Notes to the Interim report (unaudited)

2 Analyses of revenue, operating profit and assets by business segment

Analysis by operating segment

From 1 August 2008 the Group has been organised into five divisions: Smiths Detection, John Crane, Smiths Medical, Smiths Interconnect and Flex-Tek. Prior period disclosures have been amended to conform to the new structure. The “Other” division comprises the Marine Systems business which was sold on 8 November 2007 and the Specialty Engineering divisional office which was disbanded on 31 July 2008.

Smiths divisions design and manufacture the following products:

Smiths Detection – sensors that detect and identify explosives, weapons, chemical agents, biohazards, narcotics and contraband;
John Crane – mechanical seals, seal support systems, engineered bearings, power transmission couplings and specialist filtration systems;
Smiths Medical – drug delivery systems, vital care products and safety devices that prevent needlestick injuries and reduce cross infection;
Smiths Interconnect – specialised electronic and radio frequency products;
Flex-Tek – engineered components that heat and move fluids, flexible hosing and rigid tubing.

The position and performance of each division is reported monthly to the Board of Directors. This information is prepared using the same accounting policies as the consolidated financial information except that the Group uses headline operating profit to monitor divisional results and operating assets to monitor divisional position. See note 3 for an explanation of which items are excluded from headline measures.

Intersegment sales and transfers are charged at arms length prices.

	Period ended 31 January 2009
	Smiths Detection £m	John Crane £m	Smiths Medical £m	Smiths Interconnect £m	Flex-Tek £m	Other £m	Total £m
Revenue	233.3	392.7	402.5	152.0	111.1		1,291.6
Divisional headline operating profit	23.8	65.8	76.8	23.9	10.8		201.1
Corporate headline operating costs							(16.0)
Headline operating profit	23.8	65.8	76.8	23.9	10.8		185.1
Divisional exceptional operating items (note 4)		(19.6)	(0.7)		(1.8)		(22.1)
Corporate exceptional operating items (note 4)							11.7
Amortisation of acquired intangible assets	(0.3)	(5.9)	(6.7)	(1.8)			(14.7)
Operating profit	23.5	40.3	69.4	22.1	9.0		160.0
Exceptional finance costs – adjustment to discounted provision (note 4)		(3.7)					(3.7)
Net finance costs – other							(21.1)
Share of post tax losses of associate companies
Profit before taxation							135.2

	Period ended 2 February 2008
	Smiths Detection £m	John Crane £m	Smiths Medical £m	Smiths Interconnect £m	Flex-Tek £m	Other £m	Total £m
Revenue	222.0	282.8	346.3	121.1	99.6	16.0	1,087.8
Divisional headline operating profit	35.0	40.7	66.8	23.3	10.5	0.8	177.1
Corporate headline operating costs							(19.0)
Headline operating profit	35.0	40.7	66.8	23.3	10.5	0.8	158.1
Divisional exceptional operating items (note 4)	(0.1)	(6.1)	(2.4)	(0.1)		27.6	18.9
Amortisation of acquired intangible assets	(0.2)	(0.6)	(5.5)	(0.9)			(7.2)
Operating profit	34.7	34.0	58.9	22.3	10.5	28.4	169.8
Exceptional finance costs – adjustment to discounted provision (note 4)		(2.5)					(2.5)
Net finance costs – other							(1.9)
Share of post tax losses of associate companies	(0.4)	0.4
Profit before taxation							165.4

	Year ended 31 July 2008
	Smiths Detection £m	John Crane £m	Smiths Medical £m	Smiths Interconnect £m	Flex-Tek £m	Other £m	Total £m
Revenue	509.3	625.8	703.4	260.6	206.1	16.0	2,321.2
Divisional headline operating profit	93.3	103.8	139.6	54.0	24.3	0.8	415.8
Corporate headline operating costs							(35.2)
Headline operating profit	93.3	103.8	139.6	54.0	24.3	0.8	380.6
Divisional exceptional operating items (note 4)	0.1	(51.0)	(9.4)	(1.3)	(0.1)	28.3	(33.4)
Corporate exceptional operating items (note 4)							(2.0)
Amortisation of acquired intangible assets	(0.4)	(5.5)	(11.3)	(2.0)			(19.2)
Financing losses			(0.4)		0.1		(0.3)
Operating profit	93.0	47.3	118.5	50.7	24.3	29.1	325.7
Exceptional finance costs – adjustment to discounted provision (note 4)		(4.7)					(4.7)
Net finance costs – other							(0.7)
Share of post tax losses of associate companies	(1.4)	0.4					(1.0)
Profit before taxation							319.3

The net operating assets of the five divisions are set out below:

	Period ended 31 January 2009
	Smiths Detection £m	John Crane £m	Smiths Medical £m	Smiths Interconnect £m	Flex-Tek £m	Total £m
Property, plant, equipment, development projects and other intangibles	102.3	100.0	209.2	30.7	33.3	475.5
Investments in associates	12.5					12.5
Working capital assets	331.7	316.4	308.5	106.5	73.9	1,137.0
Operating assets	446.5	416.4	517.7	137.2	107.2	1,625.0
Derivatives, tax and retirement benefit assets						242.6
Goodwill and acquired intangibles						1,488.9
Corporate assets						28.6
Cash						195.4
Total assets						3,580.5

	Period ended 2 February 2008
	Smiths Detection £m	John Crane £m	Smiths Medical £m	Smiths Interconnect £m	Flex-Tek £m	Total £m
Property, plant, equipment, development projects and other intangibles	71.7	71.1	155.3	24.8	25.2	348.1
Investments in associates	10.3					10.3
Working capital assets	263.2	216.3	270.9	77.7	57.2	885.3
Operating assets	345.2	287.4	426.2	102.5	82.4	1,243.7
Derivatives, tax and retirement benefit assets						452.7
Goodwill and acquired intangibles						1,013.4
Corporate assets						33.7
Cash						142.6
Total assets						2,886.1

	Year ended 31 July 2008
	Smiths Detection £m	John Crane £m	Smiths Medical £m	Smiths Interconnect £m	Flex-Tek £m	Total £m
Property, plant, equipment, development projects and other intangibles	85.3	82.8	158.7	24.9	24.7	376.4
Investments in associates	9.1					9.1
Working capital assets	292.5	249.3	261.2	85.7	63.3	952.0
Operating assets	386.9	332.1	419.9	110.6	88.0	1,337.5
Derivatives, tax and retirement benefit assets						278.3
Goodwill and acquired intangibles						1,151.9
Corporate assets						33.1
Cash						132.5
Total assets						2,933.3

Smiths Group divisions:
Smiths Detection, John Crane, Smiths Medical, Smiths Interconnect, Flex-Tek

Smiths Group plc:
Registered office 2nd Floor, Cardinal Place, 80 Victoria Street, London SW1E 5JL
Incorporated in England No. 137013
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