TI Group Reports Business Operations in Line With Expectations
2 December 1999
TI Group Reports Business Operations in Line With Expectations
NEW YORK--Dec. 2, 1999--markets
| - | Continued strong cash flow from operations |
| - | $1.2 billion investment in acquisitions in 1999 |
| - | Integration of acquisitions proceeding well |
TI Group, the UK-based global specialized engineering firm, today reports that current trading is ahead of last year and in line with consensus market expectations, reflecting the strength of the global spread and balance of its activities. Cash flow from operations remains strong.
John Crane's mechanical seals business continues to outperform its underlying process industry markets, which have remained difficult throughout the year. The marine business is well positioned, supported by good underlying demand. The integration investment of some $24 million in the current financial year has resulted in the rationalization of infrastructure and enhanced operational efficiencies, both of which will position John Crane to capitalize on a medium term recovery in its markets.
TI Group Specialty Polymer Products was formed in October following the acquisition of Busak+Shamban, a leader in thermoplastic and PTFE technology. The integration with TI Group's Forsheda elastomer business is proceeding well and creates a world leader in high performance polymer materials. With strengthened marketing skills and an enlarged product portfolio, the new business has significant growth potential in a growing global market currently worth some $6.4 billion. The improvements shown by Forsheda in the second quarter have continued and will be further enhanced by the addition of Busak+Shamban.
TI Group Automotive Systems, incorporating Bundy and Walbro, continues to perform strongly in the second half, helped by a robust North American market and good demand in Continental Europe. Latin America remains mixed but in Asia Pacific there have been encouraging signs of recovery. Customers have responded positively to the formation of TI Group Automotive Systems, a unique full-service supplier of integrated fuel storage and delivery systems as well as brake and powertrain fluid carrying systems. The integration of Walbro is proceeding well and overall Automotive Systems will continue to outperform its underlying markets.
Dowty continues to show good progress in the second half. Hydraulics and Actuation, and Aerostructures (Hamble), are performing strongly, benefiting from the record level of large civil aircraft deliveries, and higher sales of spares. Demand for turbine engine components, an early cycle aerospace product, softened somewhat, albeit from high levels. Looking forward, Dowty products are supplied to a wide range of aircraft programs, including regional jets and defense platforms, which, together with opportunities for further outsourcing by OEMs, positions these businesses to perform ahead of underlying civil aerospace markets over the balance of the cycle.
TI Group has invested some $1.26 billion this year in strategic acquisitions to strengthen its core businesses including Tri-Industries, Kenmore Italiana, Walbro, the outstanding 51% interest in Walbro's Marwal joint venture with Magneti Marelli, and Busak+Shamban. Taken together with last year's acquisitions these have nearly doubled the Group's addressable markets to some $28 billion. With leadership positions in each of its worldwide specialized engineering sectors and, through its strengthened portfolio and capability, the company is increasingly able to provide value-added products and services to global customers.
TI Group has a clear focus and is well positioned to achieve continued growth in its three markets, aerospace, automotive and industrial. As the benefits of recent acquisitions come through, the Board is confident of continuing to generate strong cash flow and, looking forward, of achieving double-digit profit growth. The preliminary results for the financial year ending December 31, 1999 will be announced to the London Stock Exchange on March 2, 2000.
Notes to editors:
TI Group's four world leading businesses are John Crane (engineered sealing systems), TI Group Specialty Polymer Products (specialty polymer products), TI Group Automotive Systems (fluid storage and delivery systems) and Dowty (aerospace systems).
TI Group plc, listed on the London Stock Exchange, is one of the world's leading specialized engineering companies employing over 40,000 people at more than 450 manufacturing and customer service facilities in over 45 countries.
TI Group's strategy is to be an international engineering group concentrating on specialized engineering businesses operating in selected niches on a global basis. Key businesses must be able to command positions of sustainable technological and market share leadership. They will have a high knowledge and service content and be able to anticipate and meet customers' needs.
TI Group's North American operations include 150 facilities in 35 states in the United States, Canada and Mexico. Total sales of TI Group in the region in 1998 were $1.6 billion, or 46% of the Group's total sales.