Annual General Meeting Charlton House, Cheltenham 15 th May 2019 Jamie Pike Nicholas Anderson Kevin Boyd Neil Daws Peter France Caroline Johnstone Jane Kingston Trudy Schoolenberg Kevin Thompson Clive Watson Jay Whalen Andy Robson Engineering Sustainable Growth 0 Annual General Meeting May 2019
2018 Results Strong organic growth, plus full-year contribution from acquisitions • Sales growth 15%; organic 7% • Adjusted 2018 2017 Reported Organic ⁺ operating profit growth 12% Revenue £1,153.3m £998.7m +15% +7% • Adjusted Operating profit* £264.9m £235.5m +12% +12% operating margin of 23.0%; organic Operating profit margin* 23.0% 23.6% -60 bps +120 bps margin up 120 bps Net finance expense (£10.3m) (£6.4m) to 25.2% • Strong organic Pre-tax profit* £254.6m £229.1m +11% growth Tax rate* 27.6% 29.1% -150 bps • Acquisitions performing in line EPS* 250.0p 220.5p +13% with plan DPS 100.0p 87.5p +14% • Full Year dividend increased 14% ⁺ Organic measures are at constant currency and exclude contributions from acquisitions and disposals. * Adjusted profit measures. Engineering Sustainable Growth 1 Annual General Meeting May 2019
The history of Spirax-Sarco Engineering plc Celebrating the 60 th anniversary of listing and over 130 years of history On 15 th May 1959 , Spirax-Sarco Engineering Ltd listed on the London Stock Exchange. Today marks the 60 th anniversary of that listing. In 1959, shares were offered at 13s. 4d. each (67p); our • shares closed yesterday at 8,415p each. In 1958, the Company reported pre-tax profit of £285,000 ; in • 2018, we reported adjusted pre-tax profit of £255 million . The history of Spirax Sarco is a fascinating story of sustainable growth. Engineering Sustainable Growth Engineering Sustainable Growth 2 Annual General Meeting May 2019
Revenue (1968-2018) £m Adjusted Operating Profit (1968-2018) £m 1,200 300 1,000 250 800 200 600 150 400 100 200 50 £7.3m £0.9m 0 0 Adjusted Earnings Per Share (1968-2018) p Dividend Per Share (1968-2018) p 300 200 DPS Special Dividend 250 150 200 150 100 100 50 50 6.0p 0.5p 0 0 Engineering Sustainable Growth Engineering Sustainable Growth 3 Annual General Meeting May 2019
Continuing the legacy of organic growth Sales growth 2011-2018 Organic Acq'n/Disp Exchange Reported 32.0 28.0 24.0 20.0 Sales growth % 16.0 12.0 8.0 4.0 0.0 -4.0 -8.0 2011 2012 2013 2014 2015 2016 2017 2018 Engineering Sustainable Growth 4 Annual General Meeting May 2019
Organic growth supplemented by acquisitions Recent acquisitions performing well • 9% increase in sales (full-year basis) • 10% increase in sales (full-year basis) • Contributed an incremental £81 million • Contributed an incremental £33 million to sales and £9 million to profit to sales and £4.5 million to profit • Stepped up investments for future • “Safe delivery” phase of integration growth; responded to manufacturing complete inefficiencies exposed by strong sales • Brand development and relaunch • New product development complete • Geographical expansion: direct sales • Geographical expansion: direct sales established in Brazil, Chile, Norway, established in Brazil, Indonesia, Spain, Sweden, UAE and western USA. Malaysia, Middle East, Thailand and New operating company trading in South Korea. New operating company Brazil. trading in China. Engineering Sustainable Growth 5 Annual General Meeting May 2019
Acquisition of Thermocoax Completion 13 th May Established : 1957 Purpose : Designs and manufactures highly engineered electrical thermal solutions for critical applications in high added-value industries Core technology : small diameter mineral insulated cable – single or multiple conductor wires insulated by magnesium oxide, Head office (Paris, France) enclosed in a tubular metal sheath Sales and Manufacturing Sales Engineering Sustainable Growth 6 Annual General Meeting May 2019
Thermocoax Core markets Semiconductor • Consideration: €158 million (£139m) • Multiple of 12.2x EBITDA 2018 • Accretive to Group earnings in 2019 Nuclear Aeronautics • Extends capabilities of the Chromalox electrical process heating business • Broadens customer base in Europe Space • Chromalox will support Thermocoax market penetration in the USA • Compatible direct sales business model Power Generation Engineering Sustainable Growth 7 Annual General Meeting May 2019
2018 Awards and achievements FTSE 100 Spirax Sarco China won the British Spirax-Sarco Spirax-Sarco Spirax-Sarco Company of the Year Engineering plc Engineering plc Engineering plc Award. received Insider voted top of its promoted to the Media’s Company of sector (Engineering FTSE 100 Awarded to a company the Year Award in the and Machinery) effective Monday that exemplifies the 24 th December annual South West UK’s commitment to Recognised as International Trade 2018 Britain’s 12 th Most developing sustainable Awards business and cultural Admired Company relations between the UK and China Engineering Sustainable Growth 8 Annual General Meeting May 2019
Questions Engineering Sustainable Growth 9 Annual General Meeting May 2019
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