REG - Smiths Group PLC - 3rd Quarter Results

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RNS Number : 1731F  Smiths Group PLC  21 May 2026

News Release

21 May 2026

 

 

SMITHS GROUP PLC - Q3 FY2026 TRADING UPDATE

Pioneers of progress - engineering a better future

 

Smiths Group plc ('Smiths') today announces its trading statement for the
third quarter to 2 May 2026.

Roland Carter, Chief Executive Officer, commented:

"We delivered a resilient performance and ongoing strategic progress in Q3,
reflecting solid execution despite the challenging external environment.
Flex-Tek performance was in line with our expected quarterly phasing. At the
time of our previous guidance, the impact from the conflict in the Middle East
on John Crane was uncertain. To reflect the quantum of this impact in Q3 and
for the rest of the financial year, we are updating our FY2026 revenue
guidance, while maintaining our expectations on profit.

"Whilst this moderates growth in the near term, it is set against a backdrop
of increasing global demand for energy security and resilience, and we are
well positioned to support our customers. This underpins our confidence in the
strength of our medium-term growth outlook.

"We continue to make good progress reshaping the portfolio, deploying capital
with discipline and investing to drive sustainable growth and long-term
shareholder value."

Resilient Q3 and nine-months performance

Organic revenue growth(1) for Smiths(2) was flat in the third quarter, leading
to +0.2% growth for the nine-month period. This performance was achieved in
the context of the disruption in global energy markets, a subdued US
construction market and a strong comparator in Flex-Tek. Reported revenue
included a +2.1% benefit from acquisitions in the third quarter and +1.6% in
the nine months.

·   John Crane organic revenue grew +2.8%. Despite good operational
momentum, revenue was impacted by £10m following two months of disruption
from the Middle East conflict. Our order book strengthened further in the
quarter despite project phasing uncertainty, with a positive book to bill.

o Energy growth was driven by aftermarket, particularly in Latin America,
partly offset by near-term market dislocation in the Middle East and changes
to project phasing.

o Industrial delivered good growth, with particular strength in OE.

·   Flex-Tek organic revenue declined (3.9)%, in line with the expected
quarterly phasing and against a

high-single-digit prior year comparator.

o Construction performance reflected the ongoing weakness in the US
residential market. A sequential improvement from the second quarter is
expected to continue through the fourth quarter, underpinned by positive
pricing initiatives and targeted customer wins.

o Thermal Solutions declined, predominantly due to a notably strong
contribution in the prior year from the ultra-high heating project which
completed in October. A sequential improvement in heat kit demand and a more
favourable comparator support fourth quarter growth.

o Aerospace delivered continued strong growth reflecting good execution
against a strong order book and part of the price and volume benefits
following contract renewals, which underpin our confidence for improved growth
in the second half versus the first.

FY2026 outlook for Smiths

Following strong operating momentum in the first half and supported by our
order book, we previously guided to FY2026 organic revenue growth of 3-4%,
excluding any impact from the conflict in the Middle East. Reflecting the
£10m impact in the third quarter and assuming continuing disruption in the
Middle East, we are now expecting organic revenue growth of ~2%. In addition,
we now expect headline operating profit margin slightly above 20%, supported
by the Acceleration Plan and continued Smiths Excellence savings.

 

Middle East conflict

We continue to prioritise the safety of our people who work in the region. We
are also supporting our customers and remain well positioned to assist them as
facilities are returned to service and production recovers. Looking forward,
our view on the underlying strength of our John Crane business in the region
remains unchanged. While the conflict creates some near‑term headwinds, it
creates opportunity for incremental investment as the region rebuilds. The
effects from the conflict are sharpening the focus on energy security and
resilience, which we expect will continue to underpin structural growth in
spending on energy infrastructure globally. The Middle East region
represents c.7% of revenue for Smiths, primarily John Crane.

Delivering on our strategy

On 1 April, Smiths completed the disposal of Smiths Interconnect to Molex for
£1.3bn. Up to 19 May, we have executed £506m of the £1bn buyback related to
the transaction, and remain on track to complete the £600m tranche by end of
July, with the remainder to be substantially complete by end of CY2026.

The regulatory process in relation to the sale of Smiths Detection is
progressing well. We remain on track to complete the transaction in the second
half of CY2026 and subsequently provide details on the £1.5bn return of
proceeds. In the third quarter, 6% growth was driven by the continued high
levels of installation activity of CT scanners in Aviation as well as growth
in ports & borders and urban security.

The acquisition of DRC Heat Transfer completed on 2 April and it is now being
integrated into Flex-Tek's Thermal Solutions business. The acquisition is
consistent with the strategy of building into high growth adjacencies and will
enable Flex-Tek to serve customers in fast-growing power generation and data
centre markets.

Following the announcement to divest certain Flex-Tek general industrial
businesses, we have agreed a sale for two of them, with the transaction
expected to complete in June. Processes for the remaining businesses are
ongoing.

Q3 2026 conference call

A conference call will be held today at 08.00am (UK time). You can access the
webcast via the following link:

Financial results and presentations | Smiths Group
(https://www.smiths.com/investors/financial-results-and-presentations)

FY2026 results

Smiths will publish its results for the year ending 31 July 2026 on 22
September 2026.

 

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

 (2) Smiths and/or continuing operations refers to the combination of John
 Crane and Flex-Tek (i.e. excludes Smiths Detection, Smiths Interconnect and
 certain Flex-Tek general industrial businesses).
 Investor enquiries           Media enquiries
 Siobhán Andrews, Smiths      Tom Steiner, Smiths

+44 (0)7920 230093

siobhan.andrews@smiths.com  +44 (0)7787 415891

                              tom.steiner@smiths.com

 Ana Pita da Veiga, Smiths    Alex Le May, FTI Consulting

+44 (0)7702 443312
 +44 (0)7386 689442
smiths@fticonsulting.com

 ana.pitadaveiga@smiths.com

Legal Entity Identifier (LEI): 213800MJL6IPZS3ASA11

About Smiths

For 175 years, we have been pioneers of progress, engineering a better future.
Our strategy is to be a focused, efficient and value creating industrial
engineering company operating in the attractive and growing market segments of
flow control, thermal solutions, construction and aerospace.

We focus on solving the toughest problems for our customers, helping address
critical global needs such as decarbonisation and the ever-increasing demand
for process and energy efficiency.

We are pioneers of progress. Engineering a better future, we drive efficiency
for customers in mission-critical situations.

We are united by our purpose. It is what we do, how we think, and how we will
continue to use our passion for innovative engineering. For more information
visit www.smiths.com (http://www.smiths.com)

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