Smiths Group Plc · LSE:SMIN
Smiths — Investor Presentation (September 2018)
19 slides from Smiths's investor presentation, September 2018
Slide 1: September 2018
SS ~ (SEPTEMBER 2018
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: What it means to be Smiths
WHAT IT MEANS TO BE SMITHS LEADING POSITIONS IN TARGETING ATTRACTIVE MARKETS STRONG STRONG OPERATIONAL PERFORMANCE EXECUTION GROWTH & RETURNS STRONG FINANCIAL FINANCIAL PERFORMANCE DISCIPLINE A HIGH PERFORMING, DIVERSIFIED TECHNOLOGY COMPANY | 3
Slide 4: Smiths Group today
SMITHS GROUP TODAY A HIGH PERFORMING, DIVERSIFIED TECHNOLOGY COMPANY SMITHS GROUP JOHN SMITHS SMITHS SMITHS FLEX-TEK End markets CRANE MEDICAL DETECTION INTERCONNECT • Founded in 1851 Mission-critical High-quality, cost- A global leader in Solutions for high- Innovative MEDICAL • c.22,000 solutions
Slide 5: Strategic progress
STRATEGIC PROGRESS 2016 2017 2018 2019 AMBITION OUTPERFORMING A NEW SIGNIFICANT RETURN TO SUSTAINABLE OUR CHOSEN DIRECTION PROGRESS GROWTH GROWTH MARKETS | 5
Slide 6: Characteristics of a Smiths business – our DNA
CHARACTERISTICS OF A SMITHS BUSINESS – OUR DNA HIGH PROPORTION SUSTAINABLY INCREASING TECHNOLOGY OF AFTERMARKET COMPETITIVE AND DIGITISATION DIFFERENTIATION AND SERVICES ASSET LIGHT TARGETED IN GROWING MARKETS | 6
Slide 7: Targeted in growing markets
TARGETED IN GROWING MARKETS MEDICAL SECURITY & GENERAL OIL & SPACE & TECHNOLOGY DEFENCE INDUSTRIAL GAS COMMERCIAL AEROSPACE - Market growth: 3-4%1 - Market growth: 4-6%2 - Market growth: GDP+ - Market growth: 1-2%3 - Market growth: 4-6%4 - Smiths Medical; - Smiths Detection; - John Crane; Smiths - J
Slide 8: Top leadership in targeted market segments
TOP 3 LEADERSHIP IN TARGETED MARKET SEGMENTS MARKET FIX ATTRACTIVENESS - Size EXIT - Growth C. 60% C. 80% - Segment profitability - Competitor landscape SPACE & MEDICAL SECURITY & GENERAL OIL & COMMERCIAL COMPETITIVE TECHNOLOGY DEFENCE INDUSTRIAL GAS AEROSPACE POSITION - Relative market share - Infu
Slide 9: Parallel path
PARALLEL PATH FY2016 FY2018 Medium term HIGH GRADING THE BUSINESSES C. 60% C. 80% 85%+ A WORLD LEADING TECHNOLOGY RISK OF EXECUTION COMPANY PORTFOLIO PRIORITISATION CAPITAL ALLOCATION DECISIONS RISK ASSESSMENT | 9
Slide 10: A world leading technology company
A WORLD LEADING TECHNOLOGY COMPANY GROWTH INVESTMENT RETURNS Outperforming our Out performing our chosen markets chosen markets MARGIN Achieving world-class 18-20% competitiveness ROCE Strong financial 16-18% framework CASH CONVERSION 100%+ | 10
Slide 11: Medium term ambition
MEDIUM TERM AMBITION OPERATIONAL FINANCIAL PERFORMANCE PERFORMANCE Competitive position Top 3 Outperforming our Organic revenue growth chosen markets R&D % sales 5-6% Operating margin 18-20% Vitality index ~20% ROCE 16-18% Stock turns ~6x WC % sales ~20% Aftermarket % 60%+ Cash conversion 100%+ | 11
Slide 12: Smiths in FY 2018
‘ Smee IN FY 2018
Slide 13: Smiths Group – FY 2018
SMITHS GROUP – FY 2018 SMITHS SMITHS JOHN CRANE SMITHS MEDICAL FLEX-TEK GROUP DETECTION INTERCONNECT Revenue £881m £885m £793m £300m £354m £3,213m (£’m) Revenue growth* +5% (2)% +1% (1)% +10% +2% (%) Operating profit £202m £156m £134m £42m £67m £544m** (£’m) Operating margin 22.9% 17.6% 16.9% 14.1%
Slide 14: Revenue analysis - FY 2018
REVENUE ANALYSIS - FY 2018 JOHN CRANE SMITHS MEDICAL SMITHS DETECTION SMITHS INTERCONNECT FLEX-TEK 14% 19% 21% 44% 30% 33% 34% 10% 40% 4% 7% 8% 56% 26% 68% 11% 33% 25% 17% Mission-critical solutions for global energy and process industries Oil & gas Infusion systems Air transportation Defence Constr
Slide 15: John Crane: Mission-critical solutions for energy and process industries
JOHN CRANE: Mission-critical solutions for global energy and process industries Revenue £881m COMPETITIVE STRENGTHS GROWTH DRIVERS COMPETITIVE (27% of Group) LANDSCAPE • A global leader in flow control for rotating • Oil & gas markets recovering driven by Headline OP equipment underlying energy dema
Slide 16: Smiths Medical: Cost-effective medical devices and consumables
SMITHS MEDICAL: High-quality, cost-effective medical devices and consumables that are vital to patient care globally Revenue £885m COMPETITIVE STRENGTHS GROWTH DRIVERS COMPETITIVE (28% of Group) LANDSCAPE • A category leader in our chosen markets • Ageing populations with increasing Headline OP • Tr
Slide 17: Smiths Detection: Detection and identification of security threats
SMITHS DETECTION: A global leader in the detection and identification of security threats and contraband Revenue £793m COMPETITIVE STRENGTHS GROWTH DRIVERS COMPETITIVE (25% of Group) LANDSCAPE • A global market leader with • Persistent and evolving terror threats Headline OP differentiated technolog
Slide 18: Smiths Interconnect: High-speed, secure connectivity solutions
SMITHS INTERCONNECT: Solutions for high-speed, secure connectivity in demanding applications Revenue £300m COMPETITIVE STRENGTHS GROWTH DRIVERS COMPETITIVE (9% of Group) LANDSCAPE • Innovative and technically differentiated offerings • Increased connectivity supporting growth in Headline OP • Ultra-
Slide 19: Flex-Tek: Components to heat and move fluids and gases
FLEX-TEK: Innovative components to heat and move fluids and gases Revenue £354m COMPETITIVE STRENGTHS GROWTH DRIVERS COMPETITIVE (11% of Group) LANDSCAPE • High-performance products • Steady growth of the US housing Headline OP • Leading capability in design and construction market • Fluid managemen
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