Spirax-Sarco Engineering plc Capital Markets Day Friday 11 th September
Spirax-Sarco Engineering plc Nick Anderson Group Chief Executive
Agenda “Doing better what we already do well.” - Welcome from Nick Anderson (Group Chief Executive) - Presentation by Jay Whalen (President of WMFTG) - Presentation by Simon Nicholson (Managing Director, Watson-Marlow Ltd) - Site tour Lunch - Presentation by Richard Green (Group Product Manager, WMFTG) - Presentation by Rachel Pallett (Sales and Marketing Director, EME, WMFTG) - Presentation by Ian Farnworth (Group Supply Chain Director, SxS) - Presentation by Sheldon Banks (Divisional Director for the Americas, SxS) - Round up and Q&A, Nick Anderson 3
Our strategy To deliver self-generated growth outperforming our markets 1) Increase direct sales effectiveness through sector focus 2) Develop the knowledge and skills of our expert sales and service teams 3) Broaden our global presence 4) Leverage R&D investments 5) Optimise supply chain effectiveness 6) Operate sustainably and help improve our customers’ sustainability Doing better what we already do well 4
Our strategy Objective : self-generated growth that outperforms our markets Focus: doing better what we already do well Our six-part Group strategy reflects the key elements of the Spirax Sarco steam business strategy, the Watson-Marlow Fluid Technology Group strategy and the Group acquisitions strategy: Spirax Sarco Eight strategic thrusts 1. Grow end user sales in Food & Beverage and Healthcare • To be the world leader in steam 2. Grow sales in OPC and Chemicals and thermal energy solutions 3. Grow sales in OEM’s • Intensify customer focus through enhanced customer value 4. Early entry to attractive geographic markets propositions 5. Grow sales of Thermal Energy Management • Focus on priority industries and Controls products • Increased R&D effectiveness 6. Global excellence in Supply Chain • Global excellence in supply chain 7. Launch the right products to market faster • Competitive advantage through 8. Develop knowledge and skills enhanced knowledge and skills 5
Our strategy Objective : self-generated growth that outperforms our markets Focus: doing better what we already do well Our six-part Group strategy reflects the key elements of the Spirax Sarco steam business strategy, the Watson-Marlow Fluid Technology Group strategy and the Group acquisitions strategy: Spirax Sarco Watson-Marlow Acquisitions • Enhance market sector sales • To create significant focus • To be the world leader in steam shareholder value through and thermal energy solutions • Achieve rapid geographical supplementing organic growth • Intensify customer focus through expansion • Expand the capabilities of our enhanced customer value • Accelerate development of niche businesses through new propositions breakthrough products technologies, skills or • Focus on priority industries geographic coverage • Attain excellence in • Increased R&D effectiveness • manufacturing Increase our addressable • Global excellence in supply chain market into adjacent related • Selective product and market • Competitive advantage through sectors sector diversification enhanced knowledge and skills 6
Summary: strategy implementation “Doing better what we already do well” • Strategy implementation is delivered through the execution of selected projects across whole organisation • Governed by a Strategy Steering team focused on driving transformational projects • Supported by dedicated Strategy Implementation team including regional programme managers • Strategy deployment tool (Hoshin Kanri) used to cascade the strategy across the Group and align all business units • Engaging multiple levels across the global organisation Accelerating growth and adding value for the long term 8 7
Watson-Marlow Fluid Technology Group Jay Whalen Executive Director President, Watson-Marlow Fluid Technology Group
Watson-Marlow Fluid Technology Group Eight brands Precision pump High-flow industrial Low-flow peristaltic and transfer tubing hose pumps (acquired metering pumps (joined SSE plc in 1990) 1996) Stainless steel tank Low-flow, high Aseptic filling Sinusoidal pumps Biopharm tubing precision OEM (acquired 2008) connection systems bottom and in-line (acquired 2009) (acquired 2014) pumps (acquired valves for biopharm 2000) (acquired 2015) 9
Peristaltic pump How it works In a peristaltic pump, a flexible tube is occluded and fluid is driven through the pump by rollers or shoes. Restitution of the tubing draws in fresh fluid. 10
Peristaltic pump Value proposition The pump does not touch the fluid Making peristaltic pumps perfect for clean fluids which must not be contaminated – biopharm & pharmaceuticals, and food & beverage applications. A sterile tube makes a sterile pump. The fluid does not touch the pump Making peristaltic pumps equally suitable for dirty fluids which contaminate other pumps – slurries, pigments, effluent applications. No need to strip or clean the pump; a new tube makes a new pump. 11
MasoSine pump How it works • Simple single shaft and single rotor design • Symmetrical sinusoidal pumping chambers provide positive displacement of product. As one chamber discharges the other fills • A gate shuttles back and forth along the rotor separating the suction chamber from the discharge, preventing fluid slip • Large pumping chambers eliminate product compression and damage to large solids 12
MasoSine pump Value proposition Fits perfectly in gap between hygienic Watson-Marlow pumps and higher pressure Bredel pumps • Higher flow rates • Higher viscosities • Higher pressures • Non-lubricated • Gentle pumping • Simple maintenance • Targets rotary lobe pumps • Strengthens product portfolio • Doubled share of food & beverage market 13
BioPure connection systems Value proposition The connection between Watson-Marlow pumps and Watson-Marlow tubing in biopharm single use aseptic process • “Single - use” is a growing trend within the growing biotechnology sector • Peristaltic pumps and tubing are perfect for single-use • BioPure add the aseptic connection systems and enable the manufacture of single use assemblies BioBarb BioClamp BioValve 14
Asepco stainless steel valves Value proposition Asepco radial valves deliver purity and reliability • Radial valves’ ability to drain and clean simplifies batch to batch changeovers • Less risk of contamination of the customer’s high value product • Validation of the cleaning routine is paramount, and the simpler Asepco design fits to that well 15
Five core strategies • Market sector sales focus • Rapid geographical expansion • Accelerate development of breakthrough products • Excellence in manufacturing • Selective product and market sector diversification 16
Fluid path technology for process industries Strategy: market sector sales focus Biotech and Water and Industrial and Mining Food and pharmaceuticals wastewater chemicals beverage Rugged pumps Sterile pumping, Wide chemical required to reliably Abrasion-resistant Accurate, repeatable filling, transfer tubing compatibility, flow handle aggressive pumping of solids- dosing with low- and connections. rate ranges and flocculent chemicals laden fluids. shear pumping Applications include control options. and abrasive slurries Accurate and action. No damage fermentation, Ease of use ensures 24/7. controllable to solids and soft filtration, aseptic rapid acceptance chemical metering. fruit. Clean in place filling and tablet by operators. and steam in place. coating. MasoSine: gentle, low shear, viscous. 17
Sales by market sector Strategy: market sector sales focus 35% BioPharm/Pharmaceutical Mainly Watson-Marlow pumps and tubing, and Flexicon filling. Boost from Biopure Biopharmaceutical 20% Industrial Industrial General industrial markets slow Environmental 12% Water & Wastewater 2014 Sales Food & Beverage Environmental recovering in 2014 Medical Mining 11% Food & Beverage Other MasoSine and Watson-Marlow 8% Mining All Watson-Marlow and Bredel. Stabilized in 2014 6% Medical & Clinical Diagnostic OEM route to market accounts for 21% of sales Watson-Marlow and Alitea 18
Rapid geographical expansion Strategy: rapid geographical expansion Direct sales operations driven by market sector focus: • Greater understanding of customers’ processes • Greater support to end customers • Knowledge-based, close relationship with customers • Watson-Marlow actively converting 3 rd party distribution Direct sales operation > 3yrs Direct sales operations < 3yrs to direct sales Direct operations planned 2015/16 19
2014 new and emerging markets Strategy: rapid geographical expansion EMEA 44% (2013: 44%) Emerging markets 2% (2013: 3%) Americas 44% Asia Pacific 12% (2013: 44%) (2013: 12%) Emerging markets 8% Emerging markets 8% (2013: 9%) (2013: 7%) In 2014 18% of sales from emerging markets (2013: 19%) 20
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