smiths-group/ir

1. Smiths Group Meetings with investors in California Alan Thomson - Financial Director Russell Plumley - Director, Investor Relations August 2004 Register here to receive regular information  www.smiths-group.com/ir

2. Smiths Group:Good progress on reshaping the company 2001 2002 2003 2004 (financial years) Acquisitions Aero$100m Aero$30m Detection$90m Detection$375m Detection$60m total spent on acquisitions $940 million Medical$80m Medical$60m Spec Eng$25m Spec Eng$10m Spec Eng$110m MERGER DEBT~ $500m DEBT$2.5bn Auto demerger $900m cash $470m prefs Engineering$80m Engineering$255m Spec Eng $35m Polymer Seals$770m Marine Seals$340m Disposals

3. Focusing on activities with solid growth potential Estimated contribution to FY2004 Smiths Aerospace Systems and equipment for military and commercial aircraft proportion of op. profit approx sales* $1.8 billion Margin 10% Smiths Detection Equipment for protection against threats to security $0.6 million Margin 17% Smiths Medical Devices for critical care and medication delivery $0.8 billion Margin 19% Specialty Engineering Application-specific electronic and engineered products $1.5 billion Margin 13% (*£/$=1.75)

4. Adding valuable bolt-ons in each division:Six acquisitions since March 04 for $385m Aerospace DGT • Engine Components $102m Detection Cyrano SensIR $15m • Miniaturised detector • Hazmat kit $75m Medical Smiths MedicalJapan DHD $27m • Full ownership of Japanese distribution • US respiratory care devices $55m Spec Eng TRAK • Microwave components for military communications airborne antennae $111m

5. Commitment to R&D will help deliver organic growth The latest products will drive sales ahead Aerospace (systems for) A380, B7E7, F-35 Medical Needle-Pro, Cozmonitor, Cozmore Detection Bio-Seeq, Sentinel II, Hi-Scan (Continuing activities) 10% of sales 7% of sales $460m $400m $310m $255m company funded customerfunded 2001 2002 2003 2004 (E)

6. Delivering improved operational performance:Operating globally to reduce the cost base and get closer to customers MexicoMedical John Crane PolandAero components Malaysia  Flex-Tek Costa Rica  Interconnect Czech Republic John Crane China Aerospace John Crane  Interconnect China • 130,000 sq ft • Engine components • customer GE

7. Smiths Group: Significant presence in the US exports $400m 2004 (estimated) Sales: $2.4 billion Net Assets: $1.6 billion Employees: 12,000 Smiths 70 manufacturing locations in 29 states

8.      approx contrib. to 2004 profit Smiths Aerospace: Smiths is a leader in aircraft electronics, actuation systems and engine components Aftermarket Defense First tier supplier Systems integrator Significant investment in R&D Restructuring benefits will be retained Commercial OE Recovery delivers rapid improvement in margins sales • Commercial • OE recovery starts FY06 • And aftermarket in FY05 • Smiths: substantial presence on next-generation aircraft • Defense • Current programmes performing effectively • New programmes will sustain growth • Procurement budget continues to increase, but will slow

9. Company-funded R&D has increased from 4% to 8% of sales Smiths Aerospace: Steady through the recent downturn, sales will regain momentum as the commercial market recovers Outlook for 2005: Sales growth (in $) circa 7%, margin circa 10% CAGR 2000-2004:5% commercial largely organic defense Sales held steady through commercial market downturn $1,760m $1,590m $1,590m $1,570m $1,450m Sales 2000 2001 2002 2003 2004 (E)

10. A strong presence on next generation commercial aircraft: Smiths systems on the 7E7 High lift system – leading edge Leading edge power drive unit Landing gear systems flight deck interface Common computing resource Common data network High lift system - trailing edge Common core system remote data concentrators Nose gear steering, actuation and brake control monitoring system Enhanced airborne flight recorder Common core system remote data concentrators Common data network Trailing edge power drive unit • The main Smiths systems • Common Core Computing • Landing Gear Actuation • High Lift Actuation Main gear actuation and brake control monitoring system

11. approx contrib. to 2004 profit Smiths Detection: A rapidly evolving business, finding new applications for core technologies Sound organic growth  Technology acquisitions Commitment to R&D  World-wide presence Sales 2004 Military Military Airports Airports Firstresponders Critical infrastructures Ports and borders First responders Critical infrastructures Ports and borders Other

12. Smiths Detection: sales have grown rapidly, firstly from 9/11, then from wider application of detection systems Outlook for 2005: Sales growth (in $) circa 20%, margin circa 17% CAGR 2000-2004:56% from organic and acquired growth $560m Heimann acquired $435m Barringer acquired $175m $95m $90m Sales 2000 2001 2002 2003 2004 (E) Includes post-9/11 orders from TSA

13. Smiths Detection: market leadership across the full range of capabilities X X X GE (IonTrak) X X General Dynamics X X SAIC X X AS&E X-Ray (Checkpoint) EDS/EDtS Cargo Explosives trace Chem Bio Smiths has: • Broadest range of technologies • Widest market access X X X X X Smiths Detection X X X L3 InVision X X OSI/Rapiscan X : No. 1 or 2 player

14. approx contrib. to 2004 profit Smiths Medical: innovative products are driving profitable growth • Strong market niches in two specialized areas • Increased healthcare spending assures steady market growth • Technology leadership sustains margins above 18% • World-scale business driven by dynamic US market • 40% of production in low-cost areas US RoW Japan Europe sales Medication Delivery & Patient Monitoring Anaesthesia & Safety Devices

15. Smiths Medical: healthcare spending continues to rise steadily, benefiting the market for medical devices Outlook for 2005: Sales growth (in $) circa 9%, margin circa 19% CAGR 2000-2004:8% largely organic $855m $770m $700m $660m $635m Sales 2000 2001 2002 2003 2004 (E) New product innovation is driving organic growth

16. Smiths Medical: leading the way in treating serious (Type 1) diabetes Cozmo - insulin delivery pump • 10,000 sold since launch (Nov 02) • 50% of sales to people under 20 • Gaining firm market share in US • Int’l sales underway, inc France/Canada • Combined pump/glucose monitor will be launched this year Use of insulin pumps in the US 1.3m The next step…Cozmonitor • Monitor combined with pump • Blood/glucose level displayed • Easily stored/retrieved data 0.8m Type 1 diabetics 0.3m PUMPS 98 00 02 04E

17. approx contrib. to 2004 profit Specialty Engineering:Business units are performing well John Crane Ducting John Crane • Strengthening market presence in Russia, China and South America • Oil & gas sector showing growth, except in Middle East • Productivity improvement continues Marine Interconnect sales Interconnect • Defense business forging ahead • Substantial recovery in cellphone infrastructure Flex-Tek • Achieving growth in difficult markets Marine • Margins improving from a low level Shipping market buoyant

18. Specialty Engineering: robust market positions, high cash-flow Outlook for 2005: Sales growth (in $) circa 10%, margin circa 13% CAGR 2000-2004:5% Organic and acquired Telecom slowdown affected Interconnect $1,520m $1,410m $1,390m $1,320m $1,270m Sales 2000 2001 2002 2003 2004 (E)

19. Smiths Group: Good track record: turning profits into cash Operating profit 80% Operating cash-flow (after capex) Free cash-flow 7% yield on equity Generates additional growth Self-funded acq. prog. Current yield 3.7% Dividend programme Over the past 3yrs Smiths has generated $1.2bn of free cash-flow

20. Register here to receive regular information  www.smiths-group.com/ir