Spirax Group (SPX) H1 2025 earnings summary

Executive summary

• Organic sales grew 3% and adjusted operating profit rose 7% year-over-year, outpacing global industrial production growth and delivering margin expansion to 19.3%, up 70bps organically.

• Strong demand in biofarm, semicon, and process industries, with STS organic growth of 3% (excluding large projects), ETS organic growth of 10%, and Watson-Marlow organic growth of 2%, with acceleration expected in H2.

• Restructuring program on track to deliver £35m annualised savings, with majority of costs recognised in 2024 and half of savings expected in 2025, supporting investments in digital and decarbonisation.

• Interim dividend increased by 3% to 48.9p per share, reflecting continued commitment to shareholder value.

• Macroeconomic environment remains challenging, with IP in key markets contracting, currency headwinds, and cautious H2 forecasts.

Financial highlights

• Group revenue £822.2m, down 1% reported but up 3% organically; adjusted operating profit £158.8m, down 1% reported but up 7% organically; operating margin at 19.3%, up 70bps organically.

• Adjusted EPS flat at 137.6p; basic EPS 85.0p, down 31% due to restructuring and currency; interim dividend up 3% to 48.9p.

• Net financing costs reduced to £18.6m; effective tax rate at 27.4%.

• Cash conversion improved to 61% from 53% last year; net debt reduced to £658m with leverage at 1.8x EBITDA.

• Statutory operating profit £106.8m, down 27% year-over-year, impacted by £34.6m restructuring charge and currency effects.

Outlook and guidance

• Full-year guidance unchanged: organic group revenue growth in line with 2024, mid-single-digit organic growth in adjusted operating profit, and margin expected above 19.4%.

• H2 expected to accelerate due to strong order books, market recovery, and operational improvements; STS and Watson-Marlow margins expected to be in line with H1, ETS margin to improve.

• CapEx guidance at 4%-5% of sales; lower net financing costs and effective tax rate at 27% expected.

• Annualised restructuring savings of ~£35m, with ~40% achieved in 2025; one-off restructuring costs of ~£35m (cash) and ~£5m (non-cash) expected.

• Currency headwinds expected to persist, impacting reported sales and profit.