INVESTOR OPPORTUNITIES IN OUR WORLD‐LEADING NICHE BUSINESSES 0 Investor opportunities March 2019 Engineering Sustainable Growth
A British multi‐national engineering group Three world‐leading niche engineering businesses Global addressable market: £8.5bn; 14% market share • Average revenue growth: 7% per annum • Direct sales model key to delivering (excluding 2017 acquisitions) customer value • Revenue growth tracks 2x Global Industrial Production growth rate • Large diversity of customers, geographies, markets and products • Good operating profit margin: 23.0% (2018) • Robust balance sheet; strong cash generation • 85% of sales from maintenance and repair budgets (35% self‐generated) • Return on capital employed 54.9% (2018) • 51 year dividend progress; 11% CAGR • Sales presence in 62 countries; manufacturing in 14 countries • Special dividends in 2010, 2012 and 2014 1 Investor opportunities March 2019 Engineering Sustainable Growth
Group structure Three world‐leading niche businesses 2018 Group Revenue 23% 64% £1,153m 13% Thermal Energy Management Steam Specialties EMEA Steam Specialties : Chromalox: Watson‐Marlow: Asia Pacific industrial and commercial electrical process niche peristaltic pumps Americas steam systems heating and temperature and associated fluid Chromalox management solutions path technologies Watson‐Marlow www.spiraxsarco.com; www.gestra.com www.chromalox.com www.wmftg.com 2 Investor opportunities March 2019 Engineering Sustainable Growth
Thermal Energy Management Industrial and commercial steam systems Process heating and temperature management solutions (from July 2017) Steam uses: heating and curing, cleaning, sterilisation, hot water generation, space heating and humidification Uses: electric heating for mission‐critical industrial processes, freeze protection for pipes, valves and Benefits of steam: high energy content, easy to control, tanks, and component heating environmentally safe, clean and sterile Benefits of electric solutions: easy to incorporate, Products: steam traps, control valves, condensate recovery install and maintain; high temperatures; controllable; pumps, strainers, separators, flow meters, boiler controls, no emissions at point of use pre‐fabricated engineered packages Products: Industrial Heaters & Systems; Heat Tracing; Delivering: improved process efficiency and product Component Technologies quality; reduced CO₂ emissions, energy and water use, waste and maintenance downtime; compliance with Delivering: efficient thermal energy management and industry standards control solutions for improved industrial processes 3 Investor opportunities March 2019 Engineering Sustainable Growth
Plant‐wide applications Broad product range Our product range includes: steam traps, pressure and temperature control valves, condensate Pre‐fabricated engineered packages for heat recovery pumps, strainers, separators, humidifiers, transfer & recovery and clean steam generation flow meters and boiler controls Heat exchange Clean steam generator Flash steam package heat recovery We are a one‐stop shop for industrial and commercial steam systems 4 Investor opportunities March 2019 Engineering Sustainable Growth
Steam and condensate loop Applications overview Steam generation Steam distribution and utilisation Packaged Solutions & Energy Recovery Feedwater Boiler level Bottom Start‐up systems Pressure control Flow metering Steam traps Ancillaries Humidification Heat transfer Flash steam Condensate supply, storage controls blowdown and separators solutions recovery recovery and conditioning valves and Temperature Wireless Clean & pure Boiler vessels Condensate control communication steam products TDS controls blowdown monitoring Blowdown heat recovery 5 Investor opportunities March 2019 Engineering Sustainable Growth
Plant‐wide applications Broad product range Our product range includes: process heaters, air Pre‐fabricated engineered packages for process heaters, radiant heaters, tubular heaters, heating and temperature management cartridge heaters, power and temperature controls, temperature sensors, thermostats and heat trace cables and connection kits Fuel Gas Conditioning System Process Heating Packages Heat Transfer System We provide advanced thermal technologies engineered for the world’s toughest industrial heating applications 6 Investor opportunities March 2019 Engineering Sustainable Growth
Chromalox expands our addressable market Thermal Energy Management: electricity and steam have complementary uses. The choice between heating mediums is driven by application needs or customer circumstances * New Product Introduction 7 Investor opportunities March 2019 Engineering Sustainable Growth
Watson‐Marlow pumps and systems Cost‐effective solutions for difficult applications Watson‐Marlow Peristaltic pumps Business built around unique pumping and niche fluid path technologies • Peristaltic principle Rotor shoes/rollers squeeze tubing for gentle pumping action • Contamination free No moving parts in contact with process fluid • Virtually maintenance free No seals, check valves, diaphragms or rotors • Highly accurate Sophisticated pump head electronics ensure accuracy for dosing and metering applications 8 Investor opportunities March 2019 Engineering Sustainable Growth
Watson‐Marlow pumps and systems Cost‐effective solutions for difficult applications Dirty applications: the fluid does not touch the pump Making peristaltic pumps suitable for dirty fluids which contaminate other pumps – slurries, pigments, effluent applications. No need to strip or clean the pump; a new hose makes a new pump. Hygienic applications: the pump does not touch the fluid Making peristaltic pumps perfect for clean fluids which must not be contaminated – Pharmaceutical & Biotechnology and Food & Beverage industry applications. A sterile tube makes a sterile pump. Specialty filling systems (Flexicon) Small batch production of pharmaceuticals using peristaltic pump filling technology. Bench top models to fully automated filling and capping systems. Single‐use fluid path technologies Single‐use fluid path components such as clamps, valves, connectors, sanitary gaskets and tubing, for Pharmaceutical & Biotechnology industries. Lower whole‐life cost for niche applications Higher up‐front purchase cost more than offset by lower life cycle costs. 9 Investor opportunities March 2019 Engineering Sustainable Growth
Watson‐Marlow Fluid Technology Group Ten brands offering customers an unrivalled breadth of pumping services Low‐flow peristaltic High‐flow industrial Low‐flow, high precision metering pumps hose pumps OEM pumps Precision pump and Aseptic filling (acquired in 1990) transfer tubing (acquired 1996) (acquired 2000) (acquired 2008) Stainless steel tank bottom and in‐line valves High purity polymer Biotechnology tubing for Biotechnology PTFE‐lined flexible hoses Sinusoidal pumps products company connection systems (acquired 2009) (acquired 2014) (acquired 2015) (acquired 2015) (acquired 2016) 10 Investor opportunities March 2019 Engineering Sustainable Growth
Our direct sales business model Positioning us well to create value Customer needs: We help our customers to solve their difficult productivity and process challenges, improve their operational sustainability and comply with increasingly stringent health, safety and environmental requirements. Customer closeness: Our direct sales business model creates a unique understanding of our customers’ needs and enables us to build deep, long‐term relationships as we help our customers solve their difficult productivity, control and energy efficiency problems, and improve their operational performance and sustainability. Applied engineering: It is not our products alone that provide value to our customers ‐ it is the application of our extensive knowledge of systems design, operations and maintenance. Wide product range: The breadth of our product offering is unmatched by our competitors and our one‐stop shop approach simplifies the procurement process for our customers who are increasingly seeking partnerships with competent full‐service suppliers. Regional manufacturing: Local availability of a wide range of products is critical to our business model and enhances top line revenue growth. We have strategically located our manufacturing plants across the world, in Europe, North America, Latin America and Asia. 11 Investor opportunities March 2019 Engineering Sustainable Growth
Our business model in action Creating value for customers We use our… • specialist knowledge (local direct sales engineers are skilled specialists in applications and systems) • technical expertise (focus our selling on application merits and payback, not price) • engineered solutions (industry leading products, services and packages for one‐stop shop approach) • local stocks (products available off‐the‐shelf worldwide) to deliver… • energy and water savings (help our end users to meet their sustainability objectives and save money) • process improvements (provide increased operating efficiency and throughput, and lower operating costs) • regulatory compliance (help reduce plant emissions and provide expertise and training to meet increasingly stringent standards) …to customers 12 Investor opportunities March 2019 Engineering Sustainable Growth
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