Smiths Group Plc · LSE:SMIN
Smiths — Investor Day (June 2011)
33 slides from Smiths's investor day presentation, Jun 28, 2011
Slide 1: John Crane Investor Day, New York, June 28, 2011
John Crane New York June 28, 2011 www.smiths-medical.com John Crane 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: John Crane
John Crane • A global premier provider of engineered products and value added services for the process and energy services industries focused on rotating equipment and artificial lift technologies • Services a global installed base delivering expertise using 239 sales and service centres in 51 count
Slide 4: John Crane - An Attractive Investment Case
John Crane - An Attractive Investment Case Strong brand in growth markets with high barriers to entry Resilient business with high exposure to global aftermarket service markets Relationships & geographical coverage to leverage expanded product offering Strong cash generation Expertise in key compon
Slide 5: What we do - Invisible Contribution
What we do - Invisible Contribution Product Typical Equipment End Product John Crane Investor Day, New York – June 2011 | 5
Slide 6: John Crane Fact File – The Market Place
John Crane Fact File – The Market Place 2010 Sales £786m 2010 Sales Profile 2010 Sales Profile by region by market First-fit OEM 37% • 21 manufacturing sites in 15 countries covering Europe Aftermarket 63% ~120,000 SQM of Middle East & Africa Oil, gas & petrochemical manufacturing space. Chemical &
Slide 7: John Crane Serves a Wide Range of Blue Chip Customers
John Crane Serves a Wide Range of Blue Chip Customers First-Fit Supply to Original Aftermarket Supply and Value-Added Equipment Manufacturers Services to Operating Facilities John Crane Investor Day, New York – June 2011 | 7
Slide 8: John Crane – Unique Global Reach
John Crane – Unique Global Reach In the past 5 years, John Crane has increased its global presence by some 84 sales, service and manufacturing facilities. Targeted areas of growth for next 5 years: Middle East, John Crane Russia, China, India, Malaysia, South Korea and Australia, Global Coverage 200
Slide 9: John Crane Historical Overview
John Crane Historical Overview Financial performance 2010 Sales and margin growth since 2006 (£m) CAGR (organic growth) 2005 to 2008 = 6.5% Sales ROS Sales £786m Headline Op. Profit £163m Margin 20.7 % John Crane Investor Day, New York – June 2011 | 9
Slide 10: Global Infrastructure Investments - Key Drivers
Global Infrastructure Investments - Key Drivers Energy Independence • Security • Environmental Aging Infrastructure • Efficiency • Upgrades Demographics • Industrialisation • Population growth Economic Growth • Job creation • Political and social security John Crane Investor Day, New York – June 201
Slide 11: Market Update: Oil Industry
Market Update: Oil Industry £5bn • Forecasted use from 86 mbpd in 2007 to 92 mbpd in 2020, 104 mbpd in 2030 and 111 World liquid production 1990-2035* mbpd in 2035 • OPEC producers contribute 11.5 mbpd to the total increase in conventional world liquids production, and non-OPEC countries add another
Slide 12: John Crane: Oil price has limited impact
John Crane: Oil price has limited impact Upstream c25% Midstream c15% Downstream c60% High High feed costs margin Increased investment Limited pressure reduce Oil price Maintain/increase output impact investment Low feed costs Reduced investment Limited Increased price pressure Reduce output impact
Slide 13: Market Update: Gas Industry
Market Update: Gas Industry £5bn • Projected increase in natural gas production is for the non-OECD region, from Middle East (16 World natural gas consumption 2007-2035 tcf from 2007 to 2035), Africa (7 tcf), and Russia and the other countries of non-OECD Europe and Eurasia (6 tcf) Trillion cubic fe
Slide 14: Market Update: Power Industry
Market Update: Power Industry £5bn • World net electricity generation increases World Electricity generation by fuel 2007-2035* by 87%, from 18.8 tkwh in 2007 to 25.0 tkwh in 2020 and 35.2 tkwh in 2035 • Electricity demand growth returns to pre- Trillion kilowatt hours recession rates by 2015 • Non
Slide 15: Market Update: Chemical Processing Industry
Market Update: Chemical Processing Industry £5bn • Basic chemical investment gain Petrochemical Production Capacity by Region (KTon) significance in Middle East (mainly Petrochem Prod Capac Saudi Arabia, Qatar, Iran and UAE) (U-Dec-08) (kton) (x1000) Northern Europe • Capacity addition in Asia (Chin
Slide 16: Market Update: General Industry
Market Update: General Industry £5bn Water • Water infrastructure firms are looking to grow by double the global GDP rate annually over the next 10 years Pulp & Paper • Major expansion in Asia Pacific and limited replacement of ageing western assets • Constant challenge due to increasing environment
Slide 17: John Crane - Technology – Expertise – Global Service
John Crane - Technology – Expertise – Global Service We provide technology … to provide effective solutions … in Oil & Gas, Chemical & products and value-added for production-critical Pharmaceutical, and General engineering services… applications…. Industries John Crane Investor Day, New York – June
Slide 18: 2011 Current Markets Strategic Expansion Potential
2011 Current Markets Strategic Expansion Potential Worldwide process equipment market ~£50bn Expansion Markets Potential Oil & gas Chemical Total addressable market for £5.0bn Pharmaceutical engineered bearings, filtration, Power Generation and Production Solutions Production General Industry Soluti
Slide 19: Rotating Equipment Business Model - Installed Base Expansion Cycle
Rotating Equipment Business Model - Installed Base Expansion Cycle Win Seeds and First Fit Capital grows End User Projects installed base End User New equipment Installed through OEM Base channel Gain hard specification on new projects CAPEX Aftermarket existing rotating equipment New product lines
Slide 20: A Strategic Portfolio of Product & Services
A Strategic Portfolio of Product & Services Rotating Equipment Artificial Lift 76% 5% 5% 4% 10% Filtration Production Mechanical Seals Couplings Bearings Systems Solutions & Systems John Crane Investor Day, New York – June 2011 | 20
Slide 21: Rotating Equipment Technologies and Products
Rotating Equipment Technologies and Products Filtration System Engineered Gas Seal Support Gas Seals Systems 40% added value potential per skid Seal Current Power Transmission Advanced Hydrodynamic Separation Seals Products Products Couplings Bearings John Crane Investor Day, New York – June 2011 |
Slide 22: Production Solutions - Products and Services
Production Solutions - Products and Services Artificial Lift Solutions & Service Production Solutions supplies all products involved in artificial lift process with the exception of Casing • Fiberglass and steel sucker rods • Tubing and insert pumps • Automated Prime Mover – APM • Beam Pumping Unit
Slide 23: Artificial Lift Growing Opportunities
Artificial Lift Growing Opportunities Advanced Technologies • Innovative product, lighter and stronger than steel • Lower lifting costs • Non-corrosive • More efficient oil production Expanding Markets • Growing global artificial lift demand • Markets which are losing well pressure and related outpu
Slide 24: Customer Intimacy is Key John Crane Differentiator
Customer Intimacy is Key John Crane Differentiator Around The World, Around The Corner Products & Technology End User Coverage Opportunities to grow share in expanded market John Crane Investor Day, New York – June 2011 | 24
Slide 25: Customer Intimacy – Chevron Global Partnership
Customer Intimacy – Chevron Global Partnership • Global major in upstream, midstream and downstream production • Preferred Supplier Alliance with John Crane initially signed in 2002 • John Crane is rated an “Outstanding” supplier by Chevron • Ensures mutual goals alignment and enhances cooperation •
Slide 26: Strategy for Value Creation
Strategy for Value Creation • Revenue growth from expanded solution set offered and serviced - Existing, new OEM and End User customers - Add further services and solutions via organic development and acquisitions • Continue to expand service center presence in growth markets - Provide best in class
Slide 27: Investment in New Product Development
Investment in New Product Development • CO2 capture • Ultra high pressure gas compressor seals • High duty coupling test capabilities • Advanced seal face materials – Composites / Diamond Coatings • Condition Monitoring and Smart Technologies • R & D bearing technology test rig • Proprietary analyti
Slide 28: Investing in Growth Markets
Investing in Growth Markets John Crane Investor Day, New York – June 2011 | 28
Slide 29: Restructuring for Better Customer Service and Lower Costs
Restructuring for Better Customer Service and Lower Costs • Restructured into one global organisation - August 2008 • Regional Sales & Service organisations supporting local customer needs (Americas / Europe, Middle East, Africa / Asia Pacific) • Focused business units to leverage recent acquisition
Slide 30: Strategy for Value Creation: Acquisitions
Strategy for Value Creation Acquisitions: • Further leverage the John Crane business model • Leverage existing customer relationships • Current or potential service revenues • Bring a new solution set or technology – or – add to existing installed base John Crane Investor Day, New York – June 2011 |
Slide 31: John Crane: Business Priorities
John Crane: Business Priorities • Leverage full solution set in global markets • Capture share of CAPEX spend • Enhance customer service and expand in growth areas • Leverage manufacturing capability and global footprint • Build the business through acquisitions Sales growth* Operating profit margin
Slide 32: John Crane - An Attractive Investment Case
John Crane - An Attractive Investment Case Strong brand in growth markets with high barriers to entry Resilient business with high exposure to global aftermarket service markets Relationships & geographical coverage to leverage expanded product offering Strong cash generation Expertise in key compon
Slide 33: Questions and answers
Questions and answers John Crane Investor Day, New York – June 2011 | 33