{
  "docId": "019dd923-622c-750b-8b95-8eaea23f634c",
  "docSlug": "52fcebfc6e80",
  "documentTitle": "Smiths Group plc (SMIN)",
  "authorId": "27_Engine_Capital",
  "authorName": "Arnaud Ajdler",
  "documentKindSlug": "shareholder-letter",
  "documentKindLabel": "Shareholder letter",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2025-01-17 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 3,
  "pageCount": 7,
  "prevPage": 2,
  "nextPage": 4,
  "slideType": "peer_benchmark",
  "function": "compare_peers",
  "density": "overcrowded",
  "nDataPoints": 27,
  "notes": "The slide argues that operational improvements are insufficient to close the valuation gap, advocating for structural changes (breakups) instead.",
  "elementsJson": [
    "paragraph",
    "comparison_table",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b95-8eaea23f634c/3",
  "deckHref": "/decks/019dd923-622c-750b-8b95-8eaea23f634c",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b95-8eaea23f634c.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b95-8eaea23f634c#slide-3",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "While there are differences between Smiths' businesses and these companies, the fact that Smiths trades at a meaningful discount to its pure play peers in each of its divisions is a powerful attestation that the entire Company trades at a sizable discount to its SOTP valuation.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0398-7399-b328-af93e5c0c2dc",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Total Shareholder Return: -104%",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-0398-7399-b328-b0c072a0278c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.76,
        "x": 0.12,
        "y": 0.5
      },
      "kind": "paragraph",
      "text": "Given these dynamics, it is unsurprising that Smiths has underperformed its peers on a total shareholder return (\"TSR\") basis over all relevant time periods.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3b0f49e3-0196-4087-886a-6fedf99bf824",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.76,
        "x": 0.12,
        "y": 0.34
      },
      "kind": "paragraph",
      "text": "We also note that Smiths’ EV to NTM EBIT multiple is trading near 10-year lows (excluding COVID) despite the considerable progress made towards the medium-term financial targets...",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "46ce9c1c-2f54-45c3-9c92-a6f2053519c7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.76,
        "x": 0.12,
        "y": 0.73
      },
      "kind": "paragraph",
      "text": "While we understand newly appointed CEO Carter believes he can further improve operations, doing so won't change the structural dynamics discussed above.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "853fe0b5-9c4f-4c68-a4c9-89325b617855",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.76,
        "x": 0.12,
        "y": 0.08
      },
      "kind": "paragraph",
      "text": "In front of the Board. John Crane’s peers trade at a median multiple of approximately 13.7x NTM EBITDA while transaction multiples are considerably higher...",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f6dbfea9-ec69-49a4-a843-a4875fc96329",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.76,
        "x": 0.12,
        "y": 0.8
      },
      "kind": "paragraph",
      "text": "It is also worth noting that with the recent announcement of CFO Clare Scherrer's departure, and the prior departure of former CEO Keel...",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "fda24209-44b0-475e-af6b-d0f21786717c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.76,
        "x": 0.12,
        "y": 0.87
      },
      "kind": "source-note",
      "text": "5 Peer group comprised of Rotork plc... 6 Peer group comprised of TE Connectivity... 7 Per Capital IQ 8 Returns data as of 15 January 2025.",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "24860beb-2b1a-4f0c-a3c0-809d43a7cfe2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.76,
        "x": 0.12,
        "y": 0.56
      },
      "kind": "table",
      "text": "Total Shareholder Return table comparing Smiths Group against peers and index over 1, 3, and 5 years.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7d13df78-e263-4f6d-93ed-9d81957c1b48",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "breakup-spinoff",
      "slug": null,
      "matchId": "f27775ac-0e34-498c-b932-66fc553312ca",
      "evidence": "Mentions recent breakups in industrial space (GE, DowDuPont, UTC) as a model for value creation.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 4,
      "from": 3,
      "beatId": "c2fd5847-e6b3-4e7b-979b-6e9ea0d11978",
      "arcName": "The Consultant's Gambit",
      "arcSlug": "consultants-gambit",
      "beatName": "Evidence & Proof",
      "beatSlug": "consultants-gambit-evidence-proof",
      "evidence": "Peer benchmark and valuation table provide evidence",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": "Evidence",
      "parentBeatSlug": "evidence"
    }
  ],
  "loops": [
    {
      "to": 4,
      "from": 3,
      "name": "Iceberg",
      "slug": "10-iceberg",
      "bestFor": "Consulting, complex problem solving, organizational change",
      "matchId": "d07539a7-58fe-4c67-867e-c5c082b52d59",
      "evidence": "The peer benchmark and valuation table provide insight into underlying issues",
      "position": 1,
      "objective": "Reveal underlying issues",
      "structure": "The Symptom (Visible) -> The System (Hidden) -> The Root Cause",
      "confidence": 0.6,
      "description": "Reveal that the visible problem is merely a symptom of a deeper root cause"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}