Outlook
As widely reported, there are indications that the rate of decline in global GDP and industrial
production has moderated in many geographic regions, although industrial production in most
countries has fallen sharply from last year and remains at a comparatively low level. We have
limited forward visibility of our business levels which month-to-month remain somewhat volatile,
although the pace of decline against last year has stabilised in recent months. However, our
markets remain challenging.
Subject to continuation of the current favourable exchange rates versus 2008, there is expected to
be a further exchange benefit to trading in the second half year, although at current rates of
exchange the benefit will be smaller than in the first half year.
We have acted decisively in reducing our operating costs and have nearly completed the previously
announced headcount reductions. Some of the cost savings benefit began to come through late in
the second quarter and we will realise full annualised benefits in the second half year.
The 5% increase to the interim dividend demonstrates the confidence of the Board in the strength of
the underlying business and the Group’s prospects. At Spirax Sarco, we make our business
decisions with a long-term perspective and therefore continue to invest selectively in priority areas
through acquisition, product development and geographic expansion. We have maintained our
large direct selling presence around the globe to drive market share growth and keep close
relationships with our many customers, even in this difficult economic period. The Group is
benefiting from its outstanding niche businesses and fundamental strengths of a very diverse
geographic spread, broad industry and customer base, and wide range of products and solutions.
Accordingly, the Board remains confident in the future prospects for the Group.
