Smiths Group (SMIN) H2 2024 earnings summary

Executive summary

• Delivered strong FY 2024 results with 5.4% organic revenue growth and 7.1% organic operating profit growth, supported by robust order books, operational execution, and disciplined capital allocation.

• Announced two strategic acquisitions in Flex-Tek to expand HVAC and industrial heating platforms, with an active M&A pipeline across all divisions.

• Launched an acceleration plan to drive margin expansion, process improvements, and scalability, targeting £30–35 million annualized savings by FY 2027.

• Reaffirmed medium-term targets and guided for 4–6% organic revenue growth and continued margin expansion in FY 2025.

• Well positioned for FY2025 and beyond, with a clear path to improving profitability and productivity through the Acceleration Plan.

Financial highlights

• Revenue increased 3.1% to £3,132m, with organic growth of 5.4% compared to FY2023; acquisitions contributed 2%.

• Operating profit rose to £526 million, up 7.1% organically and 5.0% reported; operating margin improved by 30 bps to 16.8%.

• EPS grew 12.9% at constant currency (8.3% reported) to 105.5p; ROIC/ROCE increased 70 bps to 16.4%.

• Operating cash conversion improved to 97%, with free cash flow up 67% year-on-year to £298 million.

• Final dividend of 30.2p, full-year dividend up 5.2% to 43.75p.

Outlook and guidance

• Expecting 4–6% organic revenue growth in FY 2025, with margin expansion supported by strong order books and new product launches.

• Acceleration plan to have minimal impact in FY 2025, with benefits phasing in from FY 2026 and £30–35m annualized savings by FY 2027.

• CapEx to be elevated at ~£110 million in FY 2025, returning to trend in FY 2026.

• Cash conversion expected in the low 90s% for FY 2025, weighted to the second half.

• Macro and geopolitical uncertainty remains a headwind.