Spirax Group Delivers 5% Organic Growth in 2025, Margins Progress Despite Headwinds

Spirax Group 2025 full-year: organic growth beats IP, margins hold up

Spirax Group delivered a solid set of 2025 numbers, with organic revenue up 5% – well ahead of global Industrial Production (IP) at 2.1% (1.7% excluding China). Adjusted operating profit rose 6% organically and the adjusted margin nudged up 30bps organically to 20.0%. Statutory profit declined due to one-off restructuring costs, but the programme is now complete and delivering sizeable savings.

Management expects “good organic growth and further margin progress” in 2026. In short: the strategy is working, the imbalance between end markets is easing, and the heavy lifting on efficiency is behind them.

Headline numbers investors should know

Metric	2025	2024	Change (reported)	Organic
Revenue	£1,702.9m	£1,665.2m	+2%	+5%
Adjusted operating profit	£339.9m	£333.9m	+2%	+6%
Adjusted operating margin	20.0%	20.1%	(10)bps	+30bps
Statutory operating profit	£265.4m	£304.6m	(13)%	n/a
Statutory operating margin	15.6%	18.3%	(270)bps	n/a
Adjusted profit before tax	£301.0m	£288.2m	+4%	n/a
Adjusted basic EPS	296.3p	286.3p	+3%	n/a
Basic EPS (statutory)	221.7p	259.6p	(15)%	n/a
Dividend per share	170.0p	165.0p	+3%	n/a
Adjusted cash conversion	89%	87%	+200bps	n/a
Net debt	£564.7m	£596.2m	(5)%	n/a
Leverage (net debt/EBITDA)	1.5x	1.6x	Improved	n/a
ROIC	13.1%	not disclosed	Higher	n/a

Currency was a headwind, reducing sales by 3% and adjusted operating profit by 4%. Despite that, the Group delivered a better-than-normal “drop-through” from organic sales to profits, helped by operational improvements and price discipline.

Segment performance: STS, ETS and WMFTS

Steam Thermal Solutions (STS): steady in tough project markets

STS saw organic sales up 1% despite weaker-than-expected IP and softness in large projects in China and Korea. Excluding those large projects, organic growth was 3% – a decent result and ahead of IP, driven by MRO (maintenance, repair and overhaul) and solution-selling.

Adjusted margin was 23.5%, up 40bps organically, with restructuring savings largely reinvested to push commercial initiatives. Reported revenue was £853.4 million, down 2% year-on-year due to the project drag and currency. Statutory profit fell, reflecting those one-off restructuring costs.

Electric Thermal Solutions (ETS): double-digit organic growth

ETS delivered 11% organic sales growth to £441.3 million reported revenue (+9%). All three divisions contributed: Process Heating benefited from improved throughput and a large win with a datacentre-focused OEM; Equipment Heating was supported by ongoing Semicon demand plus Nuclear and Aerospace & Defence; Heat Trace saw early benefits from a sharper sales focus, notably in the USA and EMEA.

Adjusted margin improved 20bps organically to 16.2%. Headwinds included shipping the last of some lower-margin legacy orders (now largely completed) and initial running costs for the new Medium Voltage facility in Ogden.

Watson-Marlow Fluid Technology Solutions (WMFTS): recovery on track

WMFTS grew organic sales by 6% to £408.2 million reported revenue (+4%). Process Industries led the way, especially in the Americas and a retooled sector-led approach in EMEA. In Biopharm, sales growth accelerated in the second half with orders growth running at over 10%.

Adjusted margin moved up strongly – 160bps organically to 26.2% – as higher H2 volumes and supply chain efficiencies flowed through, partly offset by reinvestment for growth.

Margins, restructuring and investment: what changed in 2025

Spirax completed a major operational efficiency and simplification programme, unlocking £40 million of annualised savings (about half realised in 2025). These savings are being ploughed back into growth: more sales engineers, digital tools, customer connectivity, new product development and decarbonisation solutions.

That reinvestment, alongside pricing discipline and manufacturing throughput gains, helped protect adjusted margins in the face of cost inflation and tariffs. The statutory margin fell to 15.6% because the restructuring charges are recognised there – a one-off that does not recur in adjusted figures.

Cash, debt and dividend: disciplined and shareholder friendly

Adjusted cash conversion improved to 89% (from 87%), with adjusted cash from operations at £301.5 million. Net debt reduced 5% to £564.7 million, taking leverage down to 1.5x EBITDA, and ROIC rose to 13.1%.

The Board lifted the total dividend by 3% to 170.0p per share. The proposed final dividend is 121.1p, payable on 22 May 2026 to shareholders on the register at 24 April 2026. That confidence line rests on expectations of “a return to higher levels of growth and margins”.

Outlook for 2026: guidance points to further progress

Management expects good organic growth and further margin progress in 2026. The moving parts are becoming more favourable: Biopharm momentum improved through H2, Semicon demand is supportive, and ETS has operational wind in its sails. The drag from low-margin legacy orders is “now largely completed”.

Risks remain. Large projects in China and Korea are still sensitive to capex cycles, and FX was a notable 2025 headwind. But the backdrop of industrial electrification and efficiency – areas Spirax directly serves – is supportive, and the company is now through the bulk of its restructuring.

What this means for investors: my take

• Quality of growth: Beating global IP by 300bps organically, while lifting adjusted margin organically, is a clean result in a patchy macro.
• Mix improving: STS grew despite project weakness; ETS and WMFTS both posted healthy organic growth with margin tick-ups – encouraging breadth.
• Earnings bridge: The gap between adjusted and statutory is about one-offs from restructuring. With that complete and savings annualising, statutory should begin to catch up.
• Cash discipline: 89% adjusted cash conversion and lower leverage provide options – continued investment, dividend growth and balance-sheet resilience.
• Near-term catalysts: Continued Biopharm recovery, Semicon strength, and ETS execution (including the new MV facility) could underpin 2026 guidance.
• Watch-fors: China/Korea project demand, currency swings, and early-stage costs in new electrification capacity.

Quick segment snapshot

• STS: Organic sales +1% (+3% ex-large projects in China/Korea); adjusted margin 23.5% (+40bps organically).
• ETS: Organic sales +11%; adjusted margin 16.2% (+20bps organically); legacy low-margin orders largely shipped.
• WMFTS: Organic sales +6%; adjusted margin 26.2% (+160bps organically); Biopharm growth accelerated in H2.

Key terms, briefly explained

• IP: Industrial Production growth – a proxy for end-market activity.
• MRO: Maintenance, repair and overhaul – recurring, service-led revenue from installed bases.
• Semicon: Semiconductor wafer fabrication equipment manufacturers.
• Biopharm: Pharmaceutical and Biotechnology customers.
• Leverage: Net debt divided by EBITDA – lower is safer.
• ROIC: Return on invested capital – a measure of capital efficiency.

Useful resources

• Full RNS PDF: 2025 Full Year Results
• Company site: spiraxgroup.com
• Results webcast (from 9.30am): stream link

Overall, Spirax Group looks to have executed well: outgrowing its markets, nudging margins higher on an adjusted basis, and setting up 2026 for more of the same with a cleaner cost base. The dividend is up, leverage is down, and the pipeline in electrification, Semicon and Biopharm offers multiple avenues for compounding growth.