Front cover

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Front cover
Spirax-Sarco Engineering plc 2008 Half Year
Results 30th June 2008
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Spirax-Sarco Engineering plc 2008 Half Year
Results
2008 H1 Results
Mark Vernon - Chief Executive David Meredith -
Finance Director
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Overview of First Half 2008
Overview
2008 2007 Change Change excl
XR Revenue 238.7m 200.1m 19 12 Operating
profit 40.8m 31.6m 29 15 Margin 17.1 15.
8 Pre-tax profit 42.7m 33.1m
29 15 EPS 38.0p 29.1p 31 17 DPS 10.0p 8.3
p 20

• Continued strong sales growth of 19 (12 at
  constant currency)
• Operating profit up 29 (15 at constant
  currency)
• Good sales and profit growth from all regions
• Operating profit margin improved to 17.1 (2007
  15.8)
• Interim dividend increase of 20
• Good cash flow - significant capital investment
  in 2008 and 2009

Excludes amortisation of acquired intangibles of
0.8m (20070.2m) of which 0.2m relates to
Associates (2007 nil)
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Geographical analysis of revenue
Segments
2008 2007 UK and ROI 11 11 Cont.
Europe 39 38 N. America 18 19 Asia 19 20 Res
t of world 13 12 100 100
UK Republic of Ireland 11
Continental Europe 39
North America 18
Asia 19
Rest of World South America, Africa,
Australasia 13
Sales are by geographical location of the customer
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Revenue changes
Revenue Change
2008 increase excl XR /- UK and
ROI 11 Cont. Europe 8 N. America 11 Asia 13 Re
st of world 22 Exchange 7 19
Continental North UKROI Europe America Asia
ROW Exchange 2.6m 7.3m 4.3m 5.1m 5.7m
13.6m
m
2008 sales (by customer) m UK and
ROI 25.1 Cont. Europe 93.4 N. America 43.0 Asia 45
.2 Rest of world 32.0 238.7
Note Sales are based on the geographical
location of the customer. Segmental splits
are shown at constant exchange rates.
/- YOY H1 Organic Sales 10 Acquisitions 2
Exchange 7 Total 19
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Operating profit changes
Profit Change
Continental North UKROI Europe America Asia
ROW Exchange 1.4m 1.5m 0.9m 0.9m 0
.7m 3.8m
m
2008 increase excl XR /- UK and
ROI 21 Cont. Europe 9 N. America 34 Asia 12 Re
st of world 25 Exchange 12 29
/- YOY H1 Operating profit 29 Operating
margin 2008 17.1 Operating margin 2007 15.8
Note Segmental splits are shown at constant
exchange rates.
Excludes amortisation of acquired intangibles of
0.8m (20070.2m) of which 0.2m relates to
Associates (2007 nil)
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UK Republic of Ireland
UK ROI
2008 2007 change change excl XR Sales to
customers 25.1m 22.4m 12 11 Sales by
operation 64.9m 58.6m 11 11 Operating
profit 8.2m 7.6m 9 21 Margin 12.7 12.9

• Organic sales growth in domestic market 11
• Sales focus on energy saving projects for
  customers and newer products
• Demand on factories increased from overseas
• Efficiency gains in the factories offset higher
  energy and material costs

Sales by operation comprise customer and
intra-group sales Margin based on gross sales
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Spirax help UK hospital cut energy bill by 15
Case Study

• Previously, six calorifiers supplied heating and
  domestic hot water to areas of the hospital,
  designed to run on waste heat from the hospitals
  combined heat and power (CHP) plant.  
• Spirax provided a complete turnkey solution
  engineering, packaging and installation.
• Spirax replaced the six calorifiers with four
  compact packaged heat exchangers that
  predominantly run on waste heat to provide hot
  water for heating.
• The Spirax heat exchanger packages are more
  efficient than calorifiers and 25 of the size,
  are easier to control maintain, and provide
  more efficient heat transfer.
• Hospital calculates savings of 15, equivalent to
  over 5,000 a month.

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Continental Europe
Europe
2008 2007 change change excl XR Sales to
customers 93.3m 75.7m 23 8 Sales by
operation 117.5m 93.6m 25 10 Operating
profit 17.9m 12.1m 48 9 Margin 15.2 12.9

• Market conditions were generally positive
  economic environment weakening
• Significant gains from stronger euro
• Continued good performance overall sales up 8
  at constant exchange
• Flexicon integration progressing well

Sales by operation comprise customer and
intra-group sales Margin based on gross sales
10
North America
North America
2008 2007 change change excl XR Sales to
customers 43.0m 38.4m 12 11 Sales by
operation 43.8m 38.8m 13 12 Operating
profit 3.4m 2.8m 22 34 Margin 7.7 7.2

• Organic sales up 11
• Good sales of traditional products
• Economic background deteriorating
• Profit held back by exchange
• Profit up 34 at constant currency

Sales by operation comprise customer and
intra-group sales Margin based on gross sales
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Spirax saves 4.7million for USA oil refinery
Case Study

• Spirax identified steam losses that resulted in
  millions of dollars of energy savings.
• Steam trap audits by Spirax identified five
  problem areas 
• - Improperly installed and leaking steam traps
• - Freezing sulphur
• - Water hammer problems
• - Wasted blowdown
• - Steam turbine inefficiencies
• Spirax recommended engineering solutions and
  provided installation services resulting in
  reduced annual operating costs of nearly 800k in
  year one.
• The new steam trap program reduced the failure
  rate from 6 to nearly 1 over five years.
• 4.7 million has been saved over the past five
  years. 

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Asia
Asia
2008 2007 change change excl XR Sales to
customers 45.2m 39.3m 15 13 Sales by
operation 42.0m 36.2m 16 14 Operating
profit 7.8m 6.7m 17 12 Margin 18.5 18.4

• Continued overall strong performance
• Organic sales up 13
• Good results in China
• Generally strong currencies notably China but
  exchange disbenefit in Korea

Sales by operation comprise customer and
intra-group sales Margin based on gross sales
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Rest of the world
Rest of World
2008 2007 change change excl XR Sales to
customers 32.0m 24.3m 32 22 Sales by
operation 31.7m 24.3m 30 21 Operating
profit 3.5m 2.5m 43 25 Margin 11.2 10.2

• Sales up 32 (22 at constant currency)
• Exchange disbenefit in South Africa but overall
  favourable exchange movements
• Organic sales growth in nearly all markets
• South America results exceptionally good
• Operating profit well ahead in constant currency

Sales by operation comprise customer and
intra-group sales Margin based on gross sales
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Financial aspects Half Year
Financial
2008 2007 change Change constant
ccy Revenue 238.7m 200.1m 19 12
Operating Profit 40.8m 31.6m 29 15 Margin
17.1 15.8 Net finance income 0.8m
0.9m Associates 1.2m 0.6m Profit before
tax 42.7m 33.1m 29 15 Tax rate (ex
Assoc.) 32.8 34.1 EPS 38.0p 29.1p 31 17 DP
S 10.0p 8.3p 20

• Reduced net finance income Pensions
• Pre-tax profit up 29
• Lower tax rate profit mix
• Strong EPS growth 31
• Interim dividend 20

Excludes amortisation of acquired intangibles of
0.8m (20070.2m) of which 0.2m relates to
Associates (2007 nil)
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Cash flow
Cash flow
First Half First Half m 2008 2007
Operating profit 40.1 31.4 Depn
amortisation 8.2 7.0 Equity settled share
plans 1.1 0.8 Working capital changes (9.6) (5.5)
Pension payt gt PL charge (0.2) (5.5) Net
interest (0.1) (0.6) Taxation paid (10.8) (8.8) N
et capital expenditure (8.4) (6.9) Free Cash
Flow 20.2 11.9 Net dividends (16.2) (14.3) Acquis
itions (12.2) (0.7) Shares issued 2.3 1.7 Cash
Flow (5.9) (1.4)

• Good free cash flow
• Working capital up 1 (constant currency excl
  acquisitions)
• Capex increased - China
• Interest payable reduced good cash flow
• Dividends paid up 13
• Some Treasury shares reissued for options
  exercised

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Key statistics
Key statistics
First Half First Half 2008 2007 Net
cash/(debt) 12.2m (7.2)m Capital expend /
depreciation 118 102 Amortisation acquired
intangibles 0.8m 0.2m Sales per
employee 7 10 Free Cash Flow 20.2m 11.9m Ope
rating profit margin 17.1 15.8 IAS19 Pension
deficit (30th June) 47.0m 2.5m

• Net cash good cash flow
• IAS 19 Pension deficit 47m at June 2008
• Higher capex in 2008 and in to 2009

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Spirax-Sarco Engineering plc Driving growth
through excellence and innovation to
create shareholder value
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Appendix I Currencies
Appendix I

• First half First half Year
• 2008 2007 2007
• Average exchange rates
• Bank of England sterling index 94.4 104.4 103.3
• US 1.99 1.97 2.00
• Euro 1.30 1.48 1.46
• Won 1954 1844 1858
• Period end exchange rates
• Bank of England sterling index 93.2 105.0 96.8
• US 1.99 2.01 1.99
• Euro 1.26 1.49 1.36
• Won 2082 1854 1863

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Appendix II 25 Years of sales performance
Appendix II
Full year
Sterling strengthening
Sterling weakening
Sales for 2003 and prior years have been adjusted
to IFRS basis
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Appendix III EPS DPS performance
Appendix III
Full year
Key EPS DPS
Note Figures exclude non-operating and
exceptional items
From 2004 IFRS figures used excluding
amortisation of acquired intangibles
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Appendix IV Growth Opportunities
Appendix IV