Adapting for tomorrow’s world...
...delivering our strategy
Welcome to our 2025 Annual Report
Our Together for Growth Strategy builds on our unique business model.
It is designed to help us meet the evolving needs of our customers and enables us to adapt for continued growth in this more volatile and uncertain economic environment.
We do this by focusing on operational priorities that are within our control to enhance our sales, manufacturing and organisational effectiveness, driving growth and margin improvement. Through leveraging the power of the Group we are working differently, by simplifying how we operate and evolving our capabilities to deliver efficiencies that generate savings. These savings are being reinvested in targeted areas to capture the significant, compounding and long-duration organic growth opportunities ahead.
In 2025, our first full year of strategy delivery, we set clear priorities, adapted to external challenges and stayed focused on driving the actions within our control to sustain momentum and deliver against our commitments.
Leadership updates
Our performance in 2025
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£1,702.9m Revenue
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5.0% Organic revenue growth†
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£339.9m Adjusted operating profit*
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20.0% Adjusted operating profit margin*
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296.3p Adjusted earnings per share*
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£265.4m Statutory operating profit
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15.6% Statutory operating profit margin
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221.7p Statutory earnings per share
* Adjusted measures exclude certain items as set out and explained in the Group Chief Financial Officer’s Review and in the Appendix to the Consolidated Financial Statements.
Why we’re evolving
In today’s ever-changing, fast-paced world, our customers’ needs are continuously evolving and we are well placed to meet those needs.
Global trends driving our Vision…
800m+ people
entering the middle class population, with higher spending and increasing consumption leading to increased demand for process efficiency, productivity improvements and capacity expansion projects.
>5%
of global carbon emissions have the potential to be addressed through our full suite of decarbonisation solutions offered through the complementary expertise of our STS and ETS Businesses.
65+ years
is the expected age of one in six people by 2035, almost doubling this global population requiring increased healthcare provision, fuelling innovation in the Biopharm sector, which accounted for 17% of Group sales in 2025.
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9.7 billion
is the projected global population by 2050* with changing lifestyles driving consumer choices in technology, sustainability and health, which supports growth in key sectors such as Semiconductor, Datacentres, EV Batteries and Sustainable Food.
* Data source: United Nations, Department of Economic and Social Affairs, Population Division (2024), World Population Prospects 2024, Online Edition.
…create significant growth opportunities
Addressing our customers’ resource efficiency and sustainability needs has expanded our annual addressable market by 60%, compared to 2023.
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Future expansion of our addressable market
We expect our annual addressable market to expand further linked to IP-related growth, high growth in our target sectors and pricing.
Decarbonisation of thermal energy, beyond steam
Solutions we refer to as PoweringZero add ~£5 billion to our annual addressable market as we continue to deploy our Low Voltage and Medium Voltage solutions in target sectors and regions to support the electrification of critical industrial processes that currently rely on the direct burning of fossil fuels today. This number assumes adoption over multiple years.
Electrification of steam generation
Solutions we refer to as TargetZero add ~£2 billion to our annual addressable market. This opportunity is sized on 2024’s installed base of fuel-fired boilers in our target sectors and regions and an assumption of adoption over multiple years constrained by factors such as customer appetite to invest, availability of green electricity and grid transmission capacity.
How we're adapting
Our Together for Growth Strategy supports growth today and for the future.
Through the strategy we are building on the unique strengths of our business model, adapting to meet changing customer needs and drive demand growth in today’s more volatile and uncertain economic environment.
Leveraging the power of the Group, we are addressing operational priorities that enhance our sales, manufacturing and organisational effectiveness.
As we reinvest savings from efficiencies in targeted areas of growth, we are strengthening our positioning to capture the significant compounding and long-duration organic growth opportunities ahead.
Together for Growth, means:
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Putting the customer at the centre of everything that we do
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Identifying opportunities within our control and taking ownership to deliver
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Simplifying how we work, removing barriers and improving collaboration to become more effective and efficient
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Evolving our capabilities to capture significant opportunities
We achieve this through five Growth Drivers:
Our global direct sales force and local customer relationships are the core of our business model and key differentiators.
We are investing in the capability of our sales colleagues to better serve customers, meeting their evolving needs, to expand and capture our addressable market opportunity.
Our regional manufacturing facilities are strategically positioned close to our sales operating companies to deliver high levels of customer service and maintain agility in our supply chain.
We are focused on continuous operational improvements, reinvesting the benefits to support future growth.
Our local presence in the countries we serve enables us to better understand and meet customers’ needs.
We are connecting colleagues to leverage our global presence and scale and simplifying the way we work to better serve our customers.
Our relationships, technical expertise and data-driven insights are the basis of our deep customer understanding.
We are focused on being highly connected with our customers throughout their process and product lifecycles to anticipate their needs and build enduring customer partnerships.
Our combined steam and electric expertise and innovative solutions uniquely position us to decarbonise our customers’ thermal energy use.
We are investing in our decarbonisation technology and capability to capture the significant market opportunity from helping customers meet their efficiency and sustainability targets.
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Adapting to control the controllables
Our colleagues are adapting to the ongoing market challenges, demonstrating the ways in which we are focusing on our operational priorities and taking actions within our control to drive growth.
We are making targeted investments and demonstrate the progress we are making towards capturing the significant opportunities we see, particularly from our Growth Drivers of Digital and Services and Decarbonising Thermal Energy.
Our unique business model is foundational to our long track record of mid-single-digit organic sales growth at close to 2x IP, mid-to-high-single-digit organic profit growth and strong EPS growth.
Our Together for Growth Strategy builds on this to sustain and accelerate compounding organic growth and returns on capital through operational priorities that enhance our sales, manufacturing and organisational effectiveness to meet our customers’ evolving needs.
Through leveraging the power of the Group, we are delivering efficiencies that generate savings, enhance margin and fund investment into targeted areas to capture the significant compounding organic growth opportunities we see ahead.
Strategy in action: Commercial Excellence and Operational Excellence
The rapid expansion of the Datacentre sector is transforming the industrial landscape and is a major growth area for our Electric Thermal Solutions (ETS) Business. Datacentres underpin the digital economy, supporting everything from cloud computing to AI-driven applications. ICF, a global consulting and technology firm, predicts that by 2030 up to 25% of USA power production could be consumed by AI datacentres and related industries, reflecting a dramatic surge in electricity demand.
Watch our colleagues Kelly Wade and Abdul Butt explain how the rapid expansion of datacentres is transforming the industrial landscape for our ETS Business.
From hot demand
to cool delivery...
...how ETS is unlocking sustainable
demand from Datacentres.
Read more Strategy in action: Organisational Fitness
In 2025, Watson-Marlow Fluid Technology Solutions (WMFTS) EMEA undertook a significant structural transformation as part of the Group’s Organisational Fitness Growth Driver. This shift, which adapted the sales structure from a geographic model to one centred on the Biopharm or Process Industries sectors, has delivered immediate and measurable impact by sharpening commercial focus and enabling deeper market penetration across Europe.
Watch our colleagues Basia Kielska and Gabriel Polato reflect on the significant structural transformation in WMFTS EMEA.
Strategy in action: Digital and Services
Our ongoing investment in Digital and Services is strengthening customer value creation and opening new avenues for sustainable organic growth across the Group.
By remaining highly connected with customers and embedding ourselves more deeply in their process and product lifecycles, we are building long-term, insight-driven partnerships that anticipate challenges earlier and deliver measurable operational improvements, as well as efficiency savings.
Watch our colleagues Maria Wilson and Alessandro Zazzarelli explain how Digital is augmenting the expertise, physical services and solutions provided by our Businesses. With Steam Thermal Solutions leading the way.
From point‑in‑time
to real time…
…how STS is turning digital insight into operational improvements for customers.
Read moreBuilding on the strong foundations of our business model…
Understanding customer needs so we can solve their problems has long been at the heart of our strong and differentiated ‘Customer Solutions’ business model. Since establishing our Vision in 2024, we have been on a journey to evolve our model to one of ‘Customer Partnership’ that enables us anticipate our customers’ needs and meet these through the implementation of our Together for Growth Strategy.
At the core of this are our ~2,900* direct sales and service engineers who serve our customers through building close, local relationships that focus on consultative solution-selling and pricing based on the customer’s economics.
* Includes technical application engineers and inside sales.
…as we adapt to evolve for the future
Our evolving sales model, explained below is how we are maintaining and building on our competitive advantage to drive growth.
Our local direct sales presence underpins our close customer relationships. Through being even more highly connected with customers, both physically and digitally, we will move from point-in-time sales to more frequent and even continuous engagement.
How we are making progress
We launched CONNECT, our proprietary IIoT platform, with applications that help customers better understand the performance of their critical processes by accessing real-time operational data, insights, predictive analytics and sustainability metrics.
Our deep process insight and technical expertise deliver solutions that enhance our customers’ efficiency, safety and sustainability. Through digitally led, data-driven insights we will deepen our understanding of customers’ specific and critical needs to serve them better.
How we are making progress
We are investing in Digital and Services to strengthen customer value creation and generate new avenues of sustainable growth. One customer, a network of private hospitals, has improved its thermal energy management reliability and resilience through tripling the number of digitally connected steam traps providing real-time performance visibility delivered by our Steam Trap Monitoring solution.
Our wide product range underpins our tailored approach to improving the efficiency of customers’ discrete processes. Through an expanded and holistic understanding of our customers’ needs, across multiple processes, we will elevate our optimisation solutions to system and plant level.
How we are making progress
We developed our integrated thermal energy assessment operating model and go‑to-market strategy that combines our steam and electric thermal expertise in holistic plant assessments, delivering energy efficiency and sustainability roadmaps. During the year we completed multi-site assessments identifying cost savings and carbon emissions reductions for a leading global drinks brand.
Our customers rely on our ability to react quickly to their needs and maintain their critical production processes. Through deeper insights and continuous engagement, we will proactively identify their needs, delivering a more seamless service and building enduring partnerships.
How we are making progress
We have made changes to deliver a smoother, more connected service at every stage of the customer journey. A sharper sector focus, streamlined regional structures and closer collaboration between sales and manufacturing are creating a more seamless end-to-end customer experience.
Our applied engineering skills are critical to solving customers’ problems. Through building on our design engineering capability we will deliver the more bespoke solutions that our customers will require in the future.
How we are making progress
We are driving value for customers in numerous different ways through our design engineering capabilities, especially in ETS, where we are meeting strong demand for bespoke heaters. During the year, a cross-functional ETS team developed a custom temperature control solution for a datacentre focused OEM customer, enabling shipment at scale within the year.
Long-duration compounding growth
Building on our performance through Together for Growth...
Our unique business model comprising three powerful engines of growth, each with durable competitive advantage, is foundational to our long track record of:
- Mid-single-digit organic sales growth at close to 2xIP¹
- Mid-to-high-single-digit organic profit growth
- Strong Earnings Per Share (EPS) growth
Our Together for Growth Strategy builds upon this to drive compounding organic growth and improving returns on capital by focusing on operational priorities that will support the delivery of our medium-term targets and generate funding for targeted investments that evolve our capabilities to capture the significant opportunities we see in Digital and Services and Decarbonising Thermal Energy.
…to deliver strong shareholder returns through compounding growth
Our capital allocation framework sets out how we deploy the Group’s financial resources to deliver strong total shareholder returns. We have a clear hierarchy for the uses of capital aligned with our Together for Growth Strategy.
First, we will continue to invest in organic opportunities to strengthen our competitive position, enhance margins and generate high returns on capital employed (2025 ROCE2: 36.0%).
Second, we will maintain our long track record of dividend progress (58 years), supported by our high margin, low capital intensity business model and corresponding high cash conversion (2025: 89%).
Third, we will maintain a resilient balance sheet targeting a leverage range of 1.0x to 1.5x net debt to EBITDA3 (2025: 1.5x), recognising that we may temporarily move above the upper end as we invest through economic cycles.
We will apply a risk adjusted approach to assessing our options for the uses of additional capital to enhance earnings growth and return on invested capital (2025 ROIC4: 13.1%). These may include bolt-on acquisitions (benchmarked against alternative uses of capital) or additional returns of capital to shareholders.
1. ‘IP’: Industrial Production growth (February 2026).
2. Return on capital employed (ROCE) measures effective management of fixed assets and working capital relative to the profitability of the Group. It is calculated as adjusted operating profit divided by average capital employed.
3. Net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) is calculated by adding back depreciation and amortisation of owned property, plant and equipment, software and development costs to adjusted operating profit
4. Return on invested capital (ROIC) measures the post-tax return on the total capital invested in the Group.
Delivering our strategy through focused execution
Our Group continued to focus on the operational priorities within our control, including driving growth through MRO and solution-selling, as well as delivering improvements in manufacturing throughput, particularly in ETS. We protected margins against cost inflation and tariff impacts through pricing discipline and efficiency savings, as well as completing our restructuring which will deliver annualised savings of £40 million, with approximately half realised in 2025.
Find out more about how each of our Businesses adapted to drive growth through focused priorities.
“In a challenging market environment, STS delivered a resilient performance in 2025. Strong execution across MRO, solution-selling and Commercial Excellence initiatives continued to drive growth and positions the Business well for the future.”
Maurizio Preziosa
Managing Director, Steam Thermal Solutions
-
£853.4m
Revenue
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£200.3m
Adjusted operating profit
-
23.5%
Adjusted operating profit margin
-
60
Operating units
“2025 marked a year of strong progress for ETS, driven by operational improvements, a recovery in Semicon demand and major wins in attractive end markets. The successful completion of our Medium Voltage facility in Ogden, USA, provides a solid platform to support continued growth.”
Andrew Mines
Managing Director, Electric Thermal Solutions
-
£441.3m
Revenue
-
£71.3m
Adjusted operating profit
-
16.2%
Adjusted operating profit margin
-
35
Operating units
“WMFTS delivered a strong performance in 2025, supported by a recovering Biopharm market and our continued focus on sector-led selling. Ongoing operational efficiencies across manufacturing and the supply chain enabled us to translate growth into improved returns.”
Stuart Roby
Managing Director, Watson-Marlow Fluid Technology Solutions
-
£408.2m
Revenue
-
£107.0m
Adjusted operating profit
-
26.2%
Adjusted operating profit margin
-
46
Operating units
More examples of strategy in action
From local insight to regional impact…
...how STS is capturing sales from China’s overseas investments.
From energy intensive to energy efficient...
…how ETS is embedding decarbonisation solutions into OEM design.
From reach to results...
...how STS is boosting growth through distributor collaboration.
From complexity to clarity...
...how WMFTS turned customer challenges into Biopharm growth.
From cultural strength to performance advantage…
…how we are sustaining High Values and accelerating High Performance.