2005 Interim Results

1
Spirax-Sarco Engineering plc 2005 Interim
Results 30th June 2005
Steam specialties Controls instrumentation Heat
exchange solutions Steam system
services Peristaltic pumps
2
2005 Interim Results

• Mike Townsend - Chairman
• Marcus Steel - Chief Executive
• David Meredith - Director - Finance

3
Overview of Interim 2005

• 2005 2004 Change
• Revenue 166.6m 152.9m 9
• Operating profit 25.0m 22.1m 13
• Margin 15.0 14.4
• Pre-tax profit 26.0m 22.2m 17
• EPS 23.0p 19.7p 17
• DPS 6.8p 6.3p 8

• Good sales growth
• Progress particularly in Asia and Americas
• Improved operating margin of 15.0
• Strong cash position
• Earnings per share up 17

4
Geographical Analysis of Sales
UK Republic of Ireland 13
North America 20
Rest of World 12
Continental Europe 37
Asia 18
Sales are by geographical location of the customer
5
Sales Changes
Continental North UK Europe Asia America RO
W Exchange Total 0.9m 0.7m 3.5m 3.4m 3.
0m 2.2m 13.7m
m
/- YOY Organic Sales 7 Acquisitions 1 Exc
hange 1 9
Note Sales are based on the geographical
location of the customer. Geographical splits
are shown at constant exchange rates.
6
Operating Profit Changes
Continental North UK Europe Asia
America ROW Exchange Total 0.2m 0.0m 0.9m
1.1m 0.4m 0.3m 2.9m
m
/- YOY Operating profit 13 Operating margin
2005 15.0 Operating margin 2004 14.4
Note Geographical splits are shown at
constant exchange rates.
7
UK Republic of Ireland
2005 2004 change change excl XR Sales to
customers 21.0m 20.2m 4 4 Sales by
operation 51.8m 49.1m 5 5 Operating
profit 3.4m 3.3m 4 5 Margin 6.6 6.6

• UK market conditions remain difficult
• Domestic sales up 4 - including Eirdata
• Overseas demand on factories grew
• Profit up 4 despite higher pension and
  share-based costs

Sales by operation comprise customer and
intra-group sales
8
South West Water - UKBreakthrough for
peristaltic pumps on critical application

• Dosing coagulant in raw reservoir water
• Peristaltic pumps replace blocked diaphragm pumps
• Reduced risk of cross contamination
• Accurate dosage rate variable with water flow
  rate
• Very reliable no margin for error
• In-house technical standards altered to include
  peristaltic pumps

9
Continental Europe
2005 2004 change change excl XR Sales to
customers 62.4m 60.5m 3 1 Sales by
operation 77.5m 74.2m 4 3 Operating
profit 10.0m 9.7m 4 0 Margin 13.0 13
.0

• Organic third party sales grew 2
• European markets mainly weak
• Exchange boosted sales by 8
• Profit includes factory closure net charge of 1¼
  million
• Good profit growth helped by France exchange

• Sales up 3 - Growth in Finland, Germany, Norway
  and Poland
• Lower sales in France and Spain
• European industrial markets weak
• Profit up 4 due to exchange benefit

Sales by operation comprise customer and
intra-group sales
10
Asia
2005 2004 change change excl XR Sales to
customers 30.1m 25.8m 17 13 Sales by
operation 27.5m 23.3m 18 14 Operating
profit 5.0m 3.9m
29 25 Margin 18.2 16.6

• Economies generally growing
• Organic sales up 13 - widely spread
• Strong growth in Korea
• Good performance in China, Taiwan and Thailand
  but Japan flat
• Profit up 29 and margin improved

Sales by operation comprise customer and
intra-group sales
11
Total Steam Control SolutionCo-generation
project for Indonesian Palm Oil Producer

• Customer looking for good technical support and
  rapid response to operational needs.
• Complete solution for high pressure steam and
  de-superheater control.
• Quick reaction to system design changes after
  commissioning ensured minimum plant down-time.

• Customer placed orders for two more plants.
• Long term business relationship established

12
North America
2005 2004 change change excl XR Sales to
customers 32.6m 29.8m 9 12 Sales by
operation 33.0m 30.2m 9 12 Operating
profit 3.2m 2.5m 29 46 Margin 9.8 8.
3

• Sales grew by 12
• Increased sales and profits in USA packaged
  system services
• Good performance in Watson-Marlow Bredel
• Operating profit up 29 despite exchange

Sales by operation comprise customer and
intra-group sales
13
Shanghai Eastern HospitalFast response heat
exchange packages replace conventional hot water
storage units

• Hot water system suffering constant leaks,
  waterhammer, heat loss slow start-up.
• Packaged solution provided easy procurement and
  installation
• Easiheat package provides instantaneous unlimited
  hot water at safe temperatures
• Configured for that specific application
• Compact size allowed easy installation even in
  restricted access basement
• Reduced energy consumption
• Excellent performance led to additional orders
  for further up-grade projects

14
Rest of the World
2005 2004 change change excl XR Sales to
customers 20.5m 16.6m 23 17 Sales by
operation 20.8m 17.3m 20 14 Operating
profit 3.4m 2.8m 20 13 Margin 16.1 1
6.1

• Sales up 17
• Good performance in South America
• Lower margins in South Africa
• Underlying operating profit up 13
• Exchange gains boosted sales and profits

Sales by operation comprise customer and
intra-group sales
15
Financial Aspects - Interim

• m 2005 2004 change
• Revenue 166.6 152.9 9
• Operating profit 25.0 22.1 13
• Margin 15.0 14.4
• Net finance income 0.6 (0.2)
• Associates 0.4 0.3
• Profit before tax 26.0 22.2 17
• Tax rate 32.7 32.9
• EPS 23.0p 19.7p 17
• DPS 6.8p 6.3p 8
• Improved finance income good cash flow
• Tax rate unchanged in line with underlying
  rate
• Strong EPS growth

16
Cash Flow
Operating Net Capital Shares Net cash
interest Taxation expend Dividends Acqns issues
Exchange cash 26.7m 0.2m -9.5m -6.1m -11.5
m -4.9m 4.5m 0.8m 0.2m
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Key Statistics

• First half First half
• 2005 2004
• Net cash/(debt) 1.5m (14.0m)
• Capital expend / depreciation 107 101
• Cash from operations 26.7m 26.0m
• Operating profit margin 15.0 14.4
• Net pension deficit 36.2m 32.3m

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Spirax Sarco

• Focused on growth and
• creating shareholder value

19
Spirax-Sarco Engineering 2005 Interim
Results 30th June 2005 Questions
Steam specialties Controls instrumentation Heat
exchange solutions Steam system
services Peristaltic pumps
20
Appendix - Currencies

• First half 2005 First half 2004 Year 2004
• Average exchange rates
• Bank of England sterling index 102.4 104.2 103.8
• US 1.88 1.82 1.83
• Euro 1.46 1.48 1.47
• Won 1,911 2,124 2,092
• Period end exchange rates
• Bank of England sterling index 100.9 104.8 101.5
• US 1.79 1.81 1.92
• Euro 1.48 1.49 1.41
• Won 1,853 2,096 1,987

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Appendix Sources of Growth

• Geographic expansion - new and increased
  penetration
• Market share - traditional and newer products
• Product additions and developments
• Focus on market segments where we are
  under-represented
• Increased sales coverage
• Increase in industrial activity
• Acquisitions

22
Appendix IFRS effect on 2004

• Overall pre-tax profit reduced by 2.1m but EPS
  reduced by only 1
• Pensions Deficit recognised on the balance
  sheet. 28m at Dec 2004 - 41m less deferred
  tax asset 13m
• Pensions Reduced pre-tax profit by 0.7m
• Share-based payments PL charge of 0.4m for
  share options and share ownership scheme
• Goodwill Amortisation of 0.7m ceased
  (subject to annual impairment)
• RD Development expenditure capitalised and
  amortised. Net PL credit of 0.1m
• Associated companies in Mexico/India Now
  deconsolidated. Sales reduced by 9.8m.
  Pre-tax profit reduced by 1.8m but EPS not
  affected.