Philip Bowman - Chief Executive Rob White - Interim CFO Duncan Gillis - President & CEO, John Crane Jeff McCaulley - President & CEO, Smiths Medical Richard Ingram - President, Smiths Detection Roland Carter - Interim President, Smiths Interconnect Tedd Smith - President, Flex-Tek

Alexander Virgo - Nomura Chris Dyett - Investec Andrew Carter - RBC Glen Liddy - J.P. Morgan Cazenove Robert Davies - Morgan Stanley Michael Blogg - Investec Sandy Morris - Jefferies

Ladies and gentlemen, good morning and welcome to the 2015 Annual Results Presentation for Smiths Group. Before I begin, could I ask you to check that your wireless devices are turned off.

Allow me to introduce Rob White, who has been our Interim CFO covering the transition period, between the departure of Peter Turner in April and the arrival of Chris O'Shea as our new Finance Director last Friday. As Chris has only been with us such a short time, he is sitting out this presentation.

However, for those of you who don't know him from his time at Vesuvius, Chris might I ask you to stand up so anyone will recognize you going forward. Thanks Chris.

I'd also like to take this opportunity to thank Rob for filling the post so ably over the last five months. Rob will be retiring at the end of the month after some eight years with Smiths and I'd ask you to join me in wishing him well.

He and I will be happy to answer your questions at the end of the session assisted of course by the Divisional Presidents and other senior members of the corporate team who are seated towards the front of the auditorium. As usual, I'll start by giving a brief outline of the results before handing over to Rob to review the financials in greater detail.

Each of the Divisional Presidents will then update you on their results before I chair the question-and-answer session. So, now to today's results.

Revenue is down 2% amid challenging conditions in some of our markets with growth in Smiths Medical and Flex-Tek more than offset by declines in the three other divisions. However, headline operating profit increased 1% and margins rose 50 basis points to 17.6%.

Earnings per share rose 5% reflecting the higher operating profit leveraged by lower interest and tax charges. Our Board has recommended to shareholders a 2% increase in the annual dividend to £0.41 per share consistent with our policy on underpinning progressive returns to shareholders, the Board has exercised flexibility in applying the 2.5 times cover guidance to take account of short-term impacts such as foreign exchange that affected the business particularly last year.

We expect to rebuild cover over the medium-term. Operating cash conversion remained strong at 95% and return on capital rose by 30 basis points to 16%.

Our restructuring program is on track to deliver £60 million of savings by the end of 2017 and we've delivered £33 million of annualized savings since its launch some two years ago. As we've said before, these savings are earmarked to provide the fuel for investment in growth projects.

We have increased our investment in cross divisional initiatives designed, designated, engineered for growth. As I described at the interims this program is providing fresh momentum in four key areas; sales and marketing, quality improvement, product innovation and expanding our business presence in China, and I'll return to these themes later this morning.

Finally, our actions to mitigate the pension liabilities in recent years have reduced the accounting deficit to £108 million its lowest reported level since 2008 despite the continued low interest rate environment offsetting the escrow built up in combination with the Smiths Industries Pension fund the accounting result was a small surplus for the pension funds. So with that brief introduction, I'll now provide an overview of divisional performance.

The decline in oil price over the past year has done John Crane no favors, but the division nevertheless delivered a resilient performance which benefited from its focus on aftermarket services. Aftermarket revenues grew by 4%.

However, the first-fit business continued to soften with the slowdown in customer demand reported by our competitors. Margins held up well benefiting from product mix and tight cost control.

Smiths Medical achieved its strongest revenue growth in almost a decade reflecting an excellent performance in infusion pumps, helped by its track record of investment in innovation and some ongoing competitor disruption. Margins were maintained through higher volumes and cost savings despite increased R&D investment and continued pricing pressure across the medical devices industry.

The actions taken over the past 18 months in Smiths Detection have stabilized performance and they provide a platform for future profitable growth. Margins recovered after last year's non-recurring charges and were aided by efficiency gains.

Encouragingly we entered FY 2016 with a materially stronger order book for delivery in this financial year and beyond. Profitability should benefit not only from higher revenues but also from further cost savings.

Smiths Interconnect continued to face tough trading due to the phasing of certain programs and delays in customer spending, particularly in telecoms. We saw strong growth in data centers offset by challenging conditions in test and measurement and in connectors.

Margins were under pressure from lower volumes further exacerbated by the division's high operational gearing. Flex-Tek delivered another solid performance with growth in residential construction, specialty heating elements and in hoses for aerospace and automotive applications.

Increased investment in growth initiatives slightly constrained margins as did the change in product mix in the construction business. Turning now to our safety and environmental record, this slide shows just how much we've achieved in delivering improvements in our key safety metrics in recent years.

The root cause is behind a slight rise in the recordable incident rate last year primarily in one division have been identified and are being addressed through a focused program which is already delivering improvements. Three years ago we introduced the Leading Safety Activities program to increase employee engagement and reduce injury risk.

Our full year goal was to complete at least 90% of these activities and you can see that in fact we completed 95%. In terms of environmental metrics, we've again recorded improvements in greenhouse gases, water and waste with only energy showing a slight increase.

We are targeting a 15% reduction in these by the end of FY 2018 except for water usage where the target is 10%. And we expect further progress as we continue to rationalize our manufacturing footprint and invest in more energy-efficient plant and processes.

So with that overview, I'll now handover to Rob to talk you through the financials in more detail.

Thank you, Philip and good morning everyone. I'll begin by looking at the main drivers of the profit progression for the group as a whole.

Starting with last year's profit before tax of £445 million we have separated out the one-off effect of the £30 million of charges in Smiths Detection last year. Volume decline caused an adverse movement of £22 million with growth in Smiths Medical and Flex-Tek more than offset by declines in Interconnect, Detection and John Crane.

On price mix, positive gains in John Crane were partially offset by price pressures in Medical and Detection. Cost inflation was a £24 million headwind principally driven by employment related cost increases in our larger divisions.

Operational efficiencies in the year amounted to £15 million which includes procurement and other cost initiatives partly offset by variable cost inflation. These are part of our group's ongoing efficiency efforts.

We invested an additional £20 million in a combination of increased R&D and sales and marketing initiatives. As planned, these were funded by cost savings from our "Fuel for Growth" program.

Net foreign exchange was a slight positive. Translational FX almost balanced the weakness in the Euro against the U.S.

dollar strength. Transactional FX also netted off at group level with positive movements in Smiths Detection driven by the Euro and U.S.

dollar being broadly offset by continued pressures in Smiths Medical and in particular the depreciation of the Japanese yen against the U.S. dollar.

Finally interest was £7 million benefit following the repayment of the $250 million bond in May. I'll come back to this later.

As usual, we have included the translational foreign exchange ready reckoner on the side and the divisional goals are also in the appendix. Turning now to cash conversion.

At 95% it was at the top end of our range, a demonstration of our continued strong track record in this area. Working capital increased partly reflecting inventory builds to support some of the manufacturing site moves.

This will not necessarily reverse in the coming year as we pursue further site rationalization projects. As anticipated, capital expenditure also rose slightly driven mainly by investments to restructure the business as part of the "Fuel for Growth" program and some growth investment in various divisions.

Capitalized development costs fell as we are now expensing of our Detection R&D spend than in the past and the amortization charge has increased as some of the larger development programs such as XDT have been completed. Overall this is a consistently strong cash performance and cash generation remains a key focus for the group.

I will now provide some background on the items that reconcile headline operating profit to the statutory numbers, starting with the exceptional at the operating profit level which amounted to a net charge of £49 million in the period. The £38 million restructuring charge relates mainly to the "Fuel for Growth" program.

I'll give some more detail on this shortly. There was also a £19 million charge associated with the John Crane Inc.

asbestos litigation. Now as we said last year, this has now reverted to the trend of around £20 million to £25 million in a typical year.

In addition, there has been no material change in our claims experience over the past year. We also rolled forward our provision for Titeflex litigation for product claims.

This amounted to £8 million and like John Crane is a rolling 10-year discount reviewed every six months. We had a £14 million gain from the changes we made in August last year to the U.S.

pension plans. The ongoing amortization of acquired intangibles was £33 million and as we reported at the interims we have a £27 million goodwill impairment charge for John Crane production solutions, the artificial lift business which has suffered from the big drop in oil prices.

Philip mentioned that our "Fuel for Growth" program is on track and this slide presents the costs and savings by division. The two columns on the left hand side set out the costs and the annualized savings incurred to date and the expectations for the whole program are on the right.

The overall expectations of savings and costs remain unchanged although we delivered slightly ahead of our original plan this year with £33 million of annual savings. The restructuring focuses on three areas; manufacturing footprint optimization, organizational effectiveness and the upgrading of information systems.

For example, during the year Smiths Detection and Smiths Medical both closed three sites in North America while Smiths Interconnect continued to consolidate its manufacturing sites in its connect business. To date we have incurred costs of £66 million which have been treated as exceptional.

In May we had a successful £600 million Eurobond issue with 1.25% coupon for eight years. This is part of our ongoing refinancing strategy.

We used the proceeds to repay the balance on the revolving credit facility following last year's bond refinancing. It also pre-finances the 150 million sterling bond during June 2016.

So finally looking ahead to the coming year, here is a summary of some of the key financial items. We expect the headline tax rate to be in the range of 25.5% to 26.5% for the year and cash conversion will be between 85% and 95% slightly below our usual run-rate reflecting our plans to invest more capital to restructure and grow the business.

Philip will be covering the pension contributions later in the presentation. The interest charge is expected to be somewhere in the mid 50s due to short term carry costs of the new bond and FX which should fall again in FY 2017 once we repay the 150 million sterling bond in June this year.

I will now hand you back to Philip.

Rob, thank you. At the interim results I highlighted a new investment program to accelerate medium-term revenue growth.

It is a cross divisional program funding from the savings generated by our restructuring. This initiative is about gaining real momentum in four specific areas; sales and marketing excellence, quality improvement, customer-led innovation and expansion in China.

We are driving cross divisional collaboration and the sharing of best practice. We've established a sales and marketing Council to improve customer insight, market segmentation and sales pipeline management with a common set of leading indicators.

Our newly launched Global Sales Academy held four training sessions this year reaching 170 senior sales leaders across the world. That is some feedback has been extremely positive and a further seven courses are scheduled for the coming year.

Our cross divisional quality council is being established and we've defined consistent quality metrics and reviewed the sources of quality issues. The divisions have implemented quality improvement plans and aside from the direct financial benefits to margins there are of course the equally important long-term benefit of enhanced customer satisfaction.

We've consistently increased spend on new product development over recent years and are challenged as always is to generate an appropriate return on this investment and to accelerate our speed to market. Another key area is talent development to ensure that we attract, retain and encourage the best engineers.

And to support this we've introduced innovation awards to celebrate excellence in three areas; new markets, new process and new technologies. I've said on a number of occasions that Smiths was slow to enter China and we still see it as a huge long-term opportunity despite the recent concerns over the economy.

We are building our presence there by allowing the divisions to work together more closely in the Chinese market and truly leverage the group's strengths. This year we established a corporate office that has begun to provide key local expertise in legal government affairs and commercial practice for all of the divisions.

Our newly appointed President of Greater China is providing a focus to coordinate and leverage the group's activities and presence and scale. You will hear some examples of these initiatives in action during the divisional reviews, but before I hand over to Duncan Gillis to present more analysis of John Crane's performance, I thought we would have a break from the PowerPoint slides.

So watch video which was produced for the senior management conference earlier this year. It showcases the impressive range of global markets we serve and the critical role that Smiths products most often hidden from view play in our everyday lives, what we make and do benefits millions of people around the world every hour and every day.

[Video Presentation]

Oh it is certainly not easy to follow that. Roland, thank you for enabling Wi-Fi on Airplanes.

Thank you all and good morning. John Crane delivered a solid performance in a challenging market exemplifying the strength of our business model.

Sales growth from aftermarket services were offset by weaker demand from first-fit customers. Underlying revenue fell 2% and margins were about flat as our cost savings program mitigated the impact of the decline in first-fit volume.

At the end of the year, our order book was fairly robust only slightly below the previous year’s record high. Now similar to last year, our full-year operating margins were inflated, this year by about 90 basis points due to some one-time events, so the normalized full-year operating margin was 23.9%.

Full-year underlying aftermarket revenue rose 4% illustrating the strength of our end customer demand. This part of our business generates more than half of John Crane’s revenue and is driven by continuing strong demand for our services as refineries operate at full capacity.

Key renewals and new aftermarket service contracts were signed with customers across a diverse mix of process industries we serve including pulp and paper, chemical, food, and of course energy services. Despite the challenging markets, we’re able to realize modest price increases in our aftermarket business.

Underlying sales to first-fit customers fell 9% as market pressures caused by the fallen energy prices affected both volume and pricing across most geographies. While we continue to see delays globally in oil and gas projects which have not yet secured funding, John Crane’s overall project win rate is higher than in the previous period reflecting our concerted effort to expand our installed base.

First-fit sales were also affected by declines in the upstream business due to especially severe conditions in this market. However tight cost controls helped soften the impact on margins.

You’ll note from this slide that we’ve reclassified revenues for the upstream oil services business from aftermarket to first-fit. The upstream business demonstrates cyclical characteristics that are more closely aligned with the first-fit business.

Emerging markets continue to provide a strong platform for growth rising 5% on an underlying basis and now representing 24% of total sales. The largest increases came from across Latin America including Mexico, Colombia and Chile and we also saw strong growth in additional countries not included in our definition of emerging markets.

Our business in Saudi Arabia for example grew 10% and this remains a growth market for us along with the broader Persian Gulf area. We increased investment in innovation by 17% underlying our commitment to address future market needs through engineered solutions and technology advances.

The AURA 220 Gas Seal was introduced representing the next generation of advanced gas seal technology. Customer trials are underway for our new predictive diagnostic system which represents a significant advance in technology for our customers.

The system is designed to reduce customers' operational cost by predicting their maintenance needs and minimizing operational disruption. We also unveiled an advanced fibreglass sucker rod that increases production output, improves load strength and reduces lifting cost for oil producers.

We continue to strengthen our aftermarket services in strategic locations around the world. And in the past two years have upgraded about 10% of our 230 service centers; Singapore, Dubai, Saudi Arabia, Egypt, Kuwait and the United States have all seen centers opened or upgraded.

Constraints on our rotating equipment production which I reported last year have been resolved through increased machining capacity and output at our lower cost factories resulting in a reduced reliance upon higher cost subcontracted manufacturing. John Crane’s strong focus on the aftermarket which generates 56% of total revenue should support a continued resilient performance in the current low oil price environment.

Our bias towards mid and downstream applications in oil and gas also helps with refineries and petrochemical plants running at full capacity because of the low priced feed stocks. We also have experience in managing the business through cyclical downturns.

We implemented a comprehensive action plan to help reduce the pressure on margins that includes a cost reduction program to address both overheads and discretionary spend. We’re continuing to review additional opportunities for further cost efficiencies.

Looking ahead, we expect global energy markets to remain challenging for the coming year with depressed oil prices and significant market uncertainty. Absent any improvement in conditions and despite the strength of our order book at year-end, revenue is expected to decline further.

At this time, we believe that it’s more probable than not that full-year margins will be able to remain in the lower half of our previously disclosed target range. I’ll now hand over to Jeff McCaulley.

Jeff?

Thank you, Duncan and good morning. I’m very pleased to share our results with you today.

We delivered strong underlying sales growth highlighted by robust performance in our infusion systems business, a return to growth in vital care and the stabilization of our vascular access and specialty products businesses. As expected growth slowed in the second half, but was still nearly 2%.

Margins held firm at almost 20% and headline operating profit rose 2% to £166 million on higher volumes and productivity despite increased R&D investment, adverse price and adverse transactional effects. Before summarizing our performance by segment, you’ll note that we’ve reclassified our revenues into four segments from three consistent with how we've reorganized the division into four business units.

Prior year financial performance has been reclassified to allow for direct comparison. Infusion system sales grew 11% on strong performance in ambulatory infusion, particularly the continued success of our CADD product line which benefited from numerous recent year product introductions, more targeted sales execution and competitor disruption.

The first in a series of new infusion system product launches in China also proved successful. Vascular Access sales were flat with healthy growth in Sharps Safety and conventional catheters in the emerging markets offset by general softness in the developed markets.

Vital care sales rose 2% driven by bronchial hygiene and silicon tracheostomy with particularly strong growth in China and India. Specialty product sales were flat as growth in in-vitro fertilization and diabetes were offset by weakness in patient monitoring and animal health.

Overall our performance in FY 2015 improved over FY 2014 in each of our four business units and each of our three geographical regions. We believe this is an early indication that our focus on culture and people, on strategy and on our operating model is leading to better performance.

As I said at the Interims, in March we’re starting to build a solid foundation for a more competitive higher growth and higher margin business and the full-year results bear this out. Investment in new products was up 17% to 5.4% from 4.8% in the prior year.

We continue to prioritize products that we expect to deliver the strongest returns developing a more robust and a more comprehensive new product innovation pipeline. Our vitality index sales from products launched in the last three years improved slightly to 9% from 7% mainly reflecting the strong sales in ambulatory infusion, but also reflecting the fact that much of the benefit of our increased investments in innovation will materialize in the two to three-year horizon.

Launches during this past year included innovations in our Medfusion 4000 range of syringe pumps, the new Graseby C6 and F6 infusion system in China as well as our single pack acapella PEP Therapy device which helped us to capitalize on global growth opportunities in bronchial hygiene. In the past year, our R&D has been greatly improved.

In addition to new leadership we have invested in culture and people with a focus on prioritization, program discipline and execution, process optimization and productivity all of which we believe is having a positive impact on the business and in turn we’re excited about the new product pipeline that is building in the innovation offence that we expect to ensue. This should lead to a much improved portfolio competitiveness and higher sustainable growth rates in the long run.

Despite challenging conditions, sales in the developing markets rose 8%. Our China business reversed its 2004 decline of 7% achieving positive growth of 14% in the year due in large part to our focus on additional product registrations, new product launches and improved alignment and incentives in our sales organization.

India grew 23% as our move to a hybrid sales model continues to deliver strong results there. Our ongoing "Fuel for Growth" restructuring program is expected to generate £23 million of benefits by the end of FY 2017.

This year we completed the transfer and closure of our Rosendale and Rockland manufacturing facilities and our team distribution center. We also closed our commercial center in Norwell consolidating into a new World Headquarters and R&D center in Minneapolis.

This new facility will bring together numerous functions, particularly global product managements, global marketing and global R&D, which we believe reinforces and will accelerate our innovation and growth by improving collaboration, colocation and knowledge transfer in the business. We also delivered a 5% improvement in indirect headcount and a 100 basis point improvement in SG&A during the year.

Looking ahead, trading conditions in the developed markets are likely to stabilize in the medium term. But with ongoing challenges from healthcare cost controls and price pressures, we expect to maintain growth in the developing markets where we continue to invest.

Infusion systems should continue to deliver solid performance, although the competitor disruption experienced this year will not continue and growth is expected to moderate toward more normal levels. Lastly, we'll continue to pursue investments in COGS and SG&A and while we anticipate improving our operating margins some of the savings will continue to be reinvested in additional growth drivers for the future.

With that, I will now turn it over to Richard.

Thank you, Jeff and good morning everybody. Profitability at Smiths Detection recovered strongly in the year, but market conditions remained challenging and helped to push down the underlying revenue by 7%.

Our margin rise of 710 basis points stems from our program of restructuring and cost savings that we previously briefed helped by the absence of last year’s one-off charges. A number of major programs were also delayed with a corresponding impact on performance in some of our end markets.

Transportation which accounts for about half of our revenues fell 5% reflecting the prior year benefits from the large Doha Airport contract. However, recent contract wins including Abu Dhabi and London Heathrow Airport helped strengthen the order book for delivery mainly in fiscal 2016.

Ports and borders declined 34% amid weaker contract activity particularly in EMEA and North America. We did however observe some very strong tendering activity in this segment in the last quarter of the fiscal year.

Underlying revenue from military and emergency responders fell 14% as defense budgets remained constrained. However, we continue to win long-term contracts principally from the U.S.

Department of Defense including a $27 million order from Mobile Medical Shelters and a $23 million option on the existing JCAD Chemical Agent Detector program. Critical infrastructure performed well rising 13% on the back of strong demand from the U.S.

and Middle East with new courts [ph] and Saudi Government ministries ordering a wide range of x-ray equipment. Our ongoing business stabilization plan continues to build momentum.

The aftermarkets with 9% revenue increase now accounts for more than a third of our overall revenues. Recent contract wins such as Heathrow and Abu Dhabi are helping to expand our installed base.

These orders are increasingly supported by multi-year service agreements further building our aftermarkets and long-term service revenue potential. We are clearly seeing evidence that our business improvement initiatives are transforming the operation.

The cost base has been reduced and stronger management controls are in place including better program management and a more rigorous bid evaluation system for tenders. This had led us on occasions to walk away from tenders where the terms are too onerous, but despite this small cautious approach, we have an expanding order book and a sound platform for growth.

To reduce our global footprint, three North American sites have been closed during the year and our product portfolio is also being streamlined with R&D focused more tightly on smaller number of potentially more attractive prospects. Reflecting this, the company funded R&D fell to 5.3% of sales as some major capitalized development programs such as XCT reached their conclusion and moved into production.

The new IONSCAN 600 explosive trace detector is set to extend to successive system such as enhanced aviation security over the last 15 years. Our major order for Spanish Airport was received last month for almost 300 of these latest IONSCAN products.

We are also placing a greater focus on software development opportunities. For example this year, we launched Checkpoint.Evo a software solution that greatly enhances airport inspection and integration capabilities.

Recent contract wins and the improved order book are expected to deliver increased revenues in the coming year. Headline operating margins should be broadly maintained as the benefits of ongoing cost reduction initiatives are balanced by investments in operational excellence and in future revenue growth.

Thank you, I’ll now hand over to Roland for Smiths Interconnect.

Thank you, Richard and good morning. Smiths Interconnect’s underlying revenue fell 9% mainly due to weaker demand from key customers and program slowdowns in many of our end markets.

Margins came under pressure because of the negative operational gearing effects of the lower volumes and adverse mix as revenue declined in the higher margin sectors. Looking at our business units, underlying revenue at connectors fell 4% as defense sales were hit by the prolonged slowdown of the Eurofighter program and one of our biggest medical customers losing market share and cutting inventories.

In semiconductor test, Asian ship manufacturers grew at the expense of our western customers. Commercial aerospace revenues remained stable in spite of reduced demand from our Chinese project currently in flight testing.

Microwave revenue fell 19% due to dramatic reductions in demand from major customers, only marginally offset by growth in defense in the U.S. budget – as the U.S.

budgets stabilized. A test and measurement customer cut its volumes of high performance cable assemblies and a U.S.

telecom operator slowed network investment, this significantly reduced demand for our wireless telecom products. Underlying revenue at Power grew 5% as data center sales increased on the back of healthy demand particularly in the U.S.

We won contracts with existing colocation customers and attracted new enterprise customers in financial services and IT. The power protection markets remained soft especially in U.S.

telecoms, again as customer spending slowed. Our program of cost optimization continues and margins improved in the second half because of restructuring and a steady focus on procurement, value engineering and improving operational efficiencies.

For example in connectors, we consolidated our factories and back office facilities in the Americas. Company funded R&D was broadly maintained at 5.4% of sales focused on higher growth sectors.

We launched a new high speed data connector for aerospace and defense applications; also we introduced two further semiconductor test sockets to address the emerging wafer testing market. We made good progress on the next generation airborne satellite communication systems now entering initial qualification phase.

Investments in data center products focused on PowerHub 2 a new power distribution unit and lower rated pathway offering for emerging markets. We continue to increase our investments in emerging markets, particularly China.

However, during the period revenues were impacted with reduced demand for cable assemblies and delays in the aircraft program mentioned earlier. So looking to the year ahead, individual program and customer dynamics are expected to continue to affect demand.

Commercial markets, particularly aerospace and data centers are still looking positive, although semiconductor appears to be slowing. Defense budgets have stabilized in telecoms.

U.S. operator CapEx is recovering and Australian spend is expected to continue.

Margins should stabilize as restructuring benefits and operational efficiencies outweigh increased investment, pricing pressure and cost inflation. Thank you.

I’ll now hand over to Tedd.

Thank you, Roland and good morning everybody. Flex-Tek’s revenues grew again and the 4% increase was helped by sustained growth in the U.S.

home construction market, good demand for specialty heating elements and a pick-up in demand for aerospace hoses. Despite increased volumes, margins were slightly down because of the adverse product mix and higher investments in marketing and product development.

Fluid management revenues grew 2% in commercial airframe and automotive applications with sales of our 5000 PSI hose products particularly being strong. We’re starting to see new aircraft platforms ramp up production volumes which is beginning to drive demand.

Construction revenue was up 6% supported by growing demand for HVAC ducting and flexible gas piping products as well as an increase in single family home starts. However, sales of gas piping products slowed in the final quarter reflecting a change in product mix.

Revenues from heat solutions rose 8% in the back of increased sales of specialty heating elements with China showing strong growth. This more than offset the flat demand in the appliance sector.

Flexible solutions saw revenue decline 3% as higher sales in medical hose products and the U.S. industrial market more than offset by continued weakness in floor care.

Our increased R&D investment up 13% is proving highly effective at gaining approvals on products for next generation airplanes and new heating technologies. Healthy growth in fluid management is generated by demand from quieter, more fuel efficient aircraft for light weight ultra-strong hoses.

Sales opportunities for our specialty heating elements continue to emerge in higher margin markets. Our investment in additional sales and marketing capabilities is effectively complementing the proven strength of the business and management.

Additionally, we plan to expand our facility at Laconia to support the increased growth in Aerospace applications. In addition, it will deliver efficiency, support quality improvements and allow us to enhance our dedicated R&D resource to really drive innovation.

In terms of outlook, both the underlying demand in aerospace market and increased output rates of primary OEMs continue to be positive indications for the fluid management business. Housing numbers are expected to show modest improvement, although higher interest rates and stricter lending practices could hinder anticipated growth rates.

Improved general economic conditions should benefit heat solutions and flexible solutions growth in specialty applications as well with continued economic development in China. I’ll now hand you back to Philip.

Thank you, Tedd. After I’d been with Smiths for some three months, I recall commenting to the then Chairman, Donald Brydon, that I seem to spend most of my time working for the pension fund trustees and for the plaintiff's bar rather than our providers of equity.

Legacy liabilities of pensions and product liability litigation have constrained the development of our company over the past eight years, whether by way of a drain on management time or significant annual cash outflow or by impeding changes to our portfolio of businesses. Whilst the plaintiff’s bar will always be with us absent meaningful talk performed in the U.S.

John Crane, Inc. and Titeflex Inc., have made enormous strides in managing their legacy product liabilities more proactively and reducing the cash drain to the company.

In this context I would like to thank our General Counsel Michael Herlihy for his counsel, wisdom, cynicism and tireless support without which progress would have been far more limited. Turning to pensions, the aerospace division represented some 40% of revenue of Smiths Group in 2007.

The subsequent disposal left the remaining 60% of a company bearing the full burden of the legacy pension liability which was not mitigated as part of the divestment process. And this divestment was quickly followed by the financial crisis of the impact of quantitative easing.

Against this backdrop, it’s worth looking at what has happened to the pension deficit over time. The red line on this chart shows the accounting deficit which was actually a small surplus in 2007.

The combination of historically low discount rates, a fall in equity markets, increased longevity assumptions among other factors all contributed to deterioration in the accounting deficit to a record £620 million pounds in 2012. This was in spite of a substantial cash contribution that we were making at the time.

In total, since 2008 we have contributed some £750 million either directly to the pension schemes or to the escrow account linked to the Smiths Industry scheme. However, alongside these contributions and behind the scenes, we've also been systematically taking actions in conjunction with the trustees to reduce the liabilities and de-risk the assets.

In 2009, we closed the main UK and U.S. defined pension schemes for further accruals and we reduced the burden from post-retirement healthcare plans.

As a result we’ve seen curtailment and past service gains of some £91 million over the last eight years. Looking at the actuarial valuations in each of the main schemes, we’ve agreed de-risking triggers with the UK pension trustees, for example Smiths Industry scheme began an asset de-risking program in March 2013 where we switched assets to index-linked guilds and agreed a new strategy to allocate assets to diversified investments.

The preliminary results of a tri-annual review for this largest pool of liabilities though yet to be finalized between the company and trustees indicate an actuarial deficit of just over £300 million compared to £535 million in March 2012. Netting off the current value of the escrow fund, the technical deficit is down to around £150 million.

At the moment TI scheme the trustees embarked on an annuity buying program in 2008 which took place over four tranches all pensioners up to the last tranche in September 2013 are ensured by these annuities. And since then it has been further asset de-risking covering new retirees and 40% of the deferred members.

The April 2015 actuarial deficit is still under discussion with TI trustees but we expect a very significant reduction from the £117 million deficit in the 2012 review. In the U.S.

plan, we began to move assets to a liability driven investment strategy in October 2013. In August last year, we offered a cash-out program to deferred members.

We had 57% take up by members and achieved $170 million reduction in liabilities. After the year end, we contributed a further £32 million into the U.S.

plan to support a buyout of liabilities for all 5,600 retirees and reduced liabilities by a further $500 million. Overall funding liabilities for the U.S.

plan have fallen over the past year or so from $900 million to around $350 million. All this work behind the scenes has led to an IFRS net deficit of £108 million at 31 July 2015 or small surplus after deducting the escrow.

This improvement was largely driven by asset returns augmented by company contributions. The tri-annual reviews for the two UK schemes are now underway.

Based on existing agreements with the trustees, we expect cash contributions for the coming year to increase to around £127 million and this is higher than in fiscal 2015 because of the one-off contribution to the U.S. scheme of £32 million I mentioned a few minutes ago.

However, the ongoing cash contribution will depend on the outcome of negotiations with the trustees over the next several months. Given the reduction in IFRS deficit over 2012, I think it’s fair to say that the news here is likely to be good rather than bad.

In summary, it has been a long haul in a tough operating environment. It has taken a lot of management time and I'd like to recognize albeit in absentia, our Director of Pensions, Allan Whalley for his very real contribution.

The actuarial deficits for the two UK schemes are showing very significant reductions and just as importantly the changes we have made in asset liability at management have very greatly reduced the value at risk or volatility of a deficit. After eight years allowing for the escrow a small actuarial deficit remains.

But future cash demands will fall and the deficit is finally no longer a significant constraint to simplifying and focusing the portfolio. This is my last results meeting at Smiths Group and I’d like to thank the Smiths team and all our various stakeholders for their support, their challenge, their encouragement and their friendship over the past eight years.

I would also like to wish Andrew Reynolds Smith and Chris O’Shea well as they prepare to lead Smiths into the next phase of its development. So with that, Rob and I along with the other members of the senior management team will be pleased to take your questions.

In terms of housekeeping, can I remind you to wait for the microphone before asking your question and to please preface your question with your name and the company that you represent. Thank you once again for joining us this morning.

Okay in the second row back here please.

Good morning, this is Nick Wilson from [indiscernible]. A couple of questions on John Crane and one on Interconnects please.

On John Crane you mentioned your order book was below year-on-year, how much please or scale? And do you think it’s possible again to grow aftermarket revenues in 2016?

And then just on Interconnect I wanted to drill a bit more into the microwave side down 19% and telecoms in particular, is this a change as we switch more to fiber the expense of more traditional copper cabling and/or is this an impact driven by industry consolidation? I just want to try and work out whether this is more structural or more one-off in terms of individual customer exposure?

Thank you for those three questions. Before passing the first two to Duncan, I think I'll just make one overarching observation in terms of John Crane.

Clearly what happens in 2016 and beyond depends very much on what happens to the oil price given the extent of John Crane’s exposure to the oil and gas industry. I don’t think it’s our task here today to try and second guess what the oil price is going to be.

An enormous number of experts out there who produce forecasts most of them have actually been proved to be pretty wrong over the last year and I think from that perspective I would simply say that our crystal ball is still in the repair shop. But against that which I think is a significant uncertainty, very few predicted the Saudis did what they were going to do, the question of how long they’re going to maintain that I think is an interesting question of damage being done to Russia to Venezuela and the number of other countries is interesting.

But the one thing one can’t lose sight off of course is the Saudi’s requirement for cash despite their very considerable reserves is significant and is going to become in my view a more pressing issue as we go forward. So with that sort of general disclaimer, Duncan would you like to pick up the specifics please?

Certainly. Nick, order book was down 4% or £6 million year-on-year at constant FX and in terms of aftermarket revenue growth it’s going to be tougher in fiscal year 2016 than it was in fiscal year 2015.

One way to think about revenue overall at John Crane is the last time we had a major downturn was during the global financial crisis as you all know and during that period after we hit the trough for the one-year period following the trough the business was down in total 5% on the topline. The trough, the current trough I’ll say occurred in January of this year and so in the first half of our new fiscal year we're still cycling against a stronger competitor.

The other thing I’ll say is during the global - following the global financial crisis I think as most of you know oil prices spiked back up pretty quickly. So depending upon your assumption for what oil prices will do come January of 2016 that 5% number could be quite different.

Thank you.

Roland, Interconnect and Mike [indiscernible] please.

Thank you and Nick's question, so I think last year was a strong comparator absolutely. Is there a move towards fiber and – mentioned applications yes, is that going to be dominating the industry over the next few years, no this is very much part of the cycle of operators filling in the frequencies.

So, I believe that the offering that we have is still relevant for that and we’ve seen this cyclical nature of telecoms before and so it is specific customer by customer aspect.

I think I would just add to that, there are not that many large telecoms operators in the U.S. One of them has made a big acquisition and I think that has impacted their capital spending plan significantly over 2015.

Yes again, second row please?

Yes, good morning. It is Andrew Carter from RBC and I actually had three on John Crane please.

And I wondered if you could make the comparison that’s against delayed 1990s because I wonder whether that's more interesting in comparison to what we saw with the great financial crisis, I realize it was a long time ago. But is there anything that you can say about that?

I mean, I guess in particular I'd be interested if you think the business is actually materially different to what it was back then? The second one was then just in terms of the price down that you alluded to on the OE side.

We've obviously heard lots of different companies talking about lots of different levels of price down, some have been quite small, but some have been very, very large. Could you give us an idea as to which end of the scale John Crane has experienced in the OE?

And then just finally, just I guess for my records, could you remind us what you said about the difference in margin between the OE and the aftermarket revenue in John Crane?

Okay, Duncan please.

In the late 1990s I was a consultant at McKenzie and Company in Pittsburg, Pennsylvania, so I can't really tell you a whole lot about how the business has changed. I’m sorry about that.

And that’s why we go back to the last financial crisis, that's where most of the institutional memory is. Andrew in terms of our first-fit pricing or OE pricing it is very competitive out there and as we talked before, building our installed base provides an annuity stream for the future.

And so we’re making selective investments. Some of those are price investments in order to secure that revenue stream for the future.

And we’ll take a look as the year progresses in terms of what additional investments we make as that would really impact fiscal year 2017 but it’s quite competitive. The third question here, that was around?

Aftermarket margins?

I don’t think we’ve ever disclosed OE and aftermarket margins and we don’t do that for competitive reasons as you can imagine.

Thank you, Duncan.

Yes, next one along in second row seems to be hotbed of questioning?

Thanks. Alex Virgo, Nomura and another John Crane I’m afraid and tell me why you’re sitting down Duncan.

So I just wanted to ask a couple of questions may be just as more clarification than anything else. I think at the interims you mentioned some concerns around customer behavior on schedule maintenance you made a reference to refineries running at full capacity and I’m just wondering what you’re seeing in terms of customer behavior, whether you can comment on maintenance schedules and the impact that obviously it has in the context of your comment on aftermarket?

The second question related to that you made a point of positive price on aftermarket and I’m wondering whether that is in reference to the year we’ve just had when referenced to negotiations to the coming year. So are you getting positive price on your aftermarket business for the coming year?

I also understand you have negotiations on that business over the summer so if you could clarify that, that will be very helpful? And then, just whether that you can add a little bit of regional color to the year over time?

Thank you.

So the answer Alex to your first question requires regional color anyways. So we’re seeing different behaviors in different parts of the world.

In the U.S., we’re not seeing and for the Americas we’re not seeing a lot of deferrals of maintenance, but what we are seeing are deferrals of refinery and petrochemical facility expansions. So the capital is not going in to expand the capacity.

On the – in the Middle East and in Asia, we’re seeing some of those deferrals, more of those deferrals as customers due to sweat the assets and really run to failure in some cases in order to take advantage of the spreads. Your second question was around the aftermarket correct?

And the pricing? So here is the back story, last year we made a decision in May of 2014 to take a large price increase reflective of cost increases that we’re seeing primarily around our labor.

And we announced that in May to our customers that was effective in August and that was prior to any significant downturn in crude oil prices, so we’re able to realize pretty good price increases. This year it is much tougher and we’re seeing, we have asked for much smaller price increases.

Some of those are going through, some of those we are trading off higher volume commitment for holding pricing. That is the way to think about that.

And then in terms of additional color around the world beyond what I said earlier, I would say that the U.S. business had held up quite well last year.

Most of Latin America as I said held up quite well with the exception of one large country where their national oil company had some other problems. The business in Europe was stable in the aftermarket.

The business in Middle East and much of Asia was quite attractive last year.

Okay, thank you, Duncan. At the moment, there is no sign of any further questions, so you may be able to sit down.

Yes, a repeat.

Thanks. Sorry Alex Virgo, Nomura.

This one is actually not for Duncan. But the question is just on visibility in terms of both Interconnect and Medical, on Interconnect I heard what you are saying on telecoms perhaps a comment on the data center market actually given your comments there about positive momentum?

And then on Medical, I just wondered whether you can quantify the comments on pricing pressure and then where should we – which areas of the business should we expect to see the growth pick up on next year if we’re expecting to see a moderation in Infusion? Thank you.

Okay, thank you for those two. Roland, please data centers is your specialized subject.

Thank you. Thanks Alex, data centers we are seeing a continued strong demand in data centers especially in North America where our major sales are.

So we anticipate that should continue. There is obviously some challenges with the DOE [ph] 2016 regulations that will be coming through on transformers, but we believe we are well placed to deal with those challenges compared to the competition.

Go ahead Jeff.

Sure, so on price, we’ve seen pretty persistently about 100 to 150 basis point price pressure in the business and we expect that to continue for the foreseeable future. We do expect that as the new product pipeline really starts to kick in more so in FY 2017 and FY 2016 it will have some positive mix benefits.

So longer term we expect an improving price mix outlook, but we won’t see much of that in FY 2016, we will see very much the same price pressure that we’ve been seeing. Relative to the outlook on revenues, we will see the ambulatory infusion hardware line begin to decline, but the good news is we'll see a favorable offset in the disposables line.

The installed based now is much larger as a result of the success that we've had in the hardware sales and the campaign that we ran over the past couple of years. So we'll expect ambulatory infusion to come down a little that will be fully recovered by disposables.

What we talked about last year was getting stronger in infusion, starting to grow vital care after stabilizing at the prior year and stabilizing vascular and that's pretty much what we did this year. We were strong in infusion.

We saw growth in vital care. We expect that go continue pretty much at the same rate.

We stabilized vascular, but that's really the business we need to start growing. So that's going to be the real focus this year and really be a bit of a determinate on how much growth we can deliver overall.

I think our range of 03 is still the right range if you look at where the trajectory of the business is and where we are in that range depends a lot about our execution in vascular access and where ultimately we see the continued success in infusion systems.

Okay, thanks Jeff. Yes, middle towards the back.

Good morning. Chris Dyett from Investec, two questions please.

Firstly on Medical, you are obviously people are probably aware of the kind of the consolidation within the industry and also you made a comment about having some benefits in the 2015 year as kind of they got together and trying to kind of workout where they are going. So that's two questions, firstly could you quantify in some kind or form what the benefit was in 2015 you feel?

As well secondly, do you feel you are in a position to really compete over the medium term given the relative scale of the business compared to the kind of 833 now [indiscernible] that you face in the market? The second question around John Crane, I see that year-on-year the headcount was up by 100 people.

Maybe you can give us an idea of what you are doing in terms of headcounts over the next few months given the kind of deteriorating conditions in the market over the last six?

Okay, thank you for those. Jeff, do you want to go first?

So in terms of any benefit of market consolidation, certainly when big companies consolidate you can expect some disruption, that's really not the disruption that we've seen in the market over the past couple of years. It has really been more of quality driven and some of the quality challenges that our competitors have.

So I'm not sure we've seen much benefit from consolidation, but certainly going forward it is something we have to keep an eye on, on the other side. I'm still not a big believer that Brett's [ph] is that important in healthcare.

I think what's most important is that you deeply understand your customer, their workflow, their clinical needs and you are the best innovator in their space and that's very much our agenda as a company and I think that's why we'll continue to improve the competitiveness of our business. Certainly we have to understand the scale of our competitors as they get larger and continue to focus on our own cost structure and we've got significant programs in place to do that with our focus on COGS and SG&A.

So that's really our view of how to continue to keep Smiths Medical strong in a marketplace where others are looking at consolidation. Certainly we're looking at bolt-on opportunities ourselves to strength our portfolio.

So we would expect that to be a part of our offense going forward.

Jeff, thank you. Duncan can comment on headcount in John Crane.

Headcount is currently at the lowest point it has been at over the past four to five years at the end of August and we are relying more upon attrition and managing it through attrition rather than the large scale restructuring as you see announced from some of our competitors and customers.

Now in the second row please?

Yes it is Andrew Carter from RBC. I had a couple just quick more on John Crane.

Just in terms of some customer inventories, could you just talk to whether any customer do choose to hold inventories and if that's the case how big an impact could the stocking actually be there? And the second one I think the insurance stage, I think you talked a little bit about pipelines being recently accessed, I wonder if you can give a bit of an update on that, maybe there has been some change there?

And then final one, I guess this is going to be slightly difficult to answer, but obviously there is a bit of pressure on the diesel industry over the last couple of days and I was just wondering, you know you have seen couple of the share prices seem to deteriorate, but I mean I was wondering why the move from petrol to diesel? I mean it has not possibly been a benefit to John Crane in recent years and do you think that it could kind of go the other way?

Duncan?

There are two types of customer inventories, one is spares that our hold in the event that they have a problem with the CO and there is no change in that they've got to hold those spares, either we hold them or they hold them, but they've got to be held otherwise the site stops operating. The other type of inventory is through those - that part of our business that goes through distributors.

It is a very small part of our business and we're not seeing any changes in stocking levels there. Pipelines, I think last time we spoke I talked about pipelines and gas lines primarily in the United States and they continued to be built out.

The main trunks are now done, so it is a lot of the branches going off of the trucks is still pretty good business, quite good business and I haven’t seen major change, many changes there. In terms of gas to diesel, it does not really have an impact on our business and so I don’t expect it is going to matter either way for us as long as there is something used to keep the engines running.

Thank you, Duncan. Yes?

Good morning. It is Glen Liddy from J.P.

Morgan Cazenove. On the Medical business can you give us an update on what progress is being made in China?

And secondly, I mean the R&D spending has been improving and it is delivering the organic growth. How lumpy is the new launch pipeline and do you have a target for your vitality index?

So Glen starting with China we talked last year that we didn't have a very good year. We declined 7%.

We had focused on a number of things to turn that around. We actually put a seven point strategy in place.

But the heart of that strategy was to get important new registrations through the registration process to begin to launch the first in a series of new product introductions in infusion and also to focus on improving our sales and marketing effectiveness in part through additional distributor channels that would allow us to access different tiers of the Chinese market as well as improving our own sales alignment and incentives. And we saw great improvement through the year delivering 14% growth.

Some of that is clearly helped by a weaker competitor, but I think we really are in a much better place in China now and should continue to see strong growth in China. Clearly the China market is slowing.

Most medical device companies now are talking growth more the 8% to 10% range. So we'll see where China ultimately goes in the long run.

But we feel better about what we're doing in China today. There is still more work to do for us to be as large as we think we can be in China.

Relative to the pipeline, as you know had taken investment back quite a bit. We began to accelerate that two or three years ago.

Most of that went into infusion. We've in the past couple of years greatly accelerated our investment.

Some of that continues at infusion but now starts to go more broadly across the portfolio. Most of that is going to be seen really in FY 2017.

You'll see some product launches in FY 2016. There were some smaller launches in FY 2015.

You'll see some lunches in FY 2016. Our wireless version of our CADD is an important launch.

We will finish our interoperability platform in the U.S. which is very important for our hospital based products.

We'll launch a new disposable pump in the U.S. which is a really important market segment for us that we've not played in the past.

We'll start to launch a series of our next generation tracheostomy systems. But it is kind of the bow way [ph] and you'll more in FY 2017.

And I think by the middle of FY 2017 you'll start to see a better cadence, a step function improvement in the cadence of new product development coming out of the medical business and that's when I think we'll start to have a material impact on our vitality index where we're not at all satisfied with nine. We've talked about 15 to 20.

I think we talked about that last year in a bit of a banter with Sandy [ph]. So I think that's probably the number we're more interested in.

It is something that looks more like 15% to 20% vitality in the business.

All right just on Detection, the aftermarket is growing. Is it because of the aging installed base or is it the sophistication of the new products or your own endeavors to just get people to pay?

Richard?

I mean just would be to say all of the above. I think if you look at our installed base and look at where there is still a major variation between our best customers where we exploit the most of the market revenue and other channels where we don’t, which enables us to believe that we can continue to growth that piece of the business faster than the rest of the business.

There is a significant installed base which we believe will come up for renewal and as it does we will aim to attach aftermarket revenue contracts to that in order to sustain the performance. So I think we've done the best job of marketing in certain markets, but there is still more opportunity in areas which are relatively undeveloped particularly in Asia Pacific where we tend to go to market through distributors.

So we don’t voice yet access fee of the market.

Good morning. Robert Davies from Morgan Stanley.

I just has three questions if I could. First one is just around oil and gas and maybe you can give us an update on some of the trends you've seen since the end of July, obviously it is under your calendar falls ahead, fairly touch trading even in the last sort of four to six weeks.

It would be quite interesting to see if you've seen any big changes recently? Second one is around the gross targets you originally set out 4% to 6% for that business.

How do you think about those targets in a low oil price environment if they were lower for longer as we head into 2017 and beyond? And then finally you mentioned around the portfolio changes in potential M&A.

Where is the sort of balance in terms of the thought process right now in terms of changing the portfolio, is there any parts of your business you see as noncore or are there anything that's missing right now that you'd like to add? Thanks.

Duncan, do you want to talk about the two questions on John Crane?

August and three weeks into September is a touch way for us to get a read because July-August kind of gets all mixed together, sometimes some of the August shipments get shipped in July as you get near the end of the year. And then you've got holiday in much of Europe and parts of the U.S.

as well so a little bit difficult. I would say September through three weeks is looking challenging and so if I take a look at the sort of quarterly trajectory Q1 calendar year 2015, Q2 calendar year 2015, Q3 it is certainly becoming more challenging as we go forward.

On the growth targets as I said these - the markets are very unpredictable, very difficult to sort of look out without having a sort of view on oil prices and so it is a little hard for us to say right now where we'll be relative to those growth targets over time without making a lot of assumptions around oil prices which I know, no matter what assumption I make I do know it will be wrong. I just don’t know which direction it will be wrong.

Duncan, thanks for that. I think in terms of portfolio, I mean the message I was really trying to land today is that I think we have finally got to the end of a process where we are freed from a lot of the constrained sort of impeded change over the last few years.

In terms of where we're going to invest or what the changes are I think it would be invidious of me to comment given the change of management team and therefore I would suggest that you hold yourself patiently to ask Andy and Chris when you are back here in six months’ time. Yes, second row.

Good morning, Michael Blogg from Investec. Just one financial question.

With spot rates where they are, currency rates that is, what is the outlook for headwind stroke, tailwind in the coming year please?

Rob, please.

Since the year end we've seen the dollar strengthen slightly. We've seen the euro weaken slightly.

Frankly the net effect on our numbers is probably pretty balanced. We wouldn’t really see much of a net headwind or tailwind at this time.

Yes, top of the morning. A few wee things, just Rob on that one, if you have far more cash flow hedging this year than you've had in prior years, so something is going on in terms of your trade flows.

And we just have this hiccup obviously with exporting to Japan without any hedging. So we just had that transaction exposure, but where are we now in all of that please?

Well, you are correct we do. We're carrying significantly more cash flow hedging.

And yes, in some sense it is a reaction to what we've seen in the past. As we know we've got a couple of our businesses particularly highly integrated which means that they manufacture in large centers and in one part of the world and now that are exported to other areas.

The medical division is one of those and it tends to be a net exporter from the U.S. to the rest of the world and to Japan and that business has struggled with the depreciation in the Japanese yen impacting its transactional effect performance.

This year, over the past year we have gradually increased our hedging on transactional cash flows with the aim of mitigating the kind of short to medium term impact of those sort of FX movements.

Hedging and it differs in it all. You know what one needs to do is to change the flow of goods.

We have done lot of work over the last few years. If you compare Detection today with Detection seven or eight years ago where everything was manufactured in Euro land and then sent to the four corners of the earth.

We now manufacture in the U.S. We manufacture in Asia and we still manufacture some in Europe.

And the structural currency imbalances have been significantly reduced. So if you look at medical the major challenge in medical came from manufacturing in U.S.

as Rob said selling into Japan. The way of resolving that is of course to manufacture in Japan.

On the other hand I think you can understand that we're not going to do that. What we've done is, we've extended the period we're hedging those flows from around six months to 12 months, but ultimately you defer what is going to happen, you don't eliminate it.

I mean it was quite a headwind?

It was a big headwind. Yes, it was a big devaluation and I suspect that a lot of people don't recognize the scale of our Japanese business.

And then Duncan need not stand up for this because is just more a larger now big picture stuff.

You see the history with Crane was always it made commodity stuff so we went up market, we did this, we did that. And the story to me is if the product portfolio first-fit is right, never mind artificial lift, then we can't surrender first-fit market share, because we then as you were kind of saying build up an issue for the future.

So we've got to stay in there and slug it out I suppose is my simplistic approach even if we take a bit of pain. We don’t have that option now, it is different today in Crane too, 80s, 90s and early 2000s.

I don’t think there would be any difference of opinion Sandy. I think we have been slugging it out with more enthusiasm with the best of them over the course of the last three or four years.

Certainly when I joined the company and I think it's absolutely crucial that we maintain our installed base and our market share. I mean that’s where the future revenue comes from and that's very much what we have been doing and I think it is fair to say we have succeeded in growing our market share in most countries over the last five years.

So protecting a few million of profit this year is going to cost us 10 times in future.

Yes, I mean I would simply say that this is a debate that has been had a number of times at the board and the board is supportive of investing for the future.

All right and then a simple one. When Medical now says moving all your sales by market randomly right at the end here really aren’t fair.

What is in specialty? Is that things like level one and all the rest of it?

No it is really those things that don’t fit nice and neatly clinically. So in infusion it is a very sensible grouping of products.

In vital care it is predominantly airway management and temperature management and then vascular access are the vascular access devices. So what's left?

What's left is our in vitro fertilization, the Wallace product line, our veterinary medicine line basically, PCI our emergency medicine line which is our Pneupac product line and then our patient monitoring product line.

And I am not trying to sort of preempt you there is only one last thing that comes through sort of quickly, but why I am I doing this fatality and those things we had so much fun with this six months ago. But what we seemed to have achieve and what we were describing as safety for example because it is difficult.

I know you are re-categorizing, I've got FX watching it and but it looks like we have arrested sort of two, three year decline which is encouraging no?

So I think the good news in the performance of the business last year is that we did see improvements in every one of the lines of business whether you look at last year's segmentation or this year's segmentation the story is still the same. Every region got better.

China got better from a negative decline to a much more positive rate. Vascular access went from declines to being stabilized.

Most of the specialty products went from declines to stabilized. In vitro fertilization actually grew very nicely and certainly vital care went from two years ago declining last year stabilized or three years ago I guess now we should say declining, two years ago stabilized, this past year growing and we expect to see that continue to grow.

So I think there is a fundamental improvement in the business. We're still not where we need to be.

We're still slightly underperforming our markets. So I think there is still opportunity for Medical to be even better and that's really the journey where than is actually the jury we are on as a company.

Thank you for noticing. Any other questions?

If not, we'll close the session here. Thank you all very much for joining us this morning, that's it.