Spirax Group Annual Report 2023
Engineering
ourfuture
Spirax-Sarco Engineering plc
Engineering our
future through
continuity and
progression
The decisions we have taken
over the course of our history
enable our sustainable growth,
influence the value we create
and have a lasting impact for our
stakeholders in the future.
Our colleagues
Empowering future
leaders
Our environment
The future of
sustainable steam
Our shareholders
Engineering our
future, together
Our suppliers
Embedding
sustainability into
our future
Our customers
Developing
solutions for future
customer needs
Our communities
Enabling future
generations
It balances our history and where we have
come from with who we are today, and is a
natural evolution for our Company.
Spirax Group is different but also familiar. Its simplicity aims
to create clarity, by representing everyone and everything
that we do and eliminating the confusion between the name
of our Group and the Spirax Sarco Division that provides
steam thermal solutions to customers. As Spirax Group,
we are staying true to our heritage while also reflecting our
evolution to a much larger and stronger organisation.
We are inviting our shareholders to support our legal name
change to Spirax Group plc at our AGM in May.
Read about our brand story overleaf
2014
Acquired
BioPure
2016
Acquired
Aflex Hose
2017
Launched our
Global Graduate
Programme
2019
Acquired
Thermocoax
Events of the last ten years have significantly contributed
to the growth and evolution of our Company and are
reflected in our decision to refresh our Brand. 2024 marks
the culmination of an important era in our Group’s history
and lays strong foundations for our future as Spirax Group.
2015
Acquired Asepco
and Flowsmart
2017
Acquired Gestra
and Chromalox
2018
Joined the
FTSE 100
Our refreshed brand signifies our evolution across
the last decade to a much larger and more capable
organisation, while staying true to our heritage of
more than 135 years.
Across the Group, we have united behind our shared
Purpose to create value for all our stakeholders by
engineering a more efficient, safer and sustainable
future. I am so proud of our collective achievements,
grateful for all the support received and most
importantly, I’m extremely confident in the future
and sustainable success of Spirax Group.”
Nicholas Anderson
Group Chief Executive
A progressive decade...
2021
Launched our
One Planet:
Engineering
with Purpose
Sustainability
Strategy
2022
Launched
new-to-world
decarbonisation
solutions
2023
Investment
in Kyoto
Group
2022
Acquired
Vulcanic and
Durex Industries
2022
Launched the
Spirax Group
Education Fund
and Everyone is
Included
2024
Spirax-Sarco Engineering
becomes
Our Group has been built on strong foundations over
decades, creating an enviable culture based on our
Values. We are a caring, respectful and authentic
organisation with a shared Purpose that we
demonstrate every day through the way we work
together to make our difference.
We look forward to welcoming shareholders to our
AGM in May when we will share more information on
our brand refresh and ask for shareholder support to
change our legal name to Spirax Group plc.”
Nimesh Patel
Group Chief Executive Officer
...supports our bright future
As a Company established during
the second industrial revolution,
anticipating and investing in our
future needs has become a core
part of our DNA.
There were lots of examples of this
during the last decade as we evolved
the scale and composition of our
Group by focusing on opportunities
to create significant value for all our
stakeholders and address the
imperative of climate change.
Engineering
our future
for over
135 years
As Spirax Group we can help everyone better
understand who we are and how we work together
across our Businesses to help customers meet their
operational, sustainability and decarbonisation goals.
Throughout this report we share some of the ways
in which important decisions taken during the last
decade will continue to shape our long-term,
sustainable future.
Strategic Report
Summary
The industries we serve
Introducing Spirax Group
Chair’s Statement
Letter from the former Chief Executive
Case study: Empowering future
leaders
Business model and approach
Investment case
Chief Executive Officer’s Review
Stakeholder engagement
Key performance indicators
Financial Review
Ten-year financial summary
Operating Review
Solutions
Case study: Developing solutions for
future customer needs
Sustainability Report
generations
sustainable steam
information statement
sustainability into our future
Risk Management
Governance Report
Our Governance
Board leadership and Company
together
evaluation
Report
Audit, risk and internal control
Remuneration
Directors’ remuneration
Regulatory disclosures
Statement of Directors’
Responsibilities
Financial Statements
Independent Auditor’s Report
Consolidated Statement of Financial
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of Changes
in Equity
Consolidated Statement of Cash
Flows
Statements
Appendix: Alternative performance
measures
Company Statement of Financial
Company Statement of Changes in
Equity
Statements
Corporate Information
Our Global Operations
Officers and Advisers
Summary
Financial, operational and
sustainability highlights
Financial
•
Revenues up 4% reflecting full-year
contribution from acquisitions; down
•
Early restructuring actions and cost
containment partially mitigated
•
Adjusted operating profit margin
reflects adverse mix impact of lower
volumes in higher margin businesses
•
Statutory operating profit and
margin reflect impact of
restructuring and impairment costs
•
track record
•
Return to organic sales growth and
adjusted operating profit margin
Operational
•
Organic revenue growth in STS and
•
Integrations of acquisitions
progressing well
•
future growth:
•
First installations of TargetZero
solutions
•
Increased digital connections
enhancing our customer
propositions
•
Expansion of Chromalox Ogden
manufacturing facility underway
•
Investment in Kyoto
adds to energy storage solutions
•
Digital innovations in Watson-
Marlow support customers with
preventative maintenance
Sustainability
•
•
Group energy use 8% lower
•
•
•
volunteering
•
Recent appointments improving
gender balance of Executive Team
Our financial results in 2023 were impacted by a
more challenging trading environment than we
had anticipated at the start of the year, with a
number of external headwinds to our highest
margin businesses. An early focus on restructuring
to right-size capacity, together with cost
containment actions, supported our adjusted
operating profit margin. We are well positioned
to return to revenue and profit growth in 2024.”
Group Chief Executive Officer
+ ‘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
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Strategic Report
£ KPI
£1,682.6m
^ KPI
1.55
£m
£284.4m
p
249.5p
£m KPI
£349.1m
p KPI
312.4p
Organic
Change %
Margin % Margin %
1,682.6
1.55
284.4
249.5
349.1
312.4
1,242.4
3.44
245.0
226.2
282.7
265.7
1,193.4
2.62
249.0
235.5
270.4
256.6
1,344.5
2.22
320.9
318.3
340.3
338.9
1,610.6
1.75
318.8
305.1
380.2
377.2
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
2023
2022
2021
2020
2019
16.9
19.8
23.9
20.9
19.7
20.7
23.6
25.3
22.7
22.8
2023 20232023
2022 20222022
54% 59%66%54% 51%55%
23%
16%
8%
30%
39%
10%
43%
2%
23%
26% 25%
Steam Thermal Solutions Electric Thermal Solutions Watson-Marlow Fluid Technology Solutions
Appendix to the Financial Statements
The Group’s three operating segments, as defined by IFRS 8, are Steam Thermal Solutions, Electric Thermal Solutions and Watson-Marlow Fluid
Technology Solutions
16%
5
Strategic Report
Oil & Gas Chemicals Power Generation
6% of Group revenue
Electrical heating products reduce fluid
viscosity, deliver freeze protection and
provide efficiency in the processing of
natural gas, crude oil and water. Our steam
products enable optimum steam system
performance and reduce energy use during
oil and gas production.
6% of Group revenue
Steam and electricity are widely used as an
energy source in chemical production and
product processing, while our pumps are
used to safely and accurately transfer and
dose critical chemical components.
6% of Group revenue
Electrical heating technologies are widely
used to optimise power generation. Steam
turbines transfer chemical energy in fuel
into electrical energy and steam is used to
distribute and reuse waste heat formed
during the power generation process.
Food & Beverage
Pharmaceutical
& Biotechnology
OEM Machinery
18% of Group revenue
Our peristaltic pumps, valves and single-use
components enable precise flow control and
fluid isolation. Clean steam reduces the risk
of product and process contamination.
Electrical heating is used in a wide range of
process heating applications.
20% of Group revenue
Steam is used for blanching, cooking,
baking, brewing, distilling, packaging,
cleaning and sterilising. Electric heating
elements are used in commercial food
transfer ingredients, deliver food to process
lines and handle process waste.
12% of Group revenue
are companies that build and supply
machines for use in industry. Our activities
with OEMs vary from simple product supply
to advising on machine performance
improvements and process plant design.
The industries we serve
Solutions for a diverse
range of industries
We apply our products, solutions and expertise across a diverse range of industrial
sectors, helping our customers to increase their efficiency, safety and sustainability.
14% of Group revenues to ‘other’ industries including Pulp & Paper, Aerospace & Defence and Textiles.
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Strategic Report