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
2
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 Primary flight controls Engine Components (Tailpipe/Shrouds) Aerial Refuelling Pods Aerial Refuelling System and Components Engine Components Primary Flight Controls
Gust lock Primary flight controls
APU door door/slides actuators Fuel and hydraulic tubes/hoses High lift actuation system Wing structures Remote input/output Nacelles fairings Propellers Integrated Landing Gear Actuation and Control System Hydraulic Control Valves Hydraulic Fuses Airdrop System Components Auxiliary Power Engine Instrument Displays Integrated Avionics Panels and Light Control Data Management Self-contained Navigation System 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 3
Smiths Aerospace
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 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
Primary Flight Control Actuators Empennage Components
Variable Exit Nozzle/Thrust Vectoring Actuation System Engine Distress And Monitoring System Tailcone Primary Flight Control Actuators Stores/Weapon Deployment Actuation System Wing Structures
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
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 05/05 JF Investors Briefing
Smiths Aerospace
4
Capabilities on UAVs
(Applications: X-47, X-45…)
Variable Speed Constant Frequency Generator Power Distribution System Regulated/Transformer Rectifier Unit Fuel and Hydraulic Tubes/Hoses 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 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 Battery Charging System Remote Interface Unit
Refueling Probe
Smiths Aerospace
05/05 JF Investors Briefing
5
Capabilities on large commercial aircraft
(Applications: B737, A320, B777, A330/340, B787…)
Fuel Systems High-lift Systems Fuel and Hydraulic Tubes/Hoses Airframe Components Primary Flight Control Actuators
Remote Input/Output
Primary Flight Control Actuators
Power Generation Cable Harnesses and Connecters Doors and Door Actuators Integrated Avionics Flight Management Data Management Displays Landing Gear Actuation and Control Structures Power Distribution Doors and Door Actuators Utilities Management Wing Structures Landing Gear Actuation And Control Thrust Reverser and Cowl Opening Actuation System Engine Components Engine Actuation Flying Control Surfaces Primary Flight Control Actuators Wing Structures Fuel Systems Power Generation Environmental Control
Smiths Aerospace
05/05 JF Investors Briefing
6
Boeing 787 Dreamliner
Major Systems won by Smiths
Common Core High Lift Landing Gear
Programme Status
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 7
Airbus A380
Major Systems won by Smiths
High Lift Landing Gear Smiths Aerospace
Firm Orders = 139 Options = 70 Entry into Service = 2006
05/05 JF Investors Briefing 8
Programme Status
What are we?
Aerospace Systems
Delivering Integrated Solutions
Engine Components
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
9
Smiths Aerospace Business Dimensions
Electronic systems Mechanical systems Engine components
Recent Additions 8% 12%
DGT acquired for £57m in mid ’04 Integrated Aerospace acquired for £57m at end ‘05
Customer Funded
(largely govt / military)
Smiths Aerospace
05/05 JF Investors Briefing
10
Where are we?
Electronic Systems Mechanical Systems
Customer Services Engine Components
RoW China Poland Australia Singapore
Total employees: circa 11,000
Smiths Aerospace
05/05 JF Investors Briefing 11
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 A380: $1b landing gear extension & retraction system, actuators, high lift actuation, wing components
Airbus 320: $650m avionics, hydraulics, engine components
Total Integrated Support 2005 Sales
Aftermarket Original Equipment
PBL / Logistics Support
Usage based
Rate per hour
Cost Based
Fixed Price
Cost driven Reactive
Smiths Aerospace
Time & Material
05/05 JF Investors Briefing
15
How are we performing?
Smiths Aerospace performance in H1 2005
£m
Sales Operating Profit Margin
US 101 Aerospace
H1 2005
514 39 8%
at constant currency
+17% +24%
Contribution to Smiths Group operating profit 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
05/05 JF Investors Briefing 16
Smiths Aerospace
Smiths Aerospace: Sales Trends
Civil OE Military OE Aftermarket
(expected)
2005
2005 sales
Commercial OE
2004
Military OE Aftermarket
2003
10%
20%
10%
10%
(underlying growth, excluding acquisitions at constant currency)
Smiths Aerospace
05/05 JF Investors Briefing
17
The Future: Our view of the Global Military market
30 25
Aircraft Production Value $bn Actuals Forecast
The Future: Our view of the Global civil market
100
Actuals Forecast
Aircraft Production Value $bn
80
60
40
20
2006
2007
2004
2005
2008
2009
2010
2001
Civil Helicopters
2002
Exec/Utility Turboprops
2003
Business Jets
Regional Transports
Commercial Jets
Smiths increasing market share Opportunities in later years for new narrow bodies
Smiths Aerospace
05/05 JF Investors Briefing 19
2011
2012
0
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