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TRADING UPDATE

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RNS Number : 8157T
Spectris PLC
19 November 2019
 

                                                                          

 

SPECTRIS PLC

TRADING UPDATE

19 November 2019 - Spectris plc (SXS: LSE), the productivity-enhancing instrumentation and controls company, issues this trading update covering the period from 1 July to 31 October 2019 ('the period').

 

HIGHLIGHTS

·   Like-for-like1 sales in the period were flat against a tough comparator; up 1% year to date

·   Good progress in mitigating the impact of macro-economic headwinds through profit improvement programme

·   Profit improvement programme remains on track to deliver benefits at the upper end of the
£15-20 million range, 2019 exit run rate of £30 million also re-confirmed

·   Sale of BTG expected to complete at the beginning of December; the next step in executing our strategy and focusing our portfolio

·   Full-year 2019 performance anticipated to be in line with our expectations

 

TRADING

Reported sales in the period increased 4% compared to the corresponding period in the previous year. Group like-for-like1 ('LFL') sales between July and October were flat year-on-year, whilst acquisitions, net of disposals, contributed 1% to sales growth and foreign currency movements had a 3% positive impact. For the ten-month period, reported sales increased 4% and LFL sales rose 1%.

 

The Group is presenting its results under the new segmental structure, comprising the three platform businesses - Malvern Panalytical, HBK, Omega - and the Industrial Solutions Division, for the first time.

 

Sales by segment

LFL sales change

 

Sales by geography

LFL sales change

4 mths Jul-Oct

10 mths Jan-Oct

4 mths Jul-Oct

10 mths Jan-Oct

Malvern Panalytical

4%

3%

 

North America

(2%)

(2%)

HBK

1%

(1%)

Europe

0%

(1%)

Omega

(7%)

(8%)

Asia

1%

4%

Industrial Solutions

(2%)

3%

Rest of the World

11%

12%

Group

0%

1%

 

Group

0%

1%

 

In the period, Malvern Panalytical continued to deliver a good performance with a 4% LFL sales increase, driven by strong growth in Asia, as well as to its advanced materials and academic research customers.

 

At HBK, despite more difficult end markets, particularly in automotive, performance improved from the first half with a 1% increase in LFL sales in the period, with good growth into Asia and to the machine building and aerospace industries.

 

Omega has been impacted by the US-China tariffs and slowing US industrial production, with LFL sales weaker into both China and North America (its main territory). The launch of the new digital platform had also impacted sales, although volumes are recovering as the platform becomes established.

1 At constant exchange rates, and including the impact of acquisitions and disposals on a comparable basis

 

In the Industrial Solutions Division, good progress has been made year-to-date, although LFL sales were lower in the period against a tough year-on-year comparator.

 

By region, the trends from the first half of the year continued, with LFL sales lower in North America, broadly stable in Europe and higher in Asia. In Europe, Germany saw lower LFL sales, with performance worsening since the first half. In Asia, the 1% LFL sales growth reflected strong growth in Japan with lower LFL sales in China, where trading in the period was weaker than in the first half.

 

In our end markets, there was strong LFL sales growth to academic research customers as well as growth in aerospace, pharmaceutical, machine manufacturing and energy; with declines into the electronics, semiconductor, telecoms and metals and mining industries.

 

PROFIT IMPROVEMENT PROGRAMME

As previously announced, benefits in 2019 from the profit improvement programme are expected to be at the upper end of the £15-20 million range, with the full £30 million to be delivered in 2020. Exceptional charges associated with the profit improvement programme are still expected to be around £45 million in 2019.   

 

The Group continues to manage costs and utilise the Spectris Business Systems to eliminate waste and enhance efficiency.

 

BTG UPDATE

During the period, Spectris announced the sale of BTG Group to Voith GmbH & Co. KGaA for a total gross cash consideration of €319 million (£283 million). All regulatory approvals have now been received and completion is expected to take place at the beginning of December. The sale is in line with Spectris' strategy to simplify and focus its portfolio and to concentrate on developing its presence in specific
high-growth end markets. As a result of the divestment, the Group expects a reduction in full-year 2019 sales and adjusted operating profit of £13 million and £4 million, respectively, in relation to December's performance, with an expected 11-month contribution to end-November of £119 million and
£22 million, respectively.

 

Commenting, Andrew Heath, Chief Executive, said:

"Our LFL sales were flat in the period, up 1% in the year to date, against a tough comparator last year and the slowdown in the macroeconomic environment. We have the usual second half weighting and significant fourth quarter to deliver. We remain on track to meet our expectations, subject to end markets not deteriorating further, as we continue to focus on what we can control.

 

We are executing on our strategy and the agreement to sell BTG represents the next step in delivering a more focused business, while representing compelling value for shareholders and further strengthening our balance sheet.

 

Although near-term trading conditions are more demanding, the long-term fundamentals of our markets and businesses' resilience remain attractive, and we continue to focus on delivering our strategy for profitable growth, improving the operational performance of the Group and establishing a more focused organisation."

 

CONFERENCE CALL

A conference call for analysts and investors will be hosted by Andrew Heath and Derek Harding,
Chief Financial Officer, at 08.00 today to discuss this statement.

 

To access the call, please dial: +44 (0) 333 300 0804, toll free 0800 358 9473 - Pin code: 27555700#.

Or for replay, please dial +44 (0) 333 300 0819, toll free 0800 358 2049 - Pin code: 301304285#.

 

- ENDS -

Contacts:

Spectris plc

Siobhán Andrews, Head of Corporate Affairs                     +44 1784 485325

FTI Consulting

Richard Mountain / Susanne Yule                                        +44 203 727 1374

NOTES

 

PERFORMANCE IN COMPARATOR PERIOD 2018

 

Sales by segment

LFL sales change 2018

 

Sales by geography

LFL sales change 2018

4 mths Jul-Oct

10 mths Jan-Oct

4 mths Jul-Oct

10 mths Jan-Oct

Malvern Panalytical

8%

9%

 

North America

6%

5%

HBK

4%

3%

Europe

2%

4%

Omega

1%

3%

Asia

16%

10%

Industrial Solutions

12%

8%

Rest of the World

7%

4%

Group

8%

6%

 

Group

8%

6%

 

ABOUT SPECTRIS

Spectris plc is a leading supplier of productivity-enhancing instrumentation and controls. The Company's products, technologies and services help customers to improve product quality and performance, improve core manufacturing processes, reduce downtime and wastage and reduce time to market.
Its global customer base spans a diverse range of end-user markets. Headquartered in Egham, Surrey, United Kingdom, the Company employs approximately 9,500 people located in more than 30 countries. For more information, visit
www.spectris.com.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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Price: 2770

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Market Cap: £3.21 billion
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