In This Article:
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Organic Revenue Growth: 9.1%, including acquisitions increased to 10.2%.
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Reported Revenue Growth: 6.7%, impacted by adverse foreign exchange.
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Operating Profit Growth: 12.6% organic, 9.5% reported, with a margin expansion of 40 basis points to 16.7%.
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EPS Growth: 14%, enhanced by lower tax, interest charges, and share buyback program.
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Cash Conversion: 94%.
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Return on Capital Employed: 17.1%.
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Dividend Increase: 5% to 14.23p.
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Share Buyback Program: Increased to GBP500 million.
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Free Cash Flow: GBP143 million, up nearly 30% from last year.
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John Crane Organic Revenue Growth: 3.8%.
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Flex-Tek Organic Revenue Growth: 2.5%, with acquisitions adding 4.4%.
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Smiths Detection Organic Revenue Growth: 15.3%.
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Smiths Interconnect Organic Revenue Growth: 26.8%.
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Full-Year CapEx Expectation: Around GBP100 million.
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Acquisition of Duc-Pac Corporation: GBP32 million at 7.2 times EBITDA.
Release Date: March 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Smiths Group PLC (SMGKF) reported strong financial performance with organic revenue growth of 9.1% and operating profit growth of 12.6% on an organic basis.
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The company increased its dividend by 5% and expanded its share buyback program to GBP500 million, enhancing shareholder returns.
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Smiths Detection and Smiths Interconnect showed significant growth, with Detection's revenue increasing by 15.3% organically and Interconnect's revenue growing by 26.8%.
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The company is executing a strategic plan to focus on high-performance technologies, which includes the separation of Smiths Interconnect and Smiths Detection to unlock value.
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Smiths Group PLC (SMGKF) reaffirmed its fiscal-year '25 guidance, which has been raised twice since last September, indicating confidence in future performance.
Negative Points
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The company experienced a cybersecurity incident in January, impacting John Crane's performance and causing a 1% to 2% reduction in growth for the division.
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Adverse foreign exchange effects led to a lower reported revenue growth of 6.7%, compared to the organic growth rate.
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The mix of business and product lines led to a 60 basis point contraction in margins, particularly affecting John Crane and Flex-Tek.
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The US construction market remains uncertain, affecting Flex-Tek's growth outlook, with new housing permits and starts showing declines.
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The separation process for Smiths Interconnect and Smiths Detection involves complexities and potential costs, with the company needing to ensure a smooth transition.