2021 Full year results

24 Feb 2022
Press release
4 min read

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  • Strong demand for our products and services
    • 2021 orders 19% higher on a like-for-like (‘LFL’)1 basis with strong customer demand continuing
    • Record order book and strong start to 2022 provides business momentum
    • Ongoing supply chain challenges, expected to start to ease in the second half of 2022
  • A more focused, higher quality, more profitable business with a strong balance sheet
    • Divestments of Millbrook, Brüel & Kjær Vibro, ESG Solutions and NDC Technologies completed
    • Customer offer strengthened by acquisitions at HBK and Malvern Panalytical
    • Improved adjusted operating margin1 of 16.2% reflects enhanced quality of the Group, due to disposals of lower margin businesses; statutory operating margin 12.0%
    • Spectris Business System delivering productivity improvements, mitigating inflationary pressures
    • Year-end net cash of £167.8 million provides M&A optionality; robust pipeline of opportunities
  • Good financial performance
    • 10% LFL 1 sales growth
    • Statutory reported sales down by 3%, due to divestments and foreign exchange movements
    • Supply chain and COVID challenges constrained sales growth in fourth quarter
    • Adjusted operating profit1 £209.4 million, statutory operating profit £154.9 million
    • Strong adjusted cashflow conversion 1 of 96%
    • Dividend per share increase of 5%, continuing 32-year track record of dividend growth
  • Committed to being a leading sustainable business
    • Ambitious Net Zero targets validated by the Science Based Targets initiative and delivery plans underway
    • Spectris Foundation established to promote STEM education; first grant awarded
    • Aligning our strategy with key sustainability themes

2021 2020 Change Like-for-like change 2020 1 Like-for-like change 2019 1
Adjusted 1
Sales (£m) 1,292.0 1,336.2 (3%) 10% (2%)
Operating profit (£m) 209.4 173.6 21% 29% (1%)
Operating margin (%) 16.2% 13.0% 320bps 240bps 20bps
Profit before tax (£m) 204.3 166.4 23%
Earnings per share (pence) 140.7p 112.1p 26%
Adjusted cash flow conversion (%) 96% 141% (45pps)
Return on gross capital employed(%) 2 13.2% 9.9 2 % 330bps
Statutory
Sales (£m) 1,292.0 1,336.2 (3%)
Operating profit (£m) 154.9 (23.3) n/a
Operating margin (%) 12.0% (1.7%) 1,370bps
Profit/(loss) before tax (£m) 388.6 (4.1) n/a
Cash generated from operations 191.6 254.6 (25%)
Basic earnings/(loss) per share (pence) 305.1p (14.6p) n/a
Dividend per share (pence) 71.8p 68.4p 5%

1 Alternative performance measures (‘APMs’ ) are used consistently throughout this press release and are referred to as ‘adjusted’ or ‘like-for-like’ (‘LFL’). These are defined in full and reconciled to the reported statutory measures in the appendix.

2 2020 return on gross capital employed has been restated for the impact of the Group’s change in accounting policy for Software as a Service (‘SaaS’) arrangements. Please refer to Note 1.

Commenting on the results, Andrew Heath, Chief Executive, said: “We delivered a good financial performance in 2021 and have made significant progress in executing our Strategy for Profitable Growth, thanks to the hard work of the whole Spectris team. Demand for our products and services has been strong, and although supply chain and COVID challenges somewhat constrained our ability to maximise sales in the fourth quarter, we entered 2022 with a record order book, and a strong start to the year. This gives us confidence in our ability to deliver continued good sales growth this year, noting the ongoing supply chain challenges. We are making good progress in returning the Group to its previous adjusted operating margin highs of 18%, and ultimately exceeding them over the longer term.

I am really pleased with the progress made in executing our strategy. We are creating a Spectris that is more focused, higher quality, more profitable and more resilient, and supported by a very strong balance sheet. We have demonstrated our ability to reduce costs responsibly, drive organic growth, expand margins, allocate capital with discipline for attractive returns, and have made several synergistic acquisitions to enhance our customer offering.

Looking forward, we will build on this progress, investing in our businesses to take advantage of new growth opportunities, strongly aligned to our purpose and to our focus on sustainability. We will continue to aim high and be bold in our pursuit of enhancing value for all our stakeholders.”

Contacts:
Spectris plc
Siobhán Andrews
Head of Corporate Affairs
+44 20 4551 4549/+44 7920 230093

Tulchan Communications
Martin Robinson/Giles Kernick
+44 20 7353 4200

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

To access the call, please dial +44 (0) 20 3936 2999/0800 640 6441 – Pin code: 391341. Or for replay, please dial +44 (0) 20 3936 3001 – Pin code: 175209#. Questions will also be taken via the webcast at www.spectris.com .

Copies of this press release are available to the public from the Company’s website at www.spectris.com .

About Spectris
Spectris’ global group of businesses are focused on delivering value beyond measure for all our stakeholders. We target global, attractive and sustainable markets, where growth and high returns are supported by long-term drivers. Precision is at the heart of what we do. We provide customers with expert insight through our advanced instruments and test equipment, augmented by the power of our software and services. This equips customers with the ability to reduce time to market, improve processes, quality and yield. In this way, Spectris know-how creates value for our wider society, as our customers design, develop, test and manufacture their products to make the world a cleaner, healthier and more productive place. Headquartered in London, United Kingdom, the Company employs approximately 7,600 people located in more than 30 countries. For more information, visit www.spectris.com .

2021 Full year results