SPX Flow Inc, USA

COMPANY WATCH

Xylem Inc, USA

SPX Flow Inc, USA Key Figures (US million) Second quarter ended 2.7.2016

Key Figures (US$ million) Second quarter ended 30.6 2016

2015

Revenue

932

920

Cost of Revenue

563

572

Gross Profit

369

348

Selling, General & Admin Expenses

227

218

27

25

109

104

27.6.2015

Revenues Of Which: Food & Beverage Power & Energy Industrial

528.8

615.1

188.0 155.8 185.0

234.8 184.1 196.2

Cost of Products Sold

362.0

403.9

R&D Expenses

Gross Profit

166.8

211.2

Operating Income

Operating Income/(Loss)

(394.1)

62.8

Income before Taxes

90

91

Net Income/(Loss)

(352.8)

47.1

Net Income

71

74

Six months ended 2.7.2016

27.6.2015

Six months ended 30.6 2016

2015

1033.8

1186.3

Revenue

1779

1757

Cost of Revenue

1081

1094

Gross Profit

698

663

Selling, General & Admin Expenses

446

424

52

48

Revenues Of Which: Food & Beverage Power & Energy Industrial

372.8 305.5 355.5

444.9 357.5 383.9

Cost of Products Sold

707.8

786.8

R&D Expenses

Gross Profit

326.0

399.5

Operating Income

188

187

Operating Income/(Loss)

(416.0)

98.4

Income before Taxes

155

168

Net Income/(Loss)

(383.9)

70.5

Net Income

137

138

COMMENT COMMENT SPX Flow Inc has delivered second quarter revenues of US$528.8 million, down 14.0% on a year ago. Organic sales decreased 11.9%, while currency fluctuations negatively impacted revenues by 2.1%. “Coming into this year we were faced with the challenges of an uncertain macro environment and cyclical downturns in two of our key end markets, oil and dairy,” Marc Michael, the company’s president and CEO, said. “Although we saw some pockets of stabilisation in the first half of 2016, overall orders were lower than the second half of 2015, particularly in our oil and industrial related product lines.” Despite the challenging environment, Michael said

August 2016

good progress had been made in executing the company’s realignment programme. “During the first half of the year, we made significant progress reducing our cost structure, realigning our footprint and streamlining our functional support globally,” he said. “That said, given current order trends, and consistent with our original commitments, we are accelerating our realignment program. We are also evaluating and intend to take additional actions. As such, we have increased the annualised savings target from our realignment program to approximately US$135 million.” Q www.spxflow.com

Xylem Inc has reported second quarter fiscal 2016 sales of US$932 million, up 1.3% on the year earlier. Net income, however, fell 4.1% to US$71 million reflecting debt refinancing costs and higher restructuring and realignment charges. Revenues in the company’s Water Infrastructure segment rose 2.7% on the 2015 figure to US$566 million. Growth in public utility business and for major projects in emerging markets, particularly India, offset weakness in industrial applications, notably oil & gas in North America and the global mining sector. Operating income for the division was up 7.7% on the year earlier at US$70 million. Xylem’s Applied Water

Segment recorded revenues of US$366 million, down 0.8% on the year prior. Sales were up significantly in Western Europe, but these gains were outstripped by falls in the USA and China. Segment operating income was flat on the prior year at US$51 million. “With our second quarter results, we are continuing to build a compelling track record of growth that reflects a strong focus on elevating our execution and driving productivity to expand margins,” said Patrick Decker, Xylem’s president and CEO, said. “We continued to capitalise on robust growth in the global public utility sector, which helped to offset softness in the industrial end market.” Q www.xyleminc.com

Filtration Industry Analyst

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