Smiths Group PLC · LSE:SMIN
Smiths — FY2002 Earnings Presentation
24 slides from Smiths's earnings presentation, Sep 25, 2002
Slide 1: Smiths Group 2002 Preliminary Results
Smiths Group 2002 2002 Preliminary Preliminary Results Results London - Wednesday 25 September 2002 www.smiths-group.com www.smiths-group.com
Slide 2: Smiths Group - 2002 Preliminary results
Smiths Group- 2002 Preliminary results Chairman speaking Introduction Keith Orrell-Jones, Chairman Presentation Keith Butler-Wheelhouse, Chief Executive Financials Alan Thomson, Financial Director For the year-ended 31 July 2002 annual results 2002 | 2
Slide 3: Chief Executive speaking
Smiths Group- 2002 Preliminary results Chief Executive speaking Robust performance in difficult conditions Free cash of £315m - 56p per share Continued mid-teens margins R&D spend up 13% at £212m Debt reduced by £395m to £725m Final dividend increased to 16.75p, total for yea
Slide 4: Group - consolidated results
Smiths Group- consolidated results 2002 2001 £m £m (including (including continuing continuing and and discontinued) discontinued) Turnover 3,223 4,958 Profit before tax* 405 535 Free cash-flow 315 205 ** before before exceptional exceptional charges charges and and goodwill goodwill amortisation am
Slide 5: Group - 2002 consolidated
Smiths Group- 2002 consolidated £m Continuing Continuing Discontinued Discontinued Total Total Turnover 3,070 153 3,223 Operating profit* 452 10 462 2001 comparative 499 Interest (46) (11) (57) Profit before tax* 406 (1) 405 ** before before exceptional exceptional charges charges and and goodwill g
Slide 6: Group - continuing activities
Smiths Group- continuing activities £m 2002 2001 Turnover 3,070 3,132 -2% Operating profit* 452 499 -9% Margin 15% 16% ** before before exceptional exceptional charges charges and and goodwill goodwill amortisation amortisation annual results 2002 | 6
Slide 7: Group - continuing activities
Smiths Group- continuing activities £m 2002 2001 Turnover 3,070 3,132 -2% Operating profit* 452 499 -9% Margin 15% 16% Interest (46) (59) Pre-tax* 406 440 -8% EPS* 52.3p 56.4p -7% ** before before exceptional exceptional charges charges and and goodwill goodwill amortisation amortisation annual resu
Slide 8: Gaining the benefits of restructuring
Gaining the benefits of restructuring Charges £m Aerospace 39 Medical 5 Total 44 Savings Will deliver full-year benefit of £ for £ savings by 2004 2002 2002 also also benefited benefited from from over over £50m £50m of of merger merger savings savings annual results 2002 | 8
Slide 9: Sharpening the focus
Sharpening the focus Disposals 2001 contribution contribution £m £m John John Crane Crane Marine Marine Proceeds Sales Sales 230 230 Other Other non-core non-core £247m (net) Profit Profit 25 25 (net) Margin 11% Acquisitions 2002 part part year year contribution contribution £m £m Bivona Bivona Abbo
Slide 10: Driving down debt
Driving down debt Disposal Disposal programme programme and and cash cash Net debt generation generation continue continue to to drive drive down down debt debt £1.8bn Interest Interest cost cost £116m £116m £1.1bn Interest Interest cost cost £57m £57m £0.7bn Dec Dec 2000 2000 on on formation format
Slide 11: Operating cash-flow
Operating cash - flow Financial Director speaking 2002 £m £m continuing continuing total total Operating Operating profit 452 452 462 462 Depreciation Depreciation 89 89 92 92 Cap ex (98) (100) Working capital capital 30 30 29 29 Operating cash 473 473 483 483 Cash conversion 105% 105% annual result
Slide 12: Overall cash-flow - total group
Overall cash - flow- total group £m 2002 2001 Operating cash (after (after cap-ex) cap-ex) 483 483 incl. auto 513 incl. auto 513 Interest Interest and tax (109) (233) (233) Restructuring Restructuring (59) (59) (74) (74) Free Free cash cash 315 315 206 206 Merger Merger costs costs -- (54) (54) Divi
Slide 13: Pensions update
Pensions update Large UK pension plan still in surplus Measured Measured under under FRS17, FRS17, at at July July 2002 2002 market market conditions conditions FRS17 in 2002 would have reduced profit by £8m 2003 pension expense measured under FRS17 will be an additional £30m Measured Measured at at
Slide 14: Other financial issues
Other financial issues Currency Dollar Dollar and and Euro Euro -- little little translation translation impact impact Yen, Yen, Rand Rand and and S. S. America America effect effect Dollar Dollar dropped dropped close close toto year year end end Auto pref. dividend Expected shortly Goodwill £12m i
Slide 15: Aerospace
Aerospace 42% 42% contrib. to op. profit Chief Executive speaking £m £m 2002 2001 Turnover 1,345 1,301 +3% Operating profit 191 209 -9% Margin 14% 16% Detection Other Other Detection rapid rapid growth growth Civil Civil Defence Defence downturn downturn had had full full continued continued impact
Slide 16: Smiths Aerospace
Smiths Aerospace winning winning business business on on key key programmes programmes B767 B767 Global Global Tanker Tanker Smiths Smiths is is integrator integrator of of in-flight in-flight refuelling refuelling system. system. Shipset Shipset of of $3.5m, $3.5m, up up to to 500 500 aircraft airc
Slide 17: Medical
Medical 22% 22% contrib. to op. profit £m £m 2002 2001 Turnover 480 452 +6% Operating profit 97 93 +4% Margin 20% 21% Other Other specialised specialised Airway Airway Management Management products products new new products products sustain sustain strong strong growth growth high high margin margi
Slide 18: Smiths Medical
Smiths Medical Innovative Innovative products products will will drive drive growth growth Needle-Pro Needle-Pro Safe Safe needle needle closure closure devices devices Needle-Pro Needle-Pro gaining gaining market Portex Portex market share share with with extended extended range. range. Futura Futu
Slide 19: Sealing Solutions
Sealing Solutions 22% 22% contrib. to op. profit £m £m 2002 2001 Turnover 822 892 -8% Operating profit 100 104 -4% Margin 12% 12% Polymer Polymer John John Crane Crane Seals Seals on on steady steady sales, sales, profits profits sales, sales, margins margins affected affected by by significantly si
Slide 20: Industrial
Industrial 14% 14% contrib. to op. profit £m £m 2002 2001 Turnover 422 487 -13% Operating profit 65 93 -31% Margin 15% 19% Ducting Ducting Interconnect Interconnect Retaining Retaining good good pulled pulled down down margins margins on on by telecom by telecom steady steady sales sales network net
Slide 21: Robust businesses in tough conditions
Robust businesses in tough conditions £m £m 2002 2001 Aerospace 191 209 -9% Medical 97 93 +4% Sealing Solutions 100 104 -4% Industrial 65 93 -31% Operating profit* 452 499 -9% Interest (46) (59) Pre-tax* 406 440 -8% ** before before exceptional exceptional charges charges and and goodwill goodwill a
Slide 22: 2003 drivers
2003 drivers Market demand Actions Actions Civil Civil Aerospace Aerospace Defence Defence Detection Detection Medical Medical Capital Capital Restructuring Restructuring -- goods goods completion completion ofof process process already already announced announced Operating Operating efficie
Slide 23: Performance and Fundamentals
Smiths Group Performance Performance and and Fundamentals Fundamentals £m £m 2002 2002 Turnover Turnover 3,070 3,070 -2% -2% Operating Operating profit* profit* 452 452 -9% -9% EPS* EPS* 52.3p 52.3p -7% -7% Dividend Dividend 25.5p 25.5p +2% +2% Free Free cash-flow cash-flow 315 315 +54% +54% Debt De
Slide 24: Presentation audio web-cast
This This presentation presentation has has been been audio audio web-cast web-cast and and can can be be viewed viewed at at -- www.smiths-group.com/presentation www.smiths-group.com/presentation www.smiths-group.com www.smiths-group.com