[PPT] - Annual Results 19 September 2012 Bringing technology to life PowerPoint Presentation

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Annual Results 19 September 2012

investor.relations@smiths.com www.smiths.com

Bringing technology to life

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Smiths Group plc Annual Results 2012 | 2

This document contains certain statements that are forward-looking statements. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we

perate. 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. Nothing in this document should be construed as a profit

forecast. The Company and its directors accept no liability to third parties in respect
f this document save as would arise under English law. This presentation contains

brands that are trademarks and are registered and/or otherwise protected in accordance with applicable law.

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Smiths Group plc Annual Results 2012 | 3

Introduction Philip Bowman Chief Executive

GUARDION, Smiths Detection’s dual-technology chemical identifier

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Smiths Group plc Annual Results 2012 | 4

Results highlights Reported headline revenue up 7%; underlying up 5% Headline operating profit up 7%, underlying up 7% Headline EPS up 7% to 92.6p Cash conversion strong at 99% - free cash flow of £217m Return on capital employed up 10 basis points to 16.5% Dividend up 5% to 38.0 pence

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Smiths Group plc Annual Results 2012 | 5

Delivering against our operational priorities

Launch new products from the divisional pipelines to drive top-line growth

Company-funded new product investment up 9% - Strong pipeline of new product launches

Increased investment in emerging markets to deliver faster sales growth

Emerging market sales up 14% - now representing 15% of Group revenues – Expanding resources in China, Brazil, India, among other markets

Deliver the performance improvement programme benefits in Smiths Detection

Programme beginning to deliver operational and efficiency benefits – £15m of savings in period; against £40m target by FY2014

Sustain strong cash generation to fund growth initiatives and enhance value

Remain committed to strong cash conversion – Targeting 90-100% cash conversion for the coming year

Effective capital allocation to drive improved returns and value for shareholders

Focus on acquisitions and disposals – Acquisitions in Interconnect and John Crane; disposal of non-core asset in Smiths Detection

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Smiths Group plc Annual Results 2012 | 6

Recordable & lost time incident rates continue to improve

1.03 0.71 0.66 0.60** 0.51 0.30 0.29 0.21

2009 2010 2011 2012

Recordable incident rate * Lost time incident rate

Incident rate

Energy:

16% reduction

Greenhouse gases:

19% reduction

Water:

19% reduction

Non-recycled waste:

18% reduction

*** Calculated over rolling 12-month period to Jul 2012 compared to current goal baseline of FY2010. Normalised to revenue at FY2012 exchange rates.

Solid progress on environmental targets***

Promoting responsibility: An increased focus is delivering improvements

* Measured per 100 employees per year using US OSHA definition ** 0.58 excluding recently acquired businesses

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Smiths Group plc Annual Results 2012 | 7

Peter Turner Finance Director Financial review

John Crane supplies seals, filtration systems and bearings for oil and gas applications in Brazil

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Smiths Group plc Annual Results 2012 | 8

* In addition to statutory reporting, Smiths Group reports its continuing operations on a headline basis. Headline revenue and profit is before exceptional items, amortisation and impairment of acquired intangible assets, profit/loss on disposal of businesses, costs of acquisitions, net pensions finance credit and financing gains/losses from currency hedging. Free cash-flow and return on capital employed are defined in the Financial review in the press release. 2011 headline pre-tax profit, headline basic EPS and return on capital employed has been restated (see notes 1 and 3 to the 2012 Annual report and accounts) ** Organic growth at constant currency.

Headline* Statutory

reported underlying**

2012 2011 2012 2011 Revenue 3,038 2,842 7% 5% 3,030 2,842 Operating profit 554 517 7% 7% 407 438 Margin 18.2% 18.2%

13.4%

15.4% Pre-tax profit 497 463 7% 7% 366 398 Basic EPS (p) 92.6 86.5 7% 65.4 77.8 Free cash flow 217 236 Dividend (pps) 38.0 36.25 5% 38.0 36.25 Return on capital employed 16.5% 16.4% 10 bps £m

Annual results 2012

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Smiths Group plc Annual Results 2012 | 9

Revenue growth Revenue Operating profit H1 H2 growth growth

John Crane +13% +5% +9% +11% Smiths Medical

1%

+6% +2% +2% Smiths Detection

11%

+17% +3% +13% Smiths Interconnect

6%

+12% +3%

9%

Flex-Tek +2% +7% +5% +36% Group +1% +8% +5% +7%

Underlying headline sales and profit performance

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Smiths Group plc Annual Results 2012 | 10

Volume: Volume growth across all divisions
Price: Positive in John Crane and Flex-Tek offsetting negative pricing pressure elsewhere
Mix: Adverse mix in Interconnect and Detection
Increased R&D: Higher new product investment across nearly all divisions
Sales & marketing: Increased investment in sales & marketing – particularly in emerging markets
Efficiencies: Detection restructuring and other operational efficiency initiatives across other divisions
Cost inflation: Largely wage-related (represents c. 1.5% increase)

PBT: £463m PBT: £497m £41m

Volume Interest

£3m £34m

Average exchange rates US$ 1.58 (2011: 1.60) Euro 1.20 (2011: 1.16)

Cost inflation

£15m

Increased R&D

£7m £10m

Price Sales & marketing

£10m £8m

Headline profit progression 2011 to 2012

Mix Sales & marketing

£26m

Efficiencies

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Smiths Group plc Annual Results 2012 | 11

£m (for continuing activities) 2012 2011 Headline operating profit 554 517 Changes in working capital (23) (47) Share based payment 14 14 Capital expenditure (Property, plant & equipment) (46) (46) Depreciation 59 64 Development costs & other intangibles (9) (13) Operating cash-flow 549 489 Conversion rate 99% 95%

(net of amortisation and deferred income)

Group cash conversion

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Smiths Group plc Annual Results 2012 | 12 Return on capital employed is calculated over a rolling 12-month basis and is the percentage that headline operating profit comprises of monthly average capital employed. Capital employed comprises total equity adjusted for goodwill recognised directly in reserves, post- retirement benefit assets and liabilities and litigation provisions relating to exceptional items, both net of tax and net debt. 2011 capital employed has been restated – see note 2 to the 2012 Annual accounts. 0.0 5.0 10.0 15.0 20.0 25.0 30.0

Smiths Group Flex-Tek John Crane Smiths Medical Smiths Interconnect Smiths Detection 12 months to 31 Jul 2012 12 months to 31 Jul 2011

%

16.4% 16.5% 21.9% 28.4% 21.8% 24.0% 15.7% 12.3% 16.9% 17.6% 9.8% 10.3%

Improved return on capital from Flex-Tek, John Crane, Medical and Detection

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Smiths Group plc Annual Results 2012 | 13

£m Headline operating profit 554 Restructuring programmes (15) Litigation provision: John Crane, Inc. (40) Litigation provision: Titeflex Corporation (55) Revision of estimated rebates in Smiths Medical (8) Net acquisition and disposal exceptionals 31 Exceptional operating items (85) Amortisation and impairment of acquired intangible assets (62) Statutory operating profit 407 Key exceptional items below operating profit Pension finance credit* 24 UK deferred tax asset write-off (38)

* Under IAS 19 (revised 2011), this would be a £13m charge

Reconciliation: Headline operating profit to statutory profit

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Smiths Group plc Annual Results 2012 | 14

‡Comprising £13m of exceptional costs and £7m charged against headline operating profit

*All to be treated as exceptional

Costs to date Total planned costs Total planned savings £55m £56m £70m

Group-wide restructuring FY08-12 – now largely complete

£m 2012 costs 2012 savings Savings to date Group-wide 3 14 70 £m Savings to date 2013 forecast savings 2013 costs Smiths Detection 15 11 9* Costs to date Total planned costs Total planned savings £20m‡ £40m £40m

Detection performance improvement FY12-14

Exceptional items: Restructuring programme delivering benefits

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Smiths Group plc Annual Results 2012 | 15

Reducing costs – achieved net global headcount reduction of c. 200 or 8%
Sales and admin site at Morristown, NJ closed
Aligning X-ray manufacturing footprint to customer needs – focusing on 3 hubs:
Americas, Europe and a new site in Asia opened
Opportunities in materials and component sourcing
Value engineering initiatives to reduce scrap, rework and warranty liabilities

Smiths Detection: Performance improvement programme – achievements to date

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Smiths Group plc Annual Results 2012 | 16

Cash contributions Deficit movement since 31 July 2011

£m 31 July 2012 28 Jan 2012 31 July 2011 Assets 3,348 3,232 3,273 Liabilities (3,968) (3,691) (3,472) Deficit (620) (459) (199) UK bond yields 4.1% 4.7% 5.3% US bond yields 3.8% 4.5% 5.1% 2012 2013 Funded scheme contributions £115m £90m

Smiths Industries PS

£36m £36m

TI Group PS

£50m £16m

US and other

£29m £38m Escrow contributions £24m £24m £m Deficit at 31 July 2011 (199) Foreign exchange (4) Return on assets 104 Contributions (net of service costs) 119 Change in liabilities (640) Deficit at 31 July 2012 (620) Including escrow gilts of £58m (562)

Pensions: Deficit increased to £620m, driven by lower discount rates

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Smiths Group plc Annual Results 2012 | 17

Interest split Currency split Debt split

Bank Public USD Euro

ther

Net debt £m Borrowings 997 Cash (206) Net debt 791

Fixed Floating

Undrawn committed bank facilities of US$800m at 31 July 2012

Credit Rating: BBB+ (stable)/Baa2 (stable) Target net debt to EBITDA: <2.0x 31 Jul 2012: 1.2x

Weighted average life of debt is 3.9 years

£ Bonds $ Privates $ Bonds € Bonds

£m

50 100 150 200 250 2012 2013 2014 2015 2016 2017 2018 2019

Strong balance sheet supports investment in acquisitions and growth

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Smiths Group plc Annual Results 2012 | 18

Operational review and priorities Philip Bowman Chief Executive

Smiths Interconnect supplies filters to improve network capacity for wireless telecommunications

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Smiths Group plc Annual Results 2012 | 19

Delivering shareholder value – key themes

Investment strategies to accelerate growth are beginning to deliver Further opportunities for operational efficiencies – scale varies by division Improving performance and capabilities through cross-divisional working Sustain strong cash generation to fund growth, returns and legacy liabilities Continued focus on raising the bar for talent across the organisation Effective capital allocation to drive improved returns and value for shareholders

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Smiths Group plc Annual Results 2012 | 20

Strong sales growth across all sectors, particularly oil and gas Aftermarket sales grew 9%

Rotating equipment (seals, couplings, bearings and filters)

grew 9%

JC Production Solutions, up 8% - US onshore gas and oil

production First-fit OEM sales up 9% reflecting investment in capital projects

Activity across the globe – oil, gas and petrochemical
Investing to deliver future aftermarket revenues

2012 Revenue % (£973m)

1 First-fit OEM 37% 5 General Industry 9% 2 Oil, gas & petrochem 39% 3 Chemical and pharma 8% 4 Distributors 7% 1 2 3 4 5 Aftermarket 63%

Underlying revenue Headline operating margin Underlying headline profit

John Crane: Delivering sales growth, improving margins and returns

+9% +11% +50 bps

21.6%

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Smiths Group plc Annual Results 2012 | 21

Increasing investment in new product development

8% increase in new product development
Already investing in new engineering and test facilities
Plans to grow R&D investment by about 15% pa over next few years

Expanding the service centre network and manufacturing in emerging markets

14% growth in emerging market sales – now representing 21% of John Crane
New sales and service centres in fast growth markets
China, Brazil, Turkey, Alaska, Australia

Product diversification strategy delivering growth

Adjacent products (bearings, filters, couplings) delivered underlying sales growth of 10%
TCE acquisition enhances the aftermarket offering for bearings

John Crane: Investing in future growth: new products and markets

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Smiths Group plc Annual Results 2012 | 22

Outlook

Strong order book provides

visibility for first half growth

Margins will benefit from efficiency

initiatives

Reinvest savings in growth
pportunities: new products and

markets

John Crane: Outlook

John Crane seals are used in concentrated solar power plants

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Smiths Group plc Annual Results 2012 | 23

+2% +2% +10 bps

23.5%

Sales growth despite tough operating environment Safety devices - sales up 4%

Growth in needles, arterial blood sampling and catheters
In both developed and emerging markets

Medication delivery - sales up 4%

Ambulatory pumps up: CADD-Solis pumps and disposables
Infusion pumps boosted by successful Medfusion 4000 launch

Vital care - sales flat

Growth in assisted reproduction, anaesthesia, blood pressure

monitoring, among others

Profitability focus caused declines: patient monitoring, kitting lines

1 Medication delivery 28% 2 Vital care 41% 3 Safety devices 31% 1 2 3

Smiths Medical: Delivering sales growth from new products and markets

* Headline revenue

2012 Revenue* % (£864m) Underlying revenue Headline operating margin Underlying headline profit

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Smiths Group plc Annual Results 2012 | 24

Committed to accelerating new product launches: investment up 9% to £34m or 3.9% of sales (2011: 3.7%)

Medfusion 4000 infusion pump – Launched in US and Canada
CADD-Solis VIP and PIB ambulatory pump – Released outside US
ViaValve™ Safety IV Catheter – FDA clearance received

Expanding sales resources in emerging markets

Recruited additional 250 headcount during FY12
Increasing engineering and product development resources in China
Investment to deliver medium to long-term growth

Smiths Medical: Investing in growth opportunities

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Smiths Group plc Annual Results 2012 | 25

Outlook

Developed markets are likely to

remain challenging

US medical device tax scheduled

for January 2013

Focus will remain on investment in

new product development

Investing in sales and marketing;

increasing emerging market exposure

Cost savings benefits will be

prioritised for reinvestment

Smiths Medical: Outlook

Smiths Medical has almost doubled its Chinese workforce this year

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Smiths Group plc Annual Results 2012 | 26

+3% +13% +50 bps

Revenue growth driven by transportation, critical infrastructure and ports and borders Margins benefit from restructuring savings of £15m Transportation sales up 12%

Contracts at various European airports and TSA aTiX upgrades

Critical infrastructure underlying sales up 21%

RadSeeker sales to US DNDO, various freight handlers

Ports & borders underlying sales up 7%

Contracts in Brazil, India, Azerbaijan and Nigeria

Military underlying sales down 31%

Lower defence spending; some wins on US JCAD programme

1 Transportation 47% 5 Critical infrastructure 21% 2 Ports & borders 16% 3 Military 11% 4 Emergency responders 4% 6 Non security 1% 1 2 3 4 5 6

13.3%

Smiths Detection: Improving sales trend; margins benefit from restructuring

2012 Revenue % (£519m) Underlying revenue Headline operating margin Underlying headline profit

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Smiths Group plc Annual Results 2012 | 27

Increased investment in new products – strong pipeline of new launches

Company funded spend up 7% to £38m or 7.2% of sales
Total spend of £43m or 8.3% of sales

+3%

9%
310 bps

14.7%

1 Connectors 35% 2 Microwave 45% 3 Power management 20% 1 2 3

1 Mil/aero up 4% 2 Wireless telecoms up 1% 3 Medical, rail, automation & test up 5% Underlying sales growth – technology group

Smiths Interconnect: Challenging trading environment affected margins

Underlying sales helped by strong second half for Microwave Tough trading conditions for Connectors and Power Margins affected by adverse price/mix and dilution from acquisition Connectors – sales down 10%

Pressure on military sales, general industrial, semiconductor test
Strong growth across several rail programmes

Microwave – sales up 20%

Good growth in telecoms optimisation products; commercial aerospace

antennas and test cable assemblies

Defence sales improved in H2; contract wins, e.g UAVs

Power management – sales down 12%

Tough comparator: large military contract in prior period
Weak demand in US wireless telecoms

2012 Revenue % (£448m) Underlying revenue Headline operating margin Underlying headline profit

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Smiths Group plc Annual Results 2012 | 30

Continued investment in new product development

Company-funded R&D up 9% to £23m or 5.1% of sales (2011: 5.5%)
Total R&D spend of £27m or 6.0% of sales (2011: 6.6%)
More than 30% of sales come from products developed in last 3 years
New product initiatives include:
Smaller higher density connectors for semiconductors
Millimetre-wave components for a new helicopter flight safety radar system
Cell tower-top power and radio frequency protection devices

Expansion in emerging markets

Emerging market sales up 27% to represent c. 16% of sales

Smiths Interconnect: Investing in new products and emerging markets

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Smiths Group plc Annual Results 2012 | 31

Smiths Interconnect: Outlook Outlook

Defence market is likely to remain

challenging

Wireless network investment is

essentially flat; tough comparator period

Semiconductors and data centres

should improve but will depend on economic conditions

Margins will benefit from

restructuring savings

PDI’s PowerWave Bus modules manage power for data centres

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Smiths Group plc Annual Results 2012 | 32

+5% +36% +380 bps

16.3%

1 Fluid Management 35% 2 Construction 26% 3 Heat Solutions 24% 1 2 4 4 Flexible Solutions 15% 3

Margins up 380 bps from higher volumes and price/mix

excluding change in accounting treatment, profit rose 18%

Fluid Management - sales grew 13%

Volume growth on major airframe platforms and engines
US automotive sales to fuel and brake applications remained robust

Construction - sales up 12%

Improved demand; cross-selling strategy driving share gains

Heat Solutions - sales down 9%

Weak sales of HVAC components; demand remains uncertain

Flexible Solutions - sales flat

Improvement in industrial and medical offset US floorcare declines

Flex-Tek: Margins benefit from operational leverage

2012 Revenue % (£233m) Underlying revenue Headline operating margin Underlying headline profit

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Smiths Group plc Annual Results 2012 | 33

Outlook

Order book for aerospace

customers remains positive

Residential construction market

should continue to improve

Margins are strongly geared to

increased volumes

Flex-Tek: Outlook

Flex-Tek’s lightweight, high pressure hoses improve airline fuel efficiency

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Smiths Group plc Annual Results 2012 | 34

Headline revenue growth Performance 2009-2012

Solid progress on our financial metrics despite tough trading conditions

CAGR +4.5%

Headline operating margin Operating cash conversion

Average 103%

Return on capital

16.5% 18.2%

+250 bps +250 bps

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Smiths Group plc Annual Results 2012 | 35

Deliver new product launches to accelerate sales growth Invest in sales and marketing capabilities in high growth markets Drive operational efficiencies to improve margins and support investment Sustain strong cash conversion to fund growth initiatives and enhance value Effective capital allocation to drive improved returns and value for shareholders

Operational priorities for 2013

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Smiths Group plc Annual Results 2012 | 36

1

A world-leading provider of products and services for the major process industries, including oil and gas, power generation, chemical, pharmaceutical, pulp and paper, and mining sectors.

£973m 32% 36%

Employees:

7,000

Percentage relates to headline

perating profit before corporate costs

2012 Revenue by sector

1 First-fit OEM 37% 5 General Industry 9% 2 Oil, gas & petrochem 39% 3 Chemical and pharma 8% 4 Distributors 7% Aftermarket Revenue £m

626 790 786 894 973 2008

Contribution to 2012 Group revenue: Contribution to 2012 headline operating profit:

John Crane

2009 2010 2011 2012

2 3 4 5

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Smiths Group plc Annual Results 2012 | 37 Customers: John Crane serves oil and gas and power generation companies, refineries, pump and compressor manufacturers, chemical and

ther process industries. Its main customers

include Chevron, BP, China Petroleum, Suncor/Petro Canada, Valero, Petrobras, ExxonMobil, Gazprom, TOTAL, Sabic, PDVSA, Pemex, Saudi Aramco, Shell, Petrom, Sulzer, ITT Goulds, Flowserve, GE Nuovo Pignone, GE Energy and Power, Andritz Hydro, Rolls Royce, Siemens, Mitsubishi, Solar Turbines, Elliot, York, BASF, Weir Group, Bayer, and Dow. No customer is larger than 3% of sales. Competitors: For rotating equipment technologies, John Crane’s main competitors are Flowserve and Eagle Burgmann Industries (mechanical seals); Kingsbury and Waukesha (engineered bearings); Pall and Hydac (filtration systems); Rexnord and Emerson (couplings). For equipment in upstream energy, John Crane’s principal global competitors include Weatherford and Norris. Suppliers: John Crane

perates its supply chain

globally, using global, regional and local partnerships to meet the required service levels. Its main suppliers are Morgan Crucible, CoorsTek, Penn United Carbide, Schunk, Metalized Carbon, ESK, Earle

M. Jorgensen, Femax, BE

Group, DuPont, Greene Tweed, and Ashland Chemical.

John Crane

Delivering engineered solutions that keep process plants running, John Crane enhances customer productivity by providing advanced technology industrial products and performance-enhancing services backed by an exceptional global network.

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Smiths Group plc Annual Results 2012 | 38

£m 2012 2011 reported underlying Revenue 973 894 +9% +9% Headline operating profit 210 189 +11% +11% Margin 21.6% 21.1% +50 bps ROCE 24.0% 21.8% +220 bps

Volume: Driven by both aftermarket and OEM,

particularly for oil and gas

Price/mix: Mainly aftermarket price increases
Investment: Increased sales and marketing
Inflation: Increased labour and materials
Acquisition: Benefit from TCE aftermarket

bearings Headline operating profit £m 2010/11 189 Volume 21 Price/mix 17 Investment (4) Cost inflation (11) Acquisition 2 Foreign exchange (4) 2011/12 210

John Crane: Volumes and price drive margin; investing in sales growth

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Smiths Group plc Annual Results 2012 | 39

A leading supplier of specialist medical devices and equipment for global markets. Our products are focused on the medication delivery, vital care and safety devices market segments.

Headline revenue £m

28% 35%

Employees:

7,750

Percentage relates to headline

perating profit before corporate costs

£864m

2012 Headline revenue by sector

1 2 3

1 Medication delivery 28% 2 Vital care 41% 3 Safety devices 31% Contribution to 2012 Group revenue: Contribution to 2012 headline operating profit:

Smiths Medical

2008 2009 2010 2011 2012 703 834 858 838 864

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Smiths Group plc Annual Results 2012 | 40 Customers: We estimate that three-quarters of our end customers are hospitals, with the remainder comprising the alternate care market such as homecare, clinics and

ther surgery centres. We

have a direct sales presence in over 20 countries, and distribution arrangements in approximately 100 others. Competitors: The competitive landscape for Smiths Medical is complex as we compete with different companies across the broad product portfolio. Our major competitors include Covidien, Teleflex, B Braun, Becton Dickinson, C R Bard, 3M (Arizant), Hospira and CareFusion. We often compete with a small portion of a major competitor’s medical business, as well as with any number of smaller, single product line companies trying to gain entrance into a particular market. This makes comparison between peers far from straightforward. In emerging markets, we compete with both large multinational companies and smaller domestic players. Suppliers: Our strategy is to actively engage suppliers in product innovation, value engineering and a commitment to quality. Our goal is to reduce product and supply chain costs, improve delivery performance and ensure supply continuity plans. The majority of our direct spending is

n resins, plastic injection mouldings,

and electronics. Among indirect purchases, freight, services, travel, temporary labour and capital equipment represent the majority.

In medication delivery, our devices help treat cancer patients and provide relief to those in pain. Our vital care products reduce hospital-acquired infections, manage patients’ airways before, during, and after surgery, maintain body temperature and assist reproduction through IVF therapy. Our safety products protect health workers by helping prevent needlestick injuries and reducing cross-infections.

Smiths Medical

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Smiths Group plc Annual Results 2012 | 41

£m 2012 2011 reported underlying Headline revenue 864 838 +3% +2% Headline operating profit 203 196 +3% +2% Operating margin 23.5% 23.4% +10 bps ROCE 17.6% 16.9% +70 bps

Volume: New product launches (infusion

pumps) and emerging market growth

Price: Adverse, particularly Europe and Japan
Efficiencies: Value engineering, manufacturing

savings and lower overheads

Investment: Mainly sales and marketing
R&D: Increased to support new products
FX: Net impact of translation/transaction

Headline operating profit £m 2010/11 196 Volume 15 Price (10) Operational efficiencies 11 Growth investment (10) R&D (4) Foreign exchange 5 2011/12 203

Smiths Medical: Investment is driving growth; funded by efficiency gains

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Smiths Group plc Annual Results 2012 | 42

A world-leading designer and manufacturer

f sensors that detect and identify

explosives, narcotics, weapons, chemical agents, biohazards, nuclear & radioactive material and contraband.

£519m

1 Transportation 47% 2 Ports and borders 16% 3 Military 11% 4 Emergency responders 4% 5 Critical infrastructure 21% 6 Non-security 1% Contribution to 2012 Group revenue:

17%

Contribution to 2012 headline operating profit:

12%

Employees:

2,300

Percentage relates to headline

perating profit before corporate costs

2012 Revenue by sector

1 2 3 4 5 6

Revenue £m

Smiths Detection

2008 2009 2010 2011 2012 509 501 574 510 519

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Smiths Group plc Annual Results 2012 | 43 Customers: A significant majority of sales are influenced by more than 100 governments and their agencies, including homeland security authorities, customs authorities, emergency responders and the military. These include the US Department of Defense, US Transportation Security Administration (TSA), and the UK Ministry of Defence.

Our technology helps customers in the global transportation, ports and borders, critical infrastructure, military and emergency responder markets. We have the most comprehensive range of detection technologies in the world, including X-ray, trace detection, infra-red and gamma ray spectroscopy, and millimetre-wave.

Competitors: Smiths Detection’s broad portfolio in the homeland security and defence sectors brings it into competition with a wide range of companies in individual segments. Principal competitors include: Morpho (air transportation), Rapiscan (air transportation, ports and borders, critical infrastructure), L3 Security & Detection Systems (air transportation), Nuctech (ports and borders), AS&E (ports and borders), FLIR (air transportation, defence), SAIC (ports and borders), Chemring (military), Bruker (military, emergency responders), Thermo Fisher (military, emergency responders). Suppliers: We are actively developing synergies across sites and restructuring

ur purchasing group to ensure that we

fully leverage the size of our business. These developments will be ongoing taking into account the demand for local content with some of our major customers as well as our stringent quality and delivery requirements. Our procurement team has now been centralised and our engagement with suppliers is being standardised across all business operations.

Smiths Detection

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Smiths Group plc Annual Results 2012 | 44

Volume: Transportation, critical infrastructure,

ports and borders

Price/mix: Mainly mix from lower military; price

pressure in ports and borders

Efficiencies: Net of restructuring costs of £7m
R&D: New product launches
Net impact of recent acquisitions and disposals
FX: Net impact of translation/transaction

Headline operating profit £m 2010/11 66 Volume 4 Price/mix (5) Operational efficiencies 12 R&D (2) Acquisition/disposal (4) Net foreign exchange (2) 2011/12 69

Smiths Detection: Margins benefiting from operational efficiencies

£m 2012 2011 reported underlying Revenue 519 510 +2% +3% Headline operating profit 69 66 +6% +13% Margin 13.3% 12.8% +50 bps ROCE 10.3% 9.8% +50 bps

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Smiths Group plc Annual Results 2012 | 45

A leader in electronic components and sub-systems that connect, protect and control critical systems for wireless telecommunications, aerospace, defence, space, test, medical, rail and industrial markets.

£449m 15% 11%

Employees:

4,100

Percentage relates to headline

perating profit before corporate costs

2012 Revenue by sector

1 Connectors 35% 2 Microwave 45% 3 Power management 20%

1 2 3

Contribution to 2012 Group revenue: Contribution to 2012 headline operating profit:

Smiths Interconnect

Revenue £m

2008 2009 2010 2011 2012 261 318 340 379 449

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Smiths Group plc Annual Results 2012 | 46 Customers: Smiths Interconnect supplies to multiple levels of the supply chain and its blue chip customers include primes and service providers, OEMs, system suppliers and sub-system manufacturers. Amongst

ur largest customers are Raytheon,

Finmeccanica, BAE Systems, Boeing, EADS, AAI/Textron, Northrop Grumman, General Dynamics, Lockheed Martin, Row44, Ericsson, Motorola, AT&T, Verizon, Sprint, ZTE, Huawei, Facebook, APC, Foxconn, GE Healthcare, Varian, Qualcomm, NVIDIA and Alstom.

We design and manufacture products that connect, protect and control critical systems for the global data centre, wireless telecommunications, aerospace, defence, space, medical, rail, test and industrial markets. Our products are application-specific and incorporate innovative technologies to provide our customers with a competitive advantage.

Competitors: Smiths Interconnect operates in a fragmented market with many small and medium- sized competitors in various product and technology areas. Connector competitors include Amphenol, Deutsch (part of TE Connectivity), Everett Charles (part of Dover), Glenair, ODU and

Harting. Microwave competes with, amongst
thers, Anaren, PowerWave, KMW, Dover,

CommScope, Cobham, EMS (part of Honeywell) and Teledyne. Emerson Network Power, Cyberex (part of ABB), Eaton, Starline (part of Universal Electric), Huber & Suhner, Dehn + Söhne and Phoenix Contact offer competitive power products Suppliers: Smiths Interconnect maintains a strong supply base with machined parts and electronic components together representing approximately half of the total spend. No individual supplier accounts for more than 4% of total purchased value.

Smiths Interconnect

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Smiths Group plc Annual Results 2012 | 47

£m 2012 2011 reported underlying Revenue 449 379 +18% +3% Headline operating profit 66 68 (2)% (9)% Margin 14.7% 17.8% (310) bps ROCE 12.3% 15.7% (340) bps

Volume: Positive volume offset by adverse
perational gearing in certain facilities
Price/mix: Adverse mix from lower military and

pricing pressure in telecoms sector

R&D: More targeted R&D spend
Acquisition: PDI (Oct 2011)
FX: Net impact of translation/transaction

Headline operating profit £m 2010/11 68 Volume 1 Price/mix (7) R&D 1 Acquisition 4 Net foreign exchange (1) 2011/12 66

Smiths Interconnect: Margins affected by challenging trading environment

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Smiths Group plc Annual Results 2012 | 48

£233m 8% 6%

Employees:

2,000

Percentage relates to headline

perating profit before corporate costs

2012 Revenue by sector

1 Fluid Management 35% 2 Flexible Solutions 15% 3 Heat Solutions 24% 4 Construction 26%

1 2 4 3

Contribution to 2012 Group revenue: Contribution to 2012 headline operating profit:

A global provider of engineered components that heat and move fluids and gases for the aerospace, medical, industrial, construction and domestic appliance markets.

Flex-Tek

Revenue £m

2008 2009 2010 2011 2012 206 222 212 221 233

SLIDE 49

Smiths Group plc Annual Results 2012 | 49 Customers: We serve mainly aerospace engine and airframe manufacturers, domestic appliance manufacturers and the US construction industry. Large customers include Boeing, Airbus, Pratt & Whitney, GE Aerospace, Whirlpool, Electrolux, Trane, and

Carrier. Our notable distributors in

the US construction market include Ferguson and Watsco.

Our flexible hosing and rigid tubing provide fluid management for fuel and hydraulic applications on commercial and military aircraft, deliver fuel gas and conditioned air in residential and commercial buildings, and provide respiratory care for medical

applications. Flex-Tek heating elements and thermal systems improve the performance
f a range of devices; from medical and diagnostic equipment to domestic appliances

such as clothes tumble dryers and HVAC equipment.

Competitors: Competitors for our Fluid Management business include specialty segments

f Parker-Hannifin, Eaton, and Kongsberg; as well

as vertically integrated capacity from key

customers. Heat Solutions competitors in the US

include: Zoppas, Nibe, Watlow and Chromalox; and in China, Kawai and Dongfang manufacture a wide variety of electric heaters. Flex-Tek’s Construction products compete with US manufacturers: Hitachi, Atco, Omega-Flex, Hart & Cooley and Goodman. Flexible Solutions competes globally with a number

f smaller privately owned businesses which

manufacture specialty hoses. Suppliers: Flex-Tek sources key raw materials from world- class companies including electrical resistance wire from Sandvik, fibreglass insulation from Owens Corning, specialty plastic resins from DuPont and PolyOne, and stainless steel from Allegheny Ludlum. Each

f these supply chain partners

is chosen based on its ability to provide exceptional quality, service and value.

Flex-Tek

SLIDE 50

Smiths Group plc Annual Results 2012 | 50

£m 2012 2011 reported underlying Revenue 233 221 +6% +5% Headline operating profit 38 28 +38% +36% Margin 16.3% 12.5% +380 bps ROCE 28.4% 21.9% +650 bps

Volume: Gains in aerospace and construction

sectors

Price: Improved price helped offset inflation
Input cost inflation: PTFE, brass and fibreglass
R&D: Investment in new products
Litigation: legal costs are now treated as

exceptional (£5m in prior period) Headline operating profit £m 2010/11 28 Volume 6 Price 6 Input cost inflation (6) R&D (1) Litigation 5 2011/12 38

Flex-Tek: Volumes and pricing offset inflation pressures to grow margins

SLIDE 51

Smiths Group plc Annual Results 2012 | 51

£m 2012

Net debt at start of period (729) Operating cash (after capex etc.) 549 Interest and tax (158) Exceptionals/Pensions (174) Free cash flow 217 Dividends (144) Acquisitions/disposals (120) Financing including net investment hedges (8) Foreign exchange (2) Movement in fair value of swapped debt and interest accrual (5) Change in net debt (62) Net debt at end of period (791)

Net debt increased by £62m driven by acquisitions and dividends

SLIDE 52

Smiths Group plc Annual Results 2012 | 52

40000 80000 120000 160000 200000 240000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Claims dismissed Claims outstanding

Cumulative claim trends

20 40 60 80 100 120 2004 2005 2006 2007 2008 2009 2010 2011 2012

Awards ($m) Adverse judgments

Cumulative claim history

Provisions and claims as at 31 July 2012

Key figures Key facts

Asbestos litigation

Production ceased in 1985
Exposure within John Crane, Inc.
Resists claims based on ‘safe product’ defense
Provision determined using independent

valuation experts based on 10-year time horizon

Number of outstanding claims continues to fall

Gross provision £226m Discounted pre-tax provision £213m Claims dismissed 221,000 Claims outstanding 86,000 Adverse judgments 115 Adverse judgment awards paid $111m

SLIDE 53

Smiths Group plc Annual Results 2012 | 53

investor.relations@smiths.com www.smiths.com

Questions & Answers Annual Results 19 September 2012

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