Spirax Group's H1 2026: Outperforming IP, Digital and Decarbonization Gain Traction

H1 2026: Outperforming in a Weak Macro

Spirax Group reported a resilient set of first-half results on 11 August, delivering 5% organic sales growth and 6% organic profit growth, well ahead of industrial production (IP) of 1.5%. CEO Nimesh Patel emphasized the strength of the company's execution under its order book and demand growth strategy.

We continue to grow well ahead of IP. We are carrying strong order books and order momentum into the second half, and we remain confident in delivering on our reiterated guidance for the full year.

The group's three businesses all contributed to the growth. ETS delivered 11% organic sales growth, with margin up 220 basis points to 17.2%, helped by operational improvements and a favorable mix, including Heat Trace. Watson-Marlow grew 7% organically, with biopharm order intake reaching the highest quarterly level since the COVID-related peak. STS grew 1% but saw demand growth over 2x IP, with China's decline moderating to -1% versus -6% a year ago. The company's focus on self-generated demand is increasingly offsetting a weak macro backdrop, with IP forecasts revised downward for both halves.

Digital and Decarbonization: The Next Growth Engines

Patel highlighted the company's progress in digital and services, particularly the rollout of connected steam traps. Spirax now has 19,000 connected traps across 2,350 customer sites, with an ambition to reach 100,000. “Our ambition is to grow beyond the 19,000 traps, firstly, to 100,000, but then also recognizing that this number is only part of our growing installed base and a fraction of the industry's installed base.” — Nimesh Patel, Group CEO · 2026-08-11 This digital capability is creating significant pull-through revenue and strengthening customer partnerships. The company also sees growing opportunities in data centers across all three businesses, from liquid-cooled load banks to freeze protection and specialist hoses.

Margins, Cash, and Guidance

Group adjusted operating margin improved to 19.8%, and CFO Louisa Burdett noted that “Group performance in the first half was in line with our expectations and sets us up well to deliver our full year guidance.” — Louisa Burdett, Group CFO · 2026-08-11 She also added, “We delivered mid-single-digit revenue growth, increasing 5% organically, well ahead of IP and with growth in all 3 businesses.” — Louisa Burdett, Group CFO · 2026-08-11 Cash conversion came in at 54% due to planned inventory builds, but the company expects to reach ~90% for the full year. Net debt-to-EBITDA was 1.6x, temporarily above the target range of 1-1.5x, but deleveraging is expected by year-end.

Looking ahead, management reiterated its full-year guidance and expressed confidence in reaching its medium-term margin targets of 22-23%. The company also revisited its capital allocation framework, with M&A remaining a possibility for bolt-ons, and buybacks contingent on leverage and opportunity. As Patel put it in the 2024 call, “We have no intention of building at this time a fourth leg to the portfolio.” — Nimesh Patel, CEO · 2024-03-07 That stance continues, but the current results suggest the existing three businesses are delivering.

The prior year's interim results had a more cautious tone, with Louisa noting in August 2025, “We continue to expect organic growth in group revenue in line with 2024.” — Louisa Sachiko Burdett, Group CFO · 2025-08-12 Now, with stronger momentum, the company is more confident in its ability to sustain growth ahead of IP and invest for the long term.