Smiths Group (SMIN) H1 2026 earnings summary

Executive summary

• Achieved strong strategic progress with divestments of Smiths Interconnect and Smiths Detection for £3.3bn at attractive valuations, sharpening focus on higher growth and margin businesses and enabling substantial capital returns.

• Delivered solid H1/HY2026 financial performance with organic revenue growth, margin expansion, and positive momentum into the second half.

• Initiated a new £1.5bn capital return program, building on £2.3bn already returned over 4.5 years, with ongoing and planned share buybacks totaling up to £2.5bn.

• Transitioning to a focused industrial engineering company specializing in flow control and thermal solutions, aligned with long-term structural trends.

• Disciplined capital allocation with ongoing share buybacks, enhanced shareholder returns, and targeted M&A including the DRC Heat Transfer acquisition.

Financial highlights

• Group organic revenue grew 4.0% year-over-year to £1,437m; reported revenue up 2.2%.

• Headline operating profit rose 7.2% organically to £248m; margin expanded 50bps to 17.2%.

• Basic EPS up 11.7% to 62.0p; ROCE improved by 130bps to 18.4%.

• Operating cash conversion at 78%, reflecting increased inventory and separation costs.

• Interim dividend increased 5.4% to 15.00p per share; £104m paid in H1.

Outlook and guidance

• FY2026 organic revenue growth expected at 3-4%, with H2 growth in the 5-7% medium-term target range.

• Operating profit margin expected around 20%, progressing toward 21-23% medium-term target.

• Cash conversion expected in low-to-mid 90s% for the full year.

• John Crane expected to deliver mid-single digit growth in H2, supported by a strong order book.

• Flex-Tek outlook driven by aerospace strength; US construction recovery remains uncertain.