Rotork LON: ROR reported 2025 full-year results that management said reflected continued progress under its Growth+ strategy, with organic constant currency (OCC) order growth of 6% and expanding profitability despite mixed end markets and late-year project deferrals in oil and gas.
Orders, revenue and margins
Orders received were £783 million, up 6% year-over-year on an OCC basis, with all divisions delivering growth. Revenue totaled £777 million, rising 3.7% on an OCC basis and 3% on a reported basis. Chief Financial Officer Ben Peacock said foreign exchange translation created a £15.9 million headwind to reported revenue.
Adjusted operating profit was £191.5 million, up 10% OCC, and the adjusted operating margin increased to 24.6%, up 140 basis points on an OCC basis. Peacock said mix and operating leverage supported margin expansion, and that price increases more than offset salary inflation. On a reported basis, the group faced a £6.1 million currency headwind to operating profit, reducing reported margin progression by about 30 basis points.
Adjusted earnings per share were £0.17, up 6.9% on a reported basis. Return on capital employed increased to 38.4%. Rotork proposed a full-year dividend of £0.083 per share, up 7.1% from the prior year.
Cash flow, balance sheet and capital allocation
Rotork generated operating cash conversion of 101%, down from the prior year due to increased working capital from delivery phasing in the second half. Working capital to sales was 26.8%. Free cash flow was £106.8 million, lower than the prior year, reflecting working capital investment and higher business transformation costs.
Net cash ended the year at £65 million. Peacock said the decrease was expected given capital deployment during the year, including a £40 million acquisition and £60 million of share buybacks. Year-end net cash comprised £110 million of cash and cash equivalents, offset by £23 million of lease liabilities and £22 million of borrowings under the group’s £75 million revolving credit facility.
Management said it returned £67 million via dividends and £60 million via buybacks during 2025. The company also noted £2 million of contingent consideration related to the Noah Actuation acquisition, bringing the total acquisition cost to £42 million.
Alongside results, Rotork announced the disposal of two “small non-core” businesses for a combined £24 million, which management said had 2025 sales of £15 million.
Division performance and key end-market drivers
Rotork highlighted target segment revenue growth of 8% OCC for the year and said Rotork Service continued to gain share, representing 24% of group sales, up from 23% in the prior year.
- Oil & Gas: Divisional sales grew 0.6% OCC. Peacock said target segment growth was strong, particularly in upstream electrification and LNG, but midstream revenues were softer in the second half due to customer-driven project deferrals late in the year. Adjusted operating profit rose 9.1% OCC to £97.6 million, and adjusted operating margin improved 200 basis points, which management attributed to electric actuator mix, service contribution, and operational efficiencies.
- CPI: Revenue increased 7% OCC. Noah Actuation contributed to CPI results post-acquisition, adding 4% to divisional sales in the period, and contributed £11.2 million of group revenue. Adjusted operating profit rose 9.9% OCC to £58.2 million, with margins up 70 basis points to 26.1% due to higher volumes. Management pointed to improving momentum through the year and strong performance in the Americas.
- Water & Power: Sales grew 6.1% OCC, with power growing slightly faster than water. Adjusted operating profit was £58 million; excluding FX headwinds, profit was up 6% OCC. Margins were slightly lower at 28.6% as mix effects and higher investment offset the benefit of higher volumes.
Strategy updates: target segments, service and product initiatives
Chief Executive Kiet Huynh said Growth+ has helped deliver record revenues and strengthened margins since its 2022 launch, with group revenues increasing at an 8% compound annual growth rate over the period. He said the company does not view “mid-20s%” operating margins as a ceiling over the medium to long term.
Management emphasized three structural trends: automation (with only about a quarter of industrial valves estimated to be automated), electrification (electric actuators about 55% of Rotork sales), and digitalization (with connected products offered since 1986). The company said it increased commercial investment by nearly 60% across sales, strategy and business development since launching Growth+, and cited an improved Net Promoter Score and acceleration in new product development.
In Q&A, Huynh said target segments performed “really strongly” and that the target end markets set out at the company’s prior investor updates had not changed, though he said carbon capture and hydrogen “haven’t gone as well” as originally expected. He also said Rotork walked away from several potential acquisitions during 2025 due to pricing, while describing the M&A pipeline as “really good” and noting interest in bilateral deals with private-owned businesses.
Outlook and 2026 guidance items
For 2026, management said it expects continued momentum in target segments and Rotork Service, with mixed underlying end markets. In oil and gas, Rotork expects stable performance with a higher second-half weighting, citing subdued upstream and midstream expectations and stable downstream markets. CPI is expected to continue growing based on automation, electrification, and digitalization tailwinds, while broader process markets remain subdued. For water and power, Rotork said it expects robust demand in water infrastructure and continued recovery in power end markets.
Peacock provided additional 2026 guidance items, including a neutral year-on-year sales impact from foreign exchange at current rates, capital expenditure of £15 million, and £25 million of investment in the business transformation program due to phasing changes. He also said the company expects to complete the remaining portion of its current share buyback by the end of the first half.
Management noted its outlook commentary did not include direct or indirect impacts from recent events in the Middle East, which Huynh said accounts for around 10% of sales, adding that it was “too early” to provide an update on potential impacts. He said Rotork’s immediate focus has been employee safety and that the company’s staff in the region were safe.
About Rotork LON: ROR
Rotork is a market-leading global provider of mission-critical intelligent flow control solutions for oil & gas, water and wastewater, power, chemical process and industrial applications. We help customers around the world to improve efficiency, reduce emissions, minimise their environmental impact and assure safety. Rotork employs about 3,200 people, has manufacturing facilities in more than 17 locations and serves 170 countries through a global service network. Its shares have a premium listing on the London Stock Exchange symbol: ROR and are a constituent of the FTSE 250 index.
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