Treasury and financing policy - Smiths Group plc

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Treasury and financing policy

Group Treasury operates as a centralised service managing debt financing, liquidity, interest rate and foreign exchange risks. The Board reviews and mandates policies for financial risk management.

The funding policy of the Group is to maintain a broad portfolio of rated public debt, diversified by source and maturity and to maintain committed bank facilities sufficient to ensure that at all times £200m of undrawn committed facilities are available.

Our balance sheet can be affected by currency translation movements. Our policy is to match foreign currency assets and cash-flows with foreign currency debt to provide a natural hedge for a significant part of the translation exposure.

The amount of risk to any one counterparty is restricted according to credit rating. We continually monitor our exposure to counterparties and their credit ratings.

Exposures to interest rate fluctuations on borrowings are managed by using interest rate financial instruments. It is our policy to keep over 55% of gross debt at fixed rates of interest over the medium-term.

Key financial policy metrics
  Financial policy Actual (31.7.16) Actual (31.7.15)
Net debt / Headline EBITDA < 2x 1.6x
1.4x
Undrawn committed facilities > £200m £605m
£512m
Fixed rate as % of gross debt > 55% 47%
58%
Bank debt as % of net debt < 30% 0%
0%
Average debt maturity profile > 4 years 4.5 years 5 years





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Smiths Group divisions:

John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect, Flex-Tek

Smiths Group plc:
Registered office 4th Floor, 11-12 St James’s Square, London, SW1Y 4LB
Incorporated in England No. 137013
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