SMITHS GROUP PLC – ANNUAL RESULTS FOR YEAR ENDED 31 JULY 2021
Stronger H2 performance; good momentum
Pioneers of progress – improving our world through smarter engineering
HIGHLIGHTS
· Strengthening topline
o Underlying revenue (2)% for the full year, flat in the second half, and growth in Q4
o Good order book momentum
o Primary focus on organic growth, complemented by disciplined M&A; acquisition of Royal Metal delivering ahead of plan
· Strong profit conversion and earnings growth
o Operating profit up +7% and operating profit margin +140bps; EPS +8%
o Margin improvement across all divisions, accelerating in the second half
o Restructuring programme completed; committed savings delivered ahead of schedule
· Another year of excellent cash generation
o Operating cash conversion of 125%. Free cash-flow of £383m
· Delivering the successful separation of Smiths Medical
o Sale to ICU Medical Inc represents enterprise value of $2.7bn on announcement, with potential upside from equity consideration and earnout
o Expected completion H1 CY2022
· Positioned for accelerated growth in core industrial technology business
o Market leading industrial technology businesses with shared purpose and operating model
o Enhanced focus and execution pace to support delivery of accelerating growth
o Well positioned for long-term trends of safety, sustainability and digitisation
o Proposed final dividend of 26.0p. Full year dividend increased by +8%
o Update on strategy at capital markets event on 17-18 November 2021
|
Headline1 |
FY2021 |
FY2020 |
Reported |
Underlying2 |
|
Smiths continuing operations3 |
|
|
|
|
|
Revenue |
£2,406m |
£2,548m |
(6)% |
(2)% |
|
Operating profit |
£372m |
£327m |
+14% |
+7% |
|
Total Group4 |
|
|
|
|
|
Profit for the year (after tax) |
£370m |
£338m |
+9% |
+8% |
|
Basic EPS |
93.1p |
84.8p |
+10% |
+8% |
|
Free cash-flow5 |
£383m |
£273m |
+40% |
|
|
Statutory |
FY2021 |
FY2020 |
Reported |
|
Smiths continuing operations3 |
|
|
|
|
Revenue |
£2,406m |
£2,548m |
(6)% |
|
Operating profit |
£326m |
£241m |
+35% |
|
Total Group4 |
|
|
|
|
Profit for the year (after tax) |
£285m |
£267m |
+7% |
|
Basic EPS |
71.7p |
66.9p |
+7% |
|
Dividend per share |
37.7p |
35.0p |
+8% |
OUTLOOK
· Well positioned as markets recover, with good order book momentum
· Economic uncertainty and supply chain challenges continue
· Group revenue growth, expected to return to around pre-COVID levels during the year
· Further operational efficiency and good cash generation
· Increasingly confident about Smiths' future prospects and ability to deliver excellent, sustainable value for all stakeholders
Paul Keel, Group Chief Executive, commented:
“The Group's robust performance in FY2021 is testament to the qualities that attracted me to Smiths when I joined in May. Smiths has high quality businesses with strong fundamentals and is well positioned in markets with near-term upside and attractive long-term growth drivers.
Further improvement centres on accelerating our growth and consistently delivering results, underpinned by our focus on continuous operational excellence and investment in our people and culture.
An important milestone for the Group was announcing the sale of Smiths Medical. In doing so, we fulfilled a commitment to simplify our business and focus on our higher-performing industrial technology core, whilst delivering significant returns to our shareholders.
This is an exciting time for Smiths. We are building good momentum and are positioned for growth in our core industrial technology business. Smiths is pointed in the right direction and our focus now is squarely on acceleration – acceleration of delivery, acceleration of growth, and acceleration of value creation. We look forward to sharing more details of our plans and ambitions at our capital markets event in November.”