- Email: [email protected]
Siemens expands water business down Mexico way
IN BRIEF/DIVIDENDS/NEWS
Pump Industry Analyst
September 2005
IN BRIEF
DIVIDENDS
• For the three months ended 30 June 2005, Japan’s Torishima Pump delivered net sales of ¥2946 million, an operating loss of ¥567 million and a net loss of ¥289 million. This compares with net sales of ¥3497 million, operating loss of ¥422 million and net income of ¥285 million a year ago. • Armstrong Holden Brooke Pullen has signed an agreement with Danfoss for the exclusive worldwide supply of drives with sensorless control software for circulating pumps. The control software was initially developed in conjunction with Holden Brooke Pullen for its variable speed IVS Sensorless pump range. Holden Brooke Pullen was acquired by Canada’s Armstrong Pumps Ltd in 2004. • United Technologies Corp - parent company of Blackmer and Wilden - is on track to deliver 2005 earnings of UA$3.00–3.07 per share. • Given the strength of the group’s cash generation and balance sheet, the Weir Group board continues to target a share buy-back of up to £50 million in the current year. The company recently purchased 100 000 shares at £3.76 each, which Weir intends to hold in treasury. Following the purchase of these shares, Weir holds 2 979 966 of its ordinary shares in treasury and has 205 507 119 ordinary shares in issue. • Roper Industries Inc presented at the Prudential Equity Group LLC Investor Conference on 22 September 2005 in Mount Snow, Vermont. A copy of the presentation is available at www.roperind.com.
• Tecumseh Products Co is suspending its quarterly dividend until profitability improves. The company has paid dividends without interruption for more than 50 years. “We deeply regret this action, but logic dictates that we continue to fund our business improvement and new product initiatives in order to create a business that can resume dividend payments in the future,” explained Todd Herrick, chairman of the board and chief executive officer. “While recent amendments to the company’s financing arrangements would permit declaration of a third quarter dividend, future dividends may need to be curtailed. Instead of creating expectations of future dividends, the company and its board of directors believe that it is in the long-term best interest of shareholders to utilize available funds to continue ongoing restructuring efforts and reduce indebtedness,” added James Nicholson, vice president, treasurer and chief financial officer. • Spirax-Sarco has declared an interim dividend of 6.8p per ordinary share, an increase of 8% on 2004’s 6.3p, which will be paid on 11 November 2005 to shareholders on the register at the close of business on 14 October 2005. • Weir Group plc is proposing to pay an interim dividend of 3.55p (up from 2004’s 3.45p) on 11 November 2005 to shareholders on the register at the close of business on 14 October 2005. • GUD has announced a 25% increase in its annual dividend to A$0.50 per share fully franked from A$0.40 previously.
12
FORD TO SELL HERTZ IN US$15 BN DEAL Ford Motor Co is selling its wholly owned subsidiary, The Hertz Corp, in a transaction valued at approximately US$15 billion including debt, to a group of private equity investors including Clayton Dubilier & Rice, The Carlyle Group and Merrill Lynch Global Private Equity. Under the terms of the agreement, Ford will receive US$5.6 billion for the Hertz equity. Hertz operates the largest general use car rental business in the world and one of the largest industrial, construction and material handling equipment rental businesses in North America. Hertz Equipment Rental Corp offers a range of pumps including centrifugal, diaphragm, industrial, submersible, test and trash.
ROUNDABOUT WAY TO CLEAN WATER IN MOZAMBIQUE About 40 000 school children in Mozambique will soon have clean drinking water and sanitation facilities thanks to a new initiative by of the UN World Food Programme (WFP), the UN Children’s Fund (UNICEF) and the Dutch logistics company TNT. In a joint effort to improve learning conditions in primary schools in Mozambique, the two UN agencies are supporting the Government of Mozambique through the Ministry of Education and Culture and the Ministry of Public Works and Housing by installing childrens’ roundabouts that pump safe drinking water. As children spin the carousel in play, they inadvertently pump borehole water
into a tank for use by the school and surrounding communities. The roundabout pumps are part of a broader programme called “Flourishing Schools” initiated through a US$444 000 donation from TNT. The Flourishing Schools programme aims to provide potable water and sanitation to 60 rural Mozambican schools. In the first phase, 30 roundabout play pumps will be installed in schools in the provinces of Maputo, Gaza and Inhambane. In addition, 30 conventional hand pumps will be installed in Manica and Sofala. The roundabouts have already proved hugely successful in rural schools across South Africa and Swaziland. “Access to safe water and sanitation facilities is a crucial factor for keeping children in school and helping them to learn in a healthy environment,” said Leila Pakkala, UNICEF representative. WFP and TNT have agreed to drill the boreholes while UNICEF will install sanitation facilities and provide hygiene training. The play pumps were developed by the SouthAfrican company Roundabout and are partly paid for by the World Bank. For further information, visit www.roundabout.co.za.
SIEMENS EXPANDS WATER BUSINESS DOWN MEXICO WAY Siemens Water Technologies plans to grow the company’s water business in Mexico, Central America and the Caribbean by leveraging the existing Siemens infrastructure in Mexico – including the Mexico City base of USFilter. The Siemens Water Technologies business will continue to focus on both industrial and municipal markets with an expanded scope of
September 2005
FLOWSERVE TO BOOK US$10 MN FOR CEO CHANGE Flowserve expects to record about US$10 million for chief executive officer transitionrelated and stock compensation expenses in 2005. Former Flowserve chairman, president and CEO Scott Greer resigned in April this year (see Pump Industry Analyst, April 2005). He was replaced by Kevin Sheehan on an interim basis until July, when chief operating officer Lewis Kling stepped into the CEO and president roles, with Sheehan staying on as non-executive chairman (see Pump Industry Analyst, August 2005). The US$10 million relates to severance, executive search, previously reported management retention bonuses under the company’s Transition Security Plan, and stock compensation resulting from the modification of certain existing restricted stock and stock option grants. Approximately US$6.5 million of the approximately US$10 million charge is attributable to the CEO transition and certain stock compensation noted above reflects a non-cash charge related to this additional
non-cash compensation expense, including about US$5.5 million arising from the departure of the former CEO.
FYBROC/GOULDS ENTER DISTRIBUTION ALLIANCE Goulds Pumps Inc is to act as a key distributor of Met-Pro Corp’s Fybroc line of fiberglass reinforced plastic (FRP) horizontal and vertical centrifugal pump products. The global agreement is valid across all markets, with some specific exclusions. MetPro says it augments Fybroc’s existing global distribution network and does not present any significant competitive barriers to Fybroc’s existing sales force. As part of the agreement, Goulds Pumps will discontinue the manufacture of its FRP horizontal and vertical centrifugal pumps, but will maintain its commitment to supply spare parts and service to its existing product population. In the coming months, marketing teams from Fybroc and Goulds Pumps will be working closely together to develop product packages for distribution to the Goulds Pumps global sales network. A formal product release to the Goulds global sales network is targeted for October.
GRACO TO PURCHASE FUEL TRANSFER PUMP MAKER Graco Inc has signed an agreement to purchase the assets of PBL Industries of Angola, Indiana, a manufacturer of fuel transfer pumps, oil transfer pumps and related parts and accessories. PBL serves OEM and retail customers and has sales of US$5 million.
Financial
IN BRIEF
Calendar 5 October 2005 Robbins & Myers Q4 Results 19 October 2005 GUD Holdings Annual General Meeting 25 October 2005 Sulzer Order Intake January–September 2005 Alfa Laval Q3 Report 26 October 2005 Metso Interim Review January–September 2005 27 October 2005 ITT Q3 Results Weatherford Q3 Results 28 October 2005 Johnson Pump Quarterly Report January–September 2005 8 November 2005 Andritz Results for Q1–Q3 2005 Pfeiffer Vacuum 9 Months 2005 Results Sulzer Roadshow, Frankfurt, Germany 8–9 November 2005 Robert W Baird & Co 35th Annual Industrial Technology Conference, Chicago, USA 9 November 2005 Sulzer Roadshow, Edinburgh, UK Interpump Q3 2005 Report 10 November 2005 Bjørge Q3 2005 Results Cardo Interim Report January–September 2005 Siemens Preliminary Figures for 2005 Sulzer Roadshow, London, UK 11 November 2005 Sulzer Roadshow, Zurtich, Switzerland 22 November 2005 Hamworthy Interim Results March–September 2005 24 November 2005 Alfa Laval Capital Markets Day December 2005 Wood Group Trading Update January 2006 KSB Preliminary Report on 2005 11 January 2006 Robbins & Myers Annual Shareholders’ Meeting 10 February 2006 Bjørge Q4 2005 Results March 2006 Weir Preliminary Results
• Grundfos-owned Hilge Pumps is starting pump manufacturing in the UK. The company has recently moved from Crawley to larger premises in the Eastbourne area, with an investment programme in new CNC machinery, CAD/CAM design and manufacturing facilities. Hilge can now offer a complete range of hygienic design pumps, including single and multi-stage centrifugals, liquid ring scavenge and rotary lobe, positive displacement pumps. The Eastbourne area is already home to a number of pump companies including HMD Sealless Pumps, Alfa Laval and Johnson Pump (UK). A cluster of these pump companies and related suppliers in the Sussex/Eastbourne area have come together with the support of the University of Brighton as Sussex Pumps (www.sussexpumps.com) to improve their competitiveness. • Having received approval from the South African competition authorities, Weir Group completed the sale of Weir Envig on 14 September 2005 to Veolia Water Systems. The £2.4 million balance of the total aggregate value of £27.7 million has now been paid (see Pump Industry Analyst, July 2005). • Ensival-Moret is celebrating its 100th anniversary this year. • German sealing specialist Burgmann has set up a joint venture subsidiary in Saudi Arabia. Burgmann holds a 65% interest in Burgmann Saudi Arabia Ltd, with long-term partner Gas Arabian Services holding the remaining 35%.
13
NEWS/CALENDAR/IN BRIEF
technology offering and services in the region, the company says. The water services will include build-own-operate, mobile water treatment and emergency water supply, plus existing Siemens Energy & Automation product offerings in the water market, both industrial and municipal. As part of the business expansion, Siemens Water Technologies will also re-tool and expand its manufacturing facility in Mexico City to support the additional workload for the region. The company also expects to add additional personnel as part of the expansion.
Pump Industry Analyst
Pump Industry Analyst
September 2005
IN BRIEF
DIVIDENDS
• For the three months ended 30 June 2005, Japan’s Torishima Pump delivered net sales of ¥2946 million, an operating loss of ¥567 million and a net loss of ¥289 million. This compares with net sales of ¥3497 million, operating loss of ¥422 million and net income of ¥285 million a year ago. • Armstrong Holden Brooke Pullen has signed an agreement with Danfoss for the exclusive worldwide supply of drives with sensorless control software for circulating pumps. The control software was initially developed in conjunction with Holden Brooke Pullen for its variable speed IVS Sensorless pump range. Holden Brooke Pullen was acquired by Canada’s Armstrong Pumps Ltd in 2004. • United Technologies Corp - parent company of Blackmer and Wilden - is on track to deliver 2005 earnings of UA$3.00–3.07 per share. • Given the strength of the group’s cash generation and balance sheet, the Weir Group board continues to target a share buy-back of up to £50 million in the current year. The company recently purchased 100 000 shares at £3.76 each, which Weir intends to hold in treasury. Following the purchase of these shares, Weir holds 2 979 966 of its ordinary shares in treasury and has 205 507 119 ordinary shares in issue. • Roper Industries Inc presented at the Prudential Equity Group LLC Investor Conference on 22 September 2005 in Mount Snow, Vermont. A copy of the presentation is available at www.roperind.com.
• Tecumseh Products Co is suspending its quarterly dividend until profitability improves. The company has paid dividends without interruption for more than 50 years. “We deeply regret this action, but logic dictates that we continue to fund our business improvement and new product initiatives in order to create a business that can resume dividend payments in the future,” explained Todd Herrick, chairman of the board and chief executive officer. “While recent amendments to the company’s financing arrangements would permit declaration of a third quarter dividend, future dividends may need to be curtailed. Instead of creating expectations of future dividends, the company and its board of directors believe that it is in the long-term best interest of shareholders to utilize available funds to continue ongoing restructuring efforts and reduce indebtedness,” added James Nicholson, vice president, treasurer and chief financial officer. • Spirax-Sarco has declared an interim dividend of 6.8p per ordinary share, an increase of 8% on 2004’s 6.3p, which will be paid on 11 November 2005 to shareholders on the register at the close of business on 14 October 2005. • Weir Group plc is proposing to pay an interim dividend of 3.55p (up from 2004’s 3.45p) on 11 November 2005 to shareholders on the register at the close of business on 14 October 2005. • GUD has announced a 25% increase in its annual dividend to A$0.50 per share fully franked from A$0.40 previously.
12
FORD TO SELL HERTZ IN US$15 BN DEAL Ford Motor Co is selling its wholly owned subsidiary, The Hertz Corp, in a transaction valued at approximately US$15 billion including debt, to a group of private equity investors including Clayton Dubilier & Rice, The Carlyle Group and Merrill Lynch Global Private Equity. Under the terms of the agreement, Ford will receive US$5.6 billion for the Hertz equity. Hertz operates the largest general use car rental business in the world and one of the largest industrial, construction and material handling equipment rental businesses in North America. Hertz Equipment Rental Corp offers a range of pumps including centrifugal, diaphragm, industrial, submersible, test and trash.
ROUNDABOUT WAY TO CLEAN WATER IN MOZAMBIQUE About 40 000 school children in Mozambique will soon have clean drinking water and sanitation facilities thanks to a new initiative by of the UN World Food Programme (WFP), the UN Children’s Fund (UNICEF) and the Dutch logistics company TNT. In a joint effort to improve learning conditions in primary schools in Mozambique, the two UN agencies are supporting the Government of Mozambique through the Ministry of Education and Culture and the Ministry of Public Works and Housing by installing childrens’ roundabouts that pump safe drinking water. As children spin the carousel in play, they inadvertently pump borehole water
into a tank for use by the school and surrounding communities. The roundabout pumps are part of a broader programme called “Flourishing Schools” initiated through a US$444 000 donation from TNT. The Flourishing Schools programme aims to provide potable water and sanitation to 60 rural Mozambican schools. In the first phase, 30 roundabout play pumps will be installed in schools in the provinces of Maputo, Gaza and Inhambane. In addition, 30 conventional hand pumps will be installed in Manica and Sofala. The roundabouts have already proved hugely successful in rural schools across South Africa and Swaziland. “Access to safe water and sanitation facilities is a crucial factor for keeping children in school and helping them to learn in a healthy environment,” said Leila Pakkala, UNICEF representative. WFP and TNT have agreed to drill the boreholes while UNICEF will install sanitation facilities and provide hygiene training. The play pumps were developed by the SouthAfrican company Roundabout and are partly paid for by the World Bank. For further information, visit www.roundabout.co.za.
SIEMENS EXPANDS WATER BUSINESS DOWN MEXICO WAY Siemens Water Technologies plans to grow the company’s water business in Mexico, Central America and the Caribbean by leveraging the existing Siemens infrastructure in Mexico – including the Mexico City base of USFilter. The Siemens Water Technologies business will continue to focus on both industrial and municipal markets with an expanded scope of
September 2005
FLOWSERVE TO BOOK US$10 MN FOR CEO CHANGE Flowserve expects to record about US$10 million for chief executive officer transitionrelated and stock compensation expenses in 2005. Former Flowserve chairman, president and CEO Scott Greer resigned in April this year (see Pump Industry Analyst, April 2005). He was replaced by Kevin Sheehan on an interim basis until July, when chief operating officer Lewis Kling stepped into the CEO and president roles, with Sheehan staying on as non-executive chairman (see Pump Industry Analyst, August 2005). The US$10 million relates to severance, executive search, previously reported management retention bonuses under the company’s Transition Security Plan, and stock compensation resulting from the modification of certain existing restricted stock and stock option grants. Approximately US$6.5 million of the approximately US$10 million charge is attributable to the CEO transition and certain stock compensation noted above reflects a non-cash charge related to this additional
non-cash compensation expense, including about US$5.5 million arising from the departure of the former CEO.
FYBROC/GOULDS ENTER DISTRIBUTION ALLIANCE Goulds Pumps Inc is to act as a key distributor of Met-Pro Corp’s Fybroc line of fiberglass reinforced plastic (FRP) horizontal and vertical centrifugal pump products. The global agreement is valid across all markets, with some specific exclusions. MetPro says it augments Fybroc’s existing global distribution network and does not present any significant competitive barriers to Fybroc’s existing sales force. As part of the agreement, Goulds Pumps will discontinue the manufacture of its FRP horizontal and vertical centrifugal pumps, but will maintain its commitment to supply spare parts and service to its existing product population. In the coming months, marketing teams from Fybroc and Goulds Pumps will be working closely together to develop product packages for distribution to the Goulds Pumps global sales network. A formal product release to the Goulds global sales network is targeted for October.
GRACO TO PURCHASE FUEL TRANSFER PUMP MAKER Graco Inc has signed an agreement to purchase the assets of PBL Industries of Angola, Indiana, a manufacturer of fuel transfer pumps, oil transfer pumps and related parts and accessories. PBL serves OEM and retail customers and has sales of US$5 million.
Financial
IN BRIEF
Calendar 5 October 2005 Robbins & Myers Q4 Results 19 October 2005 GUD Holdings Annual General Meeting 25 October 2005 Sulzer Order Intake January–September 2005 Alfa Laval Q3 Report 26 October 2005 Metso Interim Review January–September 2005 27 October 2005 ITT Q3 Results Weatherford Q3 Results 28 October 2005 Johnson Pump Quarterly Report January–September 2005 8 November 2005 Andritz Results for Q1–Q3 2005 Pfeiffer Vacuum 9 Months 2005 Results Sulzer Roadshow, Frankfurt, Germany 8–9 November 2005 Robert W Baird & Co 35th Annual Industrial Technology Conference, Chicago, USA 9 November 2005 Sulzer Roadshow, Edinburgh, UK Interpump Q3 2005 Report 10 November 2005 Bjørge Q3 2005 Results Cardo Interim Report January–September 2005 Siemens Preliminary Figures for 2005 Sulzer Roadshow, London, UK 11 November 2005 Sulzer Roadshow, Zurtich, Switzerland 22 November 2005 Hamworthy Interim Results March–September 2005 24 November 2005 Alfa Laval Capital Markets Day December 2005 Wood Group Trading Update January 2006 KSB Preliminary Report on 2005 11 January 2006 Robbins & Myers Annual Shareholders’ Meeting 10 February 2006 Bjørge Q4 2005 Results March 2006 Weir Preliminary Results
• Grundfos-owned Hilge Pumps is starting pump manufacturing in the UK. The company has recently moved from Crawley to larger premises in the Eastbourne area, with an investment programme in new CNC machinery, CAD/CAM design and manufacturing facilities. Hilge can now offer a complete range of hygienic design pumps, including single and multi-stage centrifugals, liquid ring scavenge and rotary lobe, positive displacement pumps. The Eastbourne area is already home to a number of pump companies including HMD Sealless Pumps, Alfa Laval and Johnson Pump (UK). A cluster of these pump companies and related suppliers in the Sussex/Eastbourne area have come together with the support of the University of Brighton as Sussex Pumps (www.sussexpumps.com) to improve their competitiveness. • Having received approval from the South African competition authorities, Weir Group completed the sale of Weir Envig on 14 September 2005 to Veolia Water Systems. The £2.4 million balance of the total aggregate value of £27.7 million has now been paid (see Pump Industry Analyst, July 2005). • Ensival-Moret is celebrating its 100th anniversary this year. • German sealing specialist Burgmann has set up a joint venture subsidiary in Saudi Arabia. Burgmann holds a 65% interest in Burgmann Saudi Arabia Ltd, with long-term partner Gas Arabian Services holding the remaining 35%.
13
NEWS/CALENDAR/IN BRIEF
technology offering and services in the region, the company says. The water services will include build-own-operate, mobile water treatment and emergency water supply, plus existing Siemens Energy & Automation product offerings in the water market, both industrial and municipal. As part of the business expansion, Siemens Water Technologies will also re-tool and expand its manufacturing facility in Mexico City to support the additional workload for the region. The company also expects to add additional personnel as part of the expansion.
Pump Industry Analyst