Full Year 2019 Spirax-Sarco Engineering PLC Earnings Call Transcript
Key Points
- Strong organic sales growth across both Steam Specialties and Watson-Marlow businesses.
- Chromalox profit margin increased in the second half of 2019 to 15.1%, reflecting improved operational performance.
- Thermocoax acquisition expanded the Electric Thermal Solutions business, contributing to 15% of group revenues.
- Robust cash flow performance enabled significant capital investment while maintaining net debt levels below 1x EBITDA.
- Continued improvement in health and safety performance and sustainability metrics, with accelerated implementation of the group's sustainability strategy.
- Reported operating profit margin fell by 20 basis points to 22.8%.
- Overall tax rate increased to 28.5%, with an anticipated rise to 29% in the current year.
- Chromalox experienced a fall in profits on an organic level of GBP 4.5 million due to operational issues, particularly in Europe.
- Currency headwinds anticipated to impact sales by 2% and profits by 3% if February month-end rates are maintained.
- COVID-19 expected to cause a global headwind of 2% on sales and 4% on profits, with significant impact in the first half of the year.
Ladies and gentlemen, thank you for standing by, And welcome to the Spirax-Sarco 2019 Full Year Results Presentation. (Operator Instructions)
Good morning, everyone, and welcome. I'd also like to extend a warm welcome to those of you who are joining us remotely. I'm Nicholas Anderson, Group Chief Executive, and I'm joined here today by our CFO, Kevin Boyd.
We have also announced this morning that Kevin has informed the Board of his desire to retire from the group and from executive career before the end of 2020, following an orderly handover of his duties to his successor. On a more personal note, I would like to again thank Kevin for his dedication, professionalism and unwavering support over the last 4 years in which we have transformed Spirax-Sarco into the successful FTSE 100 company that we are today. Thank you, Kevin.
Regarding today's presentation, I will start by sharing the highlights of 2019 and then Kevin will take you through our
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