Spirax Sarco deliver a strong performance with organic growth up 14%

Spirax-Sarco Engineering

Spirax-Sarco Engineering PLC (LON:SPX) has announced its 2022 full year results.

Operating profit£318.8m£320.9m-1%
Operating profit margin19.8%23.9%-410 bps
Profit before taxation£308.1m£314.5m-2%
Basic earnings per share305.1p318.3p-4%
Dividend per share152.0p136.0p+12%
Adjusted operating profit£380.2m£340.3m+12%+7%
Adjusted operating profit margin23.6%25.3%-170 bps-160 bps
Adjusted profit before taxation£370.6m£333.9m+11%
Adjusted earnings per share377.2p338.9p+11%
Adjusted cash conversion57%82%
Revenues up 20% or 14% organically; driven by volume growth and price increases to protect margins
Statutory operating profit down 1% due to revenue investments, ETS restructure and acquisition costs
Adjusted operating profit of £380.2 million up 12% or 7% organically
Adjusted operating profit margin of 23.6%, down 170 bps due to revenue investments
Steam Specialties organic sales up 12%; Cotopaxi acquisition enhances Digital growth capabilities
Electric Thermal Solutions organic sales up 14%; strategic acquisitions of Vulcanic and Durex Industries
Watson-Marlow organic sales up 16%; Biopharm** normalising, Process Industries up strongly
Net debt^ increased to 1.5x EBITDA* on a pro-forma basis, following ETS acquisitions
Adjusted cash conversion lower at 57% due to record capital investment and inventory rebuilding
Total dividend up by 12% to 152.0 pence; maintaining 55-year CAGR track record at 11%

Nicholas Anderson, Group Chief Executive, commenting on the results said:

“The strong performance of our Group in 2022, delivering 14% organic sales growth and 23.6% adjusted operating profit margin in a volatile geopolitical and weakening macroeconomic environment, is testament to the Group’s robust strategies and business model, as well as our resilience through economic cycles.  All three Businesses outperformed their markets while progressing our sustainability and inclusion agendas.  In 2022, we also completed the strategic acquisitions of Vulcanic and Durex Industries that significantly enhance the scale, competitive positioning and growth prospects of the ETS Business.

“We remain confident in our ability to self-generate growth and protect margins, while navigating the uncertainties ahead.  In 2023, we anticipate mid-single-digit growth over 2022 Group pro-forma sales, with mid-to-high single digit growth in Steam Specialties and ETS, as well as Watson-Marlow sales slightly below 2022. Watson-Marlow’s extraordinary COVID vaccine-related demand should complete its normalisation cycle in 2023, with growth returning in the second half. Therefore, we look forward to delivering another year of overall double-digit sales growth, together with a small progression in the Group’s adjusted operating profit margin and improved cash conversion.”

+ The term ‘sales’ is used interchangeably with ‘revenue’ when describing the financial performance of the business.

* Organic measures are at constant currency and exclude contributions from acquisitions and disposals (with our Russian operating companies treated as disposals from the date at which the Group suspended all trading with and within Russia).

^Net debt includes total borrowings, cash and bank overdrafts but excludes lease liabilities, as set out in Note 8 to the Financial Statements.

** Biopharm refers to sales made to the Pharmaceutical & Biotechnology sector

See Note 2 to the Financial Statements for an explanation of alternative performance measures.

Audio webcast

The meeting with analysts will be available as a live audio webcast at 9.00 am on the Company’s website at www.spiraxsarcoengineering.com or via the following link: https://edge.media-server.com/mmc/p/8pxn2ptq and a recording will be made available on the website shortly after the meeting.

Conference Call

The meeting with analysts will also be available via a full conference call with Q&A facility, at 9.00 am, participants must register in advance using the provided link below:


After completing the conference call registration, you will receive dial-in details on screen and via email.

Chair’s Statement

Leading with Purpose

In a volatile year for the world’s economies, the effects of the deteriorating macroeconomic situation were felt across our global societies, impacting our Group’s stakeholders in many different ways.  In these more challenging times, the Board has remained focused on ensuring the decisions we make create value for all our stakeholders and is pleased with the Group’s strong and resilient performance.

During 2022, the Board engaged effectively and continued to reflect stakeholder views in our decision making. This was evidenced when making investment decisions such as increasing our manufacturing capacity, improving our sustainability performance, accelerating our Digital Strategy and the introduction of our Group Inclusion Plan. The Board also considered the impact we have on stakeholders when taking more difficult decisions, such as the closure of our loss-making manufacturing facility in Soissons (France) and the Group’s withdrawal from Russia.

Our commitment to inclusion, equity and diversity

Our Board is diverse ethnically, culturally and in terms of gender, bringing value to our Group, because of our Board members’ rich diversity of perspectives and experiences, enabling them to better understand and consider the needs of all our stakeholders.

At the end of December 2022, the Board met the 40% female representation target and with three members of the Board coming from a minority ethnic background, we exceeded the Parker Review target of at least one individual. The Board composition was stable during 2022 and our focus for the year was on Board consolidation and succession planning for senior leadership.

Given the increasing importance placed on sustainability by all stakeholders, the Board supported elevating the representation of this area to the Group Executive Committee (GEC) level, with Sarah Peers, Group Director of Sustainability, becoming a member of the GEC effective 1st October 2022.

The Board was pleased to approve and oversee the implementation of the Group’s Inclusion Plan in 2022, noting the impact it is already having across the Group.  In 2022, we continued increasing the number of women in senior roles across the Group and improving gender balance in our senior leadership team (GEC plus their direct reports) which reached 34% female representation by October 2022.  Although usual attrition and employee changes in the fourth quarter reduced this to 32% at the year-end, we anticipate female representation in our senior leadership will return to 34% by April 2023 and we remain committed to reaching at least 40% female representation across our senior leadership.  We are also pleased that our global graduate programme again achieved its goal of 50% female intake for the year.

To further strengthen our focus on inclusion and equity leading to greater diversity in our Group, we approved a set of refreshed Diversity goals at our December meeting.  The goals are published in our Annual Report and reaffirm our commitment to having a female Chair, Senior Independent Director, Chief Executive or Chief Financial Officer by the end of 2025, in line with the recommendations of the FTSE Women Leaders Review (formerly Hampton-Alexander).

We are fully supportive of the Group’s continued activity to champion these important societal changes.  In 2022, Nimesh Patel, Chief Financial Officer, became a Co-Chair of the FTSE Women Leaders Review and Nicholas Anderson, Group Chief Executive, is now an Ambassador for the 25×25 campaign, which is seeking to achieve 25 female CEOs in the FTSE100 by 2025. We became signatories to the UN Women’s Empowerment Principles and the UN LGBTI Standards of Conduct for Business, building on previous commitments, including as signatories to the Change the Race Ratio campaign which we began supporting in 2021.

Although not yet required to do so, we have voluntarily reported on all diversity and inclusion data which complies with the Financial Reporting Conduct’s new disclosure rules on this topic in respect of Board composition.  These disclosures are also published in our Annual Report.

Board highlights

The Board met nine times in 2022. This included two ad hoc meetings to address the acquisitions of Vulcanic and Durex Industries. The Board was actively and directly involved in progressing the Group’s ‘One Planet: Engineering with Purpose’ Sustainability Strategy. Other highlights in the year included visits to three operating companies in the UK and USA. The Board also reviewed and approved strategy updates for Digital and Health & Safety. Eight colleague engagement focus groups were held and the Board undertook a full organisational and succession review down to the level of GEC-3.

The Board has overseen a year of significant investment to support the Group’s sustainable growth over the long term. In addition to delivering a very strong financial performance, we are pleased with the progress made by Executive Management in advancing the Group’s strategic agenda across different dimensions, creating significant value for all our stakeholders in ways that are meaningful to them.

In addition to three acquisitions designed to create sustainable, long-term value for shareholders, the Group also closed its loss-making Chromalox facility in Soissons (France) and fully exited Russia. Investments in additional supply capacity, factory modernisation, IT systems and Digital are helping our Businesses do even better what they already do well. Our collaborative and proactive approach has created mutual benefit across our global supplier networks during these more challenging times. The launch of new-to-world decarbonisation solutions, created through a cross-Business collaboration between Steam Specialties and Electric Thermal Solutions (ETS), will support our customers to achieve their sustainability goals and protect our environment. The Group launched its Inclusion Plan and global commitments to ensure all 10,400 colleagues across the globe can thrive by feeling included and supported. The outstanding efforts of our teams working in support of our community engagement framework ‘Giving today for a better tomorrow’, continue making a positive difference to the local communities in which they operate.

Board changes

On 31st January 2023, we reported that, for personal reasons, Olivia Qiu stepped down as a Non-Executive Director. On behalf of our shareholders the Board acknowledges with gratitude Olivia’s significant contribution since her appointment. We have initiated the process to appoint another Non-Executive Director with the skills and experience required to support the implementation of our strategies and our commitments to inclusion and diversity.

Board effectiveness

In 2022, we conducted a Board effectiveness review with our external advisors Egon Zehnder, which enabled us to evaluate progress on the recommendations made in the 2021 review. The conclusions were positive and showed an improvement across all the key dimensions. The review highlighted the need for the Board to allow more time for keeping up with industry trends and competitor activity to better evaluate potential future risks and opportunities.


The Directors are proposing the payment of a final dividend of 109.5 pence per share, an increase of 12% (2021: 97.5 pence). Subject to approval of the final dividend by shareholders at the Annual General Meeting on Wednesday 10th May 2023, the total Ordinary dividend for the year will be 152.0 pence per share, an increase of 12% over the 136.0 pence per share for the prior year.

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