Rotork is a market-leading global provider of mission-critical intelligent flow control and instrumentation solutions for Oil & Gas, Water and Wastewater, Power, Chemical, Process and Industrial applications. Its shares are listed on the main market of the London Stock Exchange (symbol: ROR), have a market cap of £2.7bn and are a constituent of the FTSE 250 index.
We were delighted to welcome CEO Kiet Huynh and Director of Investor Relations Andrew Carter, to the latest Yellowstone Advisory webinar to present the full year 2024 results. A recording of the webinar is available here.
Reflecting on a strong year, the financial highlights from 2024 were impressive. Revenues grew 8.2% (OCC), Service revenue grew faster and now represents 23% of total revenue, ROCE improved again to 37.3%, operating margin grew 70bps to 23.6% and the company ended the year with net cash of £125m after achieving 119% cash conversion. Non financial highlights include Total Recordable Incidents of 0.22 an improvement on the previous year and receipt of an “AAA” rating from the MSCI for their ESG performance.
The performance over the last three years has been impressive and demonstrates that the Growth+ strategy has been delivering. Revenues grew by 10% CAGR, operating margin improved by 110 bps and ROCE increased by 720bps to 37.3%. Rotork Service has also grown revenues by 14% CAGR over the same period.
Target Segments, which Rotork focuses on because they represent significant future profitable growth opportunities, have strong underlying market drivers and where Rotork has a smaller relative market share, performed well growing revenue by 9%. These segments include upstream and midstream electrification, critical HVAC and decarbonisation and water infrastructure wastewater and treatment. The Core Segments, which are generally those markets where Rotork has a larger market share and are slightly more mature, grew revenues 8% YoY. These markets include refining and hydrocarbon storage, marine and other process industries and conventional power generation.
Rotork has a near 70 year track record of producing high quality products, which are very reliable and often the best on the market. The service network is part of their differentiated offer and plays a key part in their overall brand strength. Together the brand, product and service offer make a formidable package and act as a high barrier to entry to competition. This has enabled them to deliver strong financial figures, especially the 720bps improvement in the ROCE to…
