IMPROVINGOUR WORLD
THROUGH
SMARTERENGINEERING
SMITHS GROUP PLC
HALF YEAR RESULTS FY2024
26 MARCH 2024

Disclaimer
This presentation contains certain statements that are forward-looking
statements. They appear in a number of places throughout this presentation andinclude statements regarding the intentions, beliefs and/or current expectations ofSmiths Group plc (the “Company”) and its subsidiaries (together, the “Group”) andthose of their respective officers, directors and employees concerning, amongst
other things, the results of operations, financial condition, liquidity, prospects,
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forward-looking statements reflect knowledge and information available at thedate of preparation of this presentation and, unless otherwise required byapplicable law, the Company undertakes no obligation to update or revise theseforward-looking statements. The Company and its directors accept no liability to
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AgendaOpening Remarks
Paul Keel
HY2024 Financial Results
Clare Scherrer
Operational Update
Paul Keel
Q&A

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3

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HY2024 – Solid growth, building on a record year
Delivered first half organic revenue growth1 of +3.9% against record HY23 comparator
Eleventh consecutive quarter of organic revenue growth
GrowthOrders2 +16.5%, driven by John Crane (+10.9%), Smiths Detection (+38.2%) and Flex-Tek aerospace (+11.6%)
Execution focus and Smiths Excellence System delivering further tangible benefits
Headline organic operating profit3 +5.3%; margin expansion of +20bps to 16.3%; ROCE +50bps to 15.7%
Cash conversion up 26 percentage points year-on-year to 89%; more than doubled free cash flow

Execution

Announcing new £100m share buyback programme, with first tranche of up to £50m
Actively investing in our people; 1st wave of SES leaders completing assignments, 2nd wave starting
Science Based Targets initiative validated our Net Zero targets and plans

PeopleSmiths Group Foundation awarding first grants to charitable causes that align with our Purpose

Reaffirming FY24 organic revenue growth within 4-6% medium-term target, with continued margin expansion
1. Organic revenue growth excludes the effects of foreign exchange and acquisitions
2. Order intake growth excludes the effects of foreign exchange
3. Headline: In addition to statutory reporting, the Group reports on a headline basis. Definitions of headline metrics, and information about the adjustments to statutory measures, are provided in note 3 to the financial statements

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4

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Smiths Value Engine
OUR PURPOSEOUR STRENGTHSWorld-Class
Engineering

PIONEERS OF
PROGRESS
Improving our world
through smarterengineering

Leading Positions
in Critical Markets

OUR PRIORITIES

GrowthExecution

GlobalCapabilities

Robust Financial
Framework

OUR COMMITMENTS
Organic Revenue
Growth4-6%(+M&A)EPS Growth

7-10%(+M&A)

ROCE

15-17%

Operating
Profit Margin

18-20%

PeopleOperating Cash
Conversion

100%+

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5

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Sustained progress against our medium-term targets

15-17%+M&A

18-20%

100%+

7-10%
4–6%
Organic Revenue Growth1

EPS Growth

ROCE2

Operating Profit Margin

Operating Cash Conversion2

HY2022+3.4%+17.7%

14.0%

15.9%

93%

HY2023+13.5%+52.1%

15.2%

16.1%

63%

HY2024

+3.9%

+4.5%

15.7%

16.3%

89%

Organic +
M&A

+6.1%
1. Organic revenue growth excludes the effects of foreign exchange and acquisitions|

2. HY2022 ROCE and operating cash conversion exclude impact of cash payments from FY2021 restructuring programme

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6

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HY2024
Financial Results
CLARE SCHERRERCHIEF FINANCIAL OFFICER

HY2024 – Growth across all key metrics
HY20241

HY20231

ReportedchangeOrganic
changeSummary: 11th consecutive quarter of organic
revenue growth

Smiths Group Tracking to FY guidance
Revenue£1,507m£1,497m

+0.7%

+3.9%

 5.3% organic operating profit growthand moderate margin progression

Operating profit

£246m

£241m

+2.1%

+5.3%

Operating profit margin

16.3%

16.1%

+20bps+20bps EPS growth driven by operating profit
growth and benefit of share buyback,partially offset by FX

Basic EPS

48.7p

46.6p

+4.5%

Operating cash conversion

89%

63%

+26pps

ROCE

15.7%

15.2%

+50bpsDividend

13.55p

12.9p

+5.0%

1. Headline excludes items defined in note 3 of the financial statements

 Cash conversion increased
26 percentage points to 89%;reflecting working capital
improvement
 Continued ROCE expansion, driven byprofit growth Dividend per share +5%
 New £100m share buyback
programme; first tranche up to £50m

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8

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Building a track record of consistent growth

11 consecutive quarters of organic revenue growth

13.2%

5.8%

5.0%
Covid-19

13.6%

13.4%

5.7%

1.0%

6.7%

3.5%

4.2%

Q4

Q1

Q2

2.9%

Medium-term
target:4-6%(2.2%)(4.6%)(7.1%)
Q1

Q2

Q3
FY21

Q4

Q1

Q2

Q3
FY22

Q4

Q1

Q2

Q3
FY23

FY24
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9

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Moderate operating margin expansion
Summary:

Operatingmargin (%)+100bps (80)bps+70bps Margin expansion- Capturing price in excess
of input inflation- SES delivering further
benefits- FY2023 savings projects- Volume growth(30)bps(120)bps+60bps16.1%(10)bps +10bps

16.1%

16.3%

+20bps

15.9%=

Operating margin +20bps

 Margin compression- Volume decline inInterconnect- Additional cost to hire
Detection field service
engineers to support
record activity- Investments to fuel future
growth, primarily
John Crane

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10

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Delivering EPS growth

Earnings per share (pence)

EPS growth +4.5%
Constant currency EPS growth +11.3%

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11

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Improving cash conversion
 86% FY23 cash conversion, up from 80% in FY22
HY23 to HY24 - Operating cash conversion (OCC)

Actuals Working capital initiatives resulted in a £17m inflow in H2
 Targeted plans and SES 25%
projects
inventory(1)%reducing
89%

Operating profit

HY24
£m

HY23
£m

246

241

 Capital expenditure focused on increasing capacityand developing
new26
D&A
26
products
63%

0%

2%

 £[178]m of free cashflow generated (up 36% YoY)Lease depreciation

HY23 OCC

D&A(including
leases)Other

Working
capital

Capex

17

17

Other

12

9

Working capital

(45)

(106)

Capex

(38)

(36)

Operating cash flow

218

151

Summary: 89% cash
conversion, up from
63% in HY23
 Improved working
capital Capital expenditure
focused onincreasing capacity
and automation £112m of free
cashflow generated(+143.5% YoY)HY24 OCC|

12|

Business
UpdateJOHN CRANE

SMITHS
DETECTION

FLEX-TEKSMITHSINTERCONNECT

John Crane – strong organic revenue and operating profit growth
Revenue

Operating profit+12.7% 1

£555m

£128m

 Original equipment: +0.3%
 Aftermarket: +22.5%

Industrial+6.5%:

 Original equipment: +5.0%
 Aftermarket: +7.4%

23.0%

Energy 63%+110bps 1

 Record order book with orders up +10.9%
 Increasing demand for energy efficiency
and emissions reduction solutions
 Energy transition wins continue acrossmultiple markets – CCUS2, blue hydrogen,environmentally advanced battery
manufacturing

Strong operating profit growth and margin
expansion: Good operating leverage on higher volumes
 Pricing actions more than offsetting
cost inflation

Revenue breakdown
Aftermarket 73%+18.3% 1

Operating margin

Broad-based growth across both end markets
Energy+16.6%:

Business update

 SES delivering benefits

OE 27%

 Continued investment in growth to accessmarket opportunities and service strong
demandIndustrial 37%

Improving our world through mission-critical flow control solutions
1. Reflects organic revenue and operating profit growth|

2. Carbon capture, utilisation and storage

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Smiths Detection – significant growth in order book
Revenue

Operating profit+8.9% 1£404m

Strong growth across both segments:
Aviation+7.0%:

 Original equipment: +5.7%
 Aftermarket: +8.0%

Other Security
Systems (OSS)+12.8%:

 Original equipment: (0.1)%
 Aftermarket: +34.1%

Revenue breakdown
Aftermarket 54%
Aviation 66%

OE 46%£43m+10.3% 1

Operating margin10.7%+20bps 1

Good operating profit growth reflecting:Business update Multi-year orders up +38.2%, supporting
growth for H2 and beyond
 OE aviation wins globally – now sold morethan >1,200 CTiX scanners, with >50%
win rate Strong order intake in defence for chemical
detection – multi-year awards for US DOD
and UK MoD

 Strong revenue growth SES benefits and targeted actions on
costs Expanded field service engineers to
support high installation activity

OSS 34%Making our world safer through detection and screening technologies
1. Reflects organic revenue and operating profit growth

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Flex-Tek – soft construction market impacting growth
Revenue

Operating profit(4.1)% 1

£384m

£81m

Business update+2.6% 1

 Slowdown in construction market;
expecting H2 improvement
 Continued aerospace expansion supported
by strong order book

Operating margin

Strong growth in aerospace offset by
weakness in US construction+140bps Industrial: (7.6)%

21.2%

 Aerospace: +12.1%

Margin performance reflects:1

 Heating & Cooling Products integrationahead of plan and accretive to margin
 Expect a return to growth in H2

 Lower year-on-year volumes
Revenue breakdown
Industrial 81%

 SES benefits and cost control initiatives
Aero
19%

 Positive mix impact reflecting industrial
heating contracts

HVAC products: 61%

Improving our world through fluid movement and temperature management
1. Reflects organic revenue and operating profit growth

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Smiths Interconnect – quarter-on-quarter momentum, with orders returning to growth in Q2
Revenue

Operating profit£164m(13.7)% 1£20m

Business update(33.3)% 1

 Double-digit contraction in Q1, followed byflat Q2
 Orders returned to growth in Q2, with abook to bill ratio greater than 1x

Operating margin

Improvement in market conditions after
double-digit decline in Q1:

12.2%

 Industrial: (23.8)%(370)bps1

 Aerospace: (7.8)%
Profit performance reflects:

 Safety & Security: (2.1)%

 Product launches in the medical, space anddefence markets
 c.£2m UK Space Agency funding to enhancespace grade component capabilities

 Lower year-on-year volumes
Revenue breakdown
Industrial 45%

Safety &Security40%

 Challenging conditions in the semiconductor
and connectors markets
Aero
15%

 Pricing actions offsetting inflation
 SES benefits and cost control initiatives
 R&D investment maintained to advancestrong new product pipeline

Semiconductor: 19%

Improving our world through smarter connectivity
1. Reflects organic revenue and operating profit growth

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Capital allocation

Organic
investment £83m invested in the business through capital expenditure and R&D
supporting new product development

2

Portfoliochanges






3

Returns toshareholders

 +5.0% dividend increase Announcing new £100m share buyback; with first tranche of up to £50m
to be completed by end of September

1£90m across three bolt-on acquisitions in last four quarters
HCP integration progressing ahead of plan, and with accretive margins
Strong pipeline of M&A opportunitiesc.£70m (approx. 1/3) of ICU Medical stake monetised

Strong and flexible balance sheet (net debt to EBITDA of 0.9x) to support growth strategy
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H2 outlook reaffirms our FY guidance

Tailwinds Record order books in John Crane and Smiths Detection
 Gradual recovery in Flex-Tek and Smiths Interconnect markets
 New product launches driving growth SES gaining momentum with further benefits in H2
 Energised organisation executing at a faster pace

Headwinds
 Strong prior year comparators
 Pricing growth moderating

FY24 organic revenue
growth within our
medium-term target
range of 4-6%, with
continued margin
expansion

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Operational
UpdatePAUL KEEL

Our priorities

GrowthExecution

People|21|

Growth – market update
John Crane

Smiths Detection

Worldwide liquid fuels volume (million barrels per day)

104

Global air passengers (billion revenue passenger km per month)

900

102
100

600

98
96

300

94
92

Jan-21

Jan-22

Jan-23Jan-240
Jan-16

Jan-17Flex-Tek

Jan-18Jan-19Jan-20Jan-21

Jan-22

Jan-23Jan-24Smiths Interconnect

New privately-owned housing starts (‘000 units)

Semiconductor market revenue (3-month moving index, Jan 2016=100)

220

1900

180
1500
140
1100

700
Jan-18100

Jan-19Jan-20Jan-21

Jan-22

Jan-23Jan-2460
Jan-16

Jan-17Jan-18Jan-19Jan-20

Data Source: Liquid Fuels Consumption/ Brent Crude Spot - EIA and EIA Short Term Energy Outlook December 2023; Revenue passenger kilometres - IATA Monthly Analysis reports
Housing Starts - Federal Reserve Bank of St Louis; Semiconductor market - WSTS Blue Book 3 month moving average January 2016=100

Jan-21

Jan-22

Jan-23Jan-24|22|

Growth – H1 progress against long-term megatrends
Energy transition

Insatiable data demand

Ever-rising security needs

Dry gas seals for large-scale
blue hydrogen projectSignificant order growth for satellite
communications products

US DOD and UK MoD awards fornext-generation chemical detection

Wet seals for major zero-emission EV battery
manufacturing facility

Funding to enhance spacequalification facility

Sold >1,200 CTiX scanners to date in global upgrade
programme; strong increase in orders in H1

New products, contract wins and strategic progress to support future growth
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Growth – organic investment and acquisitions support geographical build-out at Flex-Tek

Core Flex-Tek HVAC

 Headquartered in South Carolina - footprint focused on regions of fastest
housing growth, and heaviest use of central HVAC systems

Organic expansion

 Added capacity in higher-demand US construction regions
 Opened greenfield locations in Florida, Arizona and, most recently, Texas

Bolt-on M&A

Further geographic
penetration

 Access to new product adjacencies and/or geographies
 Acquisition of Royal Metal Products – expansion in the south-east (H2 FY21)
 Acquisition of Heating & Cooling Products – expansion into the midwest and north-east (H1 FY24)

 Continue to look for additional organic and inorganic opportunities to deepen
market penetration in fast-growth markets

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Execution – SES in action

Case study video: Medical connector scale-up at Smiths Interconnect
Opportunity

Solution

Results to date £10m contract win
with major medical
device customer

 Value stream andproduction process
mapping to assessvalue-flow and remove
bottlenecks

 Increased production
capacity from 1,500
cables per annumto >20,000, withimproved first passyield

 Gross margin
improvement
possible, benefiting
both Smiths andcustomer Potential forsignificant carry-on
business in future

 Established an optimised
production line layout
 Standardised processes
and documentation
 Implementation of visual
management

 Improved grossmargin by 480bps
 Booked an additional£4m order, withpotential for additional
business moving
forward|25|

Execution/People
Smiths Excellence Awards: Advancing our high-performing and inclusive culture

SmithsExcellence
SystemAwards categories directly linked to
the Group’s key priorities
New product development

Growth SES
improves
results
 SES
advances ourculture SESdevelops ourtalentPricing
Sustainable growth
Customer service
Best site improvement

Execution

Productivity
Quality
Working capital
Dedication to health, safety & environment

PeopleExcellence in inclusive leadership
Inspiring individual
Outstanding contribution to our communities

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People - Smiths Group Foundation awarding first grants

 Launched Smiths Group Foundation in August 2023, with initial £10m commitment
 Supports activities in 3 key areas:– Expanding access to STEM education and skills– Improving safety and connectedness within communities– Improving the environmental sustainability of communities
 Employees nominated almost 100 good causes around the world Smiths Group Foundation awarding first grants totalling c.£1m

Charities include:

GlobalUK

USA

Nigeria

MexicoCosta Rica

Improving our world through smarter engineering
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27

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Double-digit order growth and gradually improving market conditions – reaffirming full-year guidance
H1 delivery

Delivered eleventh consecutive quarter of organic
revenue growth

Growth20 bps of margin expansion
 26 percentage points of cash flow improvement
 50 bps of ROCE growthExecution

Investing in our people, supporting ourcommunities, improving our worldGood momentum for FY2024
Strong order growth in H1, alongside gradually
improving market conditions
 Reaffirming guidance of 4-6% organic revenue
growth for FY2024


Operating leverage, alongside benefits fromSES and 2023 savings projects
 Reaffirming guidance for continued margin
expansion in FY2024
 Announcing new £100m share buybackContinuing to advance our inclusive andhigh-performing culture

People|28|

Questions& Answers

Appendix

Bridge – reported to organic
HY2023 Headline1

Foreign exchange

HY2023 Organic2

Organic movement2

Acquisitions

HY2024 Headline1

John Crane

519

(26)

493

62

-

555

Smiths Detection

390

(19)

371

33

-

404

Flex-Tek

395

(22)

373

(15)

26

384

Smiths Interconnect

193

(9)

184

(25)

5

164

Headline revenue

1,497

(76)

1,421

55

31

1,507

John Crane

114

(6)

108

20

-

128

Smiths Detection

41

(2)

39

4

-

43

Flex-Tek

77

(4)

73

2

6

81

Smiths Interconnect

32

(2)

30

(10)

(0)

20

Central costs

(23)

(23)

(3)

Headline operating profit

241

(14)

227

13

John Crane

22.0%(0.1)%

21.9%

1.1%

23.0%

Smiths Detection

10.5%

10.5%

0.2%

10.7%

Flex-Tek

19.5%

19.5%

1.4%

0.3%

21.2%

Smiths Interconnect

16.6%(0.2)%

16.4%(3.7)%(0.5)%

12.2%

Headline operating margin

16.1%(0.1)%

16.0%

0.2%

0.1%

16.3%

£m - Smiths Group

1. Headline excludes non-headline items as defined in note 3 of the financial statements|

2. Organic excludes the effects of foreign exchange and acquisitions

(26)
6

246

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31

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Income statement1£m

HY2024

HY2023

Reported change

Revenue

1,507

1,497

+1%

Headline2 operating profit

246

241

+2%

Amortisation of acquisition related intangible assets

(25)

(26)

Legacy pension scheme arrangements

(3)

(12)

Non-headline litigation provision movements

(15)

(10)

Restructuring costs-(8)

Irrecoverable VAT on chain export transactions-(2)

Other non-headline charges

(1)

(1)

Post-transaction gains/(losses), integration costs and fair value adjustment unwind

(10)

5

Total non-headline items

(54)

(54)

192

187

Statutory operating profit

1. Smiths Group excludes Smiths Medical which was disposed of in January 2022|

2. Headline excludes non-headline items as defined in note 3 of the financial statements

+3%

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32

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FX sensitivity

Currency

HY2024average rate

HY2023average rate

% change

USD

1.25

1.18

6.1%

EUR

1.16

1.15

0.6%

Translation impact

HY2024

Revenue£(76)m or (5.4)%

Operating profit£(14)m or (6.1)%- For each $0.10
move, the annual
operating profit
impact is c.£22m- For each €0.10
move, the annual
operating profit
impact is c.£6m

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33

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Net debt movement
Net debt movement (£m)

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34

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John Crane – Improving our world through innovative technologies, services and energy transition solutions
HY Revenue£555m

HY Headline Operating profit£128m

COMPETITIVE STRENGTHSGROWTH DRIVERSCOMPETITIVE LANDSCAPE- Strong and differentiated proprietary
technologies and expertise- Near-term global demand for stable energy supply- Competitors range fromlarge multinationals
through to small, more
focused companies
across the product portfolio(37% of Group)(47% of Group)

HY Headline margin

23.0%
HY ROCE25.1%- Largest installed base is in the
Energy and Industrials end markets- Innovation focused, growing digital
capability- Customer intimacy and strategicalignment with end users through a
network of ~200 service and support
centres, and unique capabilities offield service engineers

HY R&D % sales- Increasing demand for enhanced efficiency,
environmental safeguarding and cleaner processes- Energy transition – environmental safeguarding andcleaner processes. Requirement to reduce
emissions, with particular emphasis on methane.
Growth of a more diversified and cleaner lowcarbon energy eco-system, including hydrogen andrenewables, which drive more demanding needs incompression, pumping and filtration

OE/AM

END MARKETS

Americas 43%

Aftermarket 73%

Energy 63%

Europe 20%

Original
Equipment 27%

Industrials 37%

APAC 20%- Examples include:
Flowserve, EagleBurgmann,
AES and smaller/ local
companies- Long-term customer partnerships and outsourcing

1.6%

Geographies- Secular growth in energy and primary resource
demand, especially in emerging markets

RoW 17%|35|

Smiths Detection – Making our world safer through smarter engineering
HY Revenue£404m

GROWTH DRIVERSCOMPETITIVE LANDSCAPE- Global reach and market-leading brand- Persistent and evolving threats to national security,
public safety and critical infrastructure- Competitors range fromlarge multinationals
through to small, more
focused companies
across the product portfolio(27% of Group)

HY Headline Operating profit£43m

COMPETITIVE STRENGTHS(16% of Group)

HY Headline margin

10.7%
HY ROCE

7.9%
HY R&D % Sales

7.6%

Geographies- Differentiated proprietary technologies
leveraged across a broad range ofmarkets- Changing aviation security regulations and customer
requirements across our industries- Significant R&D and digital capabilities- Growing populations and urbanisation- Focus on minimising product energyuse- Growth of global transportation infrastructure- Customer intimacy and loyalty throughequipment cycle and aftermarket offer- Need for integrated digital solutions- Operating in regulated market
segments that require productcertification- Staffing constraints are driving demand for digital
image analysis software such as automated threat
recognition- Network of ~100 locations- Global growth of international trade and e-commerce- Circular economy approach solutions- Equipment replacement cycle, typically 8–10 years

OE/AM

End markets

Americas 42%

Aftermarket 54%

Aviation 66%

Europe 26%

Original
Equipment 46%

Other Security
Systems 34%

APAC 18%- Examples include: Rapiscan,
Leidos, Nuctech, Analogic,
and Chemring

RoW 14%|36|

Flex-Tek – Improving our world through safer and more efficient fluid and gas management
HY Revenue£384m

GROWTH DRIVERSCOMPETITIVE LANDSCAPE- Leading capability in design,
manufacture and cost engineering- Through-cycle growth of the US housing
construction market- High-performance differentiatedproducts- Expanding international market for
construction products- Innovation focused- The electrification of everything, leading tobroad adoption of electrical heating solutions
across industrial and domestic settings- Competitors range fromlarge multinationals
through to small, more
focused companies
across the product portfolio(25% of Group)

HY Headline Operating profit£81m

COMPETITIVE STRENGTHS(30% of Group)

HY Headline margin

21.2%
HY ROCE

26.1%
HY R&D % Sales

0.4%

Geographies- Strong customer relationships andbrand reputation- Long-term increase in commercial and military
aircraft production- Examples include: ParkerHannifin, Eaton, OmegaFlex,
Warren, Watlow andSouthwark Metal- Customer focus on efficient performance andenvironmental safeguarding- Growth in use of medical devices

End Markets

Americas 87%

Industrials 81%

Europe 8%

Aerospace 19%

APAC 5%|37|

Smiths Interconnect - Improving our world through smarter Interconnect solutions
HY Revenue£164m

GROWTH DRIVERSCOMPETITIVE LANDSCAPE- Broad portfolio of cutting-edge
technologies and products- Increased demand for faster data transmission,
greater bandwidth and faster processing powerin aerospace, defence and communications- Competitors range fromlarge multinationals
through to small, more
focused companies
across the product portfolio(11% of Group)

HY Headline Operating profit£20m

COMPETITIVE STRENGTHS(7% of Group)

HY Headline margin

12.2%
HY ROCE

10.5%- Strong research and engineering
capabilities- Customer intimacy and productcustomisation- Global reach and support- Growth of connectivity, as the world becomes
more connected, driven by trends including theInternet of Things, Big Data, Internet of Space,Industry 4.0- Development of healthcare technology- Examples include
Amphenol, TE Connectivity,
Molex, Cobham, Glenair,
Honeywell, Anaren, Leeno
and Winway

HY R&D % Sales

6.8%

Geographies
Americas 55%
Europe 27%
APAC 14%RoW 4%|

38|