Enhancing Productivity Spectris plc Interim Results

Transcription

1 Enhancing Productivity Spectris plc Interim Results 25 July 1

2 Agenda Highlights Financial Performance Business Update Summary and Outlook 2

3 Highlights Solid performance from Test & Measurement, In-line Instrumentation and Industrial Controls, with combined LFL sales growth of 4% Weaker than expected performance in the metals, minerals, mining and academic research sectors resulted in a LFL sales decline of 5% in the Materials Analysis segment LFL sales growth of 1%, adversely impacted by weaker shipments in Q2 Adverse currency translation impacted sales and operating profit by 6pp and 5pp respectively Acquisition of La Corporation Scientifique Claisse in, with two additional bolt-on acquisitions completed in July Robust cash conversion of 86% 3

4 Financial Performance Clive Watson Group Finance Director 4

5 Financial Performance 2013 Change Change at CER (2) Organic change at CER (3) Sales ( m) (1) % 2% 1% Adjusted operating profit ( m) (1) % -7% -8% Adjusted return on sales (ROS) (%) (1) pp Adjusted profit before tax ( m) (1) % Adjusted tax rate (%) (1) pp Adjusted earnings per share (pence) (1) % Dividend (pence) % Adjusted operating cash flow ( m) % Cash conversion (%) (1) pp Notes (1) The adjusted performance measures represent the statutory results excluding certain non-operational items. The 2013 comparatives have been restated to exclude the trading results and impact of the disposal of the Fusion UV business on 31 January 2013 (2) At constant exchange rates (3) At constant exchange rates excluding acquisitions 5

6 Sales m (36.2) Volume/ mix/ pricing Acquisitions Currency 6

7 Adjusted Operating Profit m (6.7) 0.6 (3.9) Volume/ mix/ pricing SG&A Acquisitions Currency ROS 14.1% ROS 13.0% 7

8 Cash Flow m Operating cash flow = 60.3m ( 2013: 65.1m) EBITDA Increase in working capital Capex (8.1) (12.3) Acquisitionrelated Dividend/ interest/ tax/other Net debt at 1 January (11.3) Net debt at 30 June (52.3) (104.1) 80.7 (107.4) 8

9 Summary Segment Performance Materials Analysis Test and Measurement In-line Instrumentation Industrial Controls Total Sales ( m) LFL sales growth -5% -3% 5% -3% 3% -3% 4% -2% 1% -3% Adjusted operating profit ( m) Return on sales 8.7% 12.4% 12.1% 10.5% 14.1% 16.6% 19.0% 19.4% 13.0% 14.1% Aftermarket service as % of sales 32% 30% 20% 23% 44% 45% 1% 2% 25% 26% 9

10 Business Update John O Higgins Chief Executive 10

11 Business Segments Laboratory / Quality Control Process / Manufacturing Materials Analysis Test and Measurement In-line Instrumentation Industrial Controls Metals/minerals/mining Pharma/fine chemicals Academic research institutes Automotive Aerospace Environmental Consumer electronics Process industries Pulp, paper & tissue Energy/utilities Converting/web/ packaging Manufacturing controls/ networking Distributors Machine building % Group Sales : 28% 29% 23% 20% 11

12 Strategy Strengthen market positions through innovation Expand regionally with a focus on emerging markets Increase our presence in key strategic growth areas, both organically and through acquisition Grow existing businesses through acquisition Focus on operational excellence 12

13 Sales by Destination m Change vs 2013 Organic change at CER Asia Pacific % 0% Asia Pacific 28% ROW 6% 33% Europe China % 2% Japan % 12% North America % 5% 33% Europe Germany % -5% 0% -1% North America Rest of the world % -6% Group total % 1% 13

14 Materials Analysis Performance in metals, minerals and mining weaker than expected due to ongoing freeze on capital spending by customers Weak demand in academic research, although China strong Growth in pharmaceutical sector, helped by launch of new products from life science development programmes 3 bolt-on acquisitions provide additional platforms for growth Operating profit and margins impacted by lower volumes and new product launch costs 2013 % change vs 2013 Organic FX Acq. Reported LFL Sales (9.1) (9.9) % -5% Adjusted Op Profit 20.6 (7.4) (0.6) % -36% ROS 12.4% 8.7% -3.7pp -4.0pp 14

15 Test and Measurement Good growth in automotive market, particularly in Asia Good performance from aerospace market with significant orders in US and Asia Strong demand from consumer electronics market for instrumentation to improve sound quality in smart phones and tablets Volume and cost management deliver margins expansion 2013 % change vs 2013 Organic FX Acq. Reported LFL Sales (10.3) % 5% Adjusted Op Profit (0.9) % 20% ROS 10.5% 12.1% 1.6pp 1.4pp 15

16 In-line Instrumentation Sales increased in energy & utilities, with strong demand from emerging markets Pulp and paper flat overall with strong growth in tissue applications offset by weakness in coated paper in Europe and China Merger of NDC and Beta LaserMike will enhance our competitive positioning in converting, web and packaging industries Volume gains offset by adverse product mix 2013 % change vs 2013 Organic FX Acq. Reported LFL Sales (7.3) % 3% Adjusted Op Profit 21.0 (3.0) (0.7) % -14% ROS 16.6% 14.1% -2.5pp -2.8pp 16

17 Industrial Controls Internationalisation of Omega business starting to show results Significant orders received for our recently launched HMI and networking products Good demand for track, trace and control products as contract electronics manufacturers scale up facilities for new product launches Underlying sales up 4% but foreign currency exchange effects reduce reported sales and profits 2013 % change vs 2013 Organic FX Acq. Reported LFL Sales (8.7) % 4% Adjusted Op Profit (1.7) % 2% ROS 19.4% 19.0% -0.4pp -0.4pp 17

18 New Product Introductions Zetasizer Helix Protein characterisation MicroCal Auto itc200 Calorimeter QuantumX High voltage data acquisition Noise Sentinel on Demand Cloud-based noise monitoring Dissolved Lignin Transmitter Pulp quality measurement AccuRay X-ray thickness gauge RAM 9000 Industrial cellular 4G switch PanelScan PCB Traceability 18

19 Summary and Outlook LFL sales grew 1% in following weaker trading in Q2 - challenging conditions in certain end markets Foreign currency exchange headwind as we enter H2 Continued investments in strategic organic growth initiatives and recent acquisitions position us well for the future H2 performance in line with expectations 19

20 Spectris plc Q&A 20