EarningsQ4 2026 Earnings Report
DE:QS2A Q4 2026 EPS Results
Actual EPS€0.59
Consensus EPS€0.56
Beat/MissBeat by +€0.03
One Year Ago EPS€0.75
DE:QS2A Q4 2026 Revenue Results
Actual Revenue€1.21B
Expected Revenue€1.19B
Beat/MissBeat by +€11.66M
YoY Revenue Growth-21.81%
Earnings Announcement Details
QuarterQ4 2026
Date09/22/2026
TimeBefore Open
Conference CallTuesday, September 22, 2026
DE:QS2A Upcoming Earnings
Smiths Group plc's next earnings date is estimated for March 23, 2027, based on past reporting schedules.
Q4 2026 Earnings Call Audio
No earnings call audio is available for this earnings event.
Q4 2026 Earnings Slide Deck
No slide deck is available for this earnings event.
Q4 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was predominantly positive. Management emphasized the completed portfolio transformation, resilient fiscal year 2026 results, strong cash generation, successful capital allocation, DRC's early performance and improving margin and growth expectations. These positives were moderated by continued Middle East disruption, weakness in U.S. residential construction, the decline in Thermal Solutions and ongoing market and working-capital challenges.Company Guidance
Portfolio Transformation Completed
Smiths completed the sales of Smiths Interconnect and Smiths Detection at very good prices, crystallizing GBP 3.3 billion of enterprise value and repositioning the company as a focused premium industrial engineering company.
Resilient Fiscal Year 2026 Financial Performance
Organic revenue grew 1.2% to GBP 1.9 billion, headline operating profit increased 1.9% organically to GBP 399 million, and headline operating margin expanded 20 basis points to 20.6%, despite Middle East disruption, tariffs, lower volumes and continued investment in growth.
Strong Earnings and Shareholder Returns
Smiths headline EPS increased 6% to 86.8p, while total group headline EPS increased 12% to 135.7%, enhanced by the share buyback program. The Board recommended a final dividend of 33.5p, taking the full-year dividend to 48.5p, an increase of 5.4%.
Strong Cash Generation and Returns
Operating cash flow was GBP 384 million, representing 96% operating cash conversion, slightly ahead of guidance. Return on capital employed was 23.5%, comfortably above the medium-term target of more than 20%.
John Crane Revenue and Margin Growth
John Crane revenue grew 2.3%, or 4% excluding the GBP 20 million Middle East impact, with growth led by original equipment sales, particularly dry gas seals. Headline operating profit increased 3.5% organically to GBP 270 million and margin expanded 30 basis points to 23.9%.
John Crane Pricing and Acceleration Benefits
Pricing, mix and benefits from the acceleration plan more than offset inflation and an GBP 8 million increase in investment in strategic projects. The acceleration plan also delivered a GBP 5 million reduction in central costs.
Strong Regional and Industrial Performance at John Crane
John Crane's U.S. and Latin America businesses grew mid-single digits. Industrial revenue grew 2%, supported by strong growth in mining and Water.
Aerospace Delivered Strong Growth
Flex-Tek Aerospace revenue grew 10.6%, supported by order book execution, contract renewals with major aircraft engine manufacturers, pricing and volume growth. Strategic growth areas in India and MRO achieved strong double-digit growth.
Flex-Tek Portfolio High-Grading
Smiths acquired DRC for GBP 165 million, adding cooling and heat-removal technologies with exposure to fast-growing data center and power-generation markets. Smiths also agreed sales of three noncore Flex-Tek industrial businesses for GBP 40 million.
DRC Performing Ahead of Expectations
In four months of ownership, DRC contributed GBP 35.5 million of revenue at a pro forma growth rate of well over 20% with an attractive margin. DRC's order book was described as building robustly for the current and following calendar years.
Strategic Growth Exposure
The company highlighted structural growth opportunities in global energy security, LNG, hydrogen, geothermal, carbon capture and storage, industrial electrification, data centers, U.S. housing, aviation and defense spending.
Recurring and Repeatable Revenue Base
John Crane aftermarket represents more than 70% of total revenue. Around 70% of construction revenue is repeatable through sustained distributor relationships, and more than 75% of aerospace revenue is under long-term agreements, contracted positions or repeatable programs.
Innovation and Operational Investment
Smiths invested GBP 64 million in RD&E, or 3.3% of revenue, and GBP 39 million in CapEx, or 2% of revenue. The company completed investments in John Crane machining and test capabilities and added automation to Flex-Tek HVAC manufacturing processes.
Acceleration Plan Benefits on Track
The acceleration plan, including site consolidation, footprint optimization, ERP harmonization and automation, delivered GBP 20 million of annual planned benefits to date and remained on track for GBP 30 million to GBP 35 million of annualized benefit for fiscal year 2026.
Positive Fiscal Year 2027 Guidance
Smiths guided to organic revenue growth of around 4% and headline operating profit margin of approximately 21% in fiscal year 2027, entering the 21% to 23% medium-term target range sooner than expected. Operating cash conversion is expected in the low 90s range.
Medium-Term Growth Conviction
Management expressed strong conviction in more quickly delivering its medium-term 5% to 7% organic revenue growth target and supporting its 21% to 23% operating profit margin target, driven by DRC, data center exposure, global energy tailwinds and the repositioned Flex-Tek portfolio.
Capital Returns and Balance Sheet Initiatives
Smiths completed the GBP 500 million buyback and the GBP 1 billion Smiths Interconnect buyback, with a further GBP 1.5 billion related to Smiths Detection still to execute and expected to be substantially completed by the end of calendar year 2027. Two major pension transactions were also completed.
Legacy Asbestos Liability Process Announced
Smiths announced a marketing process to divest the John Crane U.S. legacy asbestos liability. Management stated that the transaction is intended to remove liabilities from the balance sheet, significantly increase free cash flow and available capital, and reduce variability; asbestos-related net cash outflow has averaged around GBP 20 million annually over the last five years.
Strong Order Coverage
John Crane entered fiscal year 2027 with approximately a 1x order book. Around two-thirds of aerospace revenues were covered when the company entered the year, and DRC's order book was described as robust for the current and following calendar years.
Pricing Execution Remains Positive
Management stated that pricing was a significant part of fiscal year 2026 growth and that fiscal year 2027 growth would be more balanced between pricing and volume. Pricing was implemented across the portfolio, including John Crane, Flex-Tek Aerospace, Thermal Solutions and Construction.
DE:QS2A Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed