Smiths Group Plc · LSE:SMIN
Smiths — Shareholder Meeting (November 2017)
22 slides from Smiths's shareholder meeting presentation, Nov 14, 2017
Slide 1: Smiths Group Annual General Meeting 2017
SMITHS GROUP ANNUAL GENERAL MEETING 2017 14 NOVEMBER 2017
Slide 2: Today's Agenda
TODAY’S AGENDA CHAIRMAN’S ADDRESS | SIR GEORGE BUCKLEY, CHAIRMAN CHIEF EXECUTIVE REVIEW | ANDY REYNOLDS SMITH, CEO Q&A Smiths Group plc Annual General Meeting 2017 | 2
Slide 3: Chairman's Address
CHAIRMAN’S ADDRESS SIR GEORGE BUCKLEY CHAIRMAN Smiths Group plc Annual General Meeting 2017 | 3
Slide 4: Chief Executive Review
CHIEF EXECUTIVE REVIEW ANDY REYNOLDS SMITH CHIEF EXECUTIVE Smiths Group plc Annual General Meeting 2017 | 4
Slide 5: Executing Our Strategy
EXECUTING OUR STRATEGY STRATEGIC PRIORITIES FY17 PROGRESS OUTPERFORMING OUR • Focused investment for organic growth CHOSEN MARKETS • Significant portfolio upgrading • Smiths Excellence System implemented Group-wide ACHIEVING WORLD-CLASS • Innovation driving technological and digital transformation C
Slide 6: Strategic Portfolio Repositioning
STRATEGIC PORTFOLIO REPOSITIONING TECHNOLOGY INCREASING DIFFERENTIATION DIGITISATION POSITIONED IN GROWING MARKETS HIGH PROPORTION OF SUSTAINABLY AFTERMARKET AND COMPETITIVE RECURRING REVENUES AND ASSET LIGHT Smiths Group plc Annual General Meeting 2017 | 6
Slide 7: Significant Progress in 2017
SIGNIFICANT PROGRESS IN 2017 2016 2017 Businesses that Businesses that need improvement or need improvement or are in non-core markets are in non-core markets FIX Non-core SELL 60%+ 75%+ of our businesses of our businesses are well positioned are well positioned BUILD Smiths Group plc Annual General
Slide 8: New Product Launches
NEW PRODUCT LAUNCHES Medical Interconnect Detection ViaValve DeltaVen ThermoPad CORSYS Jelco CADD Solis DaVinci Flex-Tek CORAL CTiX E series Heater MedFusion programming John Crane •TSKS Coupling •Single Use Seal •Co-Planar Coupling •Seal for Crude Oil pumps Smiths Group plc Annual General Meeting 2
Slide 9: Key Wins
KEY WINS Detection Medical Flex-Tek • Frankfurt (Germany) • Cochin (India) • Successful acquisition of Osram Heating elements • Amsterdam (Netherlands) • Narita (Japan) • Additional Gastite wholesale • Gatwick (UK) • TSA (USA) locations added • EL AL (Israel airlines) • Munich (Germany) John Crane I
Slide 10: 2017 Financial Results
2017 FINANCIAL RESULTS £m 2017 2016 Change Revenue 3,280 2,949 +11% (1)% Underlying decline2 Operating profit1 589 510 +16% 3% Underlying growth2 Operating margin1 18.0% 17.3% +70bps Profit before tax1 528 451 +17% Free cash flow 370 243 +52% Strong cash flow ROCE1 16.2% 15.3% +90bps EPS1 97.6p 85.2
Slide 11: Revenue Analysis
REVENUE ANALYSIS +2% +9% +3% underlying1 underlying1 underlying1 growth growth growth John Smiths Smiths Crane Detection Interconnect Air transportation £885m £687m Ports & Borders £419m Oil & gas - 4%1 +4%1 Military +1%1 Non-oil & gas Urban Security Core business Morpho Detection Divestitures Dives
Slide 12: Strong Cash Flow Conversion
STRONG CASH FLOW CONVERSION £m 2017 2016 Change Operating profit1 589 510 Operating cash flow & conversion Capex including capitalised R&D (98) (108) Depreciation and amortisation 101 96 Working capital 85 9 2017 118% Other 18 13 Operating cash flow1 695 520 +34% Interest (60) (58) 2016 102% Taxatio
Slide 13: Balance Sheet Remains Strong
BALANCE SHEET REMAINS STRONG Morpho self- £m funded FCF Net Debt/ covers EBITDA dividend 1.4x 61 462 13 580 370 167 978 • Weighted average debt maturity: 6.5 years1 967 • Weighted average interest rate: 3.2%1 • Stable credit rating (BBB+/Baa2) Net debt FX Free Cash Flow Acquisitions Divestitures Div
Slide 14: 2018 Outlook
2018 OUTLOOK RETURN TO GROWTH • John Crane: growth in non-oil & gas and aftermarket more than offset challenges in oil & gas • Medical: gradual improvement driven by new product launches during the year • Detection: good growth driven by air transportation – H2 weighted • Interconnect: further progr
Slide 15: Solid Progress in 2017 - Building for the Future
SOLID PROGRESS IN 2017 - BUILDING FOR THE FUTURE STRATEGIC PRIORITIES OUTPERFORMING OUR • Structure in place to drive sustainable growth CHOSEN MARKETS • Building on 75% well positioned businesses ACHIEVING WORLD-CLASS • Strong, sustainable margins supported by operational excellence COMPETITIVENESS
Slide 16: Disclaimer
DISCLAIMER 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
Slide 17: Q&A
Q&A Smiths Group plc Annual General Meeting 2017 | 17
Slide 18: Proxy Votes
PROXY VOTES • 294,741,558 million proxy votes cast • 74.49% of the issued share capital Smiths Group plc Annual General Meeting 2017 | 18
Slide 19: Poll Vote - Resolutions
POLL VOTE - RESOLUTIONS 1. Receive the Report and Accounts 2. Approval of Directors’ Remuneration Report 3. Declaration of the final dividend 4. Re-election of Bruno Angelici as a director 5. Re-election of Sir George Buckley as a director 6. Re-election of Tanya Fratto as a director 7. Re-election
Slide 20: Poll Closes In
POLL VOTE - RESOLUTIONS 1. Receive the Report and Accounts 2. Approval of Directors’ Remuneration Report 3. Declaration of the final dividend 4. Re-election of Bruno Angelici as a director POLL 5. Re-election of Sir George Buckley as a director 6. Re-election of Tanya Fratto as a director CLOSES IN
Slide 21: Poll Closed
POLL CLOSED The final results of the poll will be announced via the Regulatory News Service to the London Stock Exchange and posted on our www.smiths.com corporate website shortly Smiths Group plc Annual General Meeting 2017 | 21
Slide 22: Thank You for Attending
THANK YOU FOR ATTENDING Smiths Group plc Annual General Meeting 2017 | 22