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22 March 2019


Delivering sustainable growth

Smiths Group plc interim results for the half year ended 31 January 2019

  Headline1 Statutory
  H1 2019
H1 20182
Reported growth Underlying3 growth H1 2019
H1 20182
Reported growth
Revenue 1,573 1,542 +2% +2% 1,573 1,542 +2%
Operating profit 246 248 (1)% (2)% 213 230 (7)%
Operating margin 15.6% 16.1% (50)bps (70)bps 13.5% 14.9% (140)bps
Pre-tax profit 216 218 (1)% - 174 200 (13)%
Profit after tax 160 162 (1)% - 121 105 +15%
Free cash-flow - - - - 71 113 (37)%
Return on capital employed 14.5% 15.2% (70)bps - - - -
Basic EPS 40.2p 40.7p (1)% (2)% 30.3p 26.3p +15%
Dividend 14.1p 13.8p 2.2% - - - -

1Headline: In addition to statutory reporting, the Group reports its continuing operations 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.

2 H1 2018 restated for IFRS 15.

3 Underlying modifies headline performance to: adjust prior year to reflect an equivalent period of ownership for divested businesses; and exclude the effects of foreign exchange, acquisitions and supplemental sales for divested businesses.



  • Delivering further good growth:
    • Underlying revenue up 2% to £1,573m; up 3% excluding Smiths Medical. Reported revenue up 2% driven by good growth in John Crane, Flex-Tek and Smiths Interconnect.
  • Focused on operational excellence:
    •  Underlying headline operating profit down (2)%; up 2% excluding Smiths Medical. Reported headline operating profit down (1)%, with favourable foreign exchange translation.
    • The difference between headline and statutory operating are non-headline items as defined in note 3 to the accounts, of which the largest constituent is the Guaranteed Minimum Pensions (‘GMP’) equalisation.
  • Strong financial framework:
    • Continued strong balance sheet, net debt to EBITDA 1.5x.
    • Cash conversion of 74%, temporarily impacted by inventory build for orders due for delivery in H2. Cash conversion is expected to be much stronger for the year overall.
  • Further value creative investment:
    • Continued investment for sustainable growth with cash R&D at 5.1% of sales (H1 2018: 4.6%).
    • Further progress on portfolio optimisation:
      • Flex-Tek’s acquisition of United Flexible for $345m completed in February 2019.
      • Sold two non-core Smiths Medical businesses for a combined consideration of c.£30m.
  • Plans announced for the separation of Smiths Medical, to create two stronger, industry-leading companies.
  • FY2019 outlook reaffirmed.


Andy Reynolds Smith, Group Chief Executive, commented:

“Smiths delivered another good performance in the first half with sustainable growth driven by John Crane, Flex-Tek and Smiths Interconnect. The strong results from these divisions were partly offset by the anticipated decline in Smiths Medical and the timing of deliveries in Smiths Detection, with both on track to deliver growth in the second half.  

Today we have announced our plans for the separation of Smiths Medical to create two stronger companies each focusing on accelerating the execution of their plans and maximising the opportunities in their respective markets.

We reaffirm our outlook for 2019. We expect to continue to deliver sustainable underlying revenue growth of at least 2%, underpinned by current trading of our four industrial technology divisions and by the increasing contribution from new product launches in Smiths Medical.”


Statutory reporting

Statutory reporting takes account of all items excluded from headline performance. On a statutory basis, pre-tax profit from continuing operations was £174m (H1 2018: £200m) and continuing basic earnings per share were 30.3p (H1 2018: 26.3p).

See accounting policies for an explanation of the presentation of results and note 3 to the financial statements for an analysis of non-headline items.



Contact details

Investor enquiries

Jemma Spalton, Smiths Group
+44 (0)20 7004 1637
+44 (0)78 6739 0350

Marion Le Bot, Smiths Group
+44 (0)20 7004 1672
+44 (0)75 8315 4386

Media enquiries

Deborah Scott, FTI Consulting
+44 (0)20 3727 1459
+44 (0)797 953 7449

Alex Le May, FTI Consulting
+44 (0)20 3727 1308
+44 (0)770 244 3312

Legal Entity Identifier (LEI): 213800MJL6IPZS3ASA11



The presentation slides and a live webcast of the analyst presentation will be available at at 09.00 (UK time) today. A recording of the webcast will be made available from 13.00 (UK time).



Original high-resolution photography is available to the media from the media contacts above or from


This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs and/or current expectations of Smiths Group plc (the “Company”) and its subsidiaries (together, the “Group”) and those of their respective officers, directors and employees concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and the businesses operated by the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and, unless otherwise required by applicable law, the Company undertakes no obligation to update or revise these forward-looking statements. Nothing in this document should be construed as a profit forecast. The Company and its directors accept no liability to third parties. This document contains brands that are trademarks and are registered and/or otherwise protected in accordance with applicable law.


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