Smiths delivered a decent H2 performance Smiths delivered a decent H2 relative to Consensus expectations. Revenue came in 2% ahead of Consensus, growing at an organic rate of 4% (Consensus at 3%) while headline profit came in line with the Consensus expectations, as margin missed by a modest 40bps. Divisionally, strength was once more driven by Flex-Tek and Interconnect (where profit beat by 9/23% respectively) but was held back by John Crane and Detection (where profit missed by 5/24% respectively) as supply chain disruptions and a step up in RandD weighed on profitability. Smiths'' guidance suggests Consensus FY''23 expectations are too modest The focus of the day was on Smiths'' FY''23 guidance. Despite the macro uncertainty, Smiths encouragingly guides to organic sales growth falling between a narrow range of 4.0-4.5% (Cons. at 3.0%) and moderate margin expansion. Solid order intake development across John Crane and Detection appears to provide some support for the organic sales growth while a new cost saving programme should support profitability (GBP12.5-15.0m of cost savings are expected to be delivered in FY''23). In all, we believe guidance supports underlying consensus upgrades of 2-3% (5% when FX driven tailwinds are reflected). Is there any risk to guidance? During the conference call Smiths did not really talk down development across any businesses. Flex-Tek despite its U.S. residential exposure (~40% of the division) and Interconnect despite its Semi exposure are both expected to grow alongside John Crane and Detection. Smiths noted that it had not seen any signs of demand slowing down for these businesses yet. While we are very confident in Flex-Tek and Interconnect delivering good growth in H1, we are slightly more cautious on their ability to grow in H2; we believe Flex-Tek and Interconnect should see sales soften. We update our numbers for trading; our TP remains unchanged We update numbers for latest trading and FX. Recent...