1 / 21

Front cover

Front cover. Spirax-Sarco Engineering plc 2008 Half Year Results 30 th June 2008. Spirax-Sarco Engineering plc 2008 Half Year Results. 2008 H1 Results. Mark Vernon - Chief Executive David Meredith - Finance Director. Overview of First Half 2008. Overview.

kale
Download Presentation

Front cover

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Front cover Spirax-Sarco Engineering plc 2008 Half Year Results 30th June 2008

  2. Spirax-Sarco Engineering plc 2008 Half Year Results 2008 H1 Results Mark Vernon - Chief Executive David Meredith - Finance Director

  3. Overview of First Half 2008 Overview 2008 2007 Change Change excl XR Revenue £238.7m£200.1m +19% +12% Operating profit* £40.8m£31.6m +29% +15% Margin* 17.1%15.8% Pre-tax profit* £42.7m£33.1m +29% +15% EPS* 38.0p29.1p +31% +17% DPS 10.0p8.3p +20% • Continued strong sales growth of 19% (12% at constant currency) • Operating profit up 29% (15% at constant currency) • Good sales and profit growth from all regions • Operating profit margin improved to 17.1% (2007: 15.8%) • Interim dividend increase of 20% • Good cash flow - significant capital investment in 2008 and 2009 *Excludes amortisation of acquired intangibles of £0.8m (2007:£0.2m) of which £0.2m relates to Associates (2007: nil)

  4. Geographical analysis of revenue Segments 2008 2007 UK and ROI 11% 11% Cont. Europe 39% 38% N. America 18% 19% Asia 19% 20% Rest of world 13% 12% 100% 100% UK & Republic of Ireland 11% Continental Europe 39% North America 18% Asia 19% Rest of World: South America, Africa, Australasia 13% Sales are by geographical location of the customer

  5. Revenue changes Revenue Change 2008 increase excl XR +/-% UK and ROI +11 Cont. Europe +8 N. America +11 Asia +13 Rest of world +22 Exchange +7 +19 Continental North UK&ROI Europe America Asia ROW Exchange +£2.6m +£7.3m +£4.3m +£5.1m +£5.7m +£13.6m £m 2008 sales (by customer) £’m UK and ROI 25.1 Cont. Europe 93.4 N. America 43.0 Asia 45.2 Rest of world 32.0 238.7 Note : Sales are based on the geographical location of the customer. : Segmental splits are shown at constant exchange rates. +/- % YOY H1 Organic Sales +10% Acquisitions +2% Exchange +7% Total +19%

  6. Operating profit changes Profit Change Continental North UK&ROI Europe America Asia ROW Exchange +£1.4m* +£1.5m* +£0.9m* +£0.9m* +£0.7m* +£3.8m £m 2008 increase excl XR +/-% UK and ROI +21 Cont. Europe +9 N. America +34 Asia +12 Rest of world +25 Exchange +12 +29 Note: Segmental splits are shown at constant exchange rates. +/-% YOY H1 Operating profit +29% Operating margin 2008 17.1% Operating margin 2007 15.8% *Excludes amortisation of acquired intangibles of £0.8m (2007:£0.2m) of which £0.2m relates to Associates (2007: nil)

  7. UK & Republic of Ireland UK & ROI 2008 2007 change change excl XR Sales to customers £25.1m £22.4m +12%+11% Sales by operation* £64.9m £58.6m +11%+11% Operating profit £8.2m £7.6m +9%+21% Margin* 12.7% 12.9% • Organic sales growth in domestic market 11% • Sales focus on energy saving projects for customers and newer products • Demand on factories increased from overseas • Efficiency gains in the factories offset higher energy and material costs *Sales by operation comprise customer and intra-group sales Margin based on gross sales

  8. Spirax help UK hospital cut energy bill by 15% Case Study • Previously, six calorifiers supplied heating and domestic hot water to areas of the hospital, designed to run on waste heat from the hospital’s combined heat and power (CHP) plant.   • Spirax provided a complete turnkey solution: engineering, packaging and installation. • Spirax replaced the six calorifiers with four compact packaged heat exchangers that predominantly run on waste heat to provide hot water for heating. • The Spirax heat exchanger packages are more efficient than calorifiers and 25% of the size, are easier to control & maintain, and provide more efficient heat transfer. • Hospital calculates savings of 15%, equivalent to over £5,000 a month.

  9. Continental Europe Europe 2008 2007 change change excl XR Sales to customers £93.3m £75.7m +23%+8% Sales by operation* £117.5m £93.6m +25%+10% Operating profit £17.9m £12.1m +48%+9% Margin* 15.2% 12.9% • Market conditions were generally positive – economic environment weakening • Significant gains from stronger euro • Continued good performance overall – sales up 8% at constant exchange • Flexicon integration progressing well *Sales by operation comprise customer and intra-group sales Margin based on gross sales

  10. North America North America 2008 2007 change change excl XR Sales to customers £43.0m £38.4m +12%+11% Sales by operation* £43.8m £38.8m +13%+12% Operating profit £3.4m £2.8m +22%+34% Margin* 7.7% 7.2% • Organic sales up 11% • Good sales of traditional products • Economic background deteriorating • Profit held back by exchange • Profit up 34% at constant currency *Sales by operation comprise customer and intra-group sales Margin based on gross sales

  11. Spirax saves $4.7million for USA oil refinery Case Study • Spirax identified steam losses that resulted in millions of dollars of energy savings. • Steam trap audits by Spirax identified five problem areas:  - Improperly installed and leaking steam traps - Freezing sulphur - Water hammer problems - Wasted blowdown - Steam turbine inefficiencies • Spirax recommended engineering solutions and provided installation services resulting in reduced annual operating costs of nearly $800k in year one. • The new steam trap program reduced the failure rate from 6% to nearly 1% over five years. • $4.7 million has been saved over the past five years. 

  12. Asia Asia 2008 2007 change change excl XR Sales to customers £45.2m £39.3m +15%+13% Sales by operation* £42.0m £36.2m +16%+14% Operating profit £7.8m £6.7m +17%+12% Margin* 18.5% 18.4% • Continued overall strong performance • Organic sales up 13% • Good results in China • Generally strong currencies – notably China but exchange disbenefit in Korea *Sales by operation comprise customer and intra-group sales Margin based on gross sales

  13. Rest of the world Rest of World 2008 2007 change change excl XR Sales to customers £32.0m £24.3m +32%+22% Sales by operation* £31.7m £24.3m +30%+21% Operating profit £3.5m £2.5m +43%+25% Margin* 11.2% 10.2% • Sales up 32% (22% at constant currency) • Exchange disbenefit in South Africa but overall favourable exchange movements • Organic sales growth in nearly all markets • South America results exceptionally good • Operating profit well ahead in constant currency *Sales by operation comprise customer and intra-group sales Margin based on gross sales

  14. Financial aspects – Half Year Financial 2008 2007 change Change constant ccy Revenue £238.7m £200.1m+19% +12% Operating Profit* £40.8m £31.6m+29% +15% Margin 17.1% 15.8% Net finance income £0.8m £0.9m Associates £1.2m £0.6m Profit before tax* £42.7m £33.1m +29%+15% Tax rate (ex Assoc.)* 32.8% 34.1% EPS* 38.0p 29.1p+31%+17% DPS 10.0p 8.3p+20% • Reduced net finance income – Pensions • Pre-tax profit up 29% • Lower tax rate – profit mix • Strong EPS growth +31% • Interim dividend +20% *Excludes amortisation of acquired intangibles of £0.8m (2007:£0.2m) of which £0.2m relates to Associates (2007: nil)

  15. Cash flow Cash flow First Half First Half £m 2008 2007 Operating profit 40.131.4 Dep’n & amortisation 8.27.0 Equity settled share plans 1.1 0.8 Working capital changes (9.6) (5.5) Pension pay’t > P&L charge (0.2) (5.5) Net interest (0.1) (0.6) Taxation paid (10.8) (8.8) Net capital expenditure (8.4) (6.9) Free Cash Flow 20.2 11.9 Net dividends (16.2) (14.3) Acquisitions (12.2) (0.7) Shares issued 2.3 1.7 Cash Flow (5.9) (1.4) • Good free cash flow • Working capital up 1% (constant currency excl acquisitions) • Capex increased - China • Interest payable reduced – good cash flow • Dividends paid up 13% • Some Treasury shares reissued for options exercised

  16. Key statistics Key statistics First Half First Half 2008 2007 Net cash/(debt) £12.2m(£7.2)m Capital expend / depreciation 118%102% Amortisation acquired intangibles £0.8m£0.2m Sales per employee +7% +10% Free Cash Flow £20.2m£11.9m Operating profit margin 17.1%15.8% IAS19 Pension deficit (30th June) £47.0m£2.5m • Net cash – good cash flow • IAS 19 Pension deficit £47m at June 2008 • Higher capex in 2008 and in to 2009

  17. Spirax-Sarco Engineering plc Driving growth through excellence and innovation to create shareholder value

  18. Appendix I – Currencies Appendix I First half First half Year 2008 2007 2007 Average exchange rates Bank of England sterling index 94.4 104.4 103.3 US$ 1.99 1.97 2.00 Euro 1.30 1.48 1.46 Won 1954 1844 1858 Period end exchange rates Bank of England sterling index 93.2 105.0 96.8 US$ 1.99 2.01 1.99 Euro 1.26 1.49 1.36 Won 2082 1854 1863

  19. Appendix II – 25 Years of sales performance Appendix II Full year Sterling strengthening Sterling weakening Sales for 2003 and prior years have been adjusted to IFRS basis

  20. Appendix III – EPS & DPS performance Appendix III Full year Key EPS DPS Note: Figures exclude non-operating and exceptional items From 2004 IFRS figures used excluding amortisation of acquired intangibles

  21. Good exposure to Asia (20% sales) and peristaltics provide higher market growth Industry growth Opportunity for market share gains across product range (especially newer products) Market share gains Expanding selling opportunities into packaged engineered systems and services Market expansion Energy savings High cost of energy provides good tailwind Bolt-ons to fill product & geographical gaps, add technology and expand application range Acquisitions Spirax Sarco Growth Appendix IV – Growth Opportunities Appendix IV

More Related