Our strategy

At Smiths, our purpose is to make the world safer, more efficient, and better connected.

Working to fulfil our purpose moves us towards achieving our overall ambition: To establish Smiths as one of the world’s leading industrial technology companies.

We'll achieve that ambition through our strategy: Outperform our chosen markets and deliver world-class competitiveness, underpinned by our strong financial framework.

1. Outperform our chosen markets

We actively manage our portfolio of businesses to be targeted in growing markets where we can sustainably achieve a position of top three leadership. 

Our businesses share the same characteristics, which embody how we create value.

  • DEFINE OUR BUSINESSES:

Our businesses share the same characteristics: technology differentiation; increasing digitisation; high proportion of aftermarket and services; and sustainably competitive and asset light

  • FOCUS ON ATTRACTIVE MARKETS:

We focus the portfolio on attractive markets with strong long-term growth drivers 

  • MAXIMISE GROWTH:

We maximise growth through organic investment and a highly disciplined approach to acquisitions, disposals and integration

2. Deliver World-class competitiveness

We drive sustainable competitiveness through focused innovation and investment; attracting and retaining the best talent; and relentless execution through our shared operating model the Smiths Excellence System (SES)

  • INNOVATE TO EXCEED CUSTOMER EXPECTATIONS:

Our Group innovation framework drives change and helps our businesses to incubate key projects 

  • ENGAGE OUR PEOPLE TO DRIVE BEST PERFORMANCE:

Our People Plan is focused on building a learning organisation to attract, retain, engage, develop and inspire our people and embed our values

  • EXECUTE CONSISTENTLY:

SES ensures that we focus on continuous improvement, speed and efficiency

Smiths Interconnect Product Closeup
3. Strong financial framework

Our financial framework underpins everything we do:

  • Focus the portfolio on sustainably competitive and asset light businesses

  • Deliver profitable growth with sustainable margins

  • Manage the business and invest with strong financial discipline

Smiths Interconnect Monet and Volta Products
Our business model
Our business model enables us to deliver value to our stakeholders on a sustainable basis. It starts with the core characteristics that define our businesses and the values that guide how we behave and encompasses our shared operating model, focused on excellence, innovation, and consistent execution.
Business Model

Key Performance Indicators

Our KPIs are aligned with our strategic objectives. Progress against them is monitored by our management processes and they drive our executive remuneration policy.

Operational Performance

Portfolio Strength
Portfolio strength

AMBITION:

90%+ revenue from top three positions in attractive markets

STRATEGIC OBJECTIVE: 1 & 3

Aftermarket & Services
Aftermarket & Services

as measured by Aftermarket % of sales

AMBITION:

50%+ aftermarket revenue sales as % of total revenue

STRATEGIC OBJECTIVE: 1

Effective Innovation
Effective Innovation

as measured by vitality index

AMBITION:

~20%  revenue from products launched in the last three years as a % of total revenue

STRATEGIC OBJECTIVE: 1, 2 & 3

Operational Excellence
Operational Excellence

as measured by stock turns

AMBITION:

~6x  stock turns

STRATEGIC OBJECTIVE: 2

Employee Engagement
Employee Engagement

STRATEGIC OBJECTIVE: 2

Safety
Safety

as measured by Recordable Incident Rate

STRATEGIC OBJECTIVE: 2

Financial Performance

Sustainable Growth
Sustainable Growth

as measured by underlying revenue growth

AMBITION:

Outperform our chosen markets

STRATEGIC OBJECTIVE: 1

Enhanced Performance
Enhanced performance

as measured by headline operating margin

AMBITION:

18-20%  headline operating margin

STRATEGIC OBJECTIVE: 2

Attractive Returns
Attractive returns

as measured by ROCE

AMBITION:

16-18%   ROCE through the cycle

STRATEGIC OBJECTIVE: 2

Asset Light
Asset Light

as measured by working capital % sales

AMBITION:

~20%  working capital as a % of total revenue

STRATEGIC OBJECTIVE: 2

Strong Cash Generation
Strong Cash Generation

as measured by operating cash conversion

AMBITION:

100%+  operating cash conversion

STRATEGIC OBJECTIVE: 2