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Pall Corp, USA
COMPANY PROFILE
Pall Corp, USA Profile
Pall Corp is a leading supplier of filters, principally made using its proprietary filter media, and other fluid clarification and separations equipment. The company serves customers in two principal markets: Life Sciences and Industrial. These two sectors are further divided into five segments: Medical and BioPharmaceuticals (which comprise the Life Sciences business) and General Industrial, Aerospace & Transportation, and, Microelectronics (which comprise the Industrial business). Analysis
Pall’s sales of US$2.3 billion for fiscal 2009 were down 9.4% on the previous year. Adjusted for currency variations the decrease in sales was 3.4%. In the Life Sciences segment revenues fell 3.6% on the year earlier to US$940.5 million, with sales in the division’s Medical business unit down 5.0% at US$389.8 million and BioPharmaceuticals sales 2.5% lower at US$550.6 million. Industrial segment sales were 13.0% easier than the 2008 comparator at US$1338.7 million with Energy, Water and Process Technologies (EWPT) revenues down 9.5% at US$887.7 million, Aerospace & Transportation sales 5.4% lower at US$290.0 million and Microelectronics 31.6% back at US$211.0 million. Pall continued to develop its revenues from systems, which saw sales expand 6.9% (in local currency) for the year reflecting growth in the Pharmaceuticals, Municipal Water, Power Generation, and Food & Beverage markets. In total, systems sales represented 13.3% of Pall’s total revenues compared with 12.4% a year earlier. Geographically, 41% of the company’s sales came from Europe, 33% from the Western Hemisphere and 26% from Asia. Gross margin was 47.3% for the year compared with 47.1% in 2008. The improvement in gross margin came from more favourable pricing and the effects of the ongoing cost reduction and lean manufacturing initiatives. Pall’s selling, general and administrative expenses (SG&A) for the year fell 6.6%, although as a percentage of sales increased to 30% compared with 29.1% in 2008. Net earnings for 2009 were US$195.6 million, down 10.0% on the previous year, reflecting the decrease in sales revenue partly offset by declines in its interest expenses and effective tax rate.
COMMENT While the global financial crisis took its toll on Pall during fiscal 2009 it doesn’t appear to have weakened the company’s resolve for growth. The company is continuing to pursue its Total Fluid Management (TFM) strategy that is based around applying its broad product portfolio to all of the fluids in a customer’s process. This includes a focus on building system sales, which have increased as a percentage of total turnover from 8.0% in fiscal 2004 to 13.4% in 2009. Geographic expansion is also playing an increasingly important role in the company’s plans. Almost 67% of Pall’s sales are now outside of the Western Hemisphere and the company is continuing to expand its capabilities in South East Asia, Eastern Europe, and Latin America, underlined by the recent creation of a legal entity in Dubai to expand its presence in that market. The economic downturn has also strengthened Pall’s commitment to improve efficiency. This has seen a plethora of initiatives, including the EuroPall and AmeriPall programmes, that have seen facilities rationalization, procurement improvement and the introduction of lean manufacturing. ■
Key Figures (US$ million) Pall Corp
Year ended 31.7 2009
2008
2007
2006
2005
Net Sales Of Which: Life Sciences Industrial
2329.2
2571.6
2249.9
2016.8
1902.3
940.5 1388.7
975.2 1596.4
880.2 1369.7
796.3 1220.5
764.7 1137.5
Cost of Sales
1228.5
1360.8
1190.5
1072.8
978.9
Gross Profit
1100.7
1210.8
1059.4
944.0
923.4
71.2
71.6
62.4
57.3
56.2
Operating Profit Of Which: Life Sciences Industrial
386.1
443.6
369.4
289.0
280.9
200.1 186.1
197.8 245.9
165.3 204.1
138.4 150.6
124.0 156.8
Earnings before Income Taxes
270.8
325.6
260.5
203.2
177.0
Net Earnings
195.6
217.3
127.5
52.1
113.7
R&D Expenses
Contact Details
Chair and CEO: Address:
8
Filtration Industry Analyst
Eric Krasnoff 25 Harbor Park Drive Port Washington NY 11050 USA
Tel: +1 516 484 5400 Fax: +1 516 801 9754 Web: www.pall.com
January 2010
Pall Corp, USA Profile
Pall Corp is a leading supplier of filters, principally made using its proprietary filter media, and other fluid clarification and separations equipment. The company serves customers in two principal markets: Life Sciences and Industrial. These two sectors are further divided into five segments: Medical and BioPharmaceuticals (which comprise the Life Sciences business) and General Industrial, Aerospace & Transportation, and, Microelectronics (which comprise the Industrial business). Analysis
Pall’s sales of US$2.3 billion for fiscal 2009 were down 9.4% on the previous year. Adjusted for currency variations the decrease in sales was 3.4%. In the Life Sciences segment revenues fell 3.6% on the year earlier to US$940.5 million, with sales in the division’s Medical business unit down 5.0% at US$389.8 million and BioPharmaceuticals sales 2.5% lower at US$550.6 million. Industrial segment sales were 13.0% easier than the 2008 comparator at US$1338.7 million with Energy, Water and Process Technologies (EWPT) revenues down 9.5% at US$887.7 million, Aerospace & Transportation sales 5.4% lower at US$290.0 million and Microelectronics 31.6% back at US$211.0 million. Pall continued to develop its revenues from systems, which saw sales expand 6.9% (in local currency) for the year reflecting growth in the Pharmaceuticals, Municipal Water, Power Generation, and Food & Beverage markets. In total, systems sales represented 13.3% of Pall’s total revenues compared with 12.4% a year earlier. Geographically, 41% of the company’s sales came from Europe, 33% from the Western Hemisphere and 26% from Asia. Gross margin was 47.3% for the year compared with 47.1% in 2008. The improvement in gross margin came from more favourable pricing and the effects of the ongoing cost reduction and lean manufacturing initiatives. Pall’s selling, general and administrative expenses (SG&A) for the year fell 6.6%, although as a percentage of sales increased to 30% compared with 29.1% in 2008. Net earnings for 2009 were US$195.6 million, down 10.0% on the previous year, reflecting the decrease in sales revenue partly offset by declines in its interest expenses and effective tax rate.
COMMENT While the global financial crisis took its toll on Pall during fiscal 2009 it doesn’t appear to have weakened the company’s resolve for growth. The company is continuing to pursue its Total Fluid Management (TFM) strategy that is based around applying its broad product portfolio to all of the fluids in a customer’s process. This includes a focus on building system sales, which have increased as a percentage of total turnover from 8.0% in fiscal 2004 to 13.4% in 2009. Geographic expansion is also playing an increasingly important role in the company’s plans. Almost 67% of Pall’s sales are now outside of the Western Hemisphere and the company is continuing to expand its capabilities in South East Asia, Eastern Europe, and Latin America, underlined by the recent creation of a legal entity in Dubai to expand its presence in that market. The economic downturn has also strengthened Pall’s commitment to improve efficiency. This has seen a plethora of initiatives, including the EuroPall and AmeriPall programmes, that have seen facilities rationalization, procurement improvement and the introduction of lean manufacturing. ■
Key Figures (US$ million) Pall Corp
Year ended 31.7 2009
2008
2007
2006
2005
Net Sales Of Which: Life Sciences Industrial
2329.2
2571.6
2249.9
2016.8
1902.3
940.5 1388.7
975.2 1596.4
880.2 1369.7
796.3 1220.5
764.7 1137.5
Cost of Sales
1228.5
1360.8
1190.5
1072.8
978.9
Gross Profit
1100.7
1210.8
1059.4
944.0
923.4
71.2
71.6
62.4
57.3
56.2
Operating Profit Of Which: Life Sciences Industrial
386.1
443.6
369.4
289.0
280.9
200.1 186.1
197.8 245.9
165.3 204.1
138.4 150.6
124.0 156.8
Earnings before Income Taxes
270.8
325.6
260.5
203.2
177.0
Net Earnings
195.6
217.3
127.5
52.1
113.7
R&D Expenses
Contact Details
Chair and CEO: Address:
8
Filtration Industry Analyst
Eric Krasnoff 25 Harbor Park Drive Port Washington NY 11050 USA
Tel: +1 516 484 5400 Fax: +1 516 801 9754 Web: www.pall.com
January 2010