AGM Trading Statement
30 July 1998
AGM Trading Statement
WINDSOR, England--July 30, 1998--At today's AGM of United Kingdom-based SIEBE plc ('Siebe'), Lord Marshall, Chairman of Siebe plc said:
"The results for 1997/98 were very encouraging and trading in the first three months of the new year indicates that this trend is set to continue. Our North American operations remain strong and our European businesses continue their recovery. Although sales in the Far East are up, the region remains a concern and we are monitoring our operations closely. Despite the mixed economic outlook we are confident at this time that 1998/99 will be another successful year for the Group."
On current trading conditions, Allen Yurko, Siebe's Chief Executive said:
"We have now completed our performance reviews for the first quarter and the Group remains on target for a successful half year result. Although, our trading environment is being impacted by weak conditions in certain sectors such as the chemical, oil and gas markets and the semiconductor equipment industry, we are seeing significant improvements elsewhere in markets such as appliance, automotive and commercial building.
Overall business activity at the Controls Division remains solid, and this is especially so for the Appliance and Automotive divisions in North America and Europe. Particularly impressive has been the performance and integration to date of Eaton's Appliance Controls operations. Our Climate Controls business has also seen an improvement in trading activity particularly in North America. The recent Coleman Safety acquisition is performing well and is being fully integrated into our North American Climate Controls operations. Conversely, the Power Controls business has recently witnessed a decline in both its North American and Far Eastern semiconductor equipment markets. Although short-term trading at Nemic-Lambda has naturally been effected by the recent problems with the past Chairman of that company, these issues have now been successfully resolved and we remain confident concerning the long-term prospects of this fine company.
The Intelligent Automation Division is projecting solid growth despite reduced activity in the chemical, oil and gas sectors. Backlog continues to rise throughout the division, including our Far Eastern operations. Operating performance improvements at APV are continuing at an accelerating pace where cost reduction and Six Sigma/Lean Manufacturing programs are ahead of plan. Additionally, the Siebe Intelligent Building Systems division is having a strong year in both North America and Europe.
Over the past few months the Intelligent Automation Division has completed several key acquisitions aimed at building the Group's position as the leader in the process automation industry. Specifically, we have acquired process automation software companies Wonderware Corp. and Simulation Sciences Inc. and process instrumentation company Eurotherm plc. We are pleased to report that these acquisitions are performing well and their integration into the Intelligent Automation Division is on schedule.
The Industrial Equipment Division is still Siebe's weakest area, but their largest business unit, CompAir is experiencing encouraging order intake levels and the benefits of the Six Sigma/Lean Manufacturing programs are beginning to favorably impact on operating results. We have also seen an improvement in activity levels at the Safety Products Division. Trading activity at the Specialist Equipment Division has, however, remained weak.
So far as our disposal program is concerned, we are pleased to announce that the sale of the Garage Equipment Lift Operations in France and the United Kingdom has been completed. Separately, significant interest has been received concerning our proposed divestiture of Safety Products and we are currently reviewing a number of proposals. The divestitures of Deutsche Tecalemit Lubrication Division, Proner Comatel, APV Industrial Pumps, APV Tanks and North Textiles are also progressing well.
In summary, clear growth strategies, accelerating Six Sigma/Lean Manufacturing cost savings and restructuring programs coupled with a more focused vision all support our view that we are currently on track to deliver another successful year."
Siebe plc is one of the United Kingdom's largest diversified engineering groups and incorporates over 200 companies worldwide, employing over 55,000 people. The Group designs and manufactures process automation and building control systems, a broad range of climate, appliance and automotive controls, electronic power controls, and engineered industrial equipment. The Group generated a profit before tax of 486.4 million pounds on revenues of 3,670.2 million pounds for the year ended April 4, 1998, up 14.7% and 22.1%, respectively on the prior financial year.