Spirax Group Plc. · LSE:SPX
Spirax — Spirax-Sarco Engineering — Investor Day (September 2015)
84 slides from Spirax's investor day presentation, Sep 11, 2015
Slide 1: Capital Markets Day
Spirax-Sarco Engineering plc Capital Markets Day Friday 11th September
Slide 2: Nick Anderson, Group Chief Executive
Spirax-Sarco Engineering plc Nick Anderson Group Chief Executive
Slide 3: Agenda
Agenda “Doing better what we already do well.” - Welcome from Nick Anderson (Group Chief Executive) - Presentation by Jay Whalen (President of WMFTG) - Presentation by Simon Nicholson (Managing Director, Watson-Marlow Ltd) - Site tour Lunch - Presentation by Richard Green (Group Product Manager, WMF
Slide 4: Our strategy
Our strategy To deliver self-generated growth outperforming our markets 1) Increase direct sales effectiveness through sector focus 2) Develop the knowledge and skills of our expert sales and service teams 3) Broaden our global presence 4) Leverage R&D investments 5) Optimise supply chain effectiven
Slide 5: Our strategy
Our strategy Objective: self-generated growth that outperforms our markets Focus: doing better what we already do well Our six-part Group strategy reflects the key elements of the Spirax Sarco steam business strategy, the Watson-Marlow Fluid Technology Group strategy and the Group acquisitions strat
Slide 6: Our strategy
Our strategy Objective: self-generated growth that outperforms our markets Focus: doing better what we already do well Our six-part Group strategy reflects the key elements of the Spirax Sarco steam business strategy, the Watson-Marlow Fluid Technology Group strategy and the Group acquisitions strat
Slide 7: Summary: strategy implementation
Summary: strategy implementation “Doing better what we already do well” • Strategy implementation is delivered through the execution of selected projects across whole organisation • Governed by a Strategy Steering team focused on driving transformational projects • Supported by dedicated Strategy Im
Slide 8: Watson-Marlow Fluid Technology Group
Watson-Marlow Fluid Technology Group Jay Whalen Executive Director President, Watson-Marlow Fluid Technology Group
Slide 9: Watson-Marlow Fluid Technology Group: eight brands
Watson-Marlow Fluid Technology Group Eight brands Low-flow peristaltic Precision pump High-flow industrial metering pumps and transfer tubing hose pumps (acquired (joined SSE plc in 1990) 1996) Low-flow, high Aseptic filling Sinusoidal pumps Biopharm tubing Stainless steel tank precision OEM (acquir
Slide 10: Peristaltic pump: how it works
Peristaltic pump How it works In a peristaltic pump, a flexible tube is occluded and fluid is driven through the pump by rollers or shoes. Restitution of the tubing draws in fresh fluid. 10
Slide 11: Peristaltic pump: value proposition
Peristaltic pump Value proposition The pump does not touch the fluid Making peristaltic pumps perfect for clean fluids which must not be contaminated – biopharm & pharmaceuticals, and food & beverage applications. A sterile tube makes a sterile pump. The fluid does not touch the pump Making peristal
Slide 12: MasoSine pump: how it works
MasoSine pump How it works • Simple single shaft and single rotor design • Symmetrical sinusoidal pumping chambers provide positive displacement of product. As one chamber discharges the other fills • A gate shuttles back and forth along the rotor separating the suction chamber from the discharge, p
Slide 13: MasoSine pump: value proposition
MasoSine pump Value proposition Fits perfectly in gap between hygienic Watson-Marlow pumps and higher pressure Bredel pumps • Higher flow rates • Higher viscosities • Higher pressures • Non-lubricated • Gentle pumping • Simple maintenance • Targets rotary lobe pumps • Strengthens product portfolio •
Slide 14: BioPure connection systems
BioPure connection systems Value proposition The connection between Watson-Marlow pumps and Watson-Marlow tubing in biopharm single use aseptic process • “Single-use” is a growing trend within the growing biotechnology sector • Peristaltic pumps and tubing are perfect for single-use • BioPure add th
Slide 15: Asepco stainless steel valves
Asepco stainless steel valves Value proposition Asepco radial valves deliver purity and reliability • Radial valves’ ability to drain and clean simplifies batch to batch changeovers • Less risk of contamination of the customer’s high value product • Validation of the cleaning routine is paramount, a
Slide 16: Five core strategies
Five core strategies • Market sector sales focus • Rapid geographical expansion • Accelerate development of breakthrough products • Excellence in manufacturing • Selective product and market sector diversification 16
Slide 17: Fluid path technology for process industries
Fluid path technology for process industries Strategy: market sector sales focus Biotech and Water and Industrial and Mining Food and pharmaceuticals wastewater chemicals Rugged pumps beverage Sterile pumping, Abrasion-resistant Wide chemical required to reliably Accurate, repeatable filling, transf
Slide 18: Sales by market sector
Sales by market sector Strategy: market sector sales focus 35% BioPharm/Pharmaceutical Mainly Watson-Marlow pumps and tubing, and Flexicon filling. Boost from Biopure Biopharmaceutical 20% Industrial Industrial General industrial markets slow Environmental 12% Water & Wastewater 2014 Sales Food & Be
Slide 19: Rapid geographical expansion
Rapid geographical expansion Strategy: rapid geographical expansion Direct sales operations driven by market sector focus: • Greater understanding of customers’ processes • Greater support to end customers • Knowledge-based, close relationship with customers • Watson-Marlow actively Direct sales ope
Slide 20: 2014 new and emerging markets
2014 new and emerging markets Strategy: rapid geographical expansion EMEA 44% (2013: 44%) Emerging markets 2% (2013: 3%) Americas 44% Asia Pacific 12% (2013: 44%) (2013: 12%) Emerging markets 8% Emerging markets 8% (2013: 9%) (2013: 7%) In 2014 18% of sales from emerging markets (2013: 19%) 20
Slide 21: Competition
Competition Peristaltic hose pumps Verder, Abaque, Boyser and PCM Delasco – mainly water treatment and mining Industrial lobe pumps and circumferential piston pumps Johnson, Waukesha and Alfa-Laval Progressive Cavity pumps Moyno, Mono and Allweiler – mainly food & beverage, water treatment, mining A
Slide 22: Breakthrough products
Breakthrough products Strategy: accelerate development of breakthrough products 22
Slide 23: Innovative product development
Innovative product development Strategy: accelerate development of breakthrough products • Watson-Marlow Qdos – totally new peristaltic metering pump to directly target solenoid diaphragm pumps in water & wastewater, mining and general chemical/industrial sectors. Qdos30 now joined by Qdos60 • Brede
Slide 24: Smallest pump versus largest pump
Our smallest pump, at its lowest speed, would take nearly 13,000 years to pump what the largest pump can pump in one minute 24
Slide 25: Addressable market size 2014
Addressable market size 2014 Total addressable market, 2014 - £760m • Acquisitions • Product development WMFTG 18% £138m Market size £760m Other 82% £622m Asepco adds £11m addressable market in 2015 25
Slide 26: Our factories – centre of excellence
Our factories – centre of excellence Strategy: excellence in manufacturing Alitea OEM Pumps Asepco Flexicon Filling Systems Stockholm, Sweden Mountain View, USA Ringsted, Denmark BioPure Portsmouth, UK Watson-Marlow Pumps Falmouth, UK Watson-Marlow Tubing Falmouth, UK Bredel Hose Pumps Delden, Nethe
Slide 27: Leveraging growth
Leveraging growth Strategy: selective product and market sector diversification • Expanding our product portfolio and addressable market, to leverage growth Acquisitions: Flexicon – aseptic filling (2008) MasoSine – sinusoidal pumps for food and beverage (2009) BioPure – aseptic tubing connection sy
Slide 28: Watson-Marlow Fluid Technology Group
Watson-Marlow Fluid Technology Group • Consistent revenue growth • Consistent profit growth • Expanding market share • Expanding sales footprint • Excellence in manufacture • Breakthrough product development • Expanding addressable market • Niche related fluid path acquisitions A market leader in po
Slide 29: Simon Nicholson, Watson-Marlow Pumps & Tubing
Watson-Marlow Fluid Technology Group Simon Nicholson Managing Director Watson-Marlow Pumps & Tubing
Slide 30: Falmouth facility
Falmouth facility Heritage and scale • Watson-Marlow started in Marlow, Bucks in 1956 • Relocated to Falmouth in 1969 with 12 people • Now on 3 sites employing over 280 people • Manufacture annually 125,000 pump heads, 15,000 pump drives, 140,000 elements and 12,000 km of tubing • Process 35,000 Sal
Slide 31: Watson-Marlow Pumps and Tubing
Watson-Marlow Pumps and Tubing Products / core competences Design and manufacture • Peristaltic pumps with flow rates 0.6ml/min to 8,000 litres/hour • Tubing and elements in bore sizes 0.13mm to 25.4mm Providing WMFTG with core competences • Make-To-Order assembly capability • Precision machining of
Slide 32: Supply strategy
Supply strategy Excellence in manufacturing and global process 1. Utilise - Global Excellence in Manufacturing (GEM) 2. Strengthen - Make-to-Order (MTO) 3. Invest in - Global IT solutions (ERP) 32
Slide 33: Global Excellence in Manufacturing
Global Excellence in Manufacturing GEM core principles • Our way of working • Our operating system • A philosophy we believe in • The right way to manage our operations and daily work 33
Slide 34: Global Excellence in Manufacturing
Global Excellence in Manufacturing How GEM delivers Since GEM introduced in 2012 • £1m savings to P&L • 7,500 hours savings added to capacity 34
Slide 35: Global Excellence in Manufacturing
Global Excellence in Manufacturing How GEM works 313/314 Pumps roller press automation • 500 hours labour saving in 2015 provides extra capacity • From 3 hours to 20 mins to assemble 1,000 rollers, with added mistake proofing P&L benefit Labour/cost savings GEM project Management Tubing tooling set-
Slide 36: Make-to-Order
Excellence in global process Make-to-Order (MTO) • Modular design allows late configuration/flexibility • Assembly cells build customer specific product • Daily shipments to the sales companies • No finished stock of pumps or drives at Falmouth • Minimal stock held at sales companies • MTO reduced O
Slide 37: Global IT solutions (ERP)
Excellence in global process Global IT solutions (ERP) • WMFTG is deploying a global ERP solution • Sales companies enter customer orders directly • Inter-company orders sent automatically • Manufacturing requirement appears in real time • Interfaces with global freight suppliers to allow automatic
Slide 38: Richard Green, Group Product Manager
Watson-Marlow Fluid Technology Group Richard Green Group Product Manager
Slide 39: New Product Development agenda
New Product Development Agenda New Product Development strategy What we have achieved so far Key breakthrough products in the pipeline Continuous improvement in process Closing comments 39
Slide 40: NPD strategy
New Product Development Our strategy Accelerate the development of breakthrough products We will invest in new product development to grow the performance envelope of our niche peristaltic and sinusoidal pumps, and associated fluid path technologies to gain market share against our competitors, whil
Slide 41: NPD: already achieved
New Product Development Already achieved • Two central themes: Growth into key market sectors by increasing addressable market Improving competitiveness and efficiency through value engineering and cost reduction • Group Product Management carry out portfolio planning: selecting the right projec
Slide 42: Recent breakthrough products in the market
New Product Development Recent breakthrough products in the market 120 cased pumps IN pumps Sector based development Improving competitiveness Updated product platform Designed for Chinese Market share increase manufacture Just launched Qdos metering pumps APEX hose pumps Sector based development Im
Slide 43: Breakthrough product development in progress
New Product Development Breakthrough product development in progress Objectives • Continue growth into chemical metering • Own the fluid path in biopharm, capitalise on growth of single-use systems • Be the pump of choice in food and beverage process • How we are achieving objectives: Increasing p
Slide 44: NPD excellence – continuous improvement
New Product Development NPD excellence – continuous improvement programme Improving NPD efficiency • New group-wide NPD-specific project management process • Honing group-wide project governance • Reducing time-to-market: retaining core IP expertise at the factories, but investing in targeted bandwi
Slide 45: Accelerating development of breakthrough products
New Product Development Accelerating the development of breakthrough products Conclusions • A clear strategy • Focused on increasing market share and addressable market • Focused on improving competitiveness • Several breakthrough products launched in the past few years • Exciting breakthrough produ
Slide 46: Rachel Pallett, Sales and Marketing Director, EME
Watson-Marlow Fluid Technology Group Rachel Pallett Sales and Marketing Director, EME
Slide 47: Rachel Pallett - background
Rachel Pallett - background • B Eng Electronic Engineering, Imperial College London • 1991 Renishaw plc (held engineering, sales, business development and general management roles) • 2008 Independent consultancy (learning, leadership) • 2010 Joined WM Ltd as UK Sales Manager • 2011 Appointed Europea
Slide 48: WMFTG regional sales structure
WMFTG regional sales structure Europe, Russia, Middle East + North Africa Americas Asia-Pacific and sub-Saharan Africa 48
Slide 49: Rapid geographical expansion of direct sales presence
Rapid geographical expansion of direct sales presence EME regional activity over the past 5 years 23 distributor conversions 3 new direct sales companies Watson-Marlow x 3 Moscow, Russia Bredel x 7 Warsaw, Poland Flexicon x 4 MasoSine x 5 Vienna, Austria BioPure x 3 Asepco x 1 49
Slide 50: Process development in sales operations
Process development in sales operations • Roll-out of new AX ERP & CRM system • 9 out of 12 EME sales companies now ‘live’ – Inter-company sales process with AX factories – Unified customer database, opportunity pipeline – Improved scope for future efficiency savings 50
Slide 51: Sector focus in sales and marketing
Sector focus in sales and marketing • Sales team structure • Product and application training • Sales conferences • Exhibitions, advertising, digital marketing • Business development 51
Slide 52: Sector focus examples
Sector focus examples OEM e-book digital marketing campaign Achema 2015, Frankfurt Customer site ‘lunch and learn’ event BioProducts Laboratory Ltd, UK 52
Slide 53: Sector focus examples
Sector focus examples Cost savings calculator e-campaign Product brochures include testimonials industrial wastewater sector to illustrate Customer Value Propositions Sales engineers trained to demonstrate value in sector specific applications 53
Slide 54: Sales involvement with NPD
Sales involvement with NPD • Facilitate capturing ‘Voice of the Customer’ • Participate in NPD stakeholder reviews • Identify trial sites and early adopters • ‘Product champions’ accelerate sales growth 54
Slide 55: Group Supply Chain, Spirax Sarco Steam Specialties
Group Supply Chain, Spirax Sarco Steam Specialties Ian Farnworth Group Supply Chain Director, Spirax Sarco
Slide 56: Purpose
Purpose 1. Introduce you to our Supply Chain 2. Current status and opportunity for improvement in our Supply Chain 3. Key Supply Chain developments 56
Slide 57: Introduction to our Supply Chain
1. Introduction to our Supply Chain Operating Supplier Transport Company Transport Customer Manufacturing Transport Our Supply Chain encompasses all of the activities that transport and transform raw materials and components into a finished product that is delivered to the end customer. 57
Slide 58: Our Supply Chain
1. Our Supply Chain • 46 operating units in 41 countries • Direct sales presence in 56 countries • 8 (+1 in 2016) regional manufacturing units • Excluding UK & France: 80% + supplied within region • Direct sales model = distributor • Short order book, 5-6 weeks • Very wide product range Requires a h
Slide 59: Current status & opportunity for improvement
2. Current status & opportunity for improvement VOC: Good performance but further opportunity in the Supply Chain: • Delivery performance • Inventory optimisation Our metrics • Planning operations • Lead time & agility Progress in • Purchasing co-ordination these areas • Operational efficiencies wil
Slide 60: Key Supply Chain developments
3. Key Supply Chain developments Spirax is recognised as having an excellent product availability service Customer First throughout the world, as viewed by the customer Thrust 6 objectives Spirax Supply Chain achieves continuous improvement in efficiency Now Time 1. Planning OTTC deployment IQM depl
Slide 61: Key Supply Chain developments
3. Key Supply Chain developments Spirax is recognised as having an excellent product availability service Customer First throughout the world, as viewed by the customer. Thrust 6 objectives Spirax Supply Chain achieves continuous improvement in efficiency Now Time 1. Planning 2. Agility Lead time pr
Slide 62: Key Supply Chain developments
3. Key Supply Chain developments Spirax is recognised as having an excellent product availability service Customer First throughout the world, as viewed by the customer. Thrust 6 objectives Spirax Supply Chain achieves continuous improvement in efficiency Now Time 1. Planning 2. Agility 3. Efficienc
Slide 63: Other Group Supply Chain developments to support
3. Other Group Supply Chain developments to support 63
Slide 64: Direct Sales Model, Spirax Sarco Steam Specialties
Direct Sales Model, Spirax Sarco Steam Specialties Sheldon Banks Divisional Director for the Americas, Spirax Sarco
Slide 65: Our operating company offering
Our operating company offering Market leading products plus more … Service & Maintenance Health & Safety Compliance Steam System Audits Installation & Commissioning 24-Hour Priority Response Project Management Training Steam Trap Surveys & Management 65
Slide 66: How we supply
Direct sales model with a variety of supply options Contractors How we supply Distributors Typical sales operating company OEMs Direct End user Selling takes place here 66
Slide 67: End customer relationship strength
End customer relationship strength Supply Chain Supply Chain Engineering End Engineering Account Projects Customer Projects Product Experts Manager Production Buyer Solutions Weak Connection Sustainability Supply Chain Supply Chain Engineering Engineering End Account Projects Projects Customer Manag
Slide 68: Our salesforce
Our The Spirax Sarco brand is not just the SALESFORCE products but also the people. The products and people together create is unique and a major brand loyalty. investment UK and ROI example Competitor Field Sales Competitor #1 Competitor #2 Vs. Competitor #3 Competitor #4 Competitor #5 Competitor #
Slide 69: Steam knowledge
Loss of Customers no longer have the steam STEAM knowledge they once had nor the resources for engineering. knowledge in the user base, direct contact essential Many customers do not understand what problems they have, let alone how to fix them. 69 Developing knowledge and skills
Slide 70: Selling
Solution SELLING Taking sales from a vendor to trusted advisor is well on the way as we focussed on VALUE become their steam engineers. for our Customers 70 How to Win Customer Value Proposition (CVP)
Slide 71: Sustainable
Challenges of Encircling the customer are a myriad of SUSTAINABLE opportunities to develop a sustainable business. processes are a minefield for the customer, we help Spirax Sarco guides clients to successful funding and technology as the industry steam leader. EU CRC Climate ETS ROCs Change Levy DE
Slide 72: Innovation
Encourage As a pioneer in the packaged system, INNOVATION Spirax Sarco sales lead the way on many fronts. that is driven from customer engagement and unmet needs Systems represent a growing share of the Company’s sales. 72 Launch the right products to market faster
Slide 73: Leverage
Leverage A unique database of the installed steam IP plant and customer base. in our databases Unprecedented contact information with as a means to win most of the key customers. Leveraging this information for sales growth is a formidable advantage. >400,000 contacts >80,000 active customers We kno
Slide 74: Training
Customer Direct contact with the customer has TRAINING created long term, high value training support to our users for the lifetime of in Spirax Sarco is recognised their systems. as the industry standard Training centres are seen as centres of excellence in a world where customer steam knowledge is
Slide 75: Case Study: Kettering General Hospital
Case Study Spirax Sarco helps Kettering General Hospital secure funding for £250k energy saving project 75 Sectorisation
Slide 76: Case Study: Texas refinery
Case Study Trap survey and replacement programme helps Texas refinery save $245,000 per annum 76 Sectorisation
Slide 77: Case Study: Europe's largest printworks
Case Study Spirax Sarco provides turnkey steam system for Europe’s largest printworks 77 Direct Sales Model
Slide 78: Case Study: cheese producer
Case Study Spirax Sarco helps cheese producer to upgrade plant with Clean Steam Generators 78 Sectorisation
Slide 79: Value created in many forms
Value created in many forms … energy savings, CO₂ savings, water savings, productivity improvements, quality improvements, cost reductions, regulatory compliance, effluent reduction, recovered product, safer working environment 79
Slide 80: Summary
Summary End user OEM Contractor Reseller Spirax Sarco value 80 Direct Sales Model
Slide 81: Nick Anderson, Group Chief Executive
Spirax-Sarco Engineering plc Nick Anderson Group Chief Executive
Slide 82: Our strategy
Our strategy Objective: self-generated growth that outperforms our markets Focus: doing better what we already do well Our six-part Group strategy reflects the key elements of the Spirax Sarco steam business strategy, the Watson-Marlow Fluid Technology Group strategy and the Group acquisitions strat
Slide 83: Summary: benefits
Summary: benefits “Doing better what we already do well” The Group strategy will: • increase the effectiveness of our direct sales organisation • leverage our strengths in key sectors • capitalise on the most attractive opportunities • expand our addressable markets • align and direct resources more
Slide 84: Questions?
Spirax-Sarco Engineering pic Questions? 84
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