2012 Annual Report - Spirax-Sarco Engineering plc

Asia Pacific
Sales and operating profit increased as
market conditions remained generally strong,
particularly in China and Southeast Asia.
Neil Daws
Executive Director
Market conditions remained encouraging
in Asia Pacific and our growth continued
at a robust pace with sales increasing by
13% from £147.1 million to £166.9 million.
Exchange rates have been reasonably stable
and generally favourable, and at constant
currency sales increased by 12%. We saw
good sales growth from nearly all product
groups and particularly strong growth in
pre-fabricated heat exchange packages
owing in part to increasing customer demand
for simpler engineering solutions to reduce
their energy intensity and carbon emissions.
Operating profit increased by 16% from £37.8
million to £43.9 million, up 11% at constant
currency, and the operating profit margin
improved from 25.7% to 26.3% due
to favourable currency movements.
Our business in China had another
outstanding year and total sales in China,
including our small Watson-Marlow pumps
business, accounted for 10% of Group
sales in the year. Our business in China is
well spread across industry sectors but the
domestic economy, including the important
food & beverage market, underpins our sales.
Our heavy exposure in China to domestic
consumption means that our business is
more resilient to the slowing economic growth
from decreased country exports. Output
at our manufacturing plant in Shanghai
continued to grow rapidly across a widening
range of products to meet domestic and
regional demand in Southeast Asia, in line
with our manufacturing strategy aimed at
increasing flexibility and improving local
customer service.
As anticipated, Korea had a much better
second half year as the large projects
were shipped, with a corresponding nice
increase in sales and profits for the year. We
achieved strong growth in Southeast Asia
and continued to add sales resource into
a number of newly emerging markets with
meaningful future potential, including our first
sales engineers in Myanmar and Cambodia.
Elsewhere in the region, there were good
performances by our smaller operations and
another year of improvement in our Japanese
business, despite the difficult local market
conditions and protracted recovery.
Revenue £m
2008 98.9
2009
104.7
2010
2011
2012
131.5
147.1
166.9
Operating profit £m
2008 21.1
2009
23.1
2010
2011
2012
34.3
37.8
43.9
20 Spirax-Sarco Engineering plc Annual Report and Accounts 2012