Smiths Group PLC · LSE:SMIN
Smiths — Non-Deal Roadshow (December 2004)
18 slides from Smiths's roadshow presentation, December 2004
Slide 1: Smiths Group: Meetings with investors, December 2004
Smiths Group Meetings with investors, December, 2004 Alan Thomson, Financial Director Russell Plumley, Director, Investor Relations www.smiths-group.com/ir INV 12/2004 Register here to receive regular information 1
Slide 2: The acquisition of Medex
The acquisition of Medex • Medex’s performance: pro forma for 12 months ended 31 December 2004 Sales: $330m Multiple: 9.3x Operating profit (EBITA): $75m EBITDA: $100m Smiths Medical pro forma 2004 includes high safe injection • Medex has a track record of strong growth proportion of and blood safet
Slide 3: Smiths Medical is significantly enlarged by the inclusion of Medex
Smiths Medical is significantly enlarged by the inclusion of Medex Common call points Safety devices Smiths Medex ProtectIV Medex catheters Anaesthesiologists Other critical care products Needle-Pro Medex Acuvance Medfusion Critical care catheters syringe pump Saf-T-wing Infection control Highly com
Slide 4: Smiths Group: four divisions, all performing strongly
Smiths Group: four divisions, all performing strongly Contribution to FY 2004 proportion sales of op. profit 28% Smiths Aerospace £1,006m Systems and equipment for military and commercial aircraft Margin 10% 15% Smiths Detection £317 million Equipment for protection against threats to security Margi
Slide 5: Smiths Group: 2004 results
Smiths Group: 2004 results Continuing activities, before goodwill amortisation and exceptionals £m 2004 increase on 2003 (at constant currency) Sales 2,678 +7% Operating profit 360 +2% Pre-tax profit 350 +6% Earnings per share 45.9p cf 45.5p Dividends per share 27.0p + 4% 34 years of successive incr
Slide 6: Continuing to generate a healthy cash-flow
Continuing to generate a healthy cash- flow £m 2004 Operating profit (incl.discontinued) 362 Operating cash (after capex) 329 Conversion of profit to cash 91% well above 80% target Free cash-flow (after interest, tax, exceptionals) 255 equivalent to EPS acquisitions £215m, Net M&A proceeds 291 dispo
Slide 7: Looking ahead: Driving growth on two fronts
Looking ahead: Driving growth on two fronts 1 Achieving better • In all four divisions operational performance • Sales growth • Efficiency gains • Recent acquisitions 2 Adding valuable acquisitions • In all four divisions to the existing businesses • Demanding criteria • Financial resources ready Re
Slide 8: Operational performance: The drivers of growth in 2005
Operational performance: The drivers of growth in 2005 • commercial Market recovery aerospace • telecom infrastructure • high gross margins Volume increases • operational gearing effect • made late in 2004 Benefit of recent acquisitions • will give full year benefit in 2005 • strengthen all 4 divisi
Slide 9: Smiths Aerospace: Fundamental strengths
Smiths Aerospace: Fundamental strengths First tier supplier to aircraft primes 2004 Sales On all the important current programmes £1,006m up 7% at constant Balanced 60/40 military/commercial split currency Strong commitment to R&D/ £100 million operating profit technology leadership Major supplier t
Slide 10: Smiths Aerospace: The drivers of continued growth
Smiths Aerospace: The drivers of continued growth 940 deliveries 2004 880 Recovery in commercial OE production 650 2000 2007 9/11 RPKs now Aftermarket demand increasing 2004 at 5% pa Military procurement commitments will sustain 5% pa growth for 2 2004 more years Restructuring: full benefit will be
Slide 11: Smiths Detection: Fundamental strengths
Smiths Detection: Fundamental strengths Market leadership in both Trace 2004 and X-ray detection Sales £317m Broadest range of applications up 21% at constant currency Not dependent on airport security £55 million operating profit Significant investment in product innovation Worldwide sales base, Co
Slide 12: Smiths Detection: The drivers of continued growth
Smiths Detection: The drivers of continued growth Market is still expanding rapidly: Military, Airports, Critical infrastructure, First responders, Ports and borders New products are strengthening our competitive position: BioSeeq, Sentinel II, Centurion Over 40% of 2005 sales are already in the ord
Slide 13: Smiths Medical: Fundamental strengths
Smiths Medical: Fundamental strengths Strong market niches in 2004 specialised devices Sales Smiths is well-placed in the hospital £488m and in the ex-hospital recovery sector up 5% at constant currency Market grows steadily at 5-6% p.a £92 million operating profit Recent product intros are adding t
Slide 14: Smiths Medical: The drivers of continued growth
Smiths Medical: The drivers of continued growth New Cozmonitor strengthens competitive position NeedlePro applications continue to be added Strong pipeline of other new products Manufacturing transfer to Mexico/ Far East delivers improved performance Restructuring to improve logistics starts to pay
Slide 15: Specialty Engineering
Specialty Engineering Fundamental strengths 2004 Very strong market leadership in rotating mechanical seals Sales Technology innovator in electronic £868m circuit connection and protection up 4% at constant High margin businesses, currency generating a strong cash-flow The drivers of continued growt
Slide 16: Keeping input costs in check
Keeping input costs in check Sales 2004 £2.7 billion current outlook (% of sales) Payroll costs 30% Increases pegged to efficiency gains Purchased materials 20% Cost are rising: energy/metals/PVC Fixed costs 10% Less significance for Smiths Gross margin 40% S&D 10% G&A 11% Holding steady R&D 5% Net
Slide 17: Smiths Group: Summary of outlook for 2005
Smiths Group: Summary of outlook for 2005 • Improving market conditions drive sales growth • Operational gearing effect benefits profitability • Restructuring delivers significant efficiency gains • Material cost increases will have modest impact • Recent acquisitions add to growth • Ready for more,
Slide 18: Smiths Group
Smiths Group www.smiths-group.com/ir INV 12/2004 Register here to receive regular information 18