Business
AGM Trading Update
AGM Trading Update.
About this update from Spirax Group Plc.
[{"type":"text","content":"\n\nNews Release\n10th May 2023\nAGM trading update\nTrading in line with expectations; full year guidance maintained\n \nEconomic environment\nFollowing global Industrial Production growth1 (IP) of 2.8% in 2022, IP was 0.6% in the first quarter of 2023 against a backdrop of continuing uncertainty over the global macroeconomic outlook. IP is expected to strengthen modestly by the end of the year, with full year 2023 IP now forecasted to be 1.3%.\n \nTrading\nOrganic sales growth in the four months to the end of April was in line with our expectations, driven by growth significantly above IP in Steam Specialties and Electric Thermal Solutions (ETS). Watson-Marlow sales were lower compared to the same period of 2022, as anticipated, reflecting the ongoing normalisation of COVID-19 related demand from Biotechnology & Pharmaceutical customers.\n \nOrder books in Steam Specialties and ETS remain at historically high levels driven by strong demand. Watson-Marlow's monthly order intake has remained at a level similar to the fourth quarter of 2022. As the underlying demand for cell and gene therapy medications remains strong, we continue to anticipate an increase in order intake in the second half of the year once Biotechnology & Pharmaceutical customers have worked through their excess stocks. However, defining the precise timing and initial pace of this return to growth remains difficult.\n \nIntegration of the acquisitions of Vulcanic and Durex Industries is progressing well, supported by revenue investments to raise the operations to our standards and deliver future growth.\n \nAs expected, the Group adjusted operating profit margin in the first four months of the year was lower than the same period in 2022. Consistent with the strong sales performance in Steam Specialties and ETS, both Businesses delivered increased margins, while Watson-Marlow's margin was lower due to the operational gearing effect of reduced sales. \n \nWe still anticipate Watson-Marlow's adjusted operating profit margin and therefore the Group's margin, will recover in the second half of the year, driven by expected higher demand and the full benefit from actions taken in the first quarter to right-size Watson-Marlow capacity and overhead support costs. \n \nCurrency moveme...