spirax-sarco engineering plc

1: Spirax-Sarco Engineering plc

3: Revenue changes

4: Operating profit changes

5: Financial aspects

6: Cash flow

7: 2009 – Items to note Capital expenditure Expect £40m investment in 2009 including New China facility £14m – 2009 and Q1 2010 Watson-Marlow tubing plant £5m – opening late 2009 Cheltenham manufacturing site consolidation £6m in 2009 and £5m in 2010. Progressive occupation starting in Q1 2010 Net interest IAS19 – net pension scheme financial income expected to reduce by £3.7m Fall in pension scheme asset values in 2008 Bank interest receivable reduced by estimated £1m due to lower interest income on cash deposits Cost containment Expected pre-tax charge of £7m in 2009 to reduce headcount Largely back office, support functions and manufacturing in all regions Annualised benefits of approximately £8m Anticipate over half to be realised in 2009 – mostly second half Fully realised in 2010

8: Key financial statistics 2008 2007 Operating profit margin 17.1% 16.5% Amortisation of acquisition intangibles £1.9m £0.6m Impairment of goodwill & intangibles £3.1m - Sales per employee +4% +9% Net cash £17.4m £15.8m Cash from operations* £91.1m £80.2m Capital expenditure as % of depreciation 164% 122% Cash conversion* 75% 93% Pension liability IAS19 basis (after tax) £49.2m £14.7m Return on capital employed 35.5% 33.6%

9: Segmental analysis of revenue

10: UK & Republic of Ireland

11: Continental Europe

12: Asia

13: North America

14: Rest of the world

15: Additional investments in 2009 Despite gloom of economic environment we see opportunities to invest to strengthen market position. Modest geographic expansion in developing markets: China, Eastern Europe, Middle East and Latin America—expect to add about 60 people. Further growth in China. Increased product development in Cheltenham and Falmouth – 15% expenditure increase. Large capital expenditure program to expand facilities in growth areas, consolidate Cheltenham manufacturing—about £25m in 2009.

16: Investing for long term delivers results

17: Well-Positioned to Maximise Market Opportunities Strong market presence Broad geographic reach Financially strong Diversified industry and customer base World leader in steam specialties and peristaltics Well-respected brands Excellent track record of performance Unmatched direct selling organisation Over 1,300 sales & service engineers worldwide Provide knowledge solutions for higher margins Close to customers, trends and applications

18: Well-Positioned to Maximise Market Opportunities Expanded product range to capture higher amount of customer spend and create new markets Controls and flow meters Heat exchange packages Pure steam generators Audit and consulting services Derivative peristaltic pumps and systems

19: Spirax Sarco Engineering plc Focused on consistent growth and creating shareholder value

20: Questions?

21: Appendix – Return on capital employed £’m 2008 2007 Capital Employed Property, plant & equipment 122.9 93.9 Inventories 102.4 73.8 Trade receivables 124.6 98.1 Prepayments, other current assets 14.9 11.7 Trade, other payables & current tax (93.0) (67.1) 271.8 210.4 Average Capital Employed 241.1 204.8 Operating Profit As reported 81.0 68.3 Amortisation/impairment of acq’n intangibles 4.7 0.4 85.7 68.7 ROCE 35.5% 33.6%

22: Appendix – Cash conversion £’m 2008 2007 Cash generated from operation 87.8 74.5 Net capital expenditure (property, plant equipment, software and development) (26.5) (16.5) Add back special pension payments 3.2 5.7 64.5 63.7 Operating Profit 81.0 68.3 Amortisation of acquisition intangibles 4.7 0.4 85.7 68.7 Cash conversion 75% 93%

23: Appendix - Currencies Year First Half Year 2007 2008 2008 Average exchange rates Bank of England sterling index 103.3 94.4 90.7 US$ 2.00 1.99 1.85 Euro 1.46 1.30 1.26 RMB 15.21 14.01 12.90 Won 1,858 1,954 1,998 Period end exchange rates Bank of England sterling index 96.8 93.2 73.8 US$ 1.99 1.99 1.44 Euro 1.36 1.26 1.03 RMB 14.54 13.64 9.81 Won 1,863 2,082 1,811

24: Appendix – Sources of growth Geographic expansion - new and increased penetration Market share - traditional and newer products Product additions and developments Focus on market segments where we are under-represented Increased sales coverage Increase in industrial activity Acquisitions

25: Spirax Sarco Korea handles entire project for Dongbu Dongbu Corporation - a major construction company in South Korea Spirax Sarco heat exchanger packaged solutions meant Spirax Sarco Korea provided the engineering, construction & products Utilised 30 bar g / 300°C superheated steam Provided a constant temperature of hot water at 10 bar g / 120°C Also provided low temperature hot water for domestic water and heating Other benefits included Shortened period of construction Delegation of responsibility for the project to Spirax Sarco Korea

26: Abbey Corrugated achieves special accreditation Abbey Corrugated produces 160 million square metres of corrugated board annually at its site in Blunham, Bedfordshire. Plant steam used mainly to heat the plates and rollers in its 3 corrugators. Abbey Corrugated became one of just 12 organisations across England and Scotland to be awarded the coveted “Carbon Trust Standard”. Spirax Sarco system was the most valuable energy saving project undertaken by Abbey Corrugated. Manager, Paul Gale: "…savings from this project were in the region of 25% of the gas used by the boiler."