REG - Spirax Group PLC - Trading Update

SpiraxAnnouncement

14/11/2024 07:00

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RNS Number : 1408M  Spirax Group PLC  14 November 2024

14 November 2024

Trading Update

Organic revenue growth ahead of first half; full year outlook unchanged

 

Spirax Group plc issues the following update in respect of the four months
ended 31 October 2024.

Economic environment

Industrial Production Growth (IP) remained weak through the third quarter,
with IP in our key geographic markets lower than was forecast by CHR at the
time of our first half results in August.  Following downward revisions to
second half IP expectations in Europe and North America, CHR's full year
forecast for global IP (excluding China) is now 0.9%, down from 1.5% in
August.  Macroeconomic conditions in China continue to remain challenging.

Trading

Against this weak macroeconomic backdrop, we have continued to focus on
driving organic sales growth and preserving our adjusted operating profit
margin.

Group organic sales growth for the ten months ended 31 October was ahead of
the first half of the year with sales above the prior year comparator in all
three Businesses, excluding currency effects.

In the four months ended 31 October, Steam Thermal Solutions (STS) returned to
organic sales growth.  Sales in China, which accounted for close to 20% of
STS sales in full year 2023, continued to be impacted by the weakness in large
orders highlighted during the first half, although MRO sales continued to
grow.

In Electric Thermal Solutions (ETS), organic sales growth was higher than in
the first half.  In the Industrial Process Heating segment, we increased
shipments from our strong order book through delivery of ongoing operational
improvements.  In the Industrial Equipment Heating segment, organic sales
growth was modestly positive against a weak prior year comparator as we have
yet to see a recovery in demand from customers in the Semicon sector.

In Watson-Marlow, sales to Biopharm customers were supported by our order book
that has continued to normalise towards lower historic levels. Process
Industries organic sales growth improved further, above the first half of the
year, supporting overall organic sales growth in Watson-Marlow.

Financial position

Net borrowings (excluding leases) at 31 October were £642 million (30 June:
£718 million), with the Group net debt to EBITDA ratio at 1.7x (30 June:
1.9x).

Outlook

Our full year outlook remains unchanged from that set out at our Capital
Markets event on 3 October 2024.  For the Group, we expect mid-single digit
organic revenue growth for the full year and an adjusted operating profit
margin broadly in line with the 2023 margin of approximately 20.0% (adjusted
for currency headwinds).  If exchange rates at the end of October were to
prevail, the headwind impact across the full year would be approximately 1%
greater on both sales and adjusted operating profit than we had expected at
the time of our first half results in August.

 Further information:
 Louisa Burdett, Chief Financial Officer  +44 (0) 1242 240281
 Mal Patel, Head of Investor Relations    +44 (0) 1242 240281

 Media:
 Martin Robinson, Teneo                   +44 (0) 20 7260 2700
 spiraxgroup@teneo.com

 

 

 

 

 

 

 

 

 

 

About Spirax Group plc

Spirax Group (formerly Spirax-Sarco Engineering) 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
new-to-world decarbonisation* solutions will use our proprietary technologies
to electrify 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 engineering vital
fluid technology solutions that optimise the efficient use of resources and
support 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.

 

* Eliminates scope 1 and 2 greenhouse gas emissions when connected to a green
electricity source.

 

Further information can be found at spiraxgroup.com
(http://www.spiraxsarcoengineering.com)

 

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