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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

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

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

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05/05 JF Investors Briefing

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

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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


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Airbus A380

Major Systems won by Smiths


High Lift Landing Gear Smiths Aerospace

Firm Orders = 139 Options = 70 Entry into Service = 2006


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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

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Smiths Aerospace Business Dimensions

Electronic systems Mechanical systems Engine components

FY04 Sales: 1,006m


Military / Civil split ~ 60% / 40%

Sales Split

R&D/Sales
Company Funded
(expense to profit)

Recent Additions 8% 12%


DGT acquired for 57m in mid 04 Integrated Aerospace acquired for 57m at end 05

Customer Funded
(largely govt / military)

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Where are we?

Electronic Systems Mechanical Systems

Customer Services Engine Components

RoW China Poland Australia Singapore

Total employees: circa 11,000


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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 A380: $1b landing gear extension & retraction system, actuators, high lift actuation, wing components

Airbus 320: $650m avionics, hydraulics, engine components

JSF: $3b avionics, utilities, hydraulics, engine components

Eurofighter: $600m avionics, utilities, hydraulics, engine components

Boeing 777: $800m electrical power, utilities, hydraulics, engine components

F-18 E/F: $650m weapons systems, utilities, hydraulics, engine components

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Competitors
Electronic Systems
Honeywell Rockwell Collins Hamilton Sundstrand Goodrich Thales Moog Cobham Goodrich Parker Liebherr

Mechanical Systems

Engine Components
Barnes Group Primes in-house capabilities GKN Carlton Magellan Doncasters Firth Rixson
Smiths Aerospace

Customer Services
Third Party Repair Centres Operators in-house capabilities

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Aeroengine Component supplier


Civil
GE/CFM Pratt & Whitney Rolls Royce/Eurojet

Military

Engine side wall Fabricated Mixers


Machined Shafts

Machined Combustors

Flash Welded Rings

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Business Dimensions - Aftermarket

Service Based Performance


Based

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

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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
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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)

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The Future: Our view of the Global Military market


30 25
Aircraft Production Value $bn Actuals Forecast

20 15 10 5 0

2006

2007

2004

2005

2008

2009

2010

2001

2002

2003

Military Helicopters

Other Fixed-Wing

Light Fighter/Attack/Trainer

Heavy Fighter

Smiths increasing market share while market flattens


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2011

2012

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
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2011

2012

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

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