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Smiths Group PLC ADR SMGZY

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Choice of New CEO at Smiths Group Not Too Surprising

Analyst Note

| Denise Molina, CFA |

We were not too surprised at the announcement of Paul Keel as the new CEO of Smiths Group as there had been press reports early in 2020 that a CEO change was possible, and as Keel comes from 3M, where Smiths Group Chairman George Buckley was himself CEO for seven years. We view Buckley as an active chairman and strong voice on strategy within the group's board and executive teams. His letters in the group's annual reports have in the past outlined a framework for growth for the company, with an emphasis on reinvestment in research and development to drive product introductions and aiming to grow at above-market rates. Nevertheless, Smiths Group continues to struggle with consistent growth, or even gross domestic product plus growth, due to the disparate investment cycles of its diverse end markets.

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Company Profile

Business Description

With its start as a London jeweler in the 19th century, Smiths Group has for most of its history operated as a company operating disparate but economically attractive businesses. Thematically, it runs businesses that manufacture niche products in security- or safety-sensitive industries. Today, Smiths Group is split across five divisions: mechanical seals, medical supplies, weapons detection, electrical connectors, and specialized hoses. The end customers for these products include airports, NASA, government security or defense departments, and hospitals. Medical is slated for a sale or spin-off.

11-12 St James’s Square, 4th Floor
London, SW1Y 4LB, United Kingdom
T +44 2070041600
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings
Fiscal Year End Jul 31, 2021
Stock Type
Employees 22,964

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