15th May 2024
Trading
update
Trading in-line with
expectations; full-year guidance maintained
Economic environment
Global Industrial Production
growth1 (IP) in the first quarter of 2024 was
1.7%. As expected, IP was negative in key markets such as the
USA, Germany and South America, while conditions in China also
weakened. IP in our key markets is forecast1 to
recover through the balance of the year, weighted towards the
second half.
Trading
In the first four months of the
year, demand was broadly flat against the strong comparative
period. Demand from Pharmaceutical and Biotechnology
('Biopharm') customers has started to show early signs of
improvement although, as expected, there has been no increase in
demand from Semiconductor Wafer Fabrication Equipment ('Semicon')
customers.
All three of our Businesses
delivered organic sales growth in the first four months of the
year. Low single-digit organic growth in Group sales was
in-line with our expectations given last year's strong comparative
period and consistent with the IP weakness we had anticipated in
our key markets. Group adjusted operating profit margin was
slightly ahead compared to the same period in 2023.
Financial Position
Net borrowings (excluding leases) at
30th April 2024 were £658 million (31st December 2023: £667
million). The final dividend of 114.0 pence per share, a 4%
increase over the prior year, will be paid on 24th May 2024,
subject to shareholder approval, with a cash impact of £84
million.
Outlook
We continue to anticipate mid to
high-single-digit organic growth in Group revenues, in line with
the forecast phasing of IP and an increase in Biopharm and Semicon
demand during the latter part of the year. Currency headwinds
are expected to persist throughout the rest of the year, with an
impact of approximately 3% to sales and approximately 6% to
adjusted operating profit. We therefore anticipate modest
progress in the Group adjusted operating profit margin compared to
the 20.7% achieved in 2023, with adjusted operating
profit2 more second half weighted than usual.
For
further information:
Phil Scott, Interim Chief Financial
Officer:
+44 (0) 1242 535234
Mal Patel, Head of Investor
Relations:
+44 (0) 1242 535234
Media
Martin Robinson, Teneo:
+44 (0) 20 7260 2700
spiraxgroup@teneo.com
1 Source: CHR Economics, 30th April 2024
2 Consensus estimates as at 28th March 2024: Sales
£1,738m; Adjusted Operating Profit £365m (range £341m -
£389m)
About Spirax Group
Spirax Group is positioned to play a
critical role in enabling the industrial transition to net zero,
aligned to our Purpose to create sustainable value for all our
stakeholders as we engineer a more efficient, safer and sustainable
world. We put solving customers' problems at the heart of our
'total solutions' approach. Our global thermal energy and fluid
technology solutions improve operating efficiency and safety in our
customers' critical industrial processes. Our decarbonisation
solutions use proprietary technologies to eliminate scope 1 and 2
greenhouse gas emissions* by electrifying boilers for the raising
of steam, as well as the electrification of other critical
industrial process heating applications.
Spirax Group comprises three strong
and aligned Businesses: Steam Thermal Solutions helps customers
control and manage steam within their mission critical industrial
applications, such as cleaning, sterilising, cooking and
heating. We are helping to put food safely on the world's
tables and keeping our hospitals running. Electric Thermal
Solutions has proprietary technologies that deliver electrification
solutions at scale in industrial settings, including for the
raising of steam, supporting our customers to achieve their net
zero goals. We also deliver freeze protection and defrost solutions
critical to aviation and space industries and ensure thermal
uniformity in Semiconductor chip manufacturing to power the
critical electronic systems we rely on. Watson‐Marlow Fluid
Technology Solutions is optimising the efficient use of resources
and supporting advancements in global health, such as lifesaving
vaccines and gene therapies.
Spirax Group is headquartered in
Cheltenham (UK). We have 37 strategically located manufacturing
plants around the world and are committed to creating a safe and
inclusive working culture for our 10,000 colleagues, operating in
66 countries and serving 110,000 customers globally. The
Company's shares have been listed on the London Stock Exchange
since 1959 (symbol: SPX) and we are a constituent of the FTSE 100
and the FTSE4Good Indexes.
*When connected to a green
electricity source.
2024 Half Year results are expected
to be published on 8th August 2024.
Further information can be found
at spiraxgroup.com
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