2012 Annual Report - Spirax-Sarco Engineering plc

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Our markets We serve a wide range of industries and this diversity insulates the Company from seasonal and cyclical demand. This section shows the specific applications in which we apply our tailored solutions to reduce energy costs and improve plant efficiency. One of the great strengths of the Group is our diverse range of customers and end markets. We have an excellent balance between cyclic higher-growth end markets and those that are more ‘defensive’ that tend to be more recession-proof. More than 50% of the Group’s revenues are derived from these defensive end markets including: foods, beverages, HVAC, pharmaceuticals, healthcare, water treatment, chemicals, textiles and power generation. More than 85% of our revenues are derived from our customers’ annual maintenance or operations’ budgets. Foods processing is our largest single end market and represents approximately 12% of total Group sales. This end market has many sub-sectors such as rendering plants, slaughterhouses, packaged foods, dairies, raw foods processing, sugar processing and palm oil processing, which are important markets for both our steam specialties business and Watson-Marlow Pumps. We have a very high exposure to food processing throughout Asia, and this represents 40% or more of total Asia sales. HVAC is our second largest end market (11% of sales) served by our steam specialties business, with applications in humidification (including during the production of semiconductors, electronics and LCD and plasma screens), space heating (for large public buildings and university complexes) and instantaneous hot water (for hospitals, resort hotels and commercial buildings). Our third largest end market is refining and petrochemicals (9% of sales). Steam is extensively used in catalytic and thermal cracking of crude oil, distillation columns, power generation and in heat tracing. Pharmaceuticals, including biotechnology, is our fourth largest end market (8% of sales) and represents the single largest end market for our Watson-Marlow pumps business, comprising about 30% of total Watson- Marlow sales. Revenue by sector Foods Brewing and distilling HVAC OEM machinery Refining and petrochemical Pharmaceuticals Healthcare Precious metal processing Water treatment Chemicals Textiles Rubber and plastics Other 10 Spirax-Sarco Engineering plc Annual Report and Accounts 2012
11 Overview Foods Brewing and distilling HVAC OEM machinery Refining and petrochemical Pharmaceuticals • Steam is widely used in the production of packaged foods, for blanching, cooking, baking, packaging and sterilising. • Steam is essential for brewing and distilling processes. It is used to protect product quality and flavour, and ensure compliance with industry standards. • Our products are used to provide space heating, humidification and hot water to create comfortable working conditions for employees and visitors in public and private buildings. • We work with manufacturers to optimise the performance of a diverse range of equipment, including mixers, reactors, paper and packaging machines, dryers, sterilisers and clinical diagnostic equipment. • Our steam system services and products enable optimum performance in steam and condensate systems, and reduce energy use during refining and petrochemical production. • Clean steam reduces the risk of product and process contamination, and our peristaltic pumps enable precise flow control and fluid isolation in the pharmaceutical industry. Healthcare Precious metal processing Water treatment Chemicals Textiles Rubber and plastics • Our products have a wide range of applications in hospitals and clinics for space heating, hot water production, humidification and sterilisation. • Peristaltic pumps reduce water, energy and chemical use and increase reliability and productivity while moving and processing highly abrasive ores and slurries. • Peristaltic pumps are used to accurately dose chemicals during water treatment processes and efficiently transfer viscous and abrasive slurries. • Steam is widely used as an energy source in chemical production and product processing. • Fabric and carpet production use steam during the spinning, dyeing and finishing processes. • Our products facilitate temperature control of exothermic process reactors, critical to the manufacture of modern composite materials. Spirax-Sarco Engineering plc Annual Report and Accounts 2012 11
Page 1 and 2: The Business of Solutions 2012 Spir
Page 3 and 4: Performance highlights Revenue £m
Page 5 and 6: 3 Overview Chairman’s statement p
Page 7 and 8: Our businesses We comprise two worl
Page 9 and 10: 7 Overview Group structure Spirax-S
Page 11: 9 Overview EMEA 44% 2011: 48% Emerg
Page 15 and 16: 13 Overview Customer value Customer
Page 17 and 18: Aligning results and reward 15 Over
Page 19 and 20: The Business of Solutions We are a
Page 21 and 22: Strategies for growth Our understan
Page 23 and 24: Strategies for growth We provide ou
Page 25 and 26: Strategies for growth We have stron
Page 27 and 28: Strategies for growth We see furthe
Page 29 and 30: Strategies for growth We create con
Page 31 and 32: Business review 17 Overview We have
Page 33 and 34: 19 Overview Revenue £232.8m 2011:
Page 41 and 42: 27 Overview Strategy and performanc
Page 43 and 44: 29 Overview Return on capital emplo
Page 47 and 48: 33 Overview UK Supply factory reduc
Page 49 and 50: 35 Overview Saving energy and preve
Page 51 and 52: 37 Overview Watson-Marlow sponsors
Page 53 and 54: 39 Overview Engaging with our staff
Page 55 and 56: 41 Overview Employment practices Th
Page 59 and 60: 45 Overview The Boardroom Chairman
Page 61 and 62: 47 Overview David Meredith FCMA, CG
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49 Overview Approach to governance
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51 Overview Governance structure Th
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53 Overview To assess the effective
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Risk management and principal risks
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57 Overview Important developments
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59 Overview There may be other risk
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61 Overview Appointment of new Exec
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63 Overview 2.1.2 Variable elements
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65 Overview 2.3 Directors’ servic
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67 Overview 3.2 Annual bonus The an
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69 Overview 3.3.2 Awards made for 2
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71 Overview 3.6 Total remuneration
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73 Overview 4.1.2 Spirax-Sarco Engi
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Statement of compliance 75 Overview
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77 Overview COMPLIANCE WITH THE UK
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79 Overview COMPLIANCE WITH THE UK
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81 Overview Share capital As at 28t
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Statement of Directors’ responsib
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Statements of financial position at
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Consolidated statement of comprehen
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Cash flow statements for the year e
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91 Overview 1 Accounting policies c
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93 Overview 1 Accounting policies c
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95 Overview 2 Segmental reporting 2
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97 Overview 4 Staff costs and numbe
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99 Overview 10 Earnings per share P
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101 Overview 13 Goodwill and other
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103 Overview 13 Goodwill and other
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105 Overview 17 Deferred tax assets
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107 Overview 21 Obligations under f
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109 Overview 27 Employee benefits P
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111 Overview 27 Employee benefits c
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119 Overview 30 Purchase of busines
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121 Overview 31 Derivatives and oth
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127 Overview 2006 £000 2007 £000
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Spirax Sarco worldwide Steam specia
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2012 Annual Report - Spirax-Sarco Engineering plc

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