REG - Spirax Group PLC - Trading Update

SpiraxAnnouncement

Wed 07:00

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RNS Number : 5238I  Spirax Group PLC  14 May 2025

14 May 2025

Trading update

Good demand growth; full-year guidance maintained

Economic environment

Global IP(1) in Q1 2025 was 2.5% and remained negative in key European markets
such as Germany, France, Italy and the UK(2).  Excluding China, IP was 1.7%
and the forecast for the full year has been revised down to 1.6% from 1.9% in
February.  Trade tariffs have resulted in macroeconomic uncertainty,
particularly impacting customers' capital investment decisions.

Trading

We have focused on the operational priorities within our control, including
driving growth through consultative solution-selling; delivering improvements
in manufacturing, particularly in ETS(3); protecting margins through pricing
discipline and efficiency savings; and executing on our restructuring plan,
which is on track to deliver approximately £35 million of annualised savings.

Demand trends in the first four months of the year were consistent with those
highlighted in our 2024 full year results in March.  Good demand growth in
WMFTS(3) was supported by continuing recovery in Biopharm(4) orders and
Process Industries growth ahead of IP.  In ETS, we saw strong demand for our
Industrial Process Heating solutions and improving Semicon(4) orders.  In
STS(3), MRO and solutions demand was higher across all markets.  This was
offset by lower demand for large projects, particularly in China and Korea
(22% of STS 2024 revenues), where conditions continue to remain challenging.

As a result, we delivered low single-digit organic growth in Group revenues,
with an adjusted operating profit margin slightly lower compared to the same
period in 2024, reflecting customers' phasing of some order shipment dates to
later into the year.

Financial Position

Net borrowings (excluding leases) at 30 April 2025 were £603 million (31
December 2024: £596 million), representing a net debt to EBITDA ratio of 1.6x
(31 December 2024: 1.6x).  The final dividend of 117.5 pence per share
represents a 3% increase over 2023 and will be paid on 23 May 2025, subject to
shareholder approval, with a cash impact of £87 million.

Outlook

We maintain our outlook for 2025 while recognising that the evolving broader
macroeconomic impact of tariffs remains uncertain.  Our local manufacturing
mitigates the direct exposure of tariffs and we expect to manage the financial
impacts through surcharges, pricing and limited reorganisation of
manufacturing activity.

If exchange rates at the beginning of May were to prevail for the remainder of
the year, 2024 sales would be approximately 3% lower at £1,615 million and
2024 adjusted operating profit would be approximately 6% lower at £314
million, with adjusted operating profit margin at 19.4%.

We continue to anticipate organic growth in Group revenues consistent with
that achieved in 2024 and Group adjusted operating profit margin ahead of the
currency adjusted 19.4% margin in 2024. We also anticipate cash conversion
above 80%.

We continue to expect revenue growth and adjusted operating profit margin to
be higher in the second half of the year, reflecting an acceleration in MRO
and solution sales across STS to offset weakness in large projects; phasing of
the recoveries in Biopharm and Semicon sales; and the delivery of the savings
from our restructuring plan.

(1) 'IP': Industrial Production growth

(2) Source: CHR Economics, 29 April 2025

(3) 'STS': Steam Thermal Solutions; 'ETS': Electric Thermal Solutions;
'WMFTS': Watson-Marlow Fluid Technology Solutions

(4) 'Biopharm': WMFTS sales to the Pharmaceutical & Biotechnology sector;
'Semicon': ETS sales to the Semiconductor Wafer Fabrication Equipment
Manufacturing sector

For further information, please contact:

 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 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 over 30
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 nearly 70 countries and serving over 100,000 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 scopes 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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