Transcript Slide 1

Smiths Aerospace
Presentation to Investors
by
Dr John Ferrie
Group Managing Director
Cheltenham – Thursday 26th May 2005
US defence spending flattening
The civil aerospace industry is recovering
Airline customers are still making huge losses
So why is Aerospace attractive?
Underlying demand for air transport as strong as ever
Defence remains high priority
Leadership positions still rewarding
Smiths Aerospace
05/05 JF Investors Briefing
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Capabilities on military transports
(Applications: C-130AMP, C-130J, C-17, C-27, P-8A MMA, B767 Tanker…)
Cargo Door Drive/Actuator
Flight Control Actuators
Engine Components (Tailpipe/Shrouds)
Primary flight controls
Aerial Refuelling Pods
Aerial Refuelling System
and Components
Gust lock
Engine Components
Primary flight controls
Primary Flight Controls
APU door door/slides actuators
Fuel and hydraulic tubes/hoses
High lift actuation system
Wing structures
Engine Instrument Displays
Integrated Avionics
Panels and Light Control
Data Management
Self-contained Navigation System
Remote input/output
Nacelles fairings
Propellers
Integrated Landing Gear
Actuation and Control System
Hydraulic Control Valves
Hydraulic Fuses
Airdrop System Components
Auxiliary Power
Smiths Aerospace
Landing Gear Actuation and Control
Nose Wheel Steering System
Hydraulic Control Valves
Cable Harnesses and Connectors
Environmental Control
Power Distribution and Control
Generators/Power Conversion
05/05 JF Investors Briefing
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Capabilities on fighters
(Applications: JSF, F-22, F-18, Eurofighter, Hawk, F-16…)
Battery Charging System
Power Supplies
Prognostics and Health
Monitoring System
Fuel Dump
Airbrake Actuator
Remote Input/Output
Landing Gear Actuation
and Uplock Mechanism
Nose Wheel Steering
Hydraulic Valves
Holdback Bar
Fuel and Hydraulic Tubes/Hoses
Integrated Cockpit Suite
Data Recording/Displays
Pitch Feel
Smiths Aerospace
Primary Flight Control
Actuators
Empennage Components
Variable Exit Nozzle/Thrust Vectoring
Actuation System
Engine Distress And Monitoring System
Secondary Flight Control
Fin Control Actuator Auto Target Recognition
Gun Pod
Cable Harnesses and Connecters
Canopy/Windscreen System/Canopy Actuators
Refueling Probe
Mission Planning
And
Debrief Systems
(Ground Based)
Variable Speed
Constant Frequency
Power Generation
Regulated/Transformer
Rectifier Unit
Tailcone
Primary Flight Control Actuators
Stores/Weapon
Deployment Actuation System
Wing Structures
Seat
Actuator
Doors
Air Intake Control
Hydraulic Fuses
Reservoir
Valves
Accumulator
Engine Components
Pylons
Pylon Interface Unit
Missile Lock
Landing Gear Actuation Door Lock
Fuel Tank
Active Fuel Probes
Integrated Modular Avionics
Mission Computer
Utilities Computer
Stores Management Systems
Interface Blanker Unit
Supplementary Power and Cooling System
Environmental Control System
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Capabilities on UAVs
(Applications: X-47, X-45…)
Fuel and Hydraulic Tubes/Hoses
Variable Speed Constant Frequency Generator
Power Distribution System
Regulated/Transformer Rectifier Unit
Cable Harnesses And Connectors
Composite Structures
Utilities Computer
Remote Input/Output
Flight Control Actuation System
Active Fuel Probes
Utility/Accessory Actuators
Engine Components
Engine Distress and
Monitoring System
Battery Charging System
Remote Interface Unit
Refueling Probe
Landing Gear Control
Landing Gear
Chemical and Biological Detection
Stores Management System
Weapon Door Control
Data Recording
Mission Computer
Vehicle Management System
Prognostics And Health Monitoring
Supplementary Power and Cooling System
Environmental Control System
Smiths Aerospace
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Capabilities on large commercial aircraft
(Applications: B737, A320, B777, A330/340, B787…)
Fuel Systems
High-lift Systems
Fuel and Hydraulic Tubes/Hoses
Primary Flight Control Actuators
Airframe Components
Primary Flight
Control Actuators
Remote Input/Output
Power Generation
Cable Harnesses and Connecters
Power Generation
Environmental Control
Doors and Door Actuators
Flying Control Surfaces
Integrated Avionics
Flight Management
Data Management
Displays
Primary Flight Control Actuators
Landing Gear Actuation
and Control
Wing Structures
Fuel Systems
Structures
Power Distribution
Doors and Door Actuators
Utilities Management
Wing Structures
Thrust Reverser and Cowl Opening Actuation System
Engine Components
Engine Actuation
Landing Gear Actuation And Control
Smiths Aerospace
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Boeing 787 Dreamliner
Major Systems won by Smiths
Programme Status
 Common Core
 High Lift
 Landing Gear
 Firm Orders = 64
 Options = 24
 Entry into Service = 2008
Trend to systems integration, but each customer is different
Smiths Aerospace
05/05 JF Investors Briefing
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Airbus A380
Major Systems won by Smiths
 High Lift
 Landing Gear
Smiths Aerospace
Programme Status
 Firm Orders = 139
 Options = 70
 Entry into Service = 2006
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What are we?
Aerospace Systems
Engine Components
Delivering Integrated Solutions
Growth fueled by Competitiveness
 Northrop Grumman selects Smiths
for J-UCAS Landing Gear System
8th February 2005
 Smiths expands Aircraft
Engine Facility in China
1st November 2004
Smiths Aerospace
05/05 JF Investors Briefing
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Smiths Aerospace Business Dimensions
Electronic systems
Mechanical systems
FY04 Sales: £1,006m
 Military / Civil split ~ 60% / 40%
Engine components
Sales Split
R&D/Sales
 Company Funded
(expense to profit)
 Customer Funded
(largely govt / military)
Smiths Aerospace
Recent Additions
8%
 DGT acquired for £57m in mid ’04
 Integrated Aerospace acquired for
£57m at end ‘05
12%
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Where are we?
Electronic Systems
Customer Services
Mechanical Systems
Engine Components
RoW
China
Poland
Australia
Singapore
Total employees: circa 11,000
Smiths Aerospace
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Smiths Aerospace on Major Platforms
Typical programme revenues
Boeing 787: $2.6b
common core
system, landing gear
and high lift
actuation systems,
flight recorder
Airbus 320: $650m
avionics, hydraulics,
engine components
JSF: $3b
avionics, utilities,
hydraulics,
engine components
Boeing 777: $800m
electrical power,
utilities, hydraulics,
engine components
Smiths Aerospace
Airbus A380: $1b
landing gear
extension & retraction
system, actuators, high
lift actuation,
wing components
Eurofighter: $600m
avionics, utilities,
hydraulics,
engine components
F-18 E/F: $650m
weapons systems,
utilities, hydraulics,
engine components
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Competitors
Electronic Systems
Mechanical Systems
Honeywell
Moog
Rockwell Collins
Cobham
Hamilton Sundstrand
Goodrich
Thales
Engine Components
Goodrich
Liebherr
Parker
Customer Services
Barnes Group
Primes in-house capabilities
GKN
Carlton
Magellan
Doncasters
Firth Rixson
Smiths Aerospace
Third Party Repair Centres
Operators in-house capabilities
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Aeroengine Component supplier
GE/CFM
Pratt & Whitney
Rolls Royce/Eurojet
Civil
Military



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

Engine side wall
Fabricated
Mixers
Machined
Shafts
Machined
Combustors
Flash Welded Rings
Smiths Aerospace
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Business Dimensions - Aftermarket
 Service Based
 Performance
Based
Total
Integrated
Support
PBL /
Logistics Support
2005 Sales
Aftermarket
Original
Equipment
 Usage based
 Cost Based
 Cost driven
 Reactive
Smiths Aerospace
Rate per hour
Fixed Price
Time & Material
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How are we performing?
Smiths Aerospace performance in H1 2005
£m
H1 2005
at constant currency
Sales
514
+17%
Operating Profit
39
+24%
Aerospace
Contribution to Smiths Group operating profit
Margin
US 101






8%
Eurofighter
Boeing 787
Delivered first system for Airbus A380, F-35 JSF, C-130 AMP
Development work on Boeing 787 Dreamliner on schedule
Selected for complete landing gear on X-47B
Teamed with Lockheed on US 101 Presidential helo fleet
Capacity in China doubled by 2006
Engine component plant in Poland being expanded
Smiths Aerospace
05/05 JF Investors Briefing
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Smiths Aerospace: Sales Trends
Military OE
Civil OE
Aftermarket
2005
(expected)
2005 sales
Commercial OE
2004
Military OE
Aftermarket
2003
10%
20%
10%
10%
(underlying growth, excluding acquisitions at constant currency)
Smiths Aerospace
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The Future: Our view of the Global Military market
Actuals
30
Forecast
Aircraft Production Value $bn
25
20
15
10
Military Helicopters
Other Fixed-Wing
Light Fighter/Attack/Trainer
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
0
2001
5
Heavy Fighter
Smiths increasing market share while market flattens
Smiths Aerospace
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The Future: Our view of the Global civil market
Actuals
Forecast
80
60
40
Civil Helicopters
Exec/Utility Turboprops
Business Jets
Regional Transports
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
0
2002
20
2001
Aircraft Production Value $bn
100
Commercial Jets
Smiths increasing market share
Opportunities in later years for new narrow bodies
Smiths Aerospace
05/05 JF Investors Briefing
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Growing as anticipated
US defence spending flattening
The civil aerospace industry is recovering
Airline customers are still making huge losses
So why is Smiths so confident?
We have strong platform positions – gaining market share
Supported by increased R&D
Engine Components business delivering planned growth
Sustained drive on all aspects of cost
Smiths Aerospace
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