Smiths Group Plc · LSE:SMIN
Smiths — Shareholder Meeting (November 2014)
21 slides from Smiths's shareholder meeting presentation, Nov 18, 2014
Slide 1: Annual General Meeting
Annual General Meeting 18 November 2014 1851 1914 2014 Samuel Smith opens his first S. Smith & Sons floats on the LSE Smiths now employs over jewellery shop in south London only days before WW1 breaks out 23,000 people in 50 countries [email protected] www.smiths.com Smiths Group plc Ann
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: Philip Bowman, Chief Executive
Philip Bowman Chief Executive Smiths Group plc Annual General Meeting 2014 | 3
Slide 4: Results overview
Results overview Reported headline revenue down 5%; underlying up £2m Headline operating profit down 10%, underlying down 6% Headline EPS down 12% to 81.8p Cash conversion remains strong at 97% - free cash flow of £143m Return on capital employed down 90 bps at 15.7% Dividend up 2% to 40.25 pence Sm
Slide 5: Key messages
Key messages Continued progress in commercial markets, tough in medical and defence • Growth in John Crane, Smiths Interconnect and Flex-Tek • Difficult trading environment in Smiths Medical and Smiths Detection Adverse FX hit to profit of £43m (c. 8%): translation £27m & transaction £16m Group is b
Slide 6: Promoting responsibility: Delivering continued improvements on key metrics
Promoting responsibility: Delivering continued improvements on key metrics Recordable & lost time incident rates continue to improve Environmental metrics • New five-year Lost time incident rate environmental targets Recordable incident rate* 0.71 0.66 • FY2014* performance: 0.60 0.54 0.50 o Energy:
Slide 7: John Crane: Delivering revenue growth and enhanced margins and returns
John Crane: Delivering revenue growth and enhanced margins and returns Underlying revenue Underlying headline profit Headline operating margin +150 bps + 2% + 8% 24.9% • Sales growth driven by oil & gas – mid & downstream • Margins at record highs with higher revenue and productivity initiatives • A
Slide 8: John Crane: Launching new products to reduce installation time and costs
John Crane: Launching new products to reduce installation time and costs Type 3740 split seal Suited for large, difficult to maintain pumps, mixers and rotating equipment Unique technology allows the seal to be installed without dismantling the equipment, cutting installation time by more than 50% U
Slide 9: Medical: Strong second half, but overall tough trading environment
Smiths Medical: Strong second half, but overall tough trading environment Underlying revenue Underlying headline profit Headline operating margin (240) bps (1)% (12)% 19.8% • Second half improved after challenging first half • Consumables flat; hardware down 3% • Margins affected by transactional FX
Slide 10: Medical: Initiatives to drive medium-term growth
Smiths Medical: Initiatives to drive medium-term growth Continue to build presence in higher growth markets • Brazil (up 12%) and India (up 74%); China down 7% • Launching new products in China market Improve service levels and productivity Investing in new products – reached a new high – 5% of reve
Slide 11: Medical: Launching new products to help children breathe
Smiths Medical: Launching new products to help children breathe Bivona Flex-Tend Special tracheostomy tube to help children breathe Flexible design helps keep connections away from the neck and chin – enhancing patient mobility and comfort Special coating aids insertion and removal. Wire insert rein
Slide 12: Detection: Tough trading environment; margins under pressure
Smiths Detection: Tough trading environment; margins under pressure Underlying revenue Underlying headline profit Headline operating margin (560) bps (5)% (57)% 4.8% • Revenue down against tough comparator • Margins affected by working capital adjustments, programme delivery costs, lower volumes and
Slide 13: Detection: A prioritised action plan to deliver improved performance
Smiths Detection: A prioritised action plan to deliver improved performance Build on our installed base and expand our aftermarket • Reduce cost base and improve competitiveness • Greater focus on growth markets e.g. Asia, Middle East Improve our programme delivery • New programme review process in
Slide 14: Detection: Launch new products that meet customer needs
Smiths Detection: Launch new products that meet customer needs ACE-ID Advanced, handheld chemical identifier for explosives, toxic industrial chemicals and narcotics Uses a laser-based technique to identify unknown solids and water-based solutions in 20 seconds or less Smiths Group plc Annual Genera
Slide 15: Interconnect: Return to growth; margins benefit from productivity initiatives
Smiths Interconnect: Return to growth; margins benefit from productivity initiatives Underlying revenue Underlying headline profit Headline operating margin +110 bps + 1% + 9% 16.0% • Sales growth from Microwave offset by decline in Connectors • Margins benefited from on-going productivity initiativ
Slide 16: Interconnect: Emerging market growth and product innovation
Smiths Interconnect: Emerging market growth and product innovation Expansion in emerging markets • Emerging market sales up 15% to represent 18% of sales, up 220 bps New product development focused on high growth markets • Company-funded R&D increased 5%; vitality index >30% • New products include:
Slide 17: Interconnect: New spring probe connector for testing semiconductors
Smiths Interconnect: New spring probe connector for testing semiconductors Monet For testing semiconductors used in latest generation mobile phones Tiny spring probe connectors that can test contacts just 200 microns apart – twice the width of a human hair Provides a more reliable way of repeatedly
Slide 18: Flex-Tek: Growth from US construction and specialty heating
Flex-Tek: Growth from US construction and specialty heating; strong margin boost Underlying revenue Underlying headline profit Headline operating margin +180 bps + 3% + 14% 18.9% • Strong sales growth from US residential construction, specialty heating and medical hoses • Margins up 180 bps from hig
Slide 19: Flex-Tek: New hose delivers savings in transfer of compressed natural gas
Flex-Tek: New hose delivers savings in the transfer of compressed natural gas Virtual pipeline hose Hose can withstand immense pressure while its advanced polymer lining maintains flexibility at temperatures as low o o as 100 F (70 C) Allows easy transfer of CNG from trucks to major customers such a
Slide 20: Operational priorities for 2015
Operational priorities for 2015 Continue to reposition the business profile to accelerate sales growth Implement the divisional improvement plans – particularly in Detection Increase investment in growth drivers: new products, emerging markets Deliver the benefits of Fuel for Growth Smiths Group plc
Slide 21: [email protected] www.smiths.com
[email protected] www.smiths.com