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Sulzer Group, Switzerland
COMPANY WATCH
Porvair plc, UK
Sulzer Group, Switzerland
Key Figures (£ million) Year ended 31.5 2014
2013
Revenue Of Which: Metals Filtration Microfiltration
51.0
38.6
14.8 36.3
14.1 24.5
Cost of Sales
36.1
25.4
Gross Profit
14.9
13.2
Operating Profit Of Which: Metals Filtration Microfiltration
4.2
3.4
1.2 4.0
1.1 3.5
Profit before Income Tax
3.8
3.0
Profit/(Loss) for the Period
2.6
2.0
COMMENT Porvair has posted revenues for the first half of fiscal 2014 of £51.0 million, up 32.2% on the prior year, while its net profit rose 29.4% to £2.6 million. Growth was particularly strong in the company’s Microfiltration segment where sales rose 47.9% on the 2013 comparator to £36.3 million, while operating income jumped 14.5 % to £4.0 million. The strong performance reflected smooth progress on three previously announced large projects (POSCO in South Korea, Reliance Industries in India, and the UK Government). In addition to these major projects, Microfiltration orders in the energy sector remained robust, while Aerospace revenues were at record levels in the period. Reflecting this growth, Porvair is undertaking significant capital investment in the division. This includes a new facility in New Milton, UK, that will be operational towards the end of 2014 and the expansion of its plant in Caribou, Maine, USA, that is scheduled for completion in early 2015. Porvair’s Metals Filtration segment saw its sales for the period increase 4.8% on the
July 2014
prior year to £14.8 million, while its operating profit lifted 8.5% to £1.2 million. The revenue growth was 12% in constant currencies and was driven by market share gains from the segment’s patented products. Ben Stocks, Porvair’s CEO, said the good performance in the first six months augured well for company’s full-year results. “Porvair’s strategic direction and operating objectives are unchanged and continue to deliver good results,” he said. “We focus on niche markets which have structural growth drivers. 2014 has started strongly, and order books are healthy across the group. The revenue benefits of previously announced large contracts are showing through with underlying growth also healthy.” Stocks added that new initiatives should also contribute positively to the full year performance. “We continue to invest in US and UK capacity expansion and new product development,” he said. “There is considerable opportunity in the Porvair businesses.” ■ www.porvair.co.uk
Key Figures (US$ million) January–June 2014
2013
Order Intake Of Which: Pumps Rotating Equipment Services Chemtech
1583.4
1738.4
851.3 379.9 354.0
954.8 373.2 411.0
Sales Of Which: Pumps Rotating Equipment Services Chemtech
1491.7
1551.6
809.5 327.5 357.3
846.1 345.4 363.5
1.2
3.3
Restructuring Expenses Operating Income Of Which: Pumps Rotating Equipment Services Chemtech
99.2
110.7
43.4 24.1 40.0
47.1 24.7 35.0
Net Income Continuing Operations
64.4
73.7
Net Income Discontinued Operations 420.2
26.8
Net Income Attributable to Shareholders 483.5
99.5
COMMENT With a new operational structure in place since 1 January 2014, Sulzer now consists of three divisions: Pumps Equipment (pumps and spares), Rotating Equipment Services (maintenance and repair services for turbines, compressors, generators, motors, and pumps), and Chemtech (separation, mixing, and service solutions). The Chemtech division’s second quarter 2014 order intake decreased by 10.0% on an adjusted basis compared with the same period last year. The decrease mainly reflects reduced orders in the process technology business – due to the delay of some large projects – and lower demand in the mass transfer technology business. Chemtech’s oil & gas downstream market activity remained level with last year while demand from general industry was stable. The Americas were strong
with good orders in the tower field service business. Europe and Asia-Pacific lagged behind last year, with adjusted sales slightly ahead of the same period in 2013. Adjusted operating income increased by 18.6% on the first half of 2013, driven by good contributions from the Sulzer Mixpac Systems and Mass Transfer Technology business units. Profitability increased from 9.6% in the first half of 2013 to 11.2% in the same period this year, driven by continuing operational improvements in all units. Having recently sold Metco, now almost 80% of the company’s sales are in the key oil & gas, power, and water markets. Sulzer says that it intends to use the funds generated from the divestment of Metco for targeted acquisitions and further investments. ■ www.sulzer.com
Filtration Industry Analyst
11
Porvair plc, UK
Sulzer Group, Switzerland
Key Figures (£ million) Year ended 31.5 2014
2013
Revenue Of Which: Metals Filtration Microfiltration
51.0
38.6
14.8 36.3
14.1 24.5
Cost of Sales
36.1
25.4
Gross Profit
14.9
13.2
Operating Profit Of Which: Metals Filtration Microfiltration
4.2
3.4
1.2 4.0
1.1 3.5
Profit before Income Tax
3.8
3.0
Profit/(Loss) for the Period
2.6
2.0
COMMENT Porvair has posted revenues for the first half of fiscal 2014 of £51.0 million, up 32.2% on the prior year, while its net profit rose 29.4% to £2.6 million. Growth was particularly strong in the company’s Microfiltration segment where sales rose 47.9% on the 2013 comparator to £36.3 million, while operating income jumped 14.5 % to £4.0 million. The strong performance reflected smooth progress on three previously announced large projects (POSCO in South Korea, Reliance Industries in India, and the UK Government). In addition to these major projects, Microfiltration orders in the energy sector remained robust, while Aerospace revenues were at record levels in the period. Reflecting this growth, Porvair is undertaking significant capital investment in the division. This includes a new facility in New Milton, UK, that will be operational towards the end of 2014 and the expansion of its plant in Caribou, Maine, USA, that is scheduled for completion in early 2015. Porvair’s Metals Filtration segment saw its sales for the period increase 4.8% on the
July 2014
prior year to £14.8 million, while its operating profit lifted 8.5% to £1.2 million. The revenue growth was 12% in constant currencies and was driven by market share gains from the segment’s patented products. Ben Stocks, Porvair’s CEO, said the good performance in the first six months augured well for company’s full-year results. “Porvair’s strategic direction and operating objectives are unchanged and continue to deliver good results,” he said. “We focus on niche markets which have structural growth drivers. 2014 has started strongly, and order books are healthy across the group. The revenue benefits of previously announced large contracts are showing through with underlying growth also healthy.” Stocks added that new initiatives should also contribute positively to the full year performance. “We continue to invest in US and UK capacity expansion and new product development,” he said. “There is considerable opportunity in the Porvair businesses.” ■ www.porvair.co.uk
Key Figures (US$ million) January–June 2014
2013
Order Intake Of Which: Pumps Rotating Equipment Services Chemtech
1583.4
1738.4
851.3 379.9 354.0
954.8 373.2 411.0
Sales Of Which: Pumps Rotating Equipment Services Chemtech
1491.7
1551.6
809.5 327.5 357.3
846.1 345.4 363.5
1.2
3.3
Restructuring Expenses Operating Income Of Which: Pumps Rotating Equipment Services Chemtech
99.2
110.7
43.4 24.1 40.0
47.1 24.7 35.0
Net Income Continuing Operations
64.4
73.7
Net Income Discontinued Operations 420.2
26.8
Net Income Attributable to Shareholders 483.5
99.5
COMMENT With a new operational structure in place since 1 January 2014, Sulzer now consists of three divisions: Pumps Equipment (pumps and spares), Rotating Equipment Services (maintenance and repair services for turbines, compressors, generators, motors, and pumps), and Chemtech (separation, mixing, and service solutions). The Chemtech division’s second quarter 2014 order intake decreased by 10.0% on an adjusted basis compared with the same period last year. The decrease mainly reflects reduced orders in the process technology business – due to the delay of some large projects – and lower demand in the mass transfer technology business. Chemtech’s oil & gas downstream market activity remained level with last year while demand from general industry was stable. The Americas were strong
with good orders in the tower field service business. Europe and Asia-Pacific lagged behind last year, with adjusted sales slightly ahead of the same period in 2013. Adjusted operating income increased by 18.6% on the first half of 2013, driven by good contributions from the Sulzer Mixpac Systems and Mass Transfer Technology business units. Profitability increased from 9.6% in the first half of 2013 to 11.2% in the same period this year, driven by continuing operational improvements in all units. Having recently sold Metco, now almost 80% of the company’s sales are in the key oil & gas, power, and water markets. Sulzer says that it intends to use the funds generated from the divestment of Metco for targeted acquisitions and further investments. ■ www.sulzer.com
Filtration Industry Analyst
11