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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