REG - Smiths Group PLC - Smiths Group Q3 FY2025 Trading Update

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RNS Number : 2889J  Smiths Group PLC  20 May 2025

News Release

20 May 2025

 

 

SMITHS GROUP PLC - Q3 FY2025 TRADING UPDATE

Pioneers of progress - engineering a better future

 

Another strong quarter, extending our growth track record

Improved FY2025 revenue guidance

Smiths Group plc ('Smiths' or 'the Group') today announces its trading
statement for the third quarter, and nine months, to 3 May 2025.

 

Third quarter organic revenue growth(1) accelerated to +10.6%, leading to
organic revenue growth for the nine-month period of +9.6%. Reflecting this
strong performance and momentum in the order book, the Group now expects to be
towards the top end of its 6-8% organic revenue growth guidance range and
continues to expect margin expansion of 40-60 basis points for FY2025.

 

Third quarter performance reflected further growth across all businesses, with
particularly strong organic revenue growth in Smiths Detection and Smiths
Interconnect, a continuation of the trends seen in the first half. Momentum
improved from the second quarter at both John Crane and Flex-Tek.

·    John Crane posted marginal organic revenue growth in the quarter
against a high single-digit growth comparator, moderated by a longer than
expected impact from the January cyber incident. We expect this to result in
second half growth broadly in line with the first half. John Crane continues
to see healthy demand in its end markets with a strong order book, especially
in OE, underpinning the progress and overall momentum of the business into the
fourth quarter.

·    Flex-Tek growth accelerated from the first half, posting high
single-digit organic revenue growth in the quarter. This performance reflected
ongoing strength in aerospace and strong growth in its construction business
which continued to outperform the US housing market. Integration of the three
acquisitions of Modular Metal Fabricators, Inc., Wattco, Inc. and Duc-Pac
Corporation is progressing well.

·    Smiths Detection delivered strong double-digit organic revenue growth
in the quarter. This resulted from continued strong growth in aviation in both
OE and aftermarket, driven by the ongoing high levels of installation activity
of its next generation detection technology.

·    Smiths Interconnect delivered low double-digit organic revenue
growth, with ongoing strength in its semi-test business following key
programme wins from customers, as semiconductor markets improved and
reflecting the premium quality of the products. It also delivered good growth
in its aerospace and defence end markets.

 

Tariffs update

The Group generates c.45% of its sales in the USA, with the significant
majority produced within the USA. Smiths therefore expects the impact of
tariffs to be limited given its local-for-local model, and through the
deployment of mitigation actions which include accessing available exemptions;
pricing actions and surcharges; and being flexible with alternative supply
sources. FY2025 guidance incorporates the direct impact of the current tariffs
in place. The Group is closely monitoring the potential indirect macroeconomic
impact of tariffs on demand, inflation and supply chains, and has not seen any
material changes in customer behaviour to date.

 

 

 

Strategic actions

Smiths continues to execute its strategy to focus on its world-class John
Crane and Flex-Tek businesses and deliver on the value creation potential of
FutureSmiths.

 

The Group is progressing the separation processes of Smiths Interconnect and
Smiths Detection and remains on track for an announcement of a sale of Smiths
Interconnect by the end of calendar year 2025, followed by the separation of
Smiths Detection by way of a UK demerger or sale.

 

Each of the businesses continues to make good progress on their specific
initiatives under the Acceleration Plan programme to enhance performance and
drive margin improvement. Activities to reduce corporate costs in line with
the FutureSmiths business profile have also been initiated.

 

Share buyback programme

To date, the Group has completed £260 million(2) of its £500 million share
buyback and remains on track to complete the programme by the end of the
calendar year.

 

Roland Carter, Chief Executive Officer, commented:

"Our strong performance has continued through the third quarter and all our
businesses contributed to the double-digit organic revenue growth. With
underlying robust demand as evidenced by our order book, we now expect to be
towards the top end of the 6-8% organic revenue growth guidance range for the

full-year and continue to expect margin expansion of 40-60 basis points. This
consistency of delivery has now underpinned successive earnings upgrades this
year and multiple years of organic revenue growth for Smiths.

 

"We are executing on the strategic actions we announced in January with pace
and purpose to unlock our inherent value and become a premium rated company,
focusing on our world-class, high-performance John Crane and Flex-Tek
businesses. The sale process for Smiths Interconnect is firmly underway and
preparatory work for the Smiths Detection separation process is also moving
forwards.

 

"I would like to thank all my colleagues across Smiths for your ongoing
commitment and focus, helping drive our continued strong performance."

 

FY2025 results

Smiths will publish its results for the year ending 31 July 2025 on 23
September 2025.

 

 (1) Organic revenue growth excludes the effects of foreign exchange and
 M&A.

 (2 ) Of the £500m share buyback: £41m returned in FY2024, £44m returned in
 HY2025 and a further £175m in H2 to date.

 

 Investor enquiries                                                     Media enquiries
 Steph Heathers, Smiths Group                                           Tom Steiner, Smiths Group

+44 (0)7584 113633

 stephanie.heathers@smiths.com (mailto:stephanie.heathers@smiths.com)   +44 (0)7787 415891

                                                                        tom.steiner@smiths.com (mailto:tom.steiner@smiths.com)

 Siobhán Andrews, Smiths Group

+44 (0)7920 230093

 siobhan.andrews@smiths.com (mailto:siobhan.andrews@smiths.com)         Alex Le May, FTI Consulting

+44 (0)7702 443312
                                                                        smiths@fticonsulting.com (mailto:smiths@fticonsulting.com)

 Ana Pita da Veiga, Smiths Group

 +44 (0)7386 689442

 ana.pitadaveiga@smiths.com (mailto:ana.pitadaveiga@smiths.com)

 

Legal Entity Identifier (LEI): 213800MJL6IPZS3ASA11

 

About Smiths Group

For over 170 years, Smiths has been pioneering progress by engineering a
better future. We serve millions of people every year, to help create a safer,
more efficient and productive, and better-connected world across four global
markets: energy, safety & security, aerospace & defence, and general
industrial. Listed on the London Stock Exchange, Smiths employs c.15,000
colleagues in over 50 countries. For more information visit www.smiths.com
(http://www.smiths.com/) .

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