Slide 1: Engineering a Better Future – HY2025 Results
ENGINEERING A BETTER FUTURE SMITHS GROUP PLC HY2025 RESULTS 25 MARCH 2025
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements that are forward-looking statements. They appear in a number of places throughout this presentation and include statements regarding the intentions, beliefs and/or current expectations of Smiths Group plc (the “Company”) and its subsidiaries (
Slide 3: Agenda
Agenda > Opening Remarks - Roland Carter > HY2025 Financial Results - Julian Fagge > Strategy Update - Roland Carter > Q&A 3
Slide 4: Opening Remarks
Opening Remarks ROLAND CARTER CHIEF EXECUTIVE OFFICER 4
Slide 5: Strategic actions underway to unlock significant value and enhance returns to shareholders
Strategic actions underway to unlock significant value and enhance returns to shareholders Focus on high performance technologies for efficient flow and Separate Smiths Interconnect and Disciplined capital allocation with heat management - John Crane Smiths Detection enhanced capital returns and Fle
Slide 6: Strong HY2025 financial results; FY2025 outlook reaffirmed
Strong HY2025 financial results; FY2025 outlook reaffirmed + 9.1% Organic1 revenue growth + 50bps Organic1 operating profit 17.1% + 14% ROCE Basic EPS growth margin expansion to 16.7% 94% £ 213m £ 129m 0.23 Operating cash Cash returned to Acquisitions2 Recordable incident rate conversion shareholder
Slide 7: HY2025 Financial Results
HY2025 Financial Results JULIAN FAGGE CHIEF FINANCIAL OFFICER 7
Slide 8: HY2025 – Continued strong financial performance
HY2025 – Continued strong financial performance Reported Organic2 HY2025 HY2024 change change Summary Smiths Group Headline1 - Strong revenue and operating profit Revenue £1,608m £1,507m +6.7% +9.1% growth with continued margin expansion Operating profit £269m £246m +9.5% +12.6% - EPS growth enhance
Slide 9: Extending our track record of organic revenue growth
Extending our track record of organic revenue growth 3.8% 11.6% 5.4% 13.5% 9.9% 9.1% 6.8% 4.1% 3.9% 3.4% H1 H2 H1 H2 H1 H2 H1 FY2022 FY2023 FY2024 FY2025 9
Slide 10: Continued operating margin expansion
Continued operating margin expansion Operating margin (%) +30bps (60)bps Margin movements +30bps +50bps 16.7% - Operating leverage from strong volume growth, 16.3% (20)bps particularly in Smiths +10bps 16.2% Detection and Smiths Interconnect Organic operating margin: +50bps - Continuing to capture p
Slide 11: Strong EPS growth driven by operating performance
Strong EPS growth driven by operating performance Earnings per share (pence) +14.0% growth 1.4 0.9 0.7 57.7 6.0 55.5 (2.2) 48.7 +19.3% constant currency growth HY2024 EPS Organic Tax and Acquisitions Share Constant FX HY2025 EPS operating interest buyback currency profit EPS 11
Slide 12: Improvement in cash conversion
Improvement in cash conversion ▪ 86% FY23 cash conversion, up from 80% in FY22 HY2025 HY2024 Operating cash flow Actuals ▪ Working capital initiatives resulted in a £17m inflow in H2 £m £m Summary Operating profit 269 246 ▪ Targeted 89% plans and SES projects reducing 94% inventory OCC1 OCC1 ▪ Capit
Slide 13: Business Update
Business Update JOHN CRANE FLEX-TEK SMITHS DETECTION SMITHS INTERCONNECT 13
Slide 14: John Crane – strong Q1, Q2 growth constrained by cyber incident
John Crane – strong Q1, Q2 growth constrained by cyber incident; order book supports H2 outlook Revenue Operating profit Business update £551m +3.8%1 £126m +3.9%1 - H2 growth to improve on H1 supported by robust order book and market demand. Order delivery affected by cyber incident moderating FY202
Slide 15: Flex-Tek – solid growth and execution despite challenging US construction market
Flex-Tek – solid growth and execution despite challenging market conditions in US construction Revenue Operating profit Business update £401m +2.5%1 £80m (5.1)%1 - Timing of US construction market recovery uncertain, but well positioned to benefit - Strong aerospace order book supports Acquisitions
Slide 16: Building on our track record with acquisition of Duc-Pac Corporation
Building on our successful track record with acquisition of Duc-Pac Corporation Feb-21 Q1 FY25 Acquisition of Acquisition of Acquisition of Acquisition of • Purchase price $41m (£32m) • Attractive valuation at 7.2x EBITDA (LTM) • Accretive to Flex-Tek margin Aug-23 Q3 FY25 £270m acquisition capital
Slide 17: Smiths Detection – significant volume growth in aviation
Smiths Detection – significant volume growth in aviation; continued margin expansion Revenue Operating profit Business update £454m +15.3%1 £51m +23.2%1 - OE aviation wins globally – now sold 1,600+ CTiX scanners with a good win rate; programme around halfway through with 2-3 more years to run Stron
Slide 18: Smiths Interconnect – innovation and execution driving strong growth
Smiths Interconnect – innovation and execution driving strong growth Revenue Operating profit Business update £202m +26.8%1 £35m +80.3%1 - Strong product innovation leading to growth in key programme wins (high speed GPUs and artificial intelligence) Strong execution in positive market conditions, O
Slide 19: Disciplined capital allocation with enhanced returns
Disciplined capital allocation with enhanced returns Disciplined use of capital HY2025 FY2025 and beyond • Capex £41m • Continued investment in organic Organic investment • RD&E £56m1 growth Value accretive • £97m for acquisitions2 • £32m for Duc-Pac in February 2025 bolt-on acquisitions • Disciplin
Slide 20: FY2025 outlook
FY2025 outlook Tailwinds Reaffirming FY2025 guidance - Continued strength in our end markets - Strong Smiths order book - Organic revenue growth of 6-8% - New product launches - Margin expansion of 40-60bps Headwinds - Uncertainty of timing of US construction market recovery - Operating cash convers
Slide 21: Strategy Update
Strategy Update ROLAND CARTER CHIEF EXECUTIVE OFFICER 21
Slide 22: Strategic actions to unlock significant value and enhance returns to shareholders
Strategic actions to unlock significant value and enhance returns to shareholders Update on FutureSmiths New enhanced medium-term financial targets Acceleration Plan to deliver a streamlined cost base Update on separation process 22
Slide 23: FutureSmiths – focusing on John Crane and Flex-Tek
FutureSmiths – focusing on our world-class John Crane and Flex-Tek businesses FutureSmiths John Crane Flex-Tek Indicative FY2024 RETAIN AND GROW BUSINESS END MARKETS John Crane 59% Gen. Industrial 54% Flex-Tek 41% Energy 38% Smiths Detection Aerospace 8% UK DEMERGER OR SALE Smiths Interconnect Total
Slide 24: FutureSmiths – engineering a better future
FutureSmiths – engineering a better future World-class engineering company specialising in high performance technologies for efficient flow and heat management Leading positions in attractive, growing markets, aligned with structural mega-trends Valued customer relationships with customised products
Slide 25: Attractive and complementary business models, industry characteristics and financial performance
Attractive and complementary business models, industry characteristics and financial performance John Crane Flex-Tek - Global demand for secure energy supply - Positioned to address the buildings and aircrafts of the future - Increased demand for energy efficiency, - Customer focus on efficiency and
Slide 26: Enhanced financial performance of FutureSmiths
Enhanced financial performance of FutureSmiths Organic revenue growth, Operating profit margin1 ROCE1 Operating cash conversion1 as reported (FY2024) (FY2024) (FY2024) (5-year historical average) 23.2% 97% 91% 19.5% 16.8% 16.4% 4.7% 3.5% Smiths Group FutureSmiths Smiths Group FutureSmiths Smiths Gro
Slide 27: Enhanced medium-term targets
Enhanced medium-term targets – reflecting further growth and higher return potential +M&A 21-23% >20% ~100% +M&A >10% 5-7% Organic revenue EPS growth Operating profit margin ROCE Operating cash growth1 conversion INCREASED from 4-6% INCREASED INCREASED INCREASED UNCHANGED discipline to reflect above
Slide 28: Clear plan with focused execution agenda underpin growth and value creation
Clear plan with focused execution agenda underpin growth and value creation ambition GROWTH EXECUTION Near Term Medium Term Near Term Medium Term Medium-term Organic Revenue Growth | Operating Profit Margin Operating Profit Margin | ROCE | Operating Cash Conversion impact Operating Margin Core Marke
Slide 29: Medium-term margin expansion supported by Acceleration Plan
Medium-term margin expansion supported by Acceleration Plan Programme of targeted investment FutureSmiths - Enhance capabilities and competitiveness - Deliver end-to-end-process improvement for resilience and scalability Medium-term - Optimise operational footprint, improve operating leverage, enhan
Slide 30: Separation of Smiths Interconnect and Smiths Detection initiated
Separation of Smiths Interconnect and Smiths Detection initiated - Smiths Interconnect: sale with targeted announcement by end CY2025 Maximise value creation - Smiths Detection: UK demerger or sale following sale of Smiths Interconnect - Advisers appointed - Board Separation Oversight Committee esta
Slide 31: Smiths Interconnect and Smiths Detection – strong, well-performing businesses
Smiths Interconnect and Smiths Detection – strong, well-performing businesses in attractive markets BUSINESS STRENGTHS Smiths Interconnect Smiths Detection - Cutting-edge capabilities in critical applications e.g. optical - Leading threat detection and screening technologies World-class transceivers
Slide 32: Summary – opportunity to deliver significant shareholder value
Summary – compelling opportunity to deliver significant shareholder value Strong capital Executing for Delivering growth Expanding margins allocation framework value creation - All businesses delivering profitable - Reaffirming FY2025 guidance of - Organic investment through R&D - The right time to
Slide 33: Q&A
smiths Q&A
Slide 34: Appendix
Appendix 34
Slide 35: Bridge – reported to organic
Bridge – reported to organic £m - Smiths Group HY2024 Headline1 Foreign exchange HY2024 Organic2 Organic movement2 Acquisitions HY2025 Headline1 John Crane 555 (24) 531 20 - 551 Flex-Tek 384 (9) 375 10 16 401 Smiths Detection 404 (10) 394 60 - 454 Smiths Interconnect 164 (5) 159 43 - 202 Headline re
Slide 36: Income statement
Income statement £m HY2025 HY2024 Reported change Revenue 1,608 1,507 +6.7% Headline1 operating profit 269 246 +9.5% Amortisation of acquisition related intangible assets (27) (25) Legacy pension scheme arrangements (2) (3) Non-headline litigation provision movements 15 (15) Restructuring costs (7)
Slide 37: FY2025 guidance
FY2025 guidance HY2025 HY2024 Currency Revenue exposure % change average rate average rate USD 55% 1.28 1.25 +2.5% - Expect FX headwind EUR 13% 1.19 1.16 +3.0% of ~3% on FY25 revenue and ~4% on Translation impact HY2025 operating profit2 Revenue £(48)m or (3.5)% - For each $0.10 move, Operating prof