Smiths Group plc (QS2A.F) Earnings Call Transcript & Summary

Hello. Good morning, ladies and gentlemen. And to all of those who are watching online. I hope you can hear me clearly. My name is Steve Williams, Chairman of Smiths. And it's my pleasure to welcome you to Smiths' 2025 Annual General Meeting. We have up here in front of you, all of the directors who are standing for reelection, who are here with us today. Just for administration and safety purposes, there are no planned fire alarm tests. So if the alarm does go off, then you'll be guided to the nearest exit. Today's meeting is being webcast to allow all of those who are unable to join us in person today to listen to our presentations and discussion. The webcast is also being recorded and will be available on our website after we finish the meeting today. So before we turn to the formal business of the meeting, let me begin by saying how pleased the Board is with the group's performance over the last year. In a period marked by global uncertainty and a lot of economic volatility, Smiths continued to deliver very strong results. And I think that's underpinned by a clear strategy and some very disciplined execution. Despite the challenges posed by uneven regional growth, shifting trade dynamics and the geopolitical risks we're all aware of. We've extended our track record to 4 consecutive years now of consistent organic growth. And through that period, we've averaged over 7%, in fact, nearly 7.5%. So that's quite remarkable as an achievement and a testament to the resilience and the agility of our businesses and reflects the strength of our order books and the successful execution of what we call the value creation strategy. Now Roland is going to say a little more on this and our Q1 trading update that we issued this morning, and he'll come up and follow me. So our capital allocation strategy continues to deliver enhanced returns for shareholders. We increased our share buyback program, as you know, to GBP 500 million. And we have a resolution today recommending a dividend, which has been increased by 5.1%, making the 74th consecutive year of dividend payment, something we're very proud of. And today, we've announced that we'll return a large portion of the Interconnect sale proceeds through an additional GBP 1 billion share buyback program. We remain committed to maintaining a strong balance sheet and a solid investment-grade credit rating. This financial strength has also allowed us to continue to invest in the future of our businesses, both organically and inorganically through acquisition. At the beginning of 2025, we launched our acceleration plan. We talked about that last year at this meeting to drive productivity, streamline our cost base and improve our margins. Now we are mindful as a Board and management about the impact of these types of plans on our employees. And so treating our colleagues with respect and in line with our values has been and continues to be an important priority for us. And I'm pleased to report that, that acceleration plan is delivering ahead of expectations. In addition, embedding of our Smiths Excellence program across the group, also drives continuous improvement in our operations. And perhaps the most significant strategic decision of the year was the separation of the Interconnect and Detection businesses. That decision was the outcome of considerable evaluation by the Board through the prior year, and we looked at all of the appropriate options. So to consider the direction we've gone, and Roland is going to talk a little bit more about that. And that move reflects our commitment to unlocking the value and creating a best-in-class industrial engineering company focused on high-performance John Crane and Flex-Tek businesses. We announced the sale of Smiths Interconnect in October and for Smiths Detection, a dual process is being run, giving us options to sell or demerge that business. We have a clear road map for executing these separations with minimal disruption and are managing those transitions with care and sensitivity, ensuring robust governance through what we call the newly established Separation Oversight Committee. We've welcomed 2 new Board members this year, Julian, welcome, Julian, as CFO, bringing a deep financial and commercial expertise. And we thank his predecessor, Clare Scherrer, for a significant contribution and smoothing -- ensuring a smooth transition as Julian came into the business. We also welcomed Simon Pryce as a nonexecutive director, whose leadership and expertise has been and will be invaluable to us as we move forward. So welcome both of you to your first Smiths Annual General Meeting. And then finally, I would just like to take a moment to recognize 3 long-serving members who are retiring today. That's Mark, Noel and Karin, who's not with us today. Their contributions have been instrumental in shaping the high-performance businesses we have. So on behalf of the Board and shareholders, I extend our sincere thanks and best wishes for your next chapters. To our colleagues across the globe, I also say thank you. Your dedication, talent and professionalism continue to drive Smiths forward. The Board is acutely aware that the changes we've announced bring uncertainty. And we're grateful for your continued commitment. Looking ahead, we remain confident in our strategy and our ability to deliver sustainable growth, higher margins and enhanced returns. 2025 has laid strong foundations for the next phase of our journey, and we're looking forward to building on this momentum in the years to come. So unless anyone objects, I'll take the notice of meeting as read and formally propose all resolutions that are set out therein. In accordance with best practice and the company's Articles of Association, a poll will be taken on each resolution. For shareholders who are not familiar with the poll process, Matthew, our Company Secretary, will explain that process later. Now before I invite questions on the resolutions proposed or any other matters relating to the company. I would just like to hand over to our Chief Executive, Roland Carter. Roland?

Thank you, Chairman. Good morning, and thank you for joining us today. Looking back on our fiscal year 2025 results, I was also pleased to see our strong financial performance, which came in ahead of our twice raised guidance and does mark our fourth consecutive year of organic revenue growth. Group organic revenue was up 8.9%, ahead of our 6% to 8% guidance. We expanded operating profit margin by 60 basis points at the top end of our guided range. We deployed capital in a disciplined and dynamic way with 3 acquisitions and an enhanced share buyback. As Steve mentioned, our acceleration plan is progressing well. Initial benefits are being delivered, and we do remain on track for full benefits of GBP 40 million to GBP 45 million in fiscal year '27. In January, we announced a number of strategic actions to unlock portfolio value and enhanced returns. We have now announced an agreement to sell Smiths Interconnect and continue with the progress on the separation of Smiths Detection. We entered fiscal year '26 with a strong order book. Today, we announced organic revenue growth of 3.5% for the first quarter, in line with our expectations and we reaffirmed our fiscal year '26 outlook of 4% to 6% organic revenue growth with continuing margin expansion. We enter the next phase of our growth journey from both a position of financial strength, but also now strategic clarity. Turning to fiscal year 2025 performance. Keeping our people safe is our #1 priority, and I am pleased to see our safety record improved this year with our recordable incident rate being the lowest for several years. We delivered strong financial results with growth across all our key metrics. We invested organically in new product development to underpin future growth as well as spending GBP 121 million on 3 margin accretive acquisitions at attractive valuations in Flex-Tek to further enhance growth. We also increased returns to shareholders and will shortly complete our current GBP 0.5 billion share buyback program. So together with dividends, we have returned GBP 1.8 billion to shareholders over the past 4 years. All 4 of our businesses delivered growth in fiscal year '25. We exceeded our revenue growth guidance despite the uncertain macro environment and a challenging U.S. construction market and interruption from the now resolved cybersecurity incident in January with the most notable impact being in John Crane. We saw particularly strong double-digit growth in Detection and Interconnect underpinned by our leading technologies in threat detection and semiconductor test. 3 businesses, John Crane, Detection and Interconnect delivered organic margin expansion reflecting higher volumes, pricing and efficiency benefits. Flex-Tek margin declined versus a strong prior year comparator on mix impacts and an GBP 8 million in-year charge for a nonmaterial balance sheet overstatement. This issue was isolated to a single U.S. industrial site and now has been thoroughly investigated and is now resolved. Turning to the strategic actions to be a focused industrial engineering company, which does mark a pivotal moment for Smiths. This sharper focus positions us to deliver superior shareholder value through consistent execution, operational and financial performance and strategic delivery. We have now announced an agreement to sell Smiths Interconnect for GBP 1.3 billion to Molex at a highly attractive multiple. In fact, above that of the group. The transaction is currently going through regulatory approval, and we expect to complete in the second half of fiscal year '26. As promised, we are turning a large portion of this Interconnect sale proceeds through a GBP 1 billion share buyback program, which we will initiate once the current buyback completes. For Smiths Detection, we are progressing both the sale and demerger options ahead of a decision on the preferred route, balancing value maximization with execution certainty. Following these separations, Smiths will be a focused industrial engineering company specializing in high-performance technologies in flow management and thermal solutions with leading positions in these growing market segments along with long-term structural megatrends. Our competitive advantage stems from our leading brands and engineering capabilities. Our targeted investment in innovation and our product development and commercialization to meet customer needs. We have valued customer relationships based on our customized technologies, products and solutions with more than 70% aftermarket recurring or repeatable revenue. Our businesses have high-performance cultures, a strong financial profile of sustainable growth with high returns and good cash generation as well as organic and inorganic expansion opportunities. Empowered decision-making across our businesses, ensure that we remain focused on supporting customers to capture growth opportunities and deliver attractive and resilient growth with high returns. This is supported by a lean corporate center. To reflect our new structure, we set out enhanced medium-term targets for fiscal year '27 onwards. These targets are ambitious, yet achievable and reflect our confidence in our ability to deliver premium returns through cycle and support a superior rating for Smiths. So in summary, in fiscal year '25, we delivered strong results, extending our track record of consistent financial performance. Our Q1 performance announced today is in line with our expectations and fiscal year 2026 outlook. We have made great progress advancing our strategic plans to focus Smiths as a high-performance industrial engineering company. As a result, Smiths is very well positioned to deliver superior value over both the medium and the long term. We are growth and returns focused, highly cash generative and have a disciplined approach to capital allocation. We are confident that these strategic actions will continue to unlock significant value and enhance returns to shareholders. Thank you. And I'll hand you back to Steve for the Q&A session.

Thank you, Roland. Now before we turn to the vote, I can confirm that we did not receive any questions from shareholders submitted prior to the meeting. And so I invite shareholders here in the room to raise any questions you may have on the resolutions proposed today. And if you want to ask a question, please raise your hand and then wait for a microphone. That's important because we want those online to be able to -- on the webcast to be able to hear the questions and answers as well. Please state your name and if you are a proxy, or a corporate representative, who you are representing. So feel free to ask questions here, and then the whole Board is going to be available after the meeting as well for slightly smaller groups to talk. Okay. So let's open up for questions. You have the microphone there. Thank you.

[ Nick Steiner ], private shareholder. Thank you for the presentation and the information and I've been sort of having a look at the annual report. It's rather large, but there's useful information in that. And we're down to sort of 2 businesses, and it's flow management and thermal solutions. I've been trying to get my head a little bit around this that there are problems. Otherwise, you don't need solutions. So the problems, obviously, would be the sort of range of temperatures and pressures and liquids and gases. Could you give some idea of what they are and why this company can lead in a world sense? And of course, we then sort of move on to the sort of heating, the radiation conduction convection, how are you sort of getting those interrelated? And of course, with the sort of seals and things you've got expansion and contraction. And again, listed with the other physical problems, how you're sort of leading in this? And then, of course, the supply of materials, cheaper materials is obviously good if they are better quality in the field. So perhaps a little more flavor of why this company leads the world and what the problems are.

Okay. Thank you. A great question. And it sort of takes us back to our strategy, if you like. And I'll take you back a couple, maybe even 3 or 4 years. We've looked at the businesses and recognize there's always room for continuous improvement and growth. And we wanted to make the businesses operationally excellent. So we went through that process, and that was very successful. The challenge we had at that point was that, that value wasn't coming through to our shareholders. So we were starting to create these 4 businesses. We're getting deep into the excellence and the expertise of their particular businesses. The strategy -- the next stage in the strategy was to say, okay, so how do we get that value through to shareholders. And it's popularly called sort of a conglomerate discount where if you have multiple businesses, often it gets viewed below the average value of the business. So we put the strategy together. We looked at the 4 businesses and said, what do we want to be at the end of this process. And of course, you never quite get to the end of it because you're always reviewing it. And we looked and said, we view ourselves as a primary core strength is the depth of our engineering and our ability to give solutions to industry. And the 2 areas we're strongest in are our flow and thermal. And thermal, you're right, you said it in your question. That means both heating and cooling, not just in one direction. And those opportunities are increasing around the world. A great example would be data centers, where the need for heat transfer and data centers is growing exponentially at the moment. So we were very comfortable that we were focusing the NewCo on those 2. So I'll probably stop there and that's at the highest level. I don't know, Roland, if you want to go into any particular examples or?

Yes. No, no, I can. Let me build on the operational performance because much of what our customers expect is exactly operational performance, and we have a very broad service footprint, which we shouldn't forgotten there as well. From the point of view of what are the megatrends that are driving this? This is energy. We know energy lifts people out of poverty. And so it is going to be a very compelling megatrend. We also understand there is this electrification of everything, which is another megatrend out there. So why do we have a right to win there? Well, obviously, we have a very strong legacy and a very strong brand in flow control. We're building on that. We are well balanced between traditional energy and new energy on that. We have invested a considerable amount in our machining footprint. We've also invested a considerable amount on testing. So that really goes to the last part of your question, why are new materials important? And what are they better? That's part of the unique thing that we offer our customers, which is the fact that our product is very well tested and we've invested and we continue to invest on our new dry gas test rigs, for example, to make sure we can deal with the 3 things that customers really worry about, higher temperatures, higher pressures and higher speeds because those are the things that are driving forward. And then on -- you mentioned heat and the transfer of heat. You've seen us not only organically grow our capabilities across low temperature, high temperature, but also medium temperature, which is where our customers want to see us and are guiding us, and it's always key that we are listening to our customers. So essentially, we are building those capabilities both organically and inorganically and you see that through the R&D spend that we put into that. Thank you.

Any more questions?

My name is [ Anthony Lee ] and I suppose I'm a delegate my family investment company. We are long-term shareholders in Smiths. And recently, we proved our faith in Smiths in increasing our investment. So if I have questions which may seem critical, it's a critical friend rather than somebody who wants to get out. If I could use a couple of metaphors, this is a cake that we're happy with the baking. It comes out the oven. We look at the cake, and we think very tasty, very nice. And then somebody comes in to carve the cake, and we start looking at what's going on individual plates. So I'd like to address that. I'm grateful to Mr. Steiner. I am also an engineer. And when I see things about seals and temperatures, I get lost, but I trust the engineers. And luckily, this is an engineering company, which has engineers on the Board. I trust you to know about what you're actually making. Regarding the future of the company, I'll train my metaphor. You have 4 divisions. Let's imagine very simply, it's a Boeing 747, 4 divisions, 4 engines. You've decided to shut 2 of the engines off, and you're going to redesign the company as maybe a Boeing 787, a 2-engine company. Now looking at the results that you published. I managed to get online this morning before I came in, I've now read the press statement. And you're getting rid of Smiths Detection, but Smiths Detection is actually making more money than one of the companies are going to keep, Flex-Tek. So again, it may be a naive question from a naive shareholder. I'd like to know a bit more about the evaluations you gave regarding the companies you decided to keep, the engines you decided to keep and the ones you decided to get rid of because from what you say in your statement, Smiths Detection is actually doing very well. And in a world where security is ever more important. Again, I'm not saying don't do it, but I'd like to know more about why you did do it. My second question is regarding this return to shareholder -- the return of value to shareholders from the sale of Interconnect. In all the reports that we did on researching the company again before we come to the AGM, you kept it quite vague, we are going to return the value of selling Interconnect. It will be returned to shareholders. Today, we learned that it's going to be returned in the form of a share buyback, and you're buying shares at the moment pretty near the top of the market because, as I said at the beginning, we bought more shares because we have confidence in the company. But again, if it's only going to come back to shareholders in the form of the share buyback and you will be buying a company whose share price has increased. It seems to us shareholders as that we may be not getting a fair deal in the sense that you could have returned some of it as a special dividend and use the rest of it to do a share buyback. We depend, and I only speak for my company, we like Smiths because there has been capital appreciation, but we also like the dividend. Now I wonder whether historically, a lot of what is happening at the moment is been driven by engine capital rather than buy anything you might want to do for the company. Their calls might not be our calls. We intend to stay invested for the dividend, but it strikes me again, if you're selling divisions, what's left of the core company is going to be paying -- maybe paying a small dividend, whereas engine capital may be ready to take the money and run. Could you address that, please?

Well, okay, I'm going to have a go at doing that. I mean Roland is going to help me if we need to go into more detail, but I'm going to go at all of that, because it gets to the very root of what a Board is and what its responsibility to its shareholders are. So I'll move through it quickly. And then we may come back to question particularly around why -- which businesses stay and which businesses go. So I mean, the sequence of events I was describing earlier were about the strategic review. And we consider all options. We looked at different combinations of the company. We looked at where our deep expertise was, where we thought we could add most value and what was going to be the most attractive company in the future. And that's where we came to the conclusion that industrial engineering, our deep engineering expertise, our ability to work with customers and help them serve solve flow and heat transfer-type problems, and we're confident in that. That didn't mean the other businesses weren't attractive. So the Interconnect business and Detection are very attractive businesses. Each business has a slightly different market and a slightly different cycle. And you're right, and it couldn't be more fortuitous in a sense because you can plan for everything, but sometimes the following wind helps. And both of the businesses that we've been selling are in very good parts of their cycle, which has meant that we're going to get them fully priced, and we're going to get good deals for them. In fact, the Interconnect deal that's been announced exceed most analysts' expectations in terms of what we could get. We had a degree of confidence as a group that would happen. So that -- it was that fundamental strategic analysis, looking at our core strengths and looking at what we wanted to be, where we thought we could add most value in the future for shareholders. The second part of your question, and then when we look at the allocation of capital, how we spend that capital, we look at all options. So we look at starting inside the company, can we invest that money and get a good return there. We look outside the company, are there target opportunities for us, and we've been fairly active. We did 3 acquisitions this year, and we're in the process of looking at some more of those sort of bolt-on type acquisitions. So we look at share buyback, we look at those organic expenditures, we look dividends. And we go through a broad consultation process with our shareholders, all of our shareholders, engine or Elliott have -- we believe, although the way they hold shares, it's complex to see through exactly what they do own. But we don't treat them any differently. We talked to all of those, particularly the big institutional shareholders, and we talk -- and we take into account their views as we start to look at the best way to allocate that capital. But fundamentally, it's an economic analysis. And part of that is we have to -- we have to form a judgment on what a fair share price is. And if you see us buying back shares, that's because we believe we're getting them at good value. So -- and my numbers won't be perfect because we're buying every day. But we bought -- 90% of the shares we bought back, I think, Julian, we bought back around GBP 20 a share. So you've got a fabulous return on that. Now there comes a moment potentially where share buybacks are not the best option. So we will continue to consult. We will continue to look at the other ways of returning. And by far, the strongest message we've got is if you can get the sort of value you getting, continue to buy back your shares for now, we will continue to review that allocation of capital in the future. So that -- for the -- Roland talked about the trade statement this morning, we've announced the intention to buy the next GBP 1 billion worth of shares back. Probably most of that will be completed in this next year. But we will continue to do the analysis. If we think those shares are overpriced, that won't be the best allocation of your capital. So we'll look at other ways of doing that. And we include in that, as I say, dividends, special dividends. Our dividend policy for is -- phenomenal dividends is quite clear. We relate the dividend -- we see the dividend as a long-term contract that shareholders can count on. And that's why we're so proud of that 74-year record. And you'll see us moving that dividend in relation to the long-term earnings and cash flow of the company. So that explains, if you like, normal dividends versus these special events where we have from -- normally from divestments, large amounts of cash that we want to most effectively get back to shareholders. So we've done the consultation with shareholders and very strong support for the program at the moment, but we will continue to review that. I don't know if you would want to add anything to that.

No, I think you've covered that.

One of the privileges of being up here, you can pinch all the easy bits and give all the difficult bits away. I'm going to stop there.

I have 1 or 2 other questions, I'll yield to other shareholders at the moment.

Okay. There's a few more questions in the room. Thank you.

My name is [ Phil Clark ], I'm a very long-term shareholder. You talked about the conglomerate discount, and that's a well-recognized feature, but there's also the strength of being a conglomerate and being a long-term shareholder, I can remember the years when some parts of the group have been horrible and have been bailed out by the continuing success of other parts of the group. And what you're doing is you're taking away that safety net by -- well, by selling parts of the big parts of the business and demerging potentially Detection. So you're increasing the risk to shareholders. So that's not necessarily a good thing. My question is, though, I don't understand how there can be any value in demerging Detection as opposed to selling it because that way the value just floats and we know better from it. But there's also the negative synergistic benefits of increased cost to be borne by separate companies. So to my mind, it makes no sense at all. So please don't do that.

Okay. No, I mean, thanks for the input. I mean a good commentary in a sense, and all I would add to it is that it depends on the price. If you can look at a range of prices and look at the options. And if you believe within Smiths, it's discounted and then it will get a significant improvement in price if it were on its own valued against its peers in its market. So those are the very things we consider. That's why we keep the options open. That's why we're running a dual path at the moment. We haven't -- we're keeping both of those tracks active. So we've got -- the sale is we've got interested parties, and we're discussing it and that would come to fruition over the next months and year. And we're keeping the demerge option as well. Just to make sure if the price -- if there isn't a buyer out there for whatever reason, wants to buy at a reasonable price, we have the alternative. But I take your point.

My name is [ Paul Carlsol ], and I'm here as corporate representative. It's disappointing to hear that you had a cybersecurity incident earlier in the year. How frequently do you have external experts come into the company and assess your preparedness, whether you're keeping up to date with all the procedures to minimize the risk of another security incident. And secondly, you've had one cybersecurity incident. Have you considered increasing your insurance against another incident?

Okay. I mean, again, a very topical and great question. So I'll talk specifically from the Smiths point of view, and then I'll broaden it out. Cybersecurity is a real risk for corporations. It's a real risk for individuals now as well. So do exercise some caution. We have comprehensive discussions and plans around cybersecurity. So we design our systems to implicitly protect themselves against intrusions. And then we have a policy and a process, which escalates any -- because we get hundreds a day of people trying to break into corporation systems. And so we have a process of escalation if any of those become significant and that gets through to the Board in minutes. So if we have a significant cyber event in play, it will be involved within minutes and hours of that event occurring. And that was the case in this event. The -- I'll just try and then context what actually happened as a -- almost not a complement -- you never want to have an intrusion. It's almost like a war that's going on at the moment. These are often not individuals. They're often state-sponsored groups who are targeting. And as fast as you design defenses than very clever people on the other side are designing ways of still attacking. The event that happened was immaterial to the group. So we're pleased in the sense that our architecture and then our response was of sufficient quality that had a minimal effect on the company. It did affect John Crane, and we've talked about some of the lessons we've learned, and we've built that in exactly, as you say, we spent probably getting close to GBP 5 million this year on improving that security. So it's a constant risk, where we talk about it and educate ourselves regularly around the boardroom table, and we have both architecture and a process, which responds and adapts to it very quickly. So you've seen a number of those events going on, and they're having significant impact. I think it's a measure of the success of the leadership here that they actually got on top of it very, very quickly. I mean you did say about insurance, and I don't know if you just wanted to make a quick comment about insurance considerations.

So I won't comment particularly on the insurance, but I will build on the external advice. We always have external advice, and we're very well connected into that external advice.

Any other questions? So we've got 2 more coming.

[ Christophe ], small shareholder. Just a question on your CapEx kind of philosophy and how it links to your creating value for our customers. The background to this question is we're all seeing the dark factories in China. And I'm wondering if that's something you need to transition to more robotization or whether the value on your end, it's more on the R&D to create -- to kind of use AI to create better products. I'm just curious as to how you're going to keep investing well in the business without wasting money?

Okay. Yes, I mean, we have an active R&D policy and demand has been leading at the Board level a lot of those discussions. And that's for exactly the reasons you talk about, we've been taking each of these businesses forward. And you can see some obvious headline examples of where that's been very successful. Detection will be a good example around some of the new technologies, which we're leading that industry in adopting. Also in terms of investment, normally, we look at organic investment is being funded from normal business. And you've seen us very active in terms of investing inside the company when we have good ideas, and they have to compete with on a return basis with investments outside of the company. So the sort of bolt-on acquisitions we've been doing. So yes, we're very active on R&D. Yes, we look at in terms of all of each of the businesses, and we look geographically around the world the best place to put some of those investments. I don't know if you'd want to add anything, Roland?

Yes. To that, so in fiscal year 2025, we spent GBP 143 million on our R&D. So you can see that the level of investment we have there. Also on CapEx, we spent in fiscal year '25 GBP 80 million on CapEx, and that was much associated with putting in the right machining capabilities specifically, as I've already mentioned, putting in the right test facilities to allow us to sort of enhance our products and continue moving forward. So it is very much a focus for us going forward.

We have a question at the front.

I'd still like to fix a bit more on what we will -- those of us who want to remain shareholders will be left with as a company. And in doing that, if we look at Smiths Detection, one of the things that we've liked about Smiths is the aftermarket, for instance, from a division like Smiths Detection. So I'd like to know a bit more in this new slim down company what is the aftermarket? And is it comparable? Can we be reassured that there is a good income stream to come from that? And some of the reports that we've read, some of the analyses that we've read about the future of the company, in saying the problem with trying to sell Smiths Detection is that due to regulatory issues, it may be a very difficult sell. That's not a question on the quality of the company, but it may be a difficult sell. And last year, I asked about Smiths Detection at airports because in Italy, when I've been traveling in Italy, at Fumicino. They were boasting of these miraculous new machines which have been installed. No, you don't need to take your computer out. No, you don't need to take the liquids out. We got this marvelous new machine. And you come back to Britain. And of course, we don't have these marvelous new machines. Now as far as we can tell, these marvelous new machines have gone into Birmingham and Edinburgh, but there might or might not have been a problem with them staying switched on. So I'd like to know again if -- are we getting rid of Smiths Detection because you're beginning to find a reluctance to install these marvelous new machines that the Italians love but certainly as far as we can see in Britain are still not in. There, Birmingham and Edinburgh, I guess most people who are flying from this area are not flying from Birmingham or Edinburgh.

Okay. I'll answer the question, but I'll keep it at a reasonable level for this meeting. And then if after you want to go into more detail around individual locations, we can. Because you touch on 2 really important points in there. Let me start with the aftermarket question first. Aftermarket is a big consideration for us. And as you say, the Detection, we have a very high market share in Detection, and that's been very successful. John Crane is probably the poster child or aftermarket in that you do the original equipment, but once the original equipment is in, you have a very long tail to that business. And that's one of the attractions to it that the aftermarket is strong, and getting stronger again. So if you think of a world where people were talking around peak oil and volumes peak, i.e. we're talking about volumes peaking in 2030. They've put their projection back to beyond 2050 now. The beauty of that for John Crane is that that's a significant part of our business in the oil and gas industry. So we're able to extend that piece of business. So aftermarket is very important to us. That's one of the very strong characteristics of the businesses, which remain. There are -- I've got to be cautious, we're in the process of selling Detection. So we have to be very measured in what we say. And I think everything you've said is reasonably well known. We don't think that the regulatory issues are a barrier to sell. We think we'll be able to sell it. We think that the technology in that industry and the -- I mean, Roland can actually talk to some of the orders we're starting to see coming in, it's looking very good. It's also getting stronger. So as a business -- if you're the buyer of that business, you'll be looking at it with a very good plan and future outlook. It's in good shape. I don't know if you'd add anything?

No, I'm just glad you had a good experience in Italy with the Smiths machines, and I recommend that you go to London Heathrow or Gatwick, which are also Smith machines, and they are the most modern versions of that. And the regulatory environment in Europe is certainly supporting an even better experience at the airport, of which Smiths is -- Smiths Detection is at the forefront.

That's reassuring. I would just -- if there was a chance to speak afterwards because I don't want to delay people. But I would say as a long-term shareholder. Normally, the Board is sort of milling around at the coffee session before. I was a little disappointed, and I always wonder if a Board is hiding from us, why they're hiding from us. So perhaps you could give reassurance to shareholders like me if you could join us briefly for coffee so that I'm sure you're not mounting the barricade.

No one is hiding. You have your full future board here, plus 2 extras, who are very, very experienced.

Could I just ask one question, what I would call housekeeping. I always ask this, but Mr. Pryce, welcome to Smiths. You joined in February. It's now November. According to the annual report, I still and my company still owns more of Smiths than you do. Would you like to add to the information that's in the report as to whether you are now a Smiths Group shareholder?

Well, firstly, thank you, and it's great to have joined the Board of such a fantastic company with such a great opportunity. You might have noticed, we have been a little busy since I joined, and you'll be aware that, that creates challenges for insiders, directors in their ability to acquire shares in the company. It is my long-term intention when there is perhaps a little less activity going on to indeed acquire some shares in Smiths.

Okay. Yes. So it's been difficult for directors to buy. And we've been black out because we have information about the divestments. Okay. So I don't think there are any more questions in the room. So I'll move on to the formal resolutions to be put to the meeting. I've already declared that the resolutions will be voted on by means of a poll. And I think, Matthew, you're going to explain that process for submitting the vote.

Yes. Hopefully, everyone received a poll card this morning on registration. If not, please speak to a representative of our share registrar, who will assist you. If you have already voted by proxy, you do not need to vote again unless you wish to change your vote. The details of the resolutions proposed are contained in the Notice of Meeting, copies of which were available this morning when you joined us. Please mark the poll card with a cross in the appropriate box and sign your poll card. Please be aware that a vote withheld will not be counted in the calculation of the proportion of votes for and against the resolution. Once completed, hand your poll card to one of the registrar's representatives, who will be located by the exit. Thank you.

Okay. Well, I mean, the company has already received proxy votes, which will be included in the votes you cast in the room today. And the final results will be announced to the market and published in our website later today. As you can see from the screens behind me, given the proxy votes that we've already received, we expect all of the resolutions to be passed. So that about concludes the formal proceedings. The voting will close in about 10 minutes from now. So if anyone not yet cast their votes, please do so before then. And it merely remains for me to say thank you for your continued support and I'll declare the meeting closed and welcome you to join us for some refreshments in the room next door. So thank you.