Smiths Group (SMIN) H2 2025 earnings summary

Executive summary

• Fiscal year 2025 delivered strong operational and financial results, with organic revenue up 8.9% and operating profit margin expanding 60 basis points to 17.4%, exceeding twice-raised guidance.

• Strategic actions included progressing the separation of Smiths Interconnect and Smiths Detection, with Interconnect reported as discontinued operations and a sale expected by end of calendar year 2025.

• Enhanced shareholder returns through a 5.1% dividend increase, ongoing share buyback (80% complete), and £1.7 billion returned over four years.

• Strong order book and disciplined capital allocation position the group for continued growth and margin expansion in fiscal year 2026.

Financial highlights

• Organic revenue growth of 8.9% year-over-year, with reported revenue up 6.5%.

• Operating profit grew 13.1% organically and 10.3% on a reported basis; EPS increased 14.8%.

• Return on capital employed rose 170 basis points to 18.1%; operating cash conversion at 99%.

• Free cash flow of £336 million (58% conversion); CapEx of £80 million, above D&A.

• Final dividend of £0.3177, total full-year dividend of £0.46, up 5.1%.

Outlook and guidance

• Fiscal year 2026 organic revenue growth expected at 4–6% with continued margin expansion.

• Margin expansion to be driven by operating leverage, acceleration plan, and efficiency programs.

• Cash conversion expected in the mid-90% range; strong order book underpins confidence despite macro and tariff headwinds.