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iShares MSCI India Small-Cap ETF Stock Price: Quote, Forecast, Splits & News (SMIN)

Perplexity Finance

Company Profile

iShares MSCI India Small-Cap ETF Price & Performance (SMIN)

Stock Performance

Updated Apr 28, 8:00 PM UTC

iShares MSCI India Small-Cap ETF

$70.24USD

+$0.33 (+0.47%)

After Hours

+$0.56 (+0.8%)

Open

$70.69

Market Cap

$793.32M

Year High

$87.06

High

$70.78

P/E Ratio

22.3

Year Low

$61.54

Low

$69.72

Dividend Yield

7.45%

Volume

507.02K

Latest News

Institutional Investors Boost Holdings in iShares MSCI India Small-Cap ETF
Apr 28, 2025
Major institutional investors, including Envestnet Asset Management and Franklin Resources, have increased their stakes in the iShares MSCI India Small-Cap ETF, signaling growing confidence in Indian small-cap equities. Despite recent volatility, the ETF remains a favored vehicle for exposure to India's dynamic small-cap sector, with notable inflows this quarter.12
Market Rally in India Driven by Robust Domestic Investment
Apr 25, 2025
India’s stock market has rebounded about 10% from its April lows, with domestic institutions injecting billions even as foreign investors withdrew capital amid U.S.-China trade tensions. Analysts say steady systematic investment plan inflows and sector-specific improvements are supporting stability, despite lingering global uncertainties and recent earnings downgrades.34
Tariff Announcements Spark Sell-Off in International ETFs, Including India
Apr 25, 2025
International ETFs, particularly those tracking India, Japan, and China, experienced sharp declines after the U.S. imposed sweeping new tariffs. The iShares MSCI India ETF fell nearly 3%, reflecting investor concerns about prolonged trade tensions and the potential for ongoing market volatility as the effects of tariffs ripple through global markets.4

What's Happening

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H1 2025

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Transcript

9m 11s

And thank you for joining us today. I'll start by providing a few opening remarks before handing over to Julian to walk us through the first half numbers. I'll then come back to you to provide an update on the strategy. And we'll have plenty of time at the end. For questions. As I said in January, since becoming CEO, this time last year, the board and I have been evaluating the options to maximize shareholder value. Despite making substantial progress with improved performance, the group still trades at a discount to our expected valuation. To address this, we will focus on our high performance technologies for efficient flow and heat management through John Crane and FlexTech. And separate Smiths Interconnect via a sale followed by Smiths detection. By either a U. K. Demerger or sale. In parallel, we have increased our share buyback program to £500,000,000. And return a large portion of disposal proceeds to shareholders. As we execute this strategy, we will become a more focused business with a higher quality financial profile that has ample potential for growth and very significant value creation. We have made good progress since January, and I'll provide more detail later. Turning to first half performance.

10m 46s

We delivered a strong set of financial results. With growth across all key metrics. We enhanced returns to shareholders, invested in attractive bolt on acquisitions, and maintained our focus on safety. Given this performance, I'm pleased to reaffirm our fiscal year twenty five guidance. Which we have raised twice since last September. Before handing over to Julian, I want to say a few words by way of introduction. Since this is his first set of results. Julian has been at Smiths for more than twelve years. His financial and strategic roles, alongside his experience at Flextech, and Smiths Interconnect, equip him well to be CFO. To drive forward the strategic actions, whilst maintaining financial control and discipline of the business. I'm incredibly pleased and fortunate to have him working alongside me. To create and deliver value. With that, I'll hand over to him to talk through the numbers. Thank you, Roland, and good morning, everyone. I'm happy to be presenting my first set of results.

11m 56s

And I'm pleased with the progress we've made in the first six months of fiscal year twenty twenty five, delivering another strong financial performance. [indiscernible] Organic revenue growth, was 9.1%, including acquisitions this increased to 10.2% with reported revenue growth of 6.7% reflecting the impact of adverse foreign exchange. We grew operating profit 12.6% an organic basis and 9.5%. On a reported basis. Resulting in margin expansion of 40 basis points to 16.7% or 50 basis points on an organic basis. This is consistent with our full year guidance. This strong operating profit performance translated to a 14% EPS growth enhanced by lower tax and interest charges and the benefit of the share buyback program. Cash conversion was good at 94% and return on capital employed reached a high 17.1% as we made efficient use of our capital. Reflecting all of this, are again increasing our dividend by 5%, to 14.23p, which is supplemented by the £500,000,000 share buyback program. These positive results delivered despite the cybersecurity event in January and I'm pleased to report that all critical systems are now up and running with the only financial impact on results relating to John Crane, which I'll cover later. Turning to the results in more detail and starting with organic revenue growth.

13m 37s

As you can see here, we're delivering consistent top line growth, within or ahead of our current medium term target of 4% to 6%. Strong revenue growth translated into even stronger operating profit growth, with a 40 basis point reported margin expansion to 16.7%. On an organic basis, margin expanded 50 basis points driven by higher volume, particularly in Smiths Interconnect and Smiths Detection, and continued price discipline more than offsetting inflation. We We delivered a net expansion of 30 basis points from efficiency savings, including the benefits delivered through the Smiths Excellence System, and whilst continuing to invest in growth. Offsetting these increases we had a 60 basis point contraction from mix, This covers both business mix, our higher growth coming from our lower margin businesses and product mix, mostly within John Crane and FlexTech. Strong operating growth translated to an even stronger EPS growth of 14%. The impact of organic profit growth, lower tax and interest, accretive acquisitions and the share buyback together delivered 19.3%. Constant currency EPS growth. We have provided full year guidance on tax, interest and FX in the appendix. On operating cash, generated GBP $254,000,000, a 94% conversion up from 89%. This time last year.

15m 7s

This reflects ongoing disciplined working capital management, whilst continuing to invest in the business. Full year CapEx is now expected to be around 100,000,000 down from the prior guidance of GBP110 million, given timing changes and higher versus last year largely due to the investment program in automation and capacity in John Crane. Finally, operating cash performance translated to a GBP143 million of free cash flow up nearly 30% on last year. Turning now to the businesses. I'll talk first through John Crane and Flexstack, the business we will retain, and then I'll cover Smiths Detection and Smiths Interconnect, the businesses we will separate. To unlock value. John Crane delivered 3.8% organic revenue growth against a strong prior year comparator when we grew 12.7%. Performance was constrained by the cyber incident where recovery took longer due to the number of systems involved. Growth was led by strong original equipment sales, particularly in energy, which although having a lower margin in the short term, secures a long term higher margin aftermarket revenue stream. Operating profit grew 3.9% with a 10 basis point organic margin expansion to 22.9% This margin reflects disciplined pricing and efficiency benefits whilst continuing to invest for future growth.

16m 36s

Offset by the negative impact of the lower margin OE sales. We had significant wins in the first half in energy, including a third asset management contract in Saudi Arabia and a partnership to supply Seals to a groundbreaking supercritical c o two project. We expect strong demand across the full energy spectrum continue over the medium term as customers focus on driving efficiency and emissions reduction. Looking ahead, we expect the second half growth to improve on the first half supported by a robust order book and market demand However, the cyber incident disrupted orders in January which continued into quarter three, moderating our growth expectations for the full year. Now turning to Flexstack. Revenue increased 2.5% organically with acquisitions adding a further 4.4% to growth. Flextec's industrial segment grew 2%, with growth of HVAC products continuing despite a subdued construction market. Aerospace grew 4.8% as we executed on the strong order book driven by new aircraft bills. Operating margin was 19.8%, down versus a strong comparator in fiscal year twenty four. The margin performance reflects positive pricing, and the benefit of efficiency savings offset by product mix. With the prior year benefiting from high margin industrial heating contracts.

18m 8s

Looking forward, the timing and shape of The US housing market recovery will be a key driver for FlexTech into the second half. On a rolling three month basis, U. S. New housing permits declined 3.1% New housing starts were down 2.7%. And builders' confidence remains negative However, the market outlook continues to be supported by a shortage of housing stock and we're well positioned to take advantage of the recovery. For Aerospace, we expect sales to remain strong underpinned by a healthy order book. Our strategy to create value in FlexDeck with accretive acquisitions has continued during the half. In September, we announced the acquisitions of modular metal fabricators, and Wattco. Today, we announced the acquisition of DuckPack Corporation, a metal duct manufacturer based in Massachusetts, for £32,000,000 at an attractive multiple of 7.2 times EBITDA. This acquisition is another step in building a nationwide integrated offer of metal duct products in the HVAC segment expanding coverage into the Northeast through an established brand and a well run business. Since the acquisition of Royal Metals, have deployed a total of GBP $270,000,000 of acquisition capital into Flextec. At a combined multiple of seven times which together with a strong organic performance has compounded growth to 13.2% over this period and added three twenty basis points of margin over the last four years.

19m 43s

Now turning to Smiths Detection. Revenue increased 15.3% organically, reflecting significant growth in Aviation, partly offset by a decline in other security systems. Aviation growth of 28.7% was driven by the ongoing global rollout of checkpoint CT scanners. We've now sold more than 16 hundreds of our CTIX products continue to secure a good win rate of more than 50% of the units contracted to date. The program is about halfway through, with another two to three years to run. Other Security Systems revenue declined 11.3%, against a high prior year comparator and reflected the phasing of certain contracts. Detection's operating profit increased 23.2% and operating margin by 70 basis points an organic basis, reflecting the strong volume growth along with improved pricing and efficiency savings. Our strong order book supports a continued positive outlook into the second half, and beyond. September, we showcased our new x-ray diffraction products, which will support future whole baggage upgrade programs. Is currently undergoing certification in Europe, Smiths detection also advancing its IC more software offer, and was the first to receive approval from The Netherlands for its AI driven detection system. An important addition to support growth in our higher margin aftermarket. Finally, Smiths Interconnect.

21m 17s

Organic revenue growth was very strong at 26.8%. With growth across all business units. Aerospace and Defense revenue grew 15.9%, driven by the strength of innovation in our fiber optic radio frequency and connector products. Growth in industrial markets, was driven by an outstanding performance in our semiconductor test business, This reflected a high program win rate particularly in high speed GPUs and AI related programs. Our technology leadership externally recognized with a number of industry awards for our da Vinci 112 Semi Test product. The notably higher volumes as well as pricing mix and significant benefits from efficiency programs drove an 80% organic increase in operating profit and this translated into a five ten basis point expansion in operating margin. Looking ahead to the second half, we expect growth to continue albeit at a more moderate rate. [indiscernible] Turning now to our capital allocation framework. As we have previously communicated, we deploy capital to fuel organic growth, fund strategic, and disciplined bolt on acquisitions, and return excess capital to shareholders. All of which we've demonstrated in the first half. Organically, we increased CapEx and invested in R and D, and engineering to ensure sustainable future growth across all our businesses.

22m 46s

We invested £97,000,000 in acquisitions in FlexTech, at attractive multiples and accretive margin. And have enhanced our returns to shareholders having increased the share buyback program and raised the dividend. As of today, I'm pleased to say we have completed the initial GBP 150,000,000 of the GBP £500 share buyback programme and we are on track to complete the remaining £350,000,000 by the end of this calendar year. In addition, we are committed to returning a large portion of disposal proceeds. In summary, our balance sheet remains strong giving us flexibility for fiscal year twenty twenty five and beyond, to fund organic investment undertake bolt on M and A and return capital to shareholders via dividend and buyback. All while maintaining our investment grade rating. And finally, a few words about our outlook for the rest of fiscal year twenty twenty five. We are reaffirming our twice increased guidance, of 6% to 8% organic revenue growth [indiscernible] by good order book visibility and continued strong demand in our end markets. Albeit with some uncertainty over The US construction market. We are also reaffirming our expectation of a 40 to 60 basis point expansion in operating margin driven by operational leverage and continued benefits from the Smiths Excellence System and other efficiency programs.

24m 13s

This guidance reflects the current position of announced U. S. Tariffs we continue to carefully monitor how the landscape evolves. Our largely local for local approach limits the impact as we typically source where we manufacture and manufacture where we sell. We expect cash conversion for the full year to be in the low 90s percent. In conclusion, 've delivered a strong first half financial performance, We have positive momentum towards meeting the full year guidance. And we are focused on executing our strategy. With that, let me hand back to Roland.

24m 51s

Thank you, Julian. Let's turn to the strategic update. We have used the terminology futuresmiths to describe Smiths as it will be in its future state. So firstly, I'll cover future Smiths. Then move on to the new medium term targets, which are supported by the acceleration plan and new business opportunities. And I'll finish with an on the separation processes. Future Smiths will focus on our John Crane and Flex Tech businesses. 54% of the business is exposed to the general industrial market, of which around half is construction, 38% to energy the remaining 8% to aerospace. Combined, these businesses generated £1,900,000,000 in revenue in fiscal year twenty twenty four. With a pro form a operating profit margin of 19.5%. The purpose of Smiths engineering a better future continues. Future Smiths is a specialist engineering business, focused on high performance technologies for a efficient flow and heat management. Our exposure to the three key markets of general industrial, energy and aerospace all present attractive growth opportunities over the near and longer term. Underpinned by important megatrends. Future Smiths has longstanding valued customer relationships [indiscernible] and quality of our products, proved through many years of serving our customers. We work in partnership with them to design products and solutions that address some of their most critical problems.

26m 38s

We operate in a coherent business model, with an embedded approach to operational excellence, the Smiths Excellence System. With the benefit of a simplified structure in the future, we will maximize the opportunity to streamline the cost base and up weight the role of our shared business support services further. Future Smiths will deliver sustainable growth through a combination of strong market positions, long standing customer and engineering domain expertise. This growth will drive high returns and good cash generation. With low capital intensity. The two businesses have complementary business models. Industry characteristics and value creation opportunities. Their end markets benefit from very supportive growth trends, increased demand for energy efficiency and emission reduction, a common theme for both. John Crane, derives a substantial proportion of its revenue from aftermarket, which is captive for the life of the seal. Flextec also has a significant recurring revenue stream, with more than 90% repeat business, supported by its well established OEM and distributor relationships. As well as its reputation for innovation and product performance. Both businesses have expansion opportunities, geographically, as well as into attractive product and service adjacencies. All of these attributes support the significant potential for further growth and value creation.

28m 21s

As is evident here, Future Smiths has a higher quality financial profile, with a strong track record of organic growth high margins, and returns in excess of our current medium term targets and good. Cash conversion. Off the back of this strong financial profile, coupled with further opportunities for growth and improved profitability, we have issued new enhanced medium term targets for future Smiths. We have upgraded our organic revenue growth expectations to 5% to 7%, increased EPS growth to greater than 10%, and raised operating profit margin to 21% to 23%. All this will be achieved whilst maintaining disciplined capital management. With our return on capital employed target increasing to greater than 20%. And maintaining operating cash generation of around 100%. We believe these ambitious yet achievable targets support a premium rating for future Smiths. Here, we demonstrate the clear road map to delivering enhanced organic growth and further improving profitability, supporting these medium term targets. The value creation opportunities for John Crane and Flextec are shown as well as highlighting the opportunities for cross business collaboration in products, markets and customers, to augment future growth. We also see significant organizational process opportunities, for example, through shared support services to deliver a streamlined cost structure within and across the businesses.

30m 10s

Turning to our acceleration plan. Where we have made good progress. As you will recall from September, plan is about value creation, not just transformation. And each business has a specific set of actions. These initiatives will deliver end to end process improvements for resilience and scalability over the longer term. As well as specific cost reduction and footprint rationalization actions. The plan also includes the rightsizing of group central costs in line with the portfolio changes We continue to refine the focus and the timing of the program. And now expect to deliver 40,000,000 to £45,000,000 in annualized benefits for the GBP 60,000,000 to GBP 65,000,000 costs previously communicated. Costs will now be 20,000,000 to £25,000,000 this fiscal year, with the remainder in fiscal year 'twenty six. Around twothree of both the costs and the benefits relate to Future Smiths. This includes the reduction in central costs, which following the completion of the separation processes, will be 1.5% to 1.7% of revenue. Continuing to be at a more efficient rate than the median of our U. K. Industrial peers. The acceleration plan is just one lever, to drive margin towards our 21% to 23% target. Supported also by operating leverage and ongoing efficiency savings through SES.

31m 43s

Whilst continuing to invest in growth. Since the announcements in January, we have commenced the separation processes. Advisers have been appointed, and we remain committed to the timetable of an announcement for Smiths Interconnect before the end of this calendar year Smiths detection to follow. Both board and executive committees have been established to oversee separations, ensuring governance and delivery at pace. With accountability. We are conscious that the proposed changes are unsettling for our people, and are committed to treating all our stakeholders respectfully as we go through this transition period. And we are committed to separating responsibly with a focus on maximum value creation. As Julian set out earlier, we have seen strong performance this half from both Smiths Interconnect and Smiths Detection. Positioning them well for the second half and beyond. Having run these businesses prior to our current role, both Julian and I know them well.

32m 48s

They share many of the key strengths with John Crane and Flex Tech. Leading technologies, strong positions in attractive markets and customer intimacy. For example, Smiths Interconnect partners with customers to meet some of the most demanding specifications with strong capabilities in specialist applications such as optical transceivers for use in aerospace and defense or semiconductor test sockets for AI chips. Smiths detection is clearly a leader in threat detection, with a global service reach. However, their financial profile in regard to margin and returns is different from that of John Crane and Flex Tech. They both have inherent opportunities to create additional value through product development and expansion. As well as efficiency improvements. We believe that these will be best delivered under different ownership, and now is the right time for separation from a position of strength. So in summary, all businesses contributed to the strong 9.1% organic revenue growth in the half. We are reaffirming our 6% to 8% guidance for the full year John Crane of Flextec have a strong track record of delivery through cycle growth. And we are well positioned in attractive markets to achieve enhanced organic revenue growth. We increased the operating profit margin to 16.7%, and are reaffirming full year guidance of 40 to 60 basis points expansion.

34m 25s

We will continue to execute our acceleration plan to support further margin expansion beyond this year. And we are committed to being ambitious as we embark on rightsizing our central costs. We continue to invest in R and D, and through M and A. Further to expand our reach in 5% and have completed the first £150,000,000 of our share buyback program, with the remaining £350,000,000 to be completed by the end of this calendar year. And we are committed to returning future disposal proceeds. [indiscernible] Our strategic actions are underway. We believe now is the right time to optimize the portfolio and focus on John Crane and Flex Tech.

35m 14s

We have initiated the process to separate Smith interconnect and Smith detection. We firmly believe these strategic actions will unlock significant value and enhance returns to shareholders. I would like to acknowledge our employees and thank them for contributing to the strong financial performance in the half. And for their continued hard work despite the backdrop of a cyber incident. And the recent news flow. Your commitment is very much appreciated, and not taken for granted. So now let's go to questions.

35m 52s

Thank you. Be announced.

36m 2s

We will now take our first question. Please standby. And the first question comes from the line of Luciathan Mehendraha from JPMorgan. Please go ahead and let us know. Open. Good morning. Good morning. Two or three questions, if that's okay.

36m 30s

So firstly, on John Crane, I mean, it possible to quantify [indiscernible] the impact of the cyber incident in the first half, and it looks like it impacted aftermarket more than early. So just sort of trying to understand the rationale there. And I guess we think about that sort of catch up in the coming [indiscernible] The second question is on just detection. Just I guess, any further thoughts or thoughts pros and cons that you're thinking in terms of demerger or [indiscernible] And then just just thirdly on on margin, which is 60 basis point headwind from mix in the first half How should we think about mix in the second half? Is that less the headwind? [indiscernible] [indiscernible] Thank you very much for the questions, Lush. And I'll take the first two, and then I'll hand over on the margin question about the mix. To Julian. So yes, we the cybersecurity event All our critical systems are now back up and running. Was there an impact? Yes, there was. Was an impact on Crane? To a great extent, yes. How would we quantify that overall for the whole group? That's sort of one to two percentage points of growth that we saw there.

38m 2s

We are seeing that John Crane is recovering that. We see that H2 will therefore be stronger than H1. Going forward. So we're pleased about that. But it is a very vertically integrated organization, so it will take time to recover. Aftermarket is the quick turn part of that business. And so the Aftermarket business, batch size in this business is less than two. So we have a finite amount of machining. So we are in a good position post the cyber, but we need to improve that. We have a firm grip on the operational aspects of that and H2 will will come in stronger than H1, but it will take time for that recovery. Going on to the demerger and sale of of Detection. As we announced at the January, the Smiths Interconnect sale would be announced, and we're aiming to announce that for the end of the calendar year. Detection, we announced that we're in the process, it will happen post that. That will be either a demerger or sale. We're open to both. We're all about value creation. That's a good news here for everybody. We will take the best route through to create value on that.

39m 27s

And both those processes are going excuse me, as we planned at moment. So that's positive news for that. We've got advisers. We set up the governance. And we're executing against that plan. On the margins, Julian will speak about [indiscernible] positive impact around that.

39m 49s

Absolutely. So we saw good margin improvement in the first half. You say, we saw the 50 basis point improvement, which was in line with our our guidance. We did see that negative mix effect coming through, which is largely divisional mix with Detection growing strongly relative to the total growth. We do expect that, that mix effect will slightly in the second half, and we reaffirm our our guidance for the full year of 40 to 60 basis points of improvement.

40m 21s

Okay.

40m 22s

Thank you.

40m 24s

Thank you. We will now go to our next question. Please stand by. And the next question comes from the line of Christian Hinderaker from Goldman Sachs. Please go ahead.

40m 38s

Good morning, Rowan. Good morning, Julian. Thanks for the opportunity. I want to start with the new growth assumption if I may. I think backing out your market growth numbers on Slide 25, I'm getting to a 4% midpoint growth number. When weighting those. And how do we think then about the building blocks for the five to 7% range? Is there a bit of a skew there at all to either segment? And then also in terms of the 21% to 23% margin, how do we think about the progression given cranes obviously at the upper level there? Is there scope for margin improvement across both businesses? Or is this FlexTech story?

41m 21s

Okay. So thank you for that. Let me take the margin question first. I think that's the exciting part of this story, that 21% to 23% margin target. And we see that there's enormous value creation [indiscernible] both those businesses. So this isn't skewed towards one particular business. We see expansion across both those businesses, whether that's with pricing, whether that's with efficiency, whether that's with mix as we move into new markets. And specifically with innovation as we drive both those businesses forward from innovation. The great thing about Future Smiths is the fact we can focus on those businesses and move those forward from a technical point of view, from commercial point of view, and obviously from driving forward with the Smiths' excellence System on the effectiveness point of view. So I think that all gives us a lot of confidence that even though these are ambitious targets, they really are targets. That we can meet on the margins. There is plenty of value to driven through that. On the growth assumptions, we feel that we have a track record of growing at those levels. And we've obviously spent a lot of time looking into the past, but that's the past.

42m 44s

The future are confident if you break it down into those parts about where we've got those businesses faced facing, whether that's the broad energy megatrend and need for energy, whether that's legacy or traditional energy or whether that's future energy. These businesses are very well set up to deliver that when you have through oil and gas, through electrification. So there are some major megatrends there. We've also seen the aerospace business in FlexTech grow very well. We've also seen that we are leaders in that and therefore, we feel confident that through the right commercial approaches, we can continue to gain market share within that. You can see the exceptional work that we've had in Tech for example. We grew in the first half in U. S. Housing in in spite of the market. Once that market comes a tailwind there it's going to take over a decade for The U. S. To crack catch up on the housing shortage. We are very well positioned we're not only doing that organically, but we're also doing that inorganically with acquisition of Duck Pack, which we are very pleased to welcome to the family and those employees.

44m

Thank you, Ron. And that brings me on to question two on Flex Tech. And I think you said 2% growth in industrial for the half. Ahead of the housing market. Just how do we think about your comments on the outlook here? Are they suggesting a flat negative market and an outperformance at the division level? I appreciate there's some uncertainty, but just want to sort of scale the thinking around the FlexTick? Guidance at year end and beyond?

44m 28s

Yes, no. Thank you. I mean, the plan we spent a lot of time making sure that this plan is the correct plan. We've seen growth in U. S. Construction, but the real story behind the Flex Trex is the industrial part of the business. We have we are very confident against the comparator, but also very confident in the business around industrial heat the second half. That's and Julian was talking about the fact that margin headwind wouldn't be there to the extent that we saw for the group. And part of that story is the flex Tech in industrial heat part of the business. And have that robust order book in Flextec Aerospace. So the important thing here to remember is we are confident in our numbers around FlexTech. We will see growth in H2. We'll see more growth in H2, we believe, than what we saw in H1. Driven by those factors. If U. S. Housing comes back, that's just an additional benefit, but we have a modest outlook for that. Within how we've lined our numbers up on that.

45m 44s

Thank you. And then a final one, just are you able to clarify the SES contribution to profitability in the bridge for the half?

45m 52s

So we don't we're not going to report out separately on ICS because we see it as a much broader aspect about VAV, about procurement savings, about pricing. However, we do continue just in the same way we look at a leading and lagging metrics, we don't disclose publicly. SES continues to be a very significant contributor and a more significant contributor this year than it was last year. So we still have that visibility. It's just we felt it was clearer to bring it all together within the margin bridge. So still a positive story there around SES as especially now we've got it aligned with the efficiency that sits around sustainability for example. So pleased that, that is still a key driver. But only one of one of one of many levers we have to increase growth and profitability.

46m 50s

Thank you.

46m 51s

You very much.

46m 53s

Thank you. We will now go to our next question. Please stand by. And the next question comes from the line of Martin Wilkie from Citi. Please go ahead. Your line is now open.

47m 7s

Yes. Thank you. Good morning. It's Martin from Citi. Just a couple of questions on interconnecting. Good news that they're going to get an answer there by the end of this year. In terms of how you're thinking about that exit, when we look about to multiples in defense, for example, it obviously got up a lot in the last few months. Can you remind us how much of that division is exposed to defense? And I saw that you have reclassified some revenue inside interconnect between the different sort of subdivisions with a larger chunk now in the aerospace and defense. So just to get an update of how much of interconnect is within defense now? Thank you.

47m 44s

Yes. So the guide for defense around Intergate is about just over half the business is very much defense focused. So [indiscernible] That's where it sits. And obviously, we are seeing tailwinds with within that part of the business, significant tailwinds within that part of the business. So as we said right at the beginning, we wanted to do and part of part of the our mantra around when we wanted to take these strategic actions was we wanted to do this from a position of strength. And it does appear that we chosen a good time to do that through our own internal actions, but also from the external environment as well. You're correct. [indiscernible] semiconductor within that, it sounds like semiconductor was a big part of the revenue acceleration in the period just reported. How much visibility do you have on that? Is that something that we can expect to continue? I mean, do you have an order backlog that suggests that we have good visibility over the next six months or so or how do we think about that? Semiconductor side of interconnect?

48m 54s

Let me hand that one to Julian because this that really is his baby. So Julian? From the past.

49m 1s

So the semi business is really quite short cycle. So we don't get a significant amount of future visibility. That said, we as evidenced in the results, we have performed very strongly across the first half particularly in the high performance GPU part of the market the AI part of the market, And certainly, the underlying conditions that are driving that remain very positive as we look forward.

49m 28s

Great. Thank you very much.

49m 31s

Thank you. Will now take our next question. Please stand by. And the next question comes from the line of Mark Davies Jones from Stiff Please go ahead. Your line is now open.

49m 43s

Good morning, Roland. Good morning, Julian. Two for me, please. Firstly, on to tech detection, still very strong OE growth, obviously, as we go through that transfer to CT. Where do you how long before we hit the inflection with enough of the installed base that the aftermarket growth starts to grow at least in line with the OE and the margin can start to inflect. That would be the first question.

50m 5s

Okay.

50m 7s

So, yes, so we're over 50% through that cycle. We've We've got two to three years of that going forward still. And we are winning over 50% of what's out there, very pleased with that product. And the execution of actually delivering that product. You recall we had a few issues in getting that into airports a while ago, but those are now truly overcome as you can see in the margin progression in that. So as they go in, the aftermarket come through on that. So we're seeing the aftermarket come through on that. And you're right, the aftermarket is is has a higher margin, a significantly higher margin on that. So that will all be to the positive. I think from the point of view of inflections, I think we'll see continued growth because we've got other OE products that are coming through. It is a It is significant amount of revenue from detection. Don't get me wrong, but [indiscernible] it isn't the substantial amount of revenue. It doesn't account for all the growth Detection. So I think we'll see a continuation of the CTICs rollout for two to three years. We'll definitely see some some and we've already sort of demonstrated better aftermarket margins as efficiencies come through.

51m 32s

But there will be another OE coming through. After that and most likely in the whole baggage area as well.

51m 39s

Okay.

51m 40s

Thank you. And then just back on interconnect, if I may. Given that very strong semiconductor performance, I guess maybe one for Julian if it was his baby, but do you think you can get full value for that business selling it as a whole given the slightly different peer group across the different segments of interconnect, do you miss losing out some of the full value of that semiconductor piece?

52m 2s

Thanks, Mark. I mean, 're open to all options. Our primary focus really is to sell the business as a whole. You'll understand it's probably best we don't kind of give the running commentary on how we we proceed. But look, I think Interconnect's really what nicely set up and we're on track to execute.

52m 23s

Okay. Thank you. Understood.

52m 27s

Thank you. We will now go to our next question. And the next question comes from the line of Stefan Klepp from HSBC. Please go ahead. Line is open.

52m 43s

For taking my question. Can we talk about John Crane a little bit more again? So you mentioned, first of all, that growth was one to two percentage points lower. Is that regarding Smiths as a group or John Crane itself? Then you have been saying as well that order intake was impacted. Can we clarify a bit? And can we clarify what that means in terms of catch up potential? I heard you H2 is going to be stronger growth again. But did you lose out here? And then at the same time, you're saying that you're view on John Crane for the full year has come down a little bit, obviously, due to the fiber intent. Can we clarify that as well again?

53m 25s

Yes.

53m 26s

And it so let me have Julian answer the 1% to 2% Is that Smiths or is that group? I'll talk about order intake and outlook. So want to Yes. So the 1% to 2% impact was on John Crane in the first half.

53m 50s

Order intake, The order intake, as you know, we don't talk about specific size of the order book, but the order intake in John Crane is robust. So as I mentioned, in earlier this morning, over 90% of our aftermarket is captive. So you're not going to lose out for a couple of weeks. So the market is very positive. Our position in the market is very strong. And will it take some time to catch up on that? And is aftermarket something that takes time to catch up on? Yes, it does. The outlook we have been cautious on the outlook because this is incredibly vertically integrated business. And what we see is the fact that it will take us time to catch up. But overarchingly, have we lost out Definitely you can see OEM isn't something that happens in a couple of weeks. So the OEM is where this business starts. That's the beginning of the cycle. You win the OEM part of the business and then it goes through. So John Crane's outlook is very robust. So we're confident in the market. We're confident in our position in the market. And we're confident in our ability to execute.

55m 11s

We just need to deal with a few operation issues from from the point of from the fact that we had that cyber incident. And we are so vertically integrated. But I would say take away from that positive outlook and a better H2 than an H1.

55m 28s

Okay. Thank you. And then on Detection, I always understood the business that you need to slot to deliver your equipment in the airport. Shouldn't that give you very high visibility on the second half as well on the next year to come because you need those installations. So wouldn't it be as well possible to be a little bit more positive and more constructive on the growth rate that we should see in the next half year and probably beyond that?

55m 59s

You're correct. I mean the visibility on detection is the most visibility that we have in any of our businesses. And we have a very robust order book which is spread is a multiyear order book spreads. In fact, not only this year, the remainder of this year, I beg your pardon, into next year but also into the year after. So yes, we can see we obviously not going to guide for FY 2026 at the moment. But as we've pointed out, I mean, the order book is robust. Think it's the best thing to take away from that.

56m 40s

Okay. Last one. You mentioned the new CapEx cycle with regard to the baggage scanners. When would that commence? But my best guess from today because you said that you are going through the certification process at the moment?

56m 53s

Yes, we're going through the certification process in Europe at the moment. I haven't got a huge amount of visibility that relies on when the happens, that relies on when the budget, that also relies on airports have a finite project management capacity that you don't see many airports do the front of house with the CTECs. And the back of house with our whole baggage. And potentially diffraction machines. At the same time. That's a that would be possible but challenging. So I haven't got a clear clear date. But when you think that the C Tech cycle is relatively late during COVID, one would imagine the whole package cycle will appear to be earlier because it's probably at the same time that it was, but the Cetix is later. If that makes sense.

57m 46s

Yes. Thank you so much.

57m 49s

Thank you. We will now take our next question Please stand by. And the next question comes from the line of Andrew Sims from Berenberg. Please go ahead. Your line is now open.

58m 2s

Good morning, gentlemen. Thanks for taking the questions. Just firstly, on the interconnect margin, I was just wondering if you could comment a little bit on the the sustainability of that given the jump in the first half. And maybe given the tailwinds in the mix, can this go any materially higher? That's the first question. Thanks.

58m 21s

So really nice performance on interconnects margin in the first half, over 17%. Really nice leverage of of the growth really as well as some nice efficiency savings coming through. We'd expect as the volume stays strong that the margin will will be in the [indiscernible] the same performance. Good second half outlook.

58m 46s

Great. And then just on the guidance, you mentioned that the guidance in includes the potential impact of U. S. Tariffs that are currently in place. I'm just wondering if could comment on where you're seeing that or what measures you're taking around those? Thanks. [indiscernible] I'll take that and then Matt maybe you can add to that. Julian. So yes, the current guidance supports the our current understanding of tariffs at the moment. It's important to remember that Smiths is local for local. So we've always said we source where we manufacture and we manufacture where we sell. We're not immune to tariffs. And in fact, you look into our AP plan, part of our AP plan was moving semiconductor production from China into America. That they already there was already tariffs on that product. And so we decided to move that through. So we've we've got a good understanding of our flows. Being local for local and not being sort of massively globalized. We don't feel we never feel overly confident, but we feel we can be agile, we can pass on some of that cost if necessary. On what gets hit. But at the moment, that's our we're monitoring it actively, and this is our best view as tariffs currently stand.

1h 10s

Don't if there's anything else you I mean it's obviously a fluid situation and we have to carefully monitor it. As Roland said, guidance reflects our latest understanding. And we're relatively well positioned I'd perhaps just add that we are making and planning the mitigation that we would take should things go differently, and we have various actions that we can take to mitigate the effects certainly in the short term.

1h 42s

Great. Thank you. And maybe just one final one. You're also talking about starting the separation of the Internet and Protection businesses. I think we've heard the past few years that behind the scenes that there's quite a lot of commonality in terms of platforms and things like that. In terms of that separation, is there going to be a lot of post transaction service levels required any investments to prepare the businesses to stand alone or some of dissynergies, I suppose? Thanks.

1h 1m 7s

I'd like take that one, Julia.

1h 1m 9s

Well, we're working through the separation work streams. As is typical with these types of separations, the there's certain costs that will travel with the businesses. And there's certain costs that could potentially get left behind. But we'll navigate that. We know how to do that, and we're confident we'll get it sorted out. And certainly treating fiscal year twenty twenty six as a transition as we as migrate over. We don't envisage any significant onetime costs as we plan for the separation. [indiscernible] We will now go to our next question. Please stand by. And the next question comes from the line of Dylan Jones from Kepler Cheuvreux. Please go ahead. Your eyes are open.

1h 2m

Morning, Rollins.

1h 2m 1s

Morning, Julian. Thanks for taking my question.

1h 2m 4s

Just a few quick follow ups. Most of mine have been asked, might ask one by one. So on interconnect, perhaps just asking a slightly different way in terms of the semi end market. Do you have a sense of where the sort of semi volumes are compared to historic levels?

1h 2m 20s

So a little bit more color on semiconductors. So the semiconductor market segments into many different end uses. And we're still seeing relatively soft end market performance through automotive, industrial. And where we're seeing the growth and the strength is in that kind of high end, high performance GPU end of the market. A lot of that performance is value driven. And therefore the volumes whilst up don't reflect and mirror the value growth that's sitting particularly in those AI chips. But as I said before, we're really well positioned The technology we have with the da Vinci product is very strong. And we're getting a win and designed into many the advanced programs that are out there. So we're pleased with how we're doing.

1h 3m 13s

Got it. Thanks for that. And you obviously announced this result the acquisition of DocPac. Just wondering if there's sort of any update you can sort of give on the M and A pipeline? And also just kind of interested in sort of commentary around, I suppose, the capacity for more M and A. And by that, I obviously don't mean balance sheet. I'm sort of talking about there's a number of sort of initiatives going on at the group, sort of the three acquisitions announced recently, the Accelerate program and obviously the demergers as well. So just interested in your thoughts around that as well. [indiscernible] No, thank you for that. I mean, we're very excited to welcome Duck into the Smiths family. It's a continuation of accelerating our organic and inorganic drive with flexible ducting and metal ducting as well. This is a very successful process that we have for for bringing these mainly family owned businesses, which we managed to acquire for very reasonable multiples and bringing in into the business and garnering the synergies that are available to us So it's a very well laid out playbook. It's a specific team in construction that does that, which is very helpful because they really know how to do this.

1h 4m 31s

It's a well oiled machine. We have made the other acquisitions in other parts of Flex Tech. Again, that's gives us the bandwidth around that as well. So it gives us the bandwidth, the heat acquisition in Wattco. Using the same playbook but different team. And so we're keen to continue with these bolt on acquisitions. We love these bolt on acquisitions. I think seen the track record and the compounding effect that that has for us. So we will continue with that. We have a very active and focused pipeline. We always said, you recall, we have a very active pipeline with different types of acquisition. We are very focused on the bolt ons. We always said we were more focused on and John Crane, which could have given you an idea of where our thinking was was always going. So that continues and continues at with pace and purpose. The The other aspects, you talked about bandwidth, Obviously, the demergers are focused on a different part of the business. And we have a dedicated team at Centre to support that. So we're comfortable with that. And then the AP plan, if you recall what we're said, it was always two thirds is focused on of the remainder is focused on John Crane.

1h 5m 49s

So substantial part focus on John Crane is probably the simplest way of doing that. [indiscernible] less so. And so they've got plenty of bandwidth there as well. And we acted on John Crane if as you can see, very quickly. So, a significant proportion of their acceleration plan is now bedding in as it were. So we'll see that continuing. Yes, are we busy? Absolutely, but we do have focus and different teams on those things. So, feel confident we can continue with those lines, mainly on bolt on, although I would suggest we that's where our sweet spot is at the moment.

1h 6m 30s

I'd just add disciplined capital allocation. We've said it, we invest our capital organically and the AP is a good example of what we're doing there. Bolt ons is working nicely for us. And then, of course, the use of capital to return to shareholders and most notably through the share buyback.

1h 6m 53s

Got it. No, thank you for that. And just one more, if I can squeeze one more in. Just following up on the divestments. I mean, you provided a bit of an update sort of saying that process has commenced it's on track. I think at the time of announcing this, strategic shift, you sort of alluded to it. You expect a strong interest. I'm just wondering if there's any sort of updated commentary now that the process has commenced around the sort of level of interest that you're seeing in particularly the Internet connect business, but also the detection business at this point?

1h 7m 22s

Julian, perhaps you'd like to answer that one.

1h 7m 24s

I mean, again, I think you'll understand best that we don't give the running commentary. But let's just say, process running as we expect on time on pace, and we're confident we'll transact as we committed.

1h 7m 42s

Got it. Thank you.

1h 7m 47s

As there are no further questions, I would now like to hand back to the room for any closing remarks.

1h 7m 52s

Thank you. Thank you very much, and thank you for all the questions today and hopefully we answered that. So essentially, we're very pleased with the financial performance and the outlook and at which we're reconfirming. As Julian said, disciplined capital allocation, of which that $05,000,000,000 buyback and the bolt on acquisitions are two of those levers. We're very comfortable in using all the levers of of disciplined capital allocation. The medium term targets, think we are very excited about future Smiths and I think the medium term targets are ambitious but with focus and resilience, we're confident that we can hit those and really give ourselves that premium rating that Smiths deserves. And as we said the strategic actions are in flight and they are executing against the plan exactly as we expected. So thank you very much for your time. Ladies and

Key Insights

SMIN delivered strong first half results for FY25, with 9.1% organic revenue growth (10.2% including acquisitions), 12.6% organic operating profit growth, and a 14% EPS increase; full-year guidance of 6-8% organic revenue growth and 40-60bps margin expansion reaffirmed.
The company is executing a strategic portfolio shift: focusing on John Crane and FlexTech (core businesses), while initiating the separation of Smiths Interconnect (via sale) and Smiths Detection (via demerger or sale); £500m share buyback program underway, with £150m completed and the remainder to finish by year-end.
John Crane saw 3.8% organic revenue growth, impacted by a cyber incident (1-2 percentage point headwind), but is expected to recover in H2; FlexTech grew 2.5% organically (plus 4.4% from acquisitions), with continued bolt-on M&A and a robust outlook, especially in aerospace and industrial heat.
Smiths Detection posted 15.3% organic revenue growth, driven by aviation (28.7%) and strong order book visibility for the next 2-3 years; Smiths Interconnect delivered 26.8% organic revenue growth, led by semiconductor test and defense, with over half of its business now defense-focused.
New medium-term targets for "Future Smiths" (post-separation) include 5-7% organic revenue growth, >10% EPS growth, operating margins of 21-23%, ROCE >20%, and ~100% cash conversion; the acceleration plan is expected to deliver £40-45m annualized benefits for £60-65m in costs, with most benefits accruing to the retained businesses.

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Smiths Group delivered strong H1 growth, reaffirmed guidance, and accelerated portfolio transformation.

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Thank you. Be announced.

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Okay.

40m 22s

Thank you.

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Thank you. We will now go to our next question. Please stand by. And the next question comes from the line of Christian Hinderaker from Goldman Sachs. Please go ahead.

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Thank you. And then a final one, just are you able to clarify the SES contribution to profitability in the bridge for the half?

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Thank you.

46m 51s

You very much.

46m 53s

Thank you. We will now go to our next question. Please stand by. And the next question comes from the line of Martin Wilkie from Citi. Please go ahead. Your line is now open.

47m 7s

47m 44s

48m 54s

Let me hand that one to Julian because this that really is his baby. So Julian? From the past.

49m 1s

49m 28s

Great. Thank you very much.

49m 31s

Thank you. Will now take our next question. Please stand by. And the next question comes from the line of Mark Davies Jones from Stiff Please go ahead. Your line is now open.

49m 43s

50m 5s

Okay.

50m 7s

51m 32s

But there will be another OE coming through. After that and most likely in the whole baggage area as well.

51m 39s

Okay.

51m 40s

52m 2s

52m 23s

Okay. Thank you. Understood.

52m 27s

Thank you. We will now go to our next question. And the next question comes from the line of Stefan Klepp from HSBC. Please go ahead. Line is open.

52m 43s

53m 25s

Yes.

53m 26s

And it so let me have Julian answer the 1% to 2% Is that Smiths or is that group? I'll talk about order intake and outlook. So want to Yes. So the 1% to 2% impact was on John Crane in the first half.

53m 50s

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55m 59s

56m 40s

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57m 46s

Yes. Thank you so much.

57m 49s

Thank you. We will now take our next question Please stand by. And the next question comes from the line of Andrew Sims from Berenberg. Please go ahead. Your line is now open.

58m 2s

58m 21s

58m 46s

1h 10s

1h 42s

1h 1m 7s

I'd like take that one, Julia.

1h 1m 9s

1h 2m

Morning, Rollins.

1h 2m 1s

Morning, Julian. Thanks for taking my question.

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1h 7m 22s

Julian, perhaps you'd like to answer that one.

1h 7m 24s

1h 7m 42s

Got it. Thank you.

1h 7m 47s

As there are no further questions, I would now like to hand back to the room for any closing remarks.

1h 7m 52s

Key Insights

SMIN delivered strong first half results for FY25, with 9.1% organic revenue growth (10.2% including acquisitions), 12.6% organic operating profit growth, and a 14% EPS increase; full-year guidance of 6-8% organic revenue growth and 40-60bps margin expansion reaffirmed.
The company is executing a strategic portfolio shift: focusing on John Crane and FlexTech (core businesses), while initiating the separation of Smiths Interconnect (via sale) and Smiths Detection (via demerger or sale); £500m share buyback program underway, with £150m completed and the remainder to finish by year-end.
John Crane saw 3.8% organic revenue growth, impacted by a cyber incident (1-2 percentage point headwind), but is expected to recover in H2; FlexTech grew 2.5% organically (plus 4.4% from acquisitions), with continued bolt-on M&A and a robust outlook, especially in aerospace and industrial heat.
Smiths Detection posted 15.3% organic revenue growth, driven by aviation (28.7%) and strong order book visibility for the next 2-3 years; Smiths Interconnect delivered 26.8% organic revenue growth, led by semiconductor test and defense, with over half of its business now defense-focused.
New medium-term targets for "Future Smiths" (post-separation) include 5-7% organic revenue growth, >10% EPS growth, operating margins of 21-23%, ROCE >20%, and ~100% cash conversion; the acceleration plan is expected to deliver £40-45m annualized benefits for £60-65m in costs, with most benefits accruing to the retained businesses.

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