Annual General Meeting Charlton House, Cheltenham 9 th May 2017 - - PowerPoint PPT Presentation

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Annual General Meeting Charlton House, Cheltenham 9 th May 2017 - - PowerPoint PPT Presentation

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> ENGINEERING SUSTAINABLE VALUE > Annual General Meeting Charlton House, Cheltenham 9 th May 2017 Bill Nicholas Trudy Neil Kevin Jane Jay Clive Jamie Andy Whiteley Anderson Schoolenberg Daws Boyd Kingston Whalen Watson

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0 Annual General Meeting May 2017

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Annual General Meeting

Charlton House, Cheltenham 9th May 2017

Nicholas Anderson Bill Whiteley Jamie Pike Kevin Boyd Neil Daws Jay Whalen Trudy Schoolenberg Clive Watson Andy Robson Jane Kingston

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1 Annual General Meeting May 2017

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2016 Results

Delivering a strong performance in challenging markets

2016 2015 Reported Organic⁺ Revenue £757.4m £667.2m +14% +4% Operating profit* £180.6m £152.4m +18% +8% Operating profit margin* 23.8% 22.8% +100 bps +80 bps Pre-tax profit* £177.9m £151.1m +18% EPS* 171.5p 142.6p +20% DPS 76.0p 69.0p +10%

  • Organic sales increased 4%
  • Record operating margin 23.8%
  • Another excellent performance in Watson-Marlow
  • Robust cash generation, 101% cash conversion
  • Full Year dividend increased by 10%

⁺ Organic measures are at constant currency and exclude acquisitions and disposals. * Adjusted profit measures.

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Sales growth 2011-2017E*

  • 8.0
  • 4.0

0.0 4.0 8.0 12.0 16.0 20.0 24.0 2011 2012 2013 2014 2015 2016 2017E* Sales growth % Organic Acq'n/Disp Exchange Reported * 2017E = BAML estimate 03/04/2017

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Global IP growth vs. organic sales growth

2011-2017E*

2 4 6 8 10 2011 2012 2013 2014 2015 2016 2017E* Growth rate %

Global IP Growth Group Organic Growth

* 2017E = BAML estimate 03/04/2017

Industrial Production data - Global Industrial Production Watch, CHR Economics

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4 Annual General Meeting May 2017

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Investing for growth

Clean Steam Facility, Cheltenham, UK

  • 1,200m² manufacturing facility for the

production of clean steam components for the Pharma, Healthcare and F&B industries

  • ISO Class 7 Cleanroom
  • Offers customers full traceability of products

and certified validation of materials used

  • 70% uplift in product unit sales by volume

March-Dec 2016, compared with the same period in the prior year

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5 Annual General Meeting May 2017

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Investing for growth

State-of-the-art manufacturing facility, India

  • June 2016, opened manufacturing, training

and office facilities

  • Sales growth; good progress, in line with our

expectations

  • Good progress expanding the range of

locally manufactured products with local certifications (IBR)

  • Sales offices in: Chennai, Mumbai, New

Delhi, Kolkata and Baroda

  • Sales engineers in Bangalore, Pune and

Chandigarh

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6 Annual General Meeting May 2017

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Investing for growth

State-of-the-art manufacturing facility, India

http://www.spiraxsarcoengineering.com/AboutUs/Pages/media.aspx

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7 Annual General Meeting May 2017

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Investing for growth

Spirax Sarco Academy

  • Established to enhance and accelerate the

learning and development programmes of the Steam Specialties business

  • Aim: to underpin growth
  • Establishing global standards, syllabus and

training materials

  • Real world assessment system
  • Its own governance structure and budget
  • Developing knowledge and capabilities;

enhancing customer value

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8 Annual General Meeting May 2017

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Investing for growth

New product development

Product launches in 2016 include:

  • Spirax Sarco: STAPS ISA100 Wireless

Steam Trap Monitor and FT62 High Pressure Float Trap

  • Watson-Marlow: MasoSine Certa™

pump range; Qdos 120 pump; and Watson-Marlow 530 and 630 pumps Q1 2017:

  • Watson-Marlow Quantum pump
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Investing for growth

Geographical expansion in 2016

* Operating units include operating companies, branches and Associate December 2016, a new WMFTG operating company began trading in Canada December 2016, a new WMFTG

  • perating company began trading

in Ireland November 2016, we acquired Aflex Hose Ltd and its subsidiary Aflex Hose USA LLC January 2016, a new Spirax Sarco operating company began trading in Vietnam July 2016, we purchased the assets of a Brazilian process control valve manufacturer, Hiter

Serving customers in over 110 countries

Operating units*

(44 countries)

Sales offices

(+14 countries)

Distributors

(+58 countries) June 2016, opened state-of-the-art Spirax Sarco manufacturing facility in Chennai, India

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10 Annual General Meeting May 2017

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Investing for growth

Aflex Hose Ltd, UK - November 2016

  • Acquired Aflex Hose Limited and its

subsidiary Aflex Hose USA LLC (Aflex) for £61.4 million

  • Design and manufacture of PTFE-lined

flexible hoses for the Pharmaceutical, Food, Chemical and Automotive industries

  • Highly synergistic with WMFTG’s fluid path

product portfolio

  • Expands WMFTG’s addressable market
  • 2016 net sales of £24 million, underlying

EBITDA of £6 million.

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11 Annual General Meeting May 2017

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Investing for growth

Gestra AG, Germany – May 2017

  • Acquired Gestra AG and associated

businesses for €186 million (£160 million)

  • Leader in advanced industrial boiler control

systems, designs and produces valves and controls for steam and fluid process control

  • Highly complementary to the Steam

Specialties business

  • Reinforces Customer first growth strategy
  • 2016 revenue of €92.5 million (£80 million)

EBITDA of €16.6 million (£14 million)

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Investing for growth

Gestra integration plan

  • Operate as an independent division of

Spirax Sarco

  • Promote Spirax Sarco and Gestra brands to

steam customers (dual brand strategy)

  • Apply strong sector focus; key to success
  • Retain Spirax Sarco and Gestra product lines
  • Develop new and improved products
  • Increase competitiveness through supply

chain improvements

  • Retain and develop Gestra employees
  • Add sales people to further globalise Gestra
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13 Annual General Meeting May 2017

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Awards and achievements

  • Spirax-Sarco Engineering plc voted top of its sector (Engineering and

Machinery)

  • Recognised as Britain’s 6th Most Admired Company
  • Peer review by senior executives from 250 companies, in 25 sectors,

and analysts from leading City investment firms

  • Criteria include: quality of management; financial soundness; quality
  • f goods and services; ability to attract, retain and develop top talent;

value as a long-term investment; innovation; and community and environmental responsibility

  • Watson-Marlow Ltd and BioPure Technology Limited have together been

honoured with a Queen’s Award for Enterprise: International Trade 2017

  • The award recognises the companies’ outstanding combined growth of over 75%

in overseas sales over the 5 year judging period

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14 Annual General Meeting May 2017

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Any questions?

Steam Training Centre, Spirax Sarco Mexico