Smiths Group plc – Half Year Results for 6 months ended 31 January 2023
Continued progress with record growth and increased FY2023 guidance
Pioneers of progress – improving our world through smarter engineering
Record growth – organic revenue +13.5%1, reported revenue +25.6%, EPS2 + 52.1%
- Seventh consecutive quarter of growth, equally balanced between volume and price
- Growth across all divisions, geographic regions, and major customer end markets
- 200bps of growth from new product launches with a +13.5% increase in R&D to support future as well as current growth
Improving execution – Smiths Excellence System (“SES”) delivering clear benefits
- Headline2 operating profit growth of +27.4% with margin up +20bps to 16.1%
- +£5m operating profit contribution from SES, scaling to +£12m for FY. Expanding programme with additional resources
- ROCE3 +120bps to 15.2%, driven by strong profit generation
- Operating cash conversion3 of 63% reflecting continued investment to secure supply and support sustainable growth
Inspiring & empowering our People – advancing our inclusive and high-performing culture
- Further progress embedding Smiths Leadership Behaviours
- Increased investment in talent development with relaunch of our Accelerate leadership training programme
- Actively investing in numerous diversity, equity & inclusion and employee engagement initiatives
- Published inaugural Sustainability Report; introduced ESG targets into incentive compensation plans; on track to deliver FY2023 ESG targets
Strong balance sheet – a foundation for sustainable growth and shareholder returns
- Net debt to EBITDA of 0.8x
- Share buyback c.90% complete
- Proposed interim dividend of 12.9p, +5%
- Raising FY2023 guidance to at least 8% organic revenue growth, with moderate margin improvement
|Operating profit margin3||16.1%||15.9%||+20bps||(10)bps|
|Operating cash conversion3||63%||93%|
|Profit for the half year (after tax)||£109m||£1,123m||(90.2)%|
|Dividend per share||12.9p||12.3p||+5%|
Paul Keel, Chief Executive Officer, commented:
“We continued to improve our performance in H1, delivering double digit revenue and earnings growth. While we are still in the early days of executing our plan, we are pleased with the progress. I congratulate and thank my 15,000 colleagues around the world for continuing to do what we do best – improving our world through smarter engineering.
With order books healthy and trading strong, we are again raising our FY2023 organic revenue growth guidance to at least 8%, with moderate margin improvement.”
|Friday 19 May 2023||Q3 Trading Update|
|Tuesday 26 Sept 2023||FY2023 Financial Results|
Statutory reporting takes account of all items excluded from headline performance.
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.
The following definitions are applied throughout the financial report:
1 Organic is headline adjusted to exclude the effects of foreign exchange and acquisitions.
2 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. Headline performance is on a Smiths Group basis, excluding the results of Smiths Medical.
3 Alternative Performance Measures (“APMs”) and Key Performance Indicators (“KPIs”) are defined in note 19 to the financial statements.
4 Basic EPS on a headline basis includes results for Smiths Group, excluding Smiths Medical in the prior period and includes the impact of the share buyback. On a statutory basis HY2022 includes the gain on disposal of Smiths Medical.
The webcast presentation and Q&A will begin at 08.30 (UK time) today at:
A recording will be available from 13.00 (UK time).
Legal Entity Identifier (LEI): 213800MJL6IPZS3ASA11
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. 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.
Smiths Group publishes 2023 ‘Sustainability at Smiths’ ReportSmiths Group publishes 2023 ‘Sustainability at Smiths’ Report12 October 2023The report outlines the progress Smiths Group has made in its environmental, social and governance (‘ESG’) performance in the financial year to July 2023.Read the full story >