gas piping and flexible ventilation ducting in North America • Represents 25% of total Flex-Tek revenue Market leading provider of flexible Leading brand of flexible heating, corrugated stainless steel tubing ventilation, and air conditioning ducting to su
Slide 23: Products and capabilities
Products and capabilities Heating, Ventilation, & Cooling Ducting • Complete line of residential and commercial ducting products • Anti-microbial ducting resists mold, mildew, and fungus • Nationwide manufacturing, inventory, and customer support Flexible Corrugated Stainless Steel Tubing • Complete
Slide 24: Flexible Solutions
Flexible Solutions Flex-Tek Investor Day, New York – June 2011 | 24
Slide 25: Overview
Overview Leading manufacturer of flexible hose and ducting products for OEM and industrial applications Medical Applications Industrial Market Floor Care Flex-Tek Investor Day, New York – June 2011 | 25
Slide 26: Products and capabilities
Products and capabilities Industrial Ducting • Ventilation, dust control, material handling, & high temperature applications • Leader in quality, service, and innovation Floor care hoses and systems • High end canister vacuum cleaners • Whole house central vacuum systems Medical Hose • Sleep apnea •
Slide 27: Investing for growth - New Products
Investing for growth - New Products Challenge: • Airlines look for new ways to reduce fuel consumption and carbon emissions • Hydraulic systems on aircraft operate at very high pressures • Traditional high pressure, flexible hoses are braided with stainless steel wire • Identify, test, and qualify a
Slide 28: Investing for growth - New Products
Investing for growth - New Products Challenge: • CT scanner image quality can be greatly improved if the internal temperatures of the apparatus are constant and stable. This permits the scanner to focus to the highest resolution possible Solution: • A turnkey system with a blower, element, temperatu
Slide 29: Investing for growth - R&D
Investing for growth - R&D Develop thermally efficient heating elements that are not dependant on commodities, specifically nickel, which price volatility can impact margins in our current design • Iron chromium • Mechanical design • Thermal Spray Alternative applications for corrugated stainless st
Slide 30: Investing for growth - Asian markets
Investing for growth - Asian markets • Asian manufacturing sites: - Heating elements in China - Floorcare and medical hoses in Malaysia - Aerospace tubing in India • Opportunity to leverage facilities for other Flex-Tek products • Local production for local consumption • Major customers include: Fle
Slide 31: Tedd Smith, President, Flex-Tek
Tedd Smith President, Flex-Tek Flex-Tek Investor Day, New York – June 2011 | 31
Slide 32: Driving efficiencies
Driving efficiencies Restructuring complete • Organised into 4 key technology / market segments • Significant reduction in fixed cost base • Improved production efficiencies and on time deliveries • 3/4 of the manufacturing locations have doubled their ROS • Greatly improved safety record & environm
Slide 33: Value Drivers
Value Drivers Internal • Manufacturing capacity exists to double our revenues of existing products with little capital investment • Our low fixed cost base will drive margin improvement • We are increasing our investment in R&D, new product development, and sales & marketing resources • Improving ma
Slide 34: Observations on Flex-Tek: an attractive business model
Observations on Flex-Tek: an attractive business model Leading brands in four distinct markets Expertise in lean manufacturing is delivering margin improvement from restructuring initiatives Strongly leveraged to recovery in US residential construction Organic growth through investment in research a
Slide 35: Questions and answers
Questions and answers Flex-Tek Investor Day, New York – June 2011 | 35
Slide 36: Appendix
Appendix Flex-Tek Investor Day, New York – June 2011 | 36
Slide 37: Geography
Geography Paris, France Lubeck, Germany Mississauga, Canada Plymouth, Indiana Springfield, Massachusetts Laconia, New Hampshire Asheville, North Carolina Vista, California Greenwood, South Carolina (HQ) Changshu, China Phoenix, Arizona Abbeville, South Carolina Abbeville, South Carolina Reynosa, Mex