Half Year 2023 Spirax-Sarco Engineering PLC Earnings Call Transcript
Key Points
- Spirax Group PLC (SPXSF) achieved strong organic sales growth of 11% despite weaker-than-expected Biopharm demand.
- Steam Specialties sales grew 15% organically, with an operating profit margin expansion of 190 basis points.
- The integration of recent acquisitions, Vulcanic and Durex Industries, is progressing well, with Vulcanic performing ahead of initial expectations.
- The company has made significant progress on its ESG agenda, achieving a 47% reduction in Scope 1 and 2 greenhouse gas emissions against its 2019 baseline.
- Spirax Group PLC (SPXSF) declared an 8% increase in the interim dividend to 46p per share, reflecting confidence in the group's underlying growth drivers.
- Group operating profit margin declined by 360 basis points to 20.2% due to lower sales in high-margin businesses like Watson-Marlow.
- Watson-Marlow sales declined 21% organically, significantly impacting operating profit.
- The company faces challenges in forecasting the precise timing and pace of recovery in Biopharm and Semicon demand, leading to a cautious full-year sales growth outlook of 0% to 4%.
- Net debt increased to GBP 748 million following last year's acquisitions, with leverage at 1.8x EBITDA.
- The company incurred restructuring cash costs of GBP 5 million and a software-related noncash impairment charge of GBP 14 million, impacting statutory results.
Good morning, and thank you for standing by. Welcome to Spirax-Sarco Engineering Plc 2023 Half Year Results Webcast and Conference Call. (Operator Instructions). Please be advised that today's conference is being recorded. I would now like to turn the conference over to our first speaker today, Mr. Nicholas Anderson, Group Chief Executive. Please go ahead.
Good morning, everyone, and welcome to our 2023 half year results announcement call. I'm Nicholas Anderson, Group Chief Executive, and I'm joined here today by our CFO, Nimesh Patel. Regarding today's presentation, I will again start by sharing the highlights of the first half and then Nimesh, who will take you through our financial performance. Later, I will return to cover the operations and outlook for the full year 2023. And to finalize, we will be happy to take questions from the analysts on the call.
As you all know, 2 days ago, we announced my desire to retire after 10 years in this role and 41
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