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2001 Interim Results

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					Spirax Sarco Interim Results


       Tim Fortune - Chairman
    Marcus Steel - Chief Executive
   David Meredith - Director Finance


       September 2001
Highlights


                          Organic sales up 5%
                          Growth broadly based
                          Difficult trading in Latin America
                          Signs of Asia slowing
                          EPS* and dividends up 4%

                * Before the profit on disposal of fixed assets




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Overview
                                             6 months to 30th June


                                           2001          2000         +/-
     Turnover                         £145.6m         £133.5m        +9%
     Operating profit                   £19.9m         £19.2m        +4%
     Margin                              13.7%          14.4%
     Pre-tax profit *                   £18.4m         £18.2m        +1%
     EPS *                                16.6p         16.0p        +4%
     DPS                                   5.6p          5.4p        +4%


     *Before the profit on disposal of fixed assets


www.SpiraxSarcoEngineering.com
Group overview
         World leader in Steam and Peristaltic Pump niche markets
         Small overall share in fragmented market
         Growing Peristaltic Pump market
         Specialist knowledge (barrier to market entry):
                  Trained force of 800 sales engineers worldwide
                  Technical & diagnostic support on site to end users
                  Demonstration & training schools in 32 countries
                  Programmes to consolidate and develop knowledge
         Offering full product ranges
         Excellent growth record & potential for future growth


www.SpiraxSarcoEngineering.com
 Business drivers                                      Creating growth



                   Economic growth
                   Industrial investment
                   Globalisation
                   Regulation (e.g. food hygiene, climate change)
                   Energy costs
                   Outsourcing
                   Project work
                   Technological changes
                   Growing Peristaltic Pump market



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Sales changes
                2000               Organic      Acquisition   Exchange    2001
               H1 Sales          sales growth                   effect   H1 Sales
     £m
                                                               +£2.8m    £145.6m
                                                 +£3.0m

                                   +£6.3m



               £133.5m

                                                Organic growth +5%
                                                Acquisition     +2%
                                                Exchange effect +2%
                                                                +9%




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Operating profit changes
                2000         Underlying  Latin     Acquisition Exchange    2001
               H1 Profit      Growth    America                 effects   H1 Profit
                                                              +£0.5m      £19.9m
     £m
                                 +£0.5m   -£0.8m

                                                   +£0.5m
               £19.2m




                                     Underlying growth       +2%
                                     Latin America           -4%
                                     Acquisition             +3%
                                     Exchange                +3%
                                                             +4%

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UK


      Grew sales and profits
      Difficult domestic market - industrial plants still
       closing
      Widening range of products and services
      Factories busy, but signs of reducing demand from Asia
      Investments in sales developments




www.SpiraxSarcoEngineering.com
Energy saving at Heinz
   Smart positioners and valves in
   Heinz Eire factory making Weight
   Watcher range                       Cookingprocess needed
                                       improved control
                                       Spiraxvalves provided
                                       greater accuracy
                                       Smart positioner enabled
                                       links to SCADA process
                                       control system
                                       Payback   just 15 months



www.SpiraxSarcoEngineering.com
Continental Europe


           Increased sales and profits overall
           Good results from sales campaigns
           Factories busy, but lower demand for Bredel from
            USA
           M&M acquisition contributed to earnings
           Small exchange gain
           Business confidence patchy



www.SpiraxSarcoEngineering.com
Watson-Marlow Bredel help OEM to improve
machine performance



  MAN   Roland - German
   printing press OEM
  Peristalticpumps deliver
   varnish to printing process
  Benefits
       Varnish contained in tube
       Less waste on start up
       Very low maintenance




www.SpiraxSarcoEngineering.com
Americas


         Overall increase in turnover - mainly due to
              exchange
         Spirax USA improved sales and profits
         Watson-Marlow Bredel USA quieter business
         US economic problems impact on Latin
              American economies
         Americas profits flat due to declines in Mexico
             and Argentina


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Global support for a global customer


                                     cream plant up-grade and
                                  Ice
                                  expansion in Peru
                                       on our relations with
                                  Built
                                  Nestlé in Switzerland and
                                  elsewhere in South America
                                  Spiraxhelped to design and
                                  equip the new steam system
                                  Contractfor expansion of
                                  culinary product plant expected



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Asia, Australasia and Africa


         Overall sales growth - strong start tailed off
         Asian economies hit by US and Japanese slow-down
         Prices restrained and some currency pressure on
          margins - particularly Korea
         Encouraging progress in Japan
         Good continuing growth in China
         Regional profits unchanged



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Financial issues


                                Exchange rates

                                Interest

                                Minority interests

                                Cash flow




www.SpiraxSarcoEngineering.com
Results
                                                          6 months to 30th June

                                                        2001          2000         +/-
     Turnover                                      £145.6m         £133.5m        +9%
     Operating profit                               £19.9m          £19.2m        +4%
     Margin                                           13.7%          14.4%
     Non-operating item                               £0.6m         (£0.9m)
     Interest payable                                 £1.5m          £1.0m
     Pre-tax profit *                               £18.4m          £18.2m        +1%
     Tax rate *                                       31.9%          31.7%
     EPS *                                             16.6p          16.0p       +4%
     DPS                                                5.6p           5.4p       +4%
       *Before the profit/(loss) on disposal of fixed assets


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             Cash flow
£m


 -10



 -20                               +£1m
                        +£20m

 -30

                                                       -£7m
 -40



 -50     -£46m                                                      -£17m        -£48m
          Net debt     Operating    Other   Exchange       Net   Interest, Tax   Net debt
          31.12.00     cash flow                       Cap exp     Dividends     30.06.01


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Key statistics
                                               Interim Full Year

                                                 2001      2000

 Net debt                                      £48.0m   £45.6m
 Net gearing                                     33%       34%
 Interest cover *                                 13x       20x
 Capital expenditure / depreciation             140%      144%
 Goodwill amortisation                         £0.3m     £0.4m
 Operating cash flow                           £20.0m   £43.4m
 * Before profit on disposal of fixed assets

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Spirax Sarco




                         Focused on growth and
                      creating shareholder value




www.SpiraxSarcoEngineering.com
 Appendix                        Currencies

                                 First half 2001   First half 2000   Year 2000
Average exchange rates
Bank of England sterling index           105.80            108.30       107.70
US$                                        1.44              1.57         1.52
Euro                                       1.61              1.64         1.64
Won                                    1,851.47          1,758.33     1,731.32
Real                                       3.08              2.81         2.78


Period end exchange rates
Bank of England sterling index           107.80            104.30       105.40
US$                                        1.41              1.51         1.49
Euro                                       1.66              1.58         1.59
Won                                    1,828.96          1,687.98     1,889.66
Real                                       3.25              2.73         2.91




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