Smiths Group plc

Good morning, everyone, and thanks for joining us. As we typically do, I'll provide a short recap of our first half results and then turn it over to Claire to walk us through the numbers. I'll come back and update you on our progress with respect to strategy and operations, and then we'll open up for your questions. Before we get to results, though, let me say a few words about today's announcement regarding our CEO transition. As you will have seen, I am leaving Smiths to take a new role in the U.S., and our board has appointed Roland Carter as my successor. The last three years have been a period of strong progress for Smiths. We completed a transformative portfolio action in FY22, We delivered record performance in FY23, and we've now posted 11 consecutive quarters of growth with, as we'll cover in just a moment, significant momentum for the second half of FY24 and beyond. Roland is the right leader to build on all this momentum. Claire and I will cover results in Q&A today, but I did want to take this opportunity to introduce and personally congratulate Roland. Roland, over to you.

Thank you very much. Hello, I'm Roland Carter. I am delighted to have been appointed as CEO of Smith Group. I'm a chartered engineer and I have been at Smith for over three decades. In this time, I've had the opportunity and the privilege to lead many parts of this company. This has enabled me to develop an in-depth operational and strategic understanding of Smiths and its fundamental growth drivers. For the past six years, I have been president of Smiths Detection. Prior to that, I was president of Smiths Interconnect and Asia Pacific. I've worked for Smiths in the UK, China, France, Germany and several other places. And I'm responsible for some of the acquisitions that form part of Smiths and also for some of the divestments that have reshaped us. Smiths is a fantastic business with great people and a wonderful culture. It has a hugely exciting growth potential. I would like to thank Paul for all he has done for Smith's. We are making great strategic progress, and our operational and financial performance has improved, with Smith's well-positioned to deliver on its significant potential. Thank you.

Thank you, Roland, and again, congratulations. Okay, having covered the CEO transition, let's now turn to our first half results. I will open with a short recap of our first half performance before turning it over to Claire to walk us through the numbers. I'll then come back and update you on our progress with respect to strategy and operations. And as always, we'll have plenty of time at the end for Q&A. We delivered 3.9% organic revenue growth in the first half, building on a record year in FY23. We've now posted our 11th consecutive quarter of growth, extending our track record of consistent performance. Driven by strong underlying demand in energy, security, and aerospace, our orders grew 16.5% in H1, providing good momentum for the second half and beyond. Our execution focus and Smith's excellent system are delivering further tangible benefits. Organic operating profit increased over 5%, resulting in a 20 basis point increase in operating margin and a 50 basis point improvement in ROCHI. Our balance sheet remains strong and cash flow is much improved. Operating cash conversion increased 26 percentage points to 89% and free cash flow more than doubled. As such, we increased our dividend by 5% and have announced a new 100 million pound share buyback program. With respect to people, we continue to actively develop our global talent. For example, we more than doubled our investment in leadership development and our Wave 1 cohort of Black Belts and Master Black Belts are now completing their assignments and re-entering into high-impact leadership roles across our company, backfilled by an even larger cohort of Wave 2 talent. We're also continuing to make good progress on advancing our sustainability strategy, as the Science-Based Targets Initiative validated our net-zero targets and plans last December. In support of our communities, I mentioned the launch of our new Smiths Foundation on our FY23 call in September. I'm now excited to share that we are making our first wave of grants in support of charitable causes that link to our purpose of improving our world through smarter engineering. In summary, we're off to a successful start in fiscal 2024 and carry strong momentum into the second half. And as such, we are reaffirming our full-year guidance of 4% to 6% organic revenue growth with continued margin expansion. You are familiar with our Schmitz Value Engine, which connects the three components of our success, our purpose, our strengths, and our priorities. For today's presentation, we've also added our financial commitments to the slide to illustrate how our strategy is purposefully shaped to deliver the financial commitments we make to all of you. Let's turn to those now. Claire will provide details on each of these in just a moment, so I'll just hit the high points. It was yet another period of strong, well-balanced performance for Schmitz. 4% organic top-line growth and 6% with M&A. Good operational execution turning this into 4.5% EPS growth or 11% on a constant currency basis. and improved capital efficiency, resulting in a significant increase in operating cash conversion and more than doubling free cash flow. As all of you know, when this business grows, as it has now for 11 straight quarters, it generates a lot of profit and cash. And with that as an overview, I'll hand it over to Claire.