Evolving
for
tomorrow’s
world…
Strategic Report
Strategic Report
1 Evolving for Tomorrow’s World
2 Introducing Spirax Group
4 2024 at a glance
5 Chair’s Statement
8 Section 172 Statement
11 Group Chief Executive Officer’s Review
14 Our Vision
16 The opportunity
18 Business model
20 Our Businesses
22 Strategy
24 Evolving to leverage our strengths
and scale
26 Evolving to deliver more customer value
28 Evolving to enable a low-carbon,
resource-efficient world
32 Chief Financial Officer’s Review
38 Ten-year financial summary
40 Key Performance Indicators
42 Operating Review
44 - Steam Thermal Solutions
48 - Electric Thermal Solutions
52 - Watson-Marlow Fluid Technology
Solutions
56 Sustainability Report
58 - Responsible Business Foundations
64
- Strategic initiatives
78 Non-Financial and Sustainability
Information Statement 2024
80 Risk Management
88 TCFD and Climate-related Financial
Disclosure (CFD)
Governance Report
97 UK Corporate Governance Code
98 Chair’s letter
100 Governance at a glance
102 Board of Directors
104 Group Executive Committee
105 Board reflections: in conversation with
Louisa Burdett
106 How we are governed
107 Board activities and annual cycle
109 Board composition, succession
and evaluation
110 Culture
112 Colleague Engagement
Committee Report
116 Nomination Committee Report
119 Risk Management Committee Report
121 Audit Committee Report
129 Remuneration Committee Report
134 At a glance summary: Executive
Directors’ remuneration
135
Annual Report on Remuneration
145 Summary Remuneration Policy
148 Directors’ Report
152 Statement of Directors’ Responsibilities
Financial Statements
154 Independent Auditor’s Report
163 Consolidated Statement of
Financial Position
164 Consolidated Income Statement
165 Consolidated Statement of
Comprehensive Income
166 Consolidated Statement of Changes in
Equity
167
Consolidated Statement of Cash Flows
168 Notes to the Consolidated
Financial Statements
205 Appendix: Alternative
performance measures
213 Company Financial Statements
214 Company Statement of
Financial Position
215 Company Statement of Changes
in Equity
216 Notes to the Company Financial
Statements
222 Corporate information: Our Global
Operations
229 Officers and Advisers
Contents
…to be
futureready
Strategic Report
.
But the world we live in is constantly changing; shaped by
emerging trends that are altering consumer behaviours.
As we set out to capture the opportunities we see from new
structural drivers of growth, we are guided by our Vision.
Our aim is to build for the future while preserving our unique
strengths. We will do this by staying true to our Purpose and
our Values and working together across Spirax Group to
deliver growth.
We call this Evolving for Tomorrow’s World.
Read more about our business model on page 18
Read more about what we do on pages 2 and 3
Read more about our Vision on page 14
Read more about global trends and how they
support growth in our addressable market on
pages 16 and 17
Read more about our Together for Growth Strategy
on pages 22 and 23
1Spirax Group plc Annual Report 2024
Strategic Report
Spirax Group plc Annual Report 20242
Strategic Report — Introducing Spirax Group
How Spirax Group is
‘engineeringyour everyday’
We work with leading food, drinks and pet food manufacturers
and with the companies producing life saving medicines
and vaccines. We work with farmers, dairy producers and
brewers. And, we serve a broad range of critical sectors
such as Power Generation, Oil & Gas, Chemicals, Transport,
Semiconductor and Aerospace & Defence, through OEM
partners or direct to the customer.
That’s why it is very likely that our solutions sit behind the
engineered processes of the things that you eat, drink,
travel on, rely on, or use every day.
From the food on your table, the tyres on your car, your
mobile phone, medicines and how you heat your home,
the work of Spirax Group plays an essential role in daily life.
As the world evolves, so are we. As we get closer to our
customers, we not only understand their needs today, but
we anticipate their needs of tomorrow. We are evolving to
meet those needs through our Together for Growth
Strategy which you can read out about on pages 22 and 23.
Read about how we are evolving for tomorrow’s world on page 1
1
1
Instant coffee is produced using water heated by steam.
The hot water is combined with ground coffee to create the
rich flavour enjoyed by millions daily. Our systems support
this process by removing condensate from the steam
system which heats the water. By returning the condensate
to the boiler house, Spirax Sarco condensate recovery
solutions ensure the process is both efficient and effective.
Scan the QR code
to find out more
Breakfast brought to you by
Spirax Group
It is said that breakfast is the most important
meal of the day, but did you realise Spirax
Group, and the industrial processes we
support, helps put it on your table?
Steam Thermal Solutions help customers to
harness the power of steam to dry and roast both
tea and coffee and it is used to pasteurise milk,
making it safe to drink. Bread is baked in commercial
convection ovens that use heating technology from
Electric Thermal Solutions. Orange juice cartons
are sustainably filled using Watson-Marlow Fluid
Technology Solutions’ pumps which preserve
precious resources.
Even the energy used to toast your bread is
generated with the help of Spirax Group.
Creating a more efficient, safer and sustainable
breakfast table is just one example of the
meaningful work we do together every day.
Wake up with a morning coffee
brought to you by Steam Thermal
Solutions (STS)
Spirax Group plc Annual Report 2024 3
Strategic Report
2
2
3
3
Orange juice is transported to and poured into cartons
using our peristaltic pumping technology from WMFTS.
As a high-viscose fluid, orange juice concentrate is
challenging to transfer. Our hygienic Certa Pumps are ‘low
shear’, produce minimal turbulence and agitation and
prevent aeration or foaming, preserving product quality.
Bread and other baked goods, including pastries and
croissants, are cooked using heating technology from ETS.
Chromalox’s tubular heating elements are used in commercial
convection heat ovens. Their exceptional heat transfer
capabilities, and ability to be sized and formed based on
customer requirements, offers flexibility and versatility,
as well as reliability in cooking processes.
Scan the QR code
to find out more
Scan the QR code
to find out more
A slice of toast brought to you by
Electric Thermal Solutions (ETS)
The perfect hit of vitamin C brought
to you by Watson-Marlow Fluid
Technology Solutions (WMFTS)
Revenue £
KPI
£1,665.2m
Organic
Change %
All-workplace injury rate^
KPI
2.31
Statutory operating profit £m
£304.6m
Margin %
Statutory earnings per share p
259.6p
Adjusted operating profit* £m
KPI
£333.9m
Margin %
Adjusted earnings per share* p
KPI
286.3p
Before corporate expenses of £30.7 million.
(2023: £27.8 million).
Before corporate expenses of £33.9 million.
(2023: £27.8 million).
2.37
~
†
249.5 312.4
2.62 235.5 256.6
2.22 318.3 338.9
1.75 305.1 377.2
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
+4
-1
+14
+17
-3
18.3
16.9
19.8
23.9
20.9
20.1
20.7
23.6
25.3
22.7
Revenue by
segment %
Adjusted operating
profit by segment* %
Statutory operating
profit by segment %
2024 2024
2023 20232023
52% 59% 55%54%
24%
27% 27%
23%
24%
14%
18%
Steam Thermal Solutions Electric Thermal Solutions Watson-Marlow Fluid Technology Solutions
See more on our KPIs pages 40 and 41
* All adjusted profit measures exclude certain items, which totalled a charge of £29.3 million (2023: charge of £64.7 million), as set out in the
Appendix to the Financial Statements
The Group’s three operating segments, as defined by IFRS 8, are Steam Thermal Solutions, Electric Thermal Solutions and Watson-Marlow Fluid
Technology Solutions
23%
^ Per 100,000 hours worked
~ Includes 2022 acquisitions from this date
† Adjusted from 2.24 following an audit by
Group H&S
1,682.6
1,193.4
1,344.5
1,610.6
2024
2023
2022
2021
2020
1,665.2
2.31
284.4
249.0
320.9
318.8
2024
2023
2022
2021
2020
304.6
259.6
349.1
270.4
340.3
380.2
2024
2023
2022
2021
2020
333.9
286.3
2024
2024 at a glance
8%
26%
66% 59%
25%
16%
Spirax Group plc Annual Report 20244
Strategic Report — 2024 at a glance
We are executing our
Together for Growth Strategy
that is already demonstrating
positive, early results
Our strategic goal is to
drive long term,
compounding growth
for the benefit of all
our stakeholders.”
Tim Cobbold
Chair
5
Strategic Report
Spirax Group plc Annual Report 2024
Strategic Report — Chair’s Statement
I was delighted to join the Board of Spirax Group in
September 2024, before succeeding Jamie Pike as
Chair on 1 January 2025. At this point it is appropriate
to acknowledge Jamie’s significant contribution to the
development of Spirax Group over the past seven years
as Chair and as a Non-Executive Director before that. 2024,
his final year as Chair, proved to be highly significant and
consequential in the evolution of both the Group, as it
navigates a more challenging macroeconomic and trading
environment, and for the Board, with the appointment of
a new Chair, CEO and CFO. Jamie provided the expert
leadership and composure so that this year of transition
proceeded smoothly, and he leaves the Group and the
Board well equipped to take advantage of the opportunities
that lie ahead.
Whilst I am still early in my tenure, my initial impressions
support the widely held external perceptions of the Group,
as high quality and differentiated, with meaningful growth
potential. It is clear that we face a more challenging
macroeconomic and trading environment, and the new
management team led by Nimesh, is providing the vision,
strategy and leadership to respond in the current market
environment and evolve the Group to take advantage of
new opportunities as markets themselves evolve.
At the Capital Markets event in October 2024, Nimesh and
his leadership team demonstrated the Company’s long-term
potential. They introduced the new growth strategy,
Together for Growth, which builds on our strong positions
in long term, attractive end markets whilst evolving the
Group’s differentiated business model. The first steps in
implementing the Together for Growth Strategy have been
taken, with positive early results. Our strategic goal is to
drive long term, compounding growth for the benefit of all
our stakeholders.
The priority for the Board under my leadership will be to
support Nimesh and the leadership team in the successful
implementation of the Together for Growth Strategy and
I look forward to working alongside my Board colleagues
and the Group Executive Committee (GEC) to do so.
I am committed to maintaining an open dialogue with
shareholders and recognise the value that can offer. In
November 2024, I wrote to the top 20 shareholders offering
to meet them with a view to gaining a better understanding
of their views and perspectives. I have since met nine of
them with more to follow. My sense, following these initial
exchanges, is that whilst there remains considerable
support for the Group and the approach being taken, there
is also the recognition that the Group will have to balance
well, its focus on operational priorities and investing for
future growth, in this tougher trading environment. The
strategy roadmap on page 23 of this Report sets out that
plan.
Board and leadership changes
I succeeded Jamie Pike, who stepped down from the
Board on 31 December 2024 after serving over ten years,
including seven as Chair. During Jamie’s tenure, the
Group made 14 strategic acquisitions, built a third Business,
Electric Thermal Solutions, invested significantly in
sustainability, decarbonisation, inclusion and digital and
became a constituent of the FTSE 100 Index. Jamie also led
the evolution of the Board, broadening the range of skills
and experience, equipping the Board to keep pace with the
needs of the Group as it became larger and more complex.
On behalf of the Board, management and all colleagues,
I would like to thank Jamie for his significant contribution
to the Group.
Jane Kingston, Chair of the Remuneration Committee and
Non-Executive Director since 2016 will complete her tenure
on the Board in September. As announced on 31 January,
Jane will be succeeded by Maria Antoniou, who joins the
Board in June. I look forward to welcoming Maria onto
the Board, confident that in addition to chairing the
Remuneration Committee, her wider business background
will enhance the Board’s range of skills and experience.
Further details can be found on page 117 of the Nomination
Committee Report.
As has been reported previously, in January 2024, Nimesh
Patel, formerly CFO, became Group Chief Executive Officer
and succeeded Nicholas Anderson, and Louisa Burdett was
appointed as CFO, joining the Group and the Board in July
2024. Céline Barroche joined the Group in September 2024
as Group Legal Counsel and Company Secretary, following
the retirement of Andy Robson.
In August 2024, we announced Andrew Mines as the successor
to Armando Pazos as Managing Director of Electric Thermal
Solutions (ETS), having led the Watson-Marlow Fluid
Technology Solutions (WMFTS) Business since 2020.
On 6 January 2025, Stuart Roby joined the Group as
Managing Director of WMFTS.
You can find biographies of all Board and GEC members
on pages 102 to 104 of the Governance Report.
Board highlights
The Board met seven times and twice on an ad hoc basis in
2024. Whilst the Board considered a wide range of matters
the most significant included:
Leadership changes
•
Overseeing the transition of the Executive Leadership
•
Approving the changes to the Group Executive Committee
(GEC) referred to above
•
The recruitment of a new Chair to replace Jamie Pike on
his retirement from the Board
Spirax Group plc Annual Report 20246
Strategic Report — Chair’s Statement continued
Group strategy
•
The Board approved the new Together for Growth
Strategy, ensuring it was well aligned to the Group’s
Purpose and Vision, as well as the expectations
of stakeholders
•
Strategic progress on the Growth Drivers of
Decarbonising Thermal Energy and Digital and Services
were also kept under review
Trading and performance
•
The Board supported and challenged constructively the
GEC as they navigated the tougher macroeconomic and
trading environment in 2024
IT infrastructure and applications
•
Following the decision in 2023 to initiate an ERP upgrade
programme, the Board maintained close oversight of the
process and in December 2024, approved the decision to
align all three Businesses around a single common design
Governance and reporting
•
At a time of significant upcoming regulatory and reporting
change, including but not limited to changes to the UK
Corporate Governance Code, the Board worked with
the GEC to support the ongoing development of the
necessary processes and systems to ensure the Group
is in a position to comply as the changes come into effect
The Board visited Spirax Group facilities in Cornwall, UK
(WMFTS), China (Spirax Sarco) and France (Vulcanic). These
visits are valuable opportunities to meet the local leadership
teams and colleagues and to triangulate activities in the
Group with the strategic plans the Board reviews on a
regular basis.
Colleagues
Colleagues across the Group have demonstrated again their
dedication and adaptability by continuing to make progress
on the strategic development of the business at the same
time as operating in a tougher trading environment. The
agility and readiness to respond to change will be a key
attribute going forward. I would like to acknowledge the
part played by colleagues across the Group towards the
development of the business and to offer, on behalf of the
Board, our sincere thanks and appreciation for their hard
work and dedication. I very much look forward to having
the opportunity to meet with more colleagues during 2025.
Board effectiveness
The Board conducted an external and independently facilitated
Board evaluation in 2024, details of which can be found
in the Nomination Committee Report on pages 116 to 118.
As a new Chair this provides an invaluable insight into the
operation of the Board upon which I will build, together
with Board colleagues. The result of any development in
the operation of the Board and its Committees will be
reported in the 2025 Annual Report.
Section 172 Statement
In accordance with the Companies (Miscellaneous Reporting)
Regulations 2018, the Directors have prepared a Statement
describing how they have had regard to the matters set out
in Section 172 when performing their duty to promote the
success of the Company. This can be found on pages
8 to 10 of the Strategic Report and on page 99 of the
Governance Report.
Dividends
The Directors are proposing the payment of a final dividend
of 117.5 pence per share (2023: 114:0 pence). Subject to
approval of the final dividend by shareholders at the AGM
on Wednesday 14 May 2025, the total Ordinary dividend
of the year will be 165.0 pence, an increase of 3% over
the Ordinary dividend of 160.0 pence per share for the prior
year.
I look forward to welcoming shareholders to our 2025 AGM
and I remain available to meet with shareholders throughout
the year.
Tim Cobbold
Chair
10 March 2025
Dividend per share p
165.0p
160.0
118.0
136.0
152.0
2024
2023
2022
2021
2020
165.0
Spirax Group plc Annual Report 2024 7
Strategic Report
Evolving for our stakeholders
Overview
This section, from pages 8 to 10, is our Section 172 Statement.
It outlines how the Directors have acted in good faith to promote
the Company’s success for our shareholders, considering and
engaging with wider stakeholders, and addressing the matters
in Section 172(1) (a) to (f) of the Companies Act 2006.
Considering these broad interests is an essential aspect
of the Board’s decision-making process. Occasionally,
the Board must balance the competing interests of
various stakeholders and other factors in executing our
Together for Growth Strategy. The Board has delegated
the responsibility for the day-to-day operations of the
Businesses to the Group Executive Committee. Consequently,
many decisions and actions undertaken have Board
approval through these delegated responsibilities.
An overview of the guiding principles for these statutory
duties are detailed on page 10 and serve as guidance for the
Group as a whole when making decisions. The Board regularly
receives updates on key initiatives carried out by the Group
that impact stakeholders, ensuring they can understand and,
when necessary, challenge management decisions.
Understanding what matters to our stakeholders
Our colleagues
Colleagues want to work in a culture where they can be
themselves, feel they belong, are supported to be at their
best and encouraged to make a difference for others, as
well as our planet. They want to achieve better balance in
their work and personal lives, while pursuing opportunities
for development and to be fairly rewarded and recognised
for their contributions.
Examples of how we engaged: Board focus groups,
Leadership OpCo visits, hybrid working survey, safety
culture survey, Global Safety Stand Down event, Business
Town halls, Colleague networks, Colleague conferences,
Coffee talks, Spark learning platform, webinars, global
communications activity and One Place colleague platform.
Our customers
Customers want trusted product quality combined with local
knowledge, insights, expert speed of response. Solving
what was previously an unrecognised need can often be
fundamental to the efficiency, safety and sustainability of
our customers’ operations. This reinforces the importance
of our direct sales business model with our engineers able
to ‘walk our customers’ plants’ or increasingly through our
investment in Digital and Services, ‘walk their plants’ data’,
converting those insights into solutions and improving
customer service.
Examples of how we engaged: 2,150 direct sales engineers
making customer visits, Voice of Customer surveys, senior
management customer meetings, product field trials, digital
insights delivery, customer feedback loops, testimonial
development and strategic account management forums.
Our communities
Local communities want to be engaged and feel supported
by businesses operating on their doorsteps. They
understand that business and communities can create
mutual benefit and that current and future generations
flourish when those relationships are working well.
Examples of how we engaged: Encouraged colleagues to
nominate their local projects for funding from Spirax Group
Education Fund and use their three days’ paid volunteering
leave to support initiatives benefitting our local
communities. Invited certain local charities to join events
and raise awareness within our organisation about the work
they do and communities they serve.
Our environment
Across the globe, Governments, Environmental Agencies,
businesses and industry, as well as the wider population,
are becoming increasingly concerned about the future of
our planet and are taking more actions to limit the global
temperature rise, to increase sustainable practices and
protect the Earth’s precious resources and biodiversity.
Examples of how we engaged: With charitable partners
through our ‘One Plant’ initiative to plant or maintain
trees and woodland globally. With SBTi on scope 3
consultations and target setting. Worked with suppliers
to trial sustainable packaging options and with regulators
and local agencies on site and project specific
environmental and sustainability matters.
Our suppliers
Many of our suppliers care about the impact they have on
the planet and want to form mutually beneficial, long-term
partnerships that help them fulfil their potential, as well as
their sustainability goals, as they continue on their journey.
Examples of how we engaged: Survey and training module
completion through the supplier portal. Supplier onboarding
and continuous improvement/best practice alignment plans.
Provided guidance on sustainability matters, to support the
transition to net zero.
Our shareholders
Our shareholders own the business and have invested
their capital in our Company. They expect accurate,
transparent and reliable reporting on strategic, operational
and sustainability factors, regular communications on
performance and governance and value to be delivered
in both the short and long term.
Examples of how we engaged: Financial and other reports
and trading updates, Full and Half Year Results meetings
and investor roadshows. AGM and Capital Markets Day.
Annual programme of 1-2-1 meetings, including with the
new Chair and attending investor conferences. See full list
on pages 100 and 101 of the Governance Report.
The long-term success of our Group relies on our interactions with all stakeholders.
This requires effective engagement, constructive working practices, and consideration
of all stakeholder perspectives to create and maintain value for everyone involved.
Spirax Group plc Annual Report 20248
Strategic Report — Section 172 Statement
New Vision and Together For
Growth
Strategy
Stakeholders considered
In June 2024, the Board approved both a new Vision and
the Together For Growth Strategy. This was the result of
thorough engagement with numerous stakeholders over
many months, to refresh our view of what matters to them
and reflect these in our strategy planning.
This was led by the Group CEO, who reported to the Board on
the output from these activities regularly. Through extensive
colleague engagement, including more than 20 operating
company visits, workshops, focus groups, as well as
customers and other stakeholders sharing their thoughts
with the senior management team, the feedback was
captured and distilled into our new Vision. These insights
also supported the creation of the new Group strategy
called Together For Growth. More details can be found on
pages 22 and 23.
Customers: As part of the strategic discussions, the Board
considered global mega trends and the impact they will
have on customers’ evolving needs, through sales force
feedback, Voice of Customer surveys and meetings with
senior management.
Shareholders: The need to take a balanced approach to
delivering short-term performance while ensuring the Group
defines and sets clear priorities for the medium term and
enabling investment for long-term sustainable growth.
Colleagues: Through the Colleague Engagement Committee
and other engagement channels, the Board has heard and
was mindful of our colleagues’ feedback to simplify
structures, reduce administrative burdens and increase
collaboration across our Businesses and the Group.
Environment: Decarbonisation is at the heart of our
long-term growth capability and central to our Purpose and
Vision to deliver a low-carbon, resource-efficient world.
Link to strategy:
Read more on pages 22 and 23
A common design for ERP across
three Businesses
Stakeholders considered
In December 2024, the Board approved the decision to align
all three Businesses around a single common design for our
ERP and underlying processes.
This approach will optimise our investment by standardising
the way we do business across our OpCos, driving
simplification and providing common tools.
One of our OpCos rolled out its new ERP during 2024 and
the rich learnings from the exercise have been fed back to
enhance the overall Group-wide project.
Colleagues: The Board heard consistent feedback from
colleagues that they want to work with standard, more
automated processes to increase productive time, promote
better collaboration and enhance job satisfaction.
Customers and Suppliers: The project has great potential
to enhance relationships with customers and suppliers by
streamlining all elements of our ‘sales to delivery’ processes
and improving communication and engagement.
Shareholders: A common ERP design and more standard
underlying processes will improve our overall efficiency and
enable us to consider how to leverage the benefits of the
Group’s scale.
Link to strategy:
Read more on pages 22 and 23
Key Board decisions
The long-term success of our Group is influenced by the way we engage with all our stakeholders and reflect on their views.
Considering these broad interests is an important part of the way the Board makes decisions. Below we have highlighted
two key Board decisions made during 2024 and how these take into account the views and needs of our stakeholders in
making those decisions.
Growth Drivers:
Commercial Excellence
Operational Excellence
Organisational Fitness
Digital and Services
Decarbonising
Thermal Energy
Spirax Group plc Annual Report 2024 9
Strategic Report
Spirax Group plc Annual Report 202410
Strategic Report — Section 172 Statement continued
Guiding principles
a
the likely consequences of
any decision in the long term
b
the interests of our
colleagues
c
the need to foster business
relationships with suppliers,
customers and others
Our Purpose, Values, and Vision define the
Group’s aspirations for the next decade.
The Board prioritises the long-term
interests of key stakeholders.
Our Together for Growth Strategy aims to
leverage structural growth opportunities.
It focuses on enhancing operations,
providing meaningful work in a supportive,
inclusive environment, and fostering
development and capability growth. Our
Sustainability Strategy, One Planet:
Engineering with Purpose, guides our
environmental, social, and governance
performance.
For more information see pages 14 and 15
The Board receives feedback from
colleagues on various topics through the
Colleague Engagement Committee (CEC),
regular interactions during site visits,
presentations from senior managers,
updates on whistle-blowing arrangements,
and sharing results of broader engagement
activities. This feedback is considered by
the Board when making strategic and
business decisions.
See page 112 to 115 in our CEC report for
how our Board engages with Colleagues
and in our Strategic Report on page 9 for
our broader colleague engagement
The Board acknowledges the importance
of maintaining business relationships with
suppliers and customers. These factors
are considered in all decisions. The Board
receives regular updates on progress
regarding sustainability goals, including
supplier engagement and Growth Drivers
which form part of our Together for Growth
Strategy that are particularly focused on
customer-centric activities, commercial
excellence, and digital solutions for
customers.
see pages 8 and 9 for information
on Board Engagement and broader
engagement in our Strategic Report
on pages 24 to 27
d
the impact of Spirax Group’s
operations on the community
and the environment
e
the desirability of maintaining
a reputation for high standards
of business conduct
f
the need to act fairly between
our shareholders
Our One Planet Sustainability Strategy
guides our relationship with the
environment and the communities we
interact with.
The Board receives regular updates on
sustainability through the Group
Sustainability Director who leads the
Group Sustainability Management
Committee and provides quarterly reports.
Some Board members also assist the
Spirax Group Education Fund in selecting
and allocating funds to projects that
address educational needs in local
communities.
For more information see pages 56 to 77
in our Sustainability Report
Our reputation is a vital asset, and we are
committed to integrity and ethical business
conduct. All colleagues and Board
members must follow our Management
Code of Conduct. In 2024, we focused on
embedding policies, especially against
fraud, and provided Board training. Spirax
Group has a zero-tolerance policy for
bribery and corruption with any parties.
We also offer a whistle-blowing facility
supported by our Whistle-blowing Policy
for reporting serious misconduct or
wrongdoing.
For more information see pages 63 in our
Sustainability Report
The Board values our shareholders and
investors as key stakeholders. Through
monthly calls, regular meetings, and
forums with shareholders, their advisers,
and the investment community, we stay
informed of investor views and address
any concerns.
For more information see page 8 in our
Strategic Report and pages 100 and 101
of our Governance Report
I thank my colleagues for their
commitment as we continue
tofocus on the operational
priorities that are within our
control and have a meaningful
impact on driving growth in a
challenging environment.
All three of our Businesses
delivered organic sales
growth and margins in line
with our expectations.”
Nimesh Patel
Group Chief Executive Officer
11
Strategic Report
Spirax Group plc Annual Report 2024
Strategic Report — Group Chief Executive Officer’s Review
Summary of 2024 performance
Global industrial production growth (IP) for the full year
was 1.7% or 0.8% excluding China and was lower than had
been forecast at the beginning of the year. Following weak
IP in the first half, the expected second half recovery did not
materialise with industrial production falling in key markets
such as the USA, Germany, France, Italy and the UK, which
together represent approximately 50% of Group sales.
Against this challenging backdrop, we focused on the
operational priorities within our control, including driving
growth through consultative solution-selling as well as
delivering improvements in manufacturing, particularly in
ETS, with the benefits supporting our investment in future
growth. We also continued to protect our margins through
pricing discipline and efficiency savings, such as through
procurement.
As a result, Group organic sales growth of 4% was well
ahead of IP. Organic growth in adjusted operating profit was
4% and the adjusted operating profit margin of 20.1% was
modestly higher organically, despite the partial reversal of
prior year temporary cost containment actions and further
investment in future growth. All three Businesses delivered
organic sales growth during the year with adjusted
operating profit margins in line with our expectations. Both
sales and adjusted operating profit were adversely
impacted by currency movements, with sales 1% lower than
2023 after a 5% exchange rate impact and adjusted
operating profit 4% lower after an 8% headwind.
STS organic sales growth was 1% despite weaker than
expected IP, with growth higher in the second half of the
year. Sales in China (17% of STS in 2023) were 13% lower
due to weaker demand for larger, expansion-related
projects that accounted for approximately 60% of sales
in 2023. Outside China, STS organic sales growth was 4%,
driven by a focus on our targeted higher growth sectors and
increasing MRO and solution-sales from our large installed
base. As expected, STS margin of 23.5% was lower than
2023, impacted by an exchange rate headwind, the partial
reversal of cost containment actions and ongoing
investment in growth.
ETS organic sales growth of 15% in the second half was
higher than in the first half (5%), with continuing strong
growth in the Industrial Process Heating Division, delivered
through our focus on operational improvements which led to
a double-digit increase in Chromalox sales from our carried
forward orderbook. In the Industrial Equipment Heating
Division, demand from Semicon customers began improving
in the fourth quarter, although from a low base. ETS margin
of 16.0% was 50bps higher organically than 2023 with
strong progress in Industrial Process Heating partially offset
by a lower margin in Industrial Equipment Heating.
WMFTS organic sales growth was 3%, supported by strong
growth in Process Industries as we continued to target
higher growth sectors including Water & Wastewater, Food &
Beverage and Mining, increasing our market share. In
Biopharm, new order intake began to recover with double-
digit growth during 2024, following a decline of over 50% by
2023, from the COVID-related peak in 2021. The recovery
was driven by non-OEM end-user customers (approximately
75% of Biopharm sales), with an increase in both orders and
sales. Large OEM customer orders also improved from a low
base although sales declined. As in previous years,
Biopharm sales remained above orders in 2024, supported
by the large carried forward orderbook which has now
normalised. The breadth and diversification of our Biopharm
customer base and the loss of the smoothing effect of the
carried forward orderbook on sales, underpin our continued
expectation of a gradual recovery. WMFTS margin
expanded by 180bps organically as operational gearing
from higher sales, supply chain efficiencies and lower
variable compensation costs offset a full year of costs
relating to our manufacturing facility in Devens,
Massachusetts (USA).
Alongside focusing on the execution of our strategy and
operational improvements to drive growth across all our
Businesses, we also continued to make progress with our
Health and Safety priorities and Sustainability Strategy. Our
all-workplace incident rate (which includes lost time
accidents) reduced from 2.37* in 2023 to 2.31* in 2024, with
a significant reduction in Serious Lost Time Accidents, most
of which were hand injuries. We also made progress towards
meeting our One Planet sustainability targets, including a
reduction in our absolute scopes 1 and 2 market-based
greenhouse gas emissions of 20% (including acquisitions)
compared to 2023 and have exceeded our 2025 reduction
target of 50%, compared to the 2019 baseline.
Our 2024 results demonstrate the continuing robustness of
our business model in a challenging environment. I am
grateful to my colleagues around the world for their focused
execution of our strategy and for their commitment to
working to deliver for all our stakeholders.
The Board has declared a final dividend of 117.5 pence
(2023: 114.0 pence) per ordinary share, bringing the total
dividend for the year to 165.0 pence. The total dividend for
2024 represents 3% growth compared to 2023, reflecting
our confidence in the Group’s business model, strategy and
medium-to-long-term prospects.
Strategic update
We have a powerful and resilient business model, defined
by: a sector focused global direct sales force of 2,150
engineers with deep process insights, serving customers
through close, local relationships; a focus on consultative
solution-selling and pricing based on the value delivered for
our customers; highly diversified geographic regions and
sectors with a high proportion of sales from defensive
end-markets and sales that are mostly funded from
customers’ operational budgets rather than capital
expenditure. This business model is common across STS,
ETS and WMFTS, our three high quality growth engines.
This business model has enabled us to deliver consistent
organic growth ahead of IP and at industry-leading margins,
over many years, through multiple economic cycles. Over the
medium term, we will sustain this track record of growth
ahead of underlying markets, with high-single digit profit
growth delivered through mid-single digit organic sales
growth and an improving margin reaching between 22% and
23%. Delivery of these targets, together with cash conversion
of over 80%, will also drive improving return on capital.
At our Capital Markets event in October 2024, we set out a
strategic framework for building on this unique business model
across all three of our Businesses; we will increase the pace at
which we address operational improvements to fund targeted
investments that will enable us to capture the significant
compounding organic growth opportunities we see ahead.
Our progress in 2024 and priorities for 2025 are set out on the
next page (further details are included in the Operating
Review on pages 42 to 55).
* per 100,000 work hours
Spirax Group plc Annual Report 202412
Strategic Report — Group Chief Executive Officer’s Review continued
Operational priorities
Commercial Excellence
During 2024, we developed our sales capability, increasing
the number of customer-facing sales colleagues,
particularly in ETS due to the strong demand for
sustainability-focused electrification solutions. In STS, we
focused on increasing MRO growth from our large installed
base and leveraging regional expertise to grow in the
Electric Vehicle Battery and Marine sectors. In WMFTS, we
expanded our customer solutions through the launch of WM
Architect (Biopharm) and Qdos H-FLO (Process Industries).
During 2025, we will continue to progress with these
initiatives with a specific focus on maximising the ability of
our direct sales force to continue to deliver growth in a
weaker economic environment.
Operational Excellence
Throughout 2024, in ETS we focused on increasing
shipments from Chromalox of orders taken in prior years,
particularly from the Ogden, Utah (USA) manufacturing
facility. The process of improvement included
comprehensive changes to the Business leadership and
local management team, completing detailed and data
driven reviews of existing processes, as well as taking best
practice from other manufacturing sites.
During 2024, we began to deliver procurement savings
within and across our three Businesses. We also targeted
productivity and efficiency improvements to maximise the
utilisation of our manufacturing capacity and reduce costs. As
a result, we closed a number of smaller manufacturing sites
after consolidating our footprint in the USA (Thermocoax’s US
production, WMFTS’ Asepco and Aflex facilities). In STS, we
announced the closure of our manufacturing facility in Mexico,
with production moving to the USA in 2025 and we have put
on hold the previously planned construction of a new Gestra
facility in Germany. As we make progress, we will have greater
flexibility in how we manage our manufacturing footprint and
we will continue to review how best to optimise and extract
value from our fixed capital.
During 2025, we expect further improvements in shipments
from Chromalox, while completion of our Ogden Medium
Voltage facility expansion will also help to reduce lead
times. We will continue to deliver procurement savings in all
three Businesses, which will partially mitigate the
reinstatement of variable compensation.
Organisational Fitness
During 2024, we successfully completed the first new ERP
implementation at Thermocoax in France, with minimal
disruption. We are bringing across these design principles
and learnings to align around a single global common
design as we move from three separate Business-led ERP
programmes to one. Once this design has been completed,
we will sequence implementation in a way that manages the
associated annual cost and potential operational risk.
In January 2025, we initiated a series of organisational
changes, reducing our management layers and consolidating
activity which can be better leveraged across our operating
companies, while protecting our differentiated local direct
sales presence. Through these changes we are taking early
steps to move towards a simpler, more agile and more
scalable organisation with improved internal processes and
increased customer facing time for our sales colleagues.
In STS, we have consolidated both the management of a
number of our operating companies and our technical sales
and service engineering resources, to better leverage
these across our regions. In ETS, we are driving improved
collaboration in developing customer opportunities and
new products with the establishment of a new Divisional
Sales structure: Industrial Process Heating, Industrial
Equipment Heating and Heat Trace. WMTFS is moving from
a geographic focus to a sector-based sales model, to
strengthen our self-generated solution-sales capability.
During 2025, we will complete our announced restructuring
and continue to progress the ERP programme.
2025 restructuring
The consolidation of manufacturing facilities and organisational
changes are the first significant restructuring activity that we
have undertaken across the Group and will realise savings to
fund our investment in future organic growth. These changes
are expected to realise annualised savings of approximately
£35 million. The cash costs to deliver this programme will be
mostly incurred in 2025 and are expected to be approximately
£35 million, with an additional non-cash cost of £5 million.
Investing in future growth
Digital and Services
In 2024, we continued to increase the number of digital
customer connections to help collect performance data,
principally in STS for steam traps and heat exchangers. In
WMFTS we have also successfully trialled our machine-
learning-enabled Bredel connected-pump on a customer
site. Aggregation and analysis of the data we are collecting
drives insights that support customers’ predictive
maintenance and process optimisation, delivered through
our sales engineers.
Early in 2024, we developed ‘MiM’, our proprietary large
language model that curates our highly specialised
technical, sector and application knowledge. For our sales
engineers, MiM accelerates the learning journey of new
hires and enables more experienced colleagues to deliver
improved solutions to customers, faster. Initially, MiM is
focused on the Food & Beverage and Water & Wastewater
sectors in STS and WMFTS respectively, with user-
acceptance and testing currently underway.
During 2025, we will continue to increase customer
connections in STS and drive higher revenues from digital
products and services. We will advance our proof-of-concept
pilots in WMFTS and extend these to ETS through the retrofit
of selected industrial process heaters in our installed base
with machine learning capabilities. We will also begin to
scale-up the adoption of MiM within our direct sales force.
Decarbonising Thermal Energy
During 2024, we made good progress in developing a
combined thermal energy strategy across STS and ETS,
including three key elements: developing an operating model
to harness both Businesses’ understanding of sector-specific
customer processes, their steam and electrical technical
expertise and direct sales capability; developing new
resistive heating products to decarbonise the generation and
storage of steam (TargetZero) and electrification of industrial
thermal processes beyond steam (PoweringZero); and
investing in emerging thermal energy solutions, such as high
temperature heat pumps that will form part of an extended
suite of options for our steam using customers.
In 2025, we will continue with proof-of-concept pilots for our
TargetZero solutions. We will add further pilots for our
combined thermal energy solutions, as well as our new
resistive heating technology that operates at higher
temperatures.
Nimesh Patel
Group Chief Executive Officer
10 March 2025
Spirax Group plc Annual Report 2024 13
Strategic Report
As the trusted global leader
in optimising critical thermal
energy and fluid technology
processes, we are highly
connected with customers,
obsessed with their evolving
needs, delivering solutions
that serve people and enable
the transition to a low-carbon,
resource-efficient world.
Creating a bold
Vision, together
Spirax Group has a well-established Purpose and
core Values. In 2024, with a new Group CEO and
his leadership team at the helm, we went deep
into the organisation to hear from colleagues
around the world. We listened to their pride in
our Purpose, their passion for solving customer
problems, heard about the challenges they
faced and asked what support they needed.
These conversations brought many insights, all
centred around how we continue to drive long term,
compounding growth at industry-leading margins.
That’s why we set out to define a Vision that
would set our direction, building on our Purpose
and Values.
Our Vision for the future
Our Vision has five important characteristics
that will shape the future of Spirax Group as
we evolve for tomorrow’s world. These are
the things that matter the most to us, and
to the people around us.
Ecosystem for growth
1. A trusted global leader
Being trusted is important to us; it speaks to
our core Values, our heritage, our track
record and the value we place on all
our relationships.
2. Highly connected with customers
Being highly connected with customers
means we build close, local relationships
in physical and digital realms.
3. Obsessed with our customers’
evolving needs
Because we are obsessed with the needs of
our customers, we are relentless in seeking
deeper insights about their requirements
today, as well as for the future.
4. Delivering solutions that serve people
Our solutions help solve real-world problems.
We play a role in so many of the critical
industries that people, all over the world, rely
on for food, medicines, healthcare and many
of the consumables used in daily life.
5. Enable the transition to a low-carbon,
resource-efficient world
Our solutions to decarbonise industrial
thermal energy use help to reduce carbon
emissions from industrial manufacturing.
We also want to expand our solutions, which
protect precious resources, like water, as
well as finding new ways to extend product
lifecycles, reducing waste.
Purpose
At Spirax Group we are defined by our
common Purpose:
To create sustainable value for all our
stakeholders as we engineer a more
efficient, safer and sustainable world.
We exist to help our industrial customers
make their processes safer, more efficient
and more sustainable.
All our stakeholders benefit from our
products and solutions, as well as the things
we do with the money we make.
Our stakeholders
Colleagues
Customers
Communities
Environment
Suppliers
Shareholders
Values
Our six core Values are common to all of us
across our Group.
They are the guiding principles we use to
underpin our decision making, guide our
conduct and define our culture.
By living our Values every day, we build a
sustainable business that is more successful
and a better place to work.
Safety
Collaboration
Customer
focus
Excellence
Respect
Integrity
1
25
4
3
Spirax Group plc Annual Report 202414
Strategic Report — Our Vision
Three Engines for Growth
Our three high quality growth engines of Steam
Thermal Solutions, Electric Thermal Solutions and
Watson-Marlow Fluid Technology Solutions, each tap
into significant mega trends and position us for strong
growth at attractive margins.
Business model
Our products, solutions and expertise are critical to the
operating efficiency and safety of our customers’ thermal
energy and fluid technology processes.
Our global direct sales force serves our customers,
through building close, local relationships, with a focus
on consultative, solution-selling and pricing based on
customer economics.
See more on pages 18 and 19
As we evolve to capture the opportunities we see from
new drivers of growth, we’ll be guided by our Vision as
we work together across our three Businesses.
Together for Growth
Together for Growth is the name of our growth
strategy. It sets out how we will work together across
Spirax Group through five Growth Drivers, to drive
growth over the short, medium and long term to
achieve our Vision.
Growth is what will sustain our Group. It enables us to
invest in what is important to us, as well as supporting
all the people who rely on us (our stakeholders).
Our Growth Drivers
Commercial
Excellence
Digital and
Services
Operational
Excellence
Decarbonising
Thermal Energy
Organisational
Fitness
See more on pages 22 and 23
See more on pages 20 and 21
Scan the QR code to find out more
Spirax Group plc Annual Report 2024 15
Strategic Report
Understanding
customer needs
D
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Opportunity
We are working to position Spirax Group to benefit from global trends
that will drive long term, compounding growth for decades to come.
Unlocking growth
fromopportunity…
1.
Emerging
middle class:
Characterised by an additional 800+ million people, largely
across Asia and Africa, with higher spending power driving
increased consumption. Impacting sectors such as Food &
Beverage, Energy and Power, which represented over a
quarter of our sales in 2024. This increase in consumer
demand drives the need for process efficiency and
productivity improvements, as well as capacity
expansion across our customers’ operations.
800m
people
entering the middle class
population
2.
Resource
efficiency and
sustainability:
Our customers are setting reduction targets for
greenhouse gas emissions and water use.
The unique combination of Steam Thermal Solutions and
Electric Thermal Solutions, together with our products
to reduce customers’ carbon dependency through the
electrification of industrial thermal processes, is a
powerful differentiator for Spirax Group. Our full suite
of decarbonisation solutions have the potential to
address around >5% of global carbon emissions,
comparable to that of the international aviation and
shipping industries combined emissions^. While our
Watson-Marlow Fluid Technology Solutions Business is a
key enabler of resource efficiency such as in the Water &
Wastewater sector.
>5%
of global carbon
emissions addressable
through our full suite of
decarbonisation
solutions
3.
Ageing global
population:
Over the next decade, it is expected that one in six
people in the world will be aged 65 or over, almost
doubling this global population requiring increased
healthcare provision. This is fuelling innovation in the
Pharmaceutical & Biotechnology (Biopharm) sector to
develop and produce new treatments. Biopharm and
Healthcare, accounted for 18% of our sales in 2024 and
through WMFTS, we are already a world leading
provider of products and solutions to the Biopharm
sector.
65
years
Age of 1 in 6 people by
2035
4.
Changing
lifestyles:
Changing lifestyles are driving consumer choices around
technology, sustainability and health. Technology is
playing an increasingly important role in everyday life
and our Industrial Equipment Heating Division in ETS, is
a leading provider of critical thermal electric solutions to
the Semiconductor sector. Both STS and WMFTS have
built a presence in the complex production chain of
Electric Vehicle batteries. WMFTS is also building a
presence in the Future Foods sector which includes
working with start-ups developing cell-based protein as a
sustainable food source to tackle food scarcity challenges,
with technologies that are highly adjacent to those used
in the Biopharm sector.
9.7bn
Projected global
population by 2050*
Overall, these four global trends underscore our potential for growth, through
the structural attractiveness of our existing end markets and through our
increased addressable market opportunities. This is how we will sustain and
accelerate our long term, compounding growth over decades.
* Data source: United Nations, Department of Economic and Social Affairs, Population Division (2024).
World Population Prospects 2024, Online Edition
^ 2022 data: www.climatetrace.org
Spirax Group plc Annual Report 202416
Strategic Report — The opportunity
The impact of these mega trends on our ability to accelerate long-term
growth is evidenced through a 60% increase in our annual
addressable market.
…expanding our annual
addressable market
Electrification of
steam generation
Solutions we refer to as TargetZero
add £2.4 billion to our annual
addressable market. This opportunity
is sized on today’s installed base of
fuel-fired boilers in our target sectors
and regions and an assumption of
adoption over multiple years
constrained by factors such
as customer appetite to invest,
availability of green electricity
and grid transmission capacity.
Decarbonisation of thermal
energy, beyond steam
Solutions we refer to as PoweringZero from
ETS add a further £4.2 billion to our annual
addressable market as we continue to
deploy our Low Voltage and Medium
Voltage solutions in target sectors and
regions to support the electrification of
critical industrial processes that currently
rely on the direct burning of fossil fuels
today. Like our TargetZero solutions, this
number assumes adoption over multiple
years with take up constrained by the same
factors as identified for the electrification
of steam generation.
Future expansion of our
addressable market
We expect our annual addressable
market to expand further linked to
IP-related growth, pricing, recoveries
in the Biopharm and Semicon sectors
and new target high growth sectors.
+£2.4bn
Added to our annual addressable
market through TargetZero
+£4.2bn
Added to our annual addressable
market through PoweringZero
£17.3bn
Current addressable
market
£10.7bn
Previous
addressable
market
Future addressable market
Spirax Group plc Annual Report 2024 17
Strategic Report
Understanding
customer needs
Business model
Evolving from strong
foundations…
Solving customer problems has long been at the heart of
our differentiated ‘Customer Solutions’ business model.
What we do
Our products, solutions and expertise are critical to the operating efficiency
and safety of our customers’ thermal energy and fluid technology processes.
Maintenance and repair sales: typical invoice value £1.5k
Solution-sales: typical invoice value £10-70k
Large project solution-sales: typical invoice value >£100k
Direct sales
Indirect sales
Where we focus
How we generate revenue
85% of Group revenue is generated from annual
maintenance and operational budgets with 40%
of Group revenue generated from solution-sales.
With strong routes to market
Our direct sales approach plays an important role as
our engineers engage with customers to demonstrate
the benefits of our products, solutions and services.
77%
23%
Capex
budgets
Opex
budgets
15%
40%
Focus on high growth sectors and
applications
We have a global footprint with a direct presence
in 68 countries and are highly diversified across
sectors. A high proportion of sales are derived
from defensive end-markets. This approach
enables us to target sectors where our solutions
are mission-critical to our customers’ processes
and reflect the value we provide in our pricing.
How we create customer value
Our 2,150 direct sales engineers serve
our customers through building close, local
relationships that focus on consultative,
solution-selling and pricing based on the
customer’s economics.
Our sales are mostly funded from customers’
operational budgets rather than capital
expenditure and our average invoice size
is circa £3,000, so our local customer focus
and relationships are key to our success.
45%
Spirax Group plc Annual Report 202418
Strategic Report — Business model
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Anticipating
customer needs
1. Customer Closeness evolves
to Connected Customers
Our local direct sales presence underpins our
close customer relationships. Through being
even more highly connected with customers,
both physically and digitally, we will move
from point-in-time sales to more frequent
and even continuous engagement.
3. Wide Product Range evolves
to Optimising Customers’
Systems
Our wide product range underpins our tailored
approach to improving the efficiency of
customers’ discrete processes. Through an
expanded and holistic understanding of our
customers’ needs, across multiple processes,
we will elevate our optimisation solutions to
system and plant level.
5. Applied Engineering evolves
to Applied Design and
Engineering
Our applied engineering skills are critical
to solving customers’ problems. Through
building on our design engineering capability
we will deliver the more bespoke solutions
that our customers will require in the future.
2. Deep Process Insight evolves
to
Deep Customer Insight
Our deep process insight and technical expertise
delivers solutions that enhance our customers’
efficiency, safety and sustainability. Through
digitally-led, data-driven insights we will deepen
our understanding of customers’ specific and critical
needs to serve them better.
4. Responsive Manufacturing
evolves to Seamless
Service Delivery
Our customers rely on our ability to react
quickly to their needs and maintain their
critical production processes. Through
deeper insights and continuous engagement,
we will proactively identify their needs,
delivering a more seamless service and
building enduring partnerships.
We know that our customers’ needs are evolving and that means the way in
which we deliver our solutions is evolving too. At our Capital Markets event
in October 2024, we shared how we are building on our already strong and
differentiated business model, evolving its focus from Customer Solutions,
where we understand customer needs, to Customer Partnership where we
anticipate customer needs. We are doing this by evolving our sales model:
…to create customer
partnerships
Our evolving business model is how we will maintain
and build on our competitive advantage and drive growth.
Read about how we are already delivering against these
aspects of Customer Partnership on pages 12 and 13
Find out how our investment priorities are supporting our
evolution to Customer Partnership on pages 26 and 31
Spirax Group plc Annual Report 2024 19
Strategic Report
Strategic Report — Business model
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Our Businesses
Our three engines
forgrowth
Our three high quality growth engines of Steam Thermal Solutions,
Electric Thermal Solutions and Watson-Marlow Fluid Technology
Solutions, each tap into significant mega trends and position us
for strong growth at attractive margins.
We’re leading the way by combining steam
technologies with our Electric Thermal
Solutions Business to decarbonise the
production of steam in customers’ facilities.
We create electrical process heating and
temperature management solutions, including
industrial heaters and systems, heat tracing
and a range of component technologies. Our
electrical process heating and temperature
management solutions improve process
efficiency through better thermal energy
management and control systems.
Our pump and fluid path technologies provide
industry-leading, sustainable solutions to
deliver secure and accurate metering, dosing,
transfer and filling for niche industries,
including Pharmaceutical & Biotechnology,
Food & Beverage Production and Healthcare.
•
Proven capability to outperform IP
through solution selling
•
Resilience from defensive sector
exposure and MRO demand
•
Solution-selling and value-based
pricing underpins attractive margin
•
Uniquely placed to lead the
decarbonisation of steam
generation
•
Clear plan to substantially improve
margin through: operational focus,
growth, price
•
Proprietary technology and proven
track record in new product
development
•
Differentiated bespoke
manufacturing expertise
•
Capabilities enable the
decarbonisation opportunity
•
Underlying Biopharm market
growing at ~ 10%
•
Process industries to drive secular
growth above IP
•
High margins supported by focus
on attractive sectors and
consumables sales
•
Well-invested following expansion
on manufacturing capacity
Spirax Group plc Annual Report 202420
Strategic Report — Our Businesses
Buildings 3%
Transport 3%
Power Generation 5%
OEM Machinery 11%
Chemicals 7%
Pharmaceutical &
Biotechnology 18%
Oil & Gas 7%
Food & Beverage 20%
Mining & Precious
Metal Processing 2%
Healthcare 4%
Water & Wastewater 3%
Semiconductor 3%
>x2
Industrial Production growth
Sustainable margin:
23.5%+
Long-term ambition Percentage of Spirax Group Sales by Sector
1
>x2
Industrial Production growth
Sustainable margin:
20.0%+
High
single digit organic growth
Sustainable margin:
30.0%+
Scan the QR code to find out more
1 14% of Group Revenues to ‘other’ industries including
Pulp & Paper, Aerospace & Defence and Textiles
Spirax Group plc Annual Report 2024 21
Strategic Report
Strategic Report — Our Businesses
Strategy
Working together to
achieve our ambition
Across the Group we are united in our ambition to deliver long term, compounding organic
revenue growth. We will achieve this by working together across our three Businesses and
together in partnership with our customers, to evolve to meet the needs of tomorrow’s world,
capturing the significant opportunity we see ahead of us and delivering on our ambition.
We have enshrined this approach in our Together for Growth Strategy Growth Drivers.
Commercial Excellence
Our global direct sales force and local customer
relationships are the core of our business model
and a key differentiator. We are investing in the
capability of our sales colleagues to better
serve customers, meeting their evolving needs,
to expand and capture our addressable
market opportunity.
Decarbonising Thermal Energy
Our combined steam and electric expertise and
innovative solutions uniquely position us to
decarbonise our customers’ thermal energy
use. We are investing in our decarbonisation
technology and capability to capture the
significant market opportunity from helping
customers meet their efficiency and
sustainability targets.
Operational Excellence
Our regional manufacturing facilities are
strategically positioned close to our sales
operating companies to deliver high levels of
customer service and maintain agility in our
supply chain. We are focused on continuous
operational improvements, reinvesting
the benefits to support future growth.
Organisational Fitness
Our local presence in the countries we serve
enables us to better understand and meet
customers’ needs. We are connecting colleagues
to leverage our global presence and scale and
simplifying the way we work to better serve
our customers.
Digital and Services
Our relationships, technical expertise and data
driven insights are the basis of our deep
customer understanding. We are focused on
being highly-connected with our customers
throughout their process and product lifecycles
to anticipate their needs and build enduring
customer partnerships.
Our Growth Drivers
Read about the progress we are making
in each Growth Driver on pages 45, 49 and 53
of our Operating Review
Spirax Group plc Annual Report 202422
Strategic Report — Strategy
Medium
term
Long
term
2024
2025
How we drive long term, compounding growth
Margin:
22%–23%
Margin: modest
investment
Margin: 20.1%
Timeline
1
By addressing our
Operational Priorities:
We drive growth in the medium
term and create capacity to invest...
2
Commercial Excellence
Continued focus on driving
organic growth with increased
customer-facing time
Operational Excellence
Improving margins through
efficiency and optimisation
Organisational Fitness
Simplifying our organisation,
reducing duplication
...in our future growth through
two key drivers...
Digital and Services
Driving growth through being
more connected to customers
Decarbonising Thermal Energy
Driving growth by enabling the
decarbonisation of industrial
thermal energy use
...to deliver on our
long-term objectives
4
Investment phase
Investment returns
Growth:>2xIP
Margin:>23%
Spirax Group plc Annual Report 2024 23
Strategic Report
During 2024, we have been taking steps to
simplify our organisation and maintain focus
on serving our customers.
Our organisational structure served us well, as we
expanded our sales and manufacturing footprint. Today,
the Group is larger and more complex with over 140
operating companies (OpCos) compared to fewer than 70
10 years ago. We have a large number of small OpCos with
significant duplication of activity. Our manufacturing
footprint has also grown significantly and become
more fragmented.
Evolving for tomorrow’s world means protecting our
strengths, such as our local sales presence, while
simplifying our structure to leverage our scale.
It also means getting closer to our customers, to
understand their needs today, as well as to anticipate their
needs tomorrow. Developing more agility in our ability to
respond quickly to their changing requirements through
our products, solutions and solutions. That’s why we are:
•
Protecting our direct sales force and maintaining our
local presence which underpins our close customer
relationships
•
Concentrating our operating companies, within our
geographic regions, enabling us to leverage our
resources and our scale
•
Getting even closer to our customers by removing layers of
sales management and creating more customer-facing time
•
Optimising our manufacturing footprint, closing some
smaller sites and relocating production
•
Focusing on efficiency gains that enable reinvestment
to deliver long-term value, while keeping pace with
a challenging trading environment
Preserving local
presence…
EMEA sales restructuring
In STS EMEA we have begun restructuring our sales
operations to improve efficiency, reduce complexity
and offer our colleagues’ improved career paths.
At the end of 2024, we had 19 sales operating
companies (OpCos) of varying sizes which meant that
there were a number of smaller OpCos which lacked the
critical mass to be able to give their full focus to our
customers. Through our organisational changes to
simplify our structures, we have consolidated into 10
larger units, removing the regional sales layer, bringing
our operations closer to the customer, eliminating
duplication of efforts, simplifying our administrative
processes and reducing overheads.
These steps reflect early progress on our journey
towards a new EMEA operating model, with our
restructured team focusing on growth and developing
new ways of working.
Mai Møllekær, STS Divisional Director, EMEA
Evolution in action
Strategic Report
Spirax Group plc Annual Report 202424
Strategic Report — Evolving to leverage our strengths and scale
…while building a simpler
and more customer-
focused future
Links to our Vision
1
2
3
4
5
Read more on page 14
Through these actions we are evolving Spirax Group
for the future, building an organisation that is:
Links to our Together for Growth Strategy
Read more on pages 22 and 23
Simpler
more scalable and agile
Connected
with and responsive
tocustomers
Efficient
and better able to
leverage specialist
capability
Investing
in targeted areas
of growth
Spirax Group plc Annual Report 2024 25
Strategic Report
We want to be obsessed with our customers’ changing needs.
That means understanding the challenges and problems they
face today, as well as anticipating their needs in the future.
We will do this by becoming even more connected to
customers, augmenting the physical ‘walk the plant’
capabilities of our 2,150 direct sales engineers (DSEs) with
connected and AI-enabled digital products that enable us
to ‘walk the data’. By leveraging our DSEs deep knowledge
of customer operations and product application processes
and by collecting and analysing our customers’ critical
data, we are able to model patterns and predict outcomes,
including potential process downtime.
It’s these insights that drive our ability to be customer
obsessed. By being able to better anticipate customer
needs, we become more agile in our ability to respond,
providing customers with the right solution, at the
right time.
Being digitally connected to our customers also enables us
to improve their experience, supporting their end-to-end
needs through new services and enhanced solutions,
delivered through our ‘Connect’ IIoT platform, launching in
the first half of 2025. The platform will be a critical enabler
for driving increased and recurring revenue streams, as
well as providing ‘always on’ customer value delivery.
Through this digital journey we aim to deliver tailored
solutions that are firmly rooted in our insights, with expert
support to address a broader set of customer needs that
demonstrate our evolving role as a trusted
customer partner.
Using data
andinsights…
Strategic Report — Evolving to deliver more customer value
Evolution in action
Digital service identifies failure; stops trouble from brewing…
The problem
Our customer, an international brewer, with more than
300 installed steam traps, was impacted by significant
steam loss and reduced efficiency due to having limited
visibility of real-time performance data.
“ Without the software we would not
have identified the failure for a very
long time.”
Customer Energy Manager
The solution
Typically, a steam trap survey would be undertaken
annually, meaning that any failures in the system could stay
undetected for up to 12 months. The STS EcoBolt Steam
Trap Monitoring Service addresses this issue. As part of a
trial, STS installed monitors on four steam traps within the
main brewing process. By connecting these monitors to
our digital platform dashboard, the customer and our sales
engineers were able to monitor performance, energy
consumption and detect failures in their critical operations.
The impact
The results were immediate, with the dashboard
identifying a steam trap having ‘failed open’. Without
the monitoring in place, the customer would have been
unaware that they were losing money, which over the
period of one year could have cost as much as £3,200
with 13.2 tonnes of CO₂ being emitted as a result of
thermal energy being wasted because of the failed
steam trap. With EcoBolt in place, the time from trap
failure to replacement was just 23 days. A later survey
identified around 15% of the customer’s steam traps
had failed, demonstrating the significant value potential
from digital monitoring for our customers’ economics,
as well as for our planet.
Spirax Group plc Annual Report 202426
Multiple revenue opportunities across the product lifecycle from Digital and Services
Consultative sell
Manufacture
Use
Optimise
Maintain/repair
End of life
management
How Digital and Services deliver more customer value;
…to drive our obsession
with customers’
changing needs
Insights:
Data is collected and analysed
through connected and intelligent
products, generating actionable
insights that drive better
customer solutions.
Enablement:
Best-in-class technology is combined
with our application knowledge
built over decades of being close
to our customers to drive superior
customer experience.
Services:
Deeper insights combined with our
ability to support customers throughout
more of their product lifecycle, create
digital services for optimising critical
processes, supporting predictive,
proactive maintenance, and rapid
repair. Keeping our customers’ critical
processes and equipment operating
at maximum efficiency for as long as
possible and supporting appropriate
end of life product disposal.
Links to our Vision
1
2
3
4
5
Read more on page 14
Links to our Together for Growth Strategy
Read more on pages 22 and 23
Spirax Group plc Annual Report 2024 27
Strategic Report
Well positioned
and ready…
Our steam and electric thermal energy management capabilities enable
us to deliver solutions that decarbonise industrial thermal energy use
and account for >5% of global carbon emissions today.
These charts show the sources of industrial thermal energy
use and the operating capabilities of steam and electric
solutions. Steam is typically utilised at temperatures
between 100
O
C and 350
O
C, in applications where higher
power loads are required. It is also more versatile in its
uses and remains the most efficient method of transferring
thermal energy from point A to point B. This is why steam
remains critical to our customers’ processes.
Electric solutions are utilised where higher temperatures
are required, typically with lower power loads and where
greater control is critical.
As a global leader in industrial thermal energy solutions,
there is huge value to be unlocked from our combined
expertise. That is our unique proposition. To help our
customers reach their net zero goals through electrifying
the generation of steam and replacing the direct burning
of fossil fuels through direct electric technology. When
combined with access to green electricity customers
can reduce their scopes 1 and 2 emissions to zero.
And, as we highlighted on page 17 of the Report, this
unique capability creates an additional £6.6 billion of
annual addressable market opportunity for Spirax Group
and highlights why ETS is so important to our future
evolution and growth. Through its proprietary technology,
proven track record in new product development, along
with differentiated design engineering and bespoke
manufacturing expertise, ETS’ capabilities are critical
to the decarbonisation opportunity of:
How we help customers deliver on their net zero requirements
Steam generated from fossil fuels
(electrification potential)
Direct burning of fossil fuels
(electrification potential)
Direct burning of fossil fuels in high
temperature applications
Existing electric
Industrial
Thermal
Energy Use
~20%
~10%
~25%
~45%
Temperature
Power
1000℃
100℃
350℃
700℃
5MW 15MW 30MW 100MW
Steam
Direct
Electric
Steam Battery Electrofit & SteamVolt HT Heat Pumps
Industrial
Process Heaters
Heat Trace Energy Storage
1. Steam generation through our TargetZero solutions
2. Replacing fossil fuel-fired direct heat with electric
through our PoweringZero solutions
Spirax Group plc Annual Report 202428
Strategic Report — Evolving to enable a low-carbon, resource-efficient world
…to lead in energy
transition through
decarbonisation
How an ‘element’ became indispensable to modern life
TargetZero and PoweringZero solutions all reply on one seemingly simple component.
The electric heating element.
Our heating elements consist of four primary parts:
Powering the engineered solutions we all rely on
Our ability to transform these raw materials into highly engineered, mission-critical heating
systems is what sets us apart as global leaders in both traditional Low Voltage and Medium
Voltage electric heating technology. The element may seem simple, but the technology
behind it is complex and highly engineered to deliver solutions essential to everyday life.
Supporting
healthcare
Growing food Powering
technology
Heating homes Putting cars on
the road
The Nichrome Resistance
Wire, which provides the
necessary heat
Magnesium Oxide
Insulation, which offers
dielectric strength to
contain the electricity
while being an excellent
thermal conductor
The Metal Sheath, which
allows the element to be
directly immersed in
industrial processes
The Termination, which
seals the element and
provides the electrical
connection
These components are
core to our range of Low
and Medium Voltage
heating solutions that
enable decarbonisation
of thermal energy use
Spirax Group plc Annual Report 2024 29
Strategic Report
Investing further in our unique capabilities
As part of our evolution to capture the significant opportunity from decarbonisation,
we are also investing further in our skills, capabilities and technologies.
This also includes the next generation technologies required to serve sector specific needs,
building on our current capabilities across Low Voltage and Medium Voltage technologies
that currently serve sectors with temperature requirements between 400 and 700°C, and
increasing these to address sectors with temperature requirements of 700°C and above.
Heating temperature requirements of key industries
Our LV and MV manufacturing is undertaken at our Ogden facility
in Utah, USA, which has already delivered:
You can read more about how Ogden production is pivotal to the decarbonisation of thermal energy use
and the work of our team there to increase throughput on pages 50 and 51.
270MW
of installed capacity
137
systems
79
projects
10,000
Medium Voltage
heating elements
Food &
Beverage
Building &
Construction
O&G
Processing
Gypsum &
Board
Energy
Storage
Petrochemical Metal
Processing
Existing LV
Technology
Existing MV
Technology
10000C<1200C
Next Generation
MV Technology
Next Generation LV
and MV Technology
Delivering today
up to 7000C
Coming soon (2025-2026)
up to 7000C
Longer term
(2026+) >7000C
Delivering today
up to 4000C
Spirax Group plc Annual Report 202430
Strategic Report — Evolving to enable a low-carbon, resource-efficient world continued
Powering Growth
through Powering Zero
ETS has the capability to become a
significant growth engine within Spirax
Group. The combination of its market
leading expertise in its targeted high
growth sectors and applications
combined with its complementarity to
STS, will support delivery of mid-single
digit organic growth over the medium term
with a clear pathway to a 20% margin.
We have a track record of solving customer problems
within their critical applications using our proprietary
technologies and we have strong demand tailwinds
and a record orderbook in both our Industrial Heating
and Industrial Equipment segments.
In combination, the total decarbonisation opportunity
we have across Spirax Group is material and that is why
we are investing in these capabilities for the pursuit
of multi-decade growth.
Read more about the operational improvements and investments we
are making in our manufacturing capabilities to support this growth
on pages 50 and 51.
Links to our Vision
1
2
3
4
5
Read more on page 14
A trusted decarbonisation partner
We recently produced a 43-page assessment
report following a visit by an ETS sales engineer to a
speciality material manufacturer, producing high-end
chemical additives.
Our report identified numerous opportunities across our
TargetZero and PoweringZero solutions portfolio to
decarbonise the manufacturing footprint and improve
energy efficiency through electrification linked to a
green electricity source.
And these results are quite typical when taking a holistic
approach to thermal energy. Our report identified
opportunities to electrify all facets of process heating
in their single production plant, including the
electrification of steam production through our
TargetZero solutions, as well as electrification of their
direct process heating and heat tracing needs through
our PoweringZero solutions.
In total, we identified opportunities to reduce this
plant’s carbon footprint by 9,211 tons of CO
2
per year
and to reduce their operational energy consumption
for thermal processes by 19%.
This is the power of ETS within the Spirax Group.
It’s what happens when you combine the world’s
leading steam company with the world’s leading electric
heating company. You get the world’s leading thermal
energy capability, able to transition industrial process
heating towards a more sustainable future.
Target Zero Powering Zero
Steam Systems Process Heating
Output Carbon (CO
2
/yr) Energy (MWh) Carbon (CO
2
/yr) Energy (MWh)
Spirax Group solutions 0 38,128 0 3,091
Links to our Together for Growth Strategy
Read more on pages 22 and 23
Evolution in action
Spirax Group plc Annual Report 2024 31
Strategic Report
Continued discipline enabled
us to maintain the right mix
ofoperating costs and protect
our investment in long-term
growth opportunities.
On an organic basis sales
were 4% higher, driven
by growth in all three
Businesses: STS (1%), ETS
(10%) and WMFTS (3%).”
Louisa Burdett
Chief Financial Officer
Spirax Group plc Annual Report 202432
Strategic Report — Chief Financial Officer’s Review
Group full year reported sales were 1% lower compared to
2023, including a material currency headwind of 5%. On an
organic basis sales were 4% higher, driven by growth in all
three Businesses: STS (1%), ETS (10%) and WMFTS (3%).
Group adjusted operating profit was 4% lower compared to
2023, including a material currency headwind of 8%, and
therefore 4% higher organically. All three Businesses
delivered organic growth in adjusted operating profit with
STS growing by 1%, ETS 13% and WMFTS 11%.
Group adjusted operating profit margin of 20.1% was 10bps
higher organically compared to 2023, benefitting from the
organic sales growth. Continued discipline enabled us to
maintain an appropriate mix of operating costs and protect
our investment in long-term growth opportunities, notably
Digital and Services. As anticipated, STS margin was
broadly unchanged on an organic basis compared to 2023,
with ETS margin 50bps higher and WMFTS margin 180bps
higher.
Group statutory operating profit was 7% higher than in 2023
at £304.6 million, with statutory operating profit margin
140bps higher at 18.3%, driven by a number of charges that
impacted the prior year. The reconciling items between
adjusted operating profit of £333.9 million and statutory
operating profit of £304.6 million are shown below:
•
A charge of £34.1 million (2023: £37.2 million) for the
amortisation of acquisition-related intangible assets
•
A one-off impairment charge of £5.7 million relating to
equipment used in the manufacture of certain Biopure
products held in WMFTS with excess capacity
•
A credit of £3.1 million relating to the deferred
consideration payable by Vulcanic in relation to the
acquisition of EML Manufacturing LLC in 2021
•
Income of £4.2 million relating to a post-completion
adjustment to the purchase consideration for
Durex Industries
•
A profit of £3.2 million on the disposal of Kyoto Group AS,
an associate investment
Tax and interest
As expected, net financing expense was higher than in the
prior year at £43.7 million (2023: £39.9 million) as a result of
the full year impact of refinancing maturing fixed rate debt
in late 2023. The new debt carries higher coupons due to
increases in market interest rates. The Group does not
expect a material change to net finance expense in 2025.
The Group effective tax rate reflects the blended average
of rates in tax jurisdictions around the world in which the
Group operates. The Group adjusted effective tax rate
was 100bps higher at 26.5%, (2023: 25.5%), due to the
reduced benefit of the inflation adjustment in Argentina and
the impact of the OECD’s Base Erosion and Profit Shifting
(BEPS) ‘Pillar Two’ initiative. This was partially offset by
non-recurring investment incentives in the USA. On a
statutory basis the Group effective tax rate was 26.1%
(2023: 24.7%). For 2025, the Group’s adjusted effective tax
rate is expected to be 27%, based on the forecast mix
of profits, the inflation position in Argentina and the USA
investment incentives not repeating.
Earnings per share and dividends
Adjusted earnings per share were 8% lower than in the prior
year at 286.3 pence, consistent with the decrease in
adjusted operating profit, higher net financing costs and the
increase in the effective tax rate. Statutory basic earnings
per share were 4% higher at 259.6 pence (2023: 249.5
pence). Statutory fully diluted earnings per share were not
materially different to statutory basic earnings per share in
either year.
The Board is proposing a final dividend of 117.5 pence
per share for 2024 (2023: 114.0 pence) payable on 23
May 2025 to shareholders on the register at 25 April 2025.
Together with the interim dividend of 47.5 pence per share
(2023: 46.0 pence), the total dividend for the year is 165.0
pence per share, an increase of 3% on the total dividend of
160.0 pence per share in 2023, reflecting confidence in a
return to higher levels of growth and margins. The total
amount of dividends paid in the year was £119.3 million, 4%
above the £114.9 million paid in 2023.
Currency movements
The Group’s Income Statement and Statement of Financial
Position are exposed to movements in a wide range of
different currencies. The largest individual currency
exposures are to the euro, US dollar, Chinese renminbi and
Korean won. While the Group’s businesses in Argentina are
immaterial to the consolidated financial results, the volatility
in the Argentinian peso has had a negative impact on
reported financial performance.
Currency movements on translation negatively impacted
Group sales by 5%. The currency impact on adjusted
operating profit was adverse by 8% due to translational and
transactional impacts of £26.0 million and £2.1 million
respectively. The translation downside reflects the impact
of the strengthening of sterling in 2024 against the
currencies in which the Group operates. The main
transactional exposure flow affecting the Group is the
export of products from our factories in the UK, invoiced in
sterling, less the import of goods from overseas Group
factories and third parties which are priced predominately in
euros and US dollars. The net exposure to transactional
currency movements is approximately £150 million.
Excluding the impact of the Argentinian peso, sales and
adjusted operating profit were negatively impacted by 3%
and 5% respectively. The timing of the material devaluation
of the Argentine peso in December 2023 exacerbated the
headwind impact based on a materially higher average
exchange rate in 2024 compared to 2023.
If exchange rates at the beginning of March were to prevail
for the remainder of 2025, there would be a headwind
impact on 2024 sales and 2024 adjusted operating profit of
2% and 4% respectively.
£m FY 2023 Exchange Organic FY 2024 Organic Reported
Revenue 1,682.6 (74.3) 56.9 1,665.2 4% (1)%
Adjusted operating profit 349.1 (28.1) 12.9 333.9 4% (4)%
Adjusted operating profit margin 20.7% 20.1% 10bps (60)bps
Adjusted basic EPS (pence) 312.4 286.3 (8)%
Statutory operating profit 284.4 304.6 7%
Statutory operating profit margin 16.9% 18.3% 140bps
Basic EPS (pence) 249.5 259.6 4%
Spirax Group plc Annual Report 2024 33
Strategic Report
Adjusted cash flow
Adjusted cash flow
2024
£m
2023
£m
Adjusted operating profit 333.9 349.1
Depreciation and amortisation (excl. leased assets) 42.5 44.2
Depreciation of leased assets 17.6 16.2
Additional contributions to pension schemes (6.4) (5.7)
Equity settled share plans 3.1 6.1
Working capital changes 1.0 (9.3)
Repayments of principal under lease liabilities (16.6) (16.1)
Capital expenditure (including software and development) (83.6) (102.8)
Adjusted cash from operations 291.5 281.7
Net interest (41.8) (37.7)
Income taxes paid (76.5) (90.7)
Adjusted Free cash flow 173.2 153.3
Net dividends paid (119.3) (114.9)
Proceeds from/(purchase of) employee benefit trust shares 1.9 (10.8)
Disposals/(Acquisitions) of subsidiaries/associates 5.3 (7.7)
Restructuring costs (2.4) (8.1)
Cash flow for the year 58.7 11.8
Exchange movements 11.8 11.9
Opening net debt (666.7) (690.4)
Net debt at 31 December (596.2) (666.7)
Lease liability (95.1) (96.7)
Net debt and lease liability at 31 December (691.3) (763.4)
There was a working capital inflow in the year, with the ratio
of working capital to sales decreasing by 90bps to 21.9% (2023:
22.8%).
Net capital expenditure in the year of £83.6 million (2023:
£102.8 million), at 5% of sales, was lower than we had
anticipated and lower than in the prior year. Construction of a
new manufacturing facility for our Gestra business in Germany
has been put on hold and the phasing of spend for the
investment in ERP has shifted into 2025 and beyond, as a
consequence of the decision to implement a common design
for the three Businesses. For 2025, we expect net capital
expenditure to be in the range of 5%-6% of sales.
Adjusted cash from operations of £291.5 million (2023: £281.7
million) was £9.8 million higher, resulting in an improved
adjusted cash conversion of 87% (2023: 81%). The improvement
in cash conversion was driven by the lower net capital
expenditure together with improved working capital
management which offset the fall in adjusted operating profit.
Adjusted free cash flow of £173.2 million (2023: £153.3 million)
has increased by 13% driven by improved adjusted cash from
operations as well as a reduction of taxes paid in the year.
Taxes paid in the year have decreased by 16% due to lower
adjusted operating profit, as well as non-recurring investment
tax incentives received in the USA in the current year.
New shares issued through the Employee Benefit Trust for
the Group’s various employee share schemes resulted in a
cash inflow of £1.9 million. No shares were purchased for the
Employee Benefit Trust in the current financial year reflecting
a lower vesting of the Group’s Performance Share Plan (2023:
net outflow of £10.8 million).
Financing and liquidity
Net debt (excluding leases) at 31 December 2024 was £596.2
million (2023: £666.7 million), with a net debt to EBITDA ratio of
1.6x (2023: 1.7x).
As at 31 December 2024, total committed and undrawn debt
facilities amounted to £400 million, representing a fully
undrawn Revolving Credit Facility, in addition to a net cash
balance of £233.9 million. In the year, the Group issued €90
million of new US Private Placement notes at a fixed coupon of
3.85%. The average tenor of our debt is over four years with the
next contractual repayment maturity in October 2025 for
floating rate debt of US$150 million as at 31 December 2024.
Return on capital employed (ROCE)
ROCE was 260bps lower at 35.5%(2023: 38.1%). Excluding the
impact of leases, ROCE decreased by 240bps to 39.2% (2023:
41.6%), driven by the adverse FX impact on adjusted operating
profit. The definition and analysis of ROCE is included in the
Appendix to the Financial Statements.
Return on invested capital (ROIC)
ROIC was 70bps lower at 12.8% (2023: 13.5%). Excluding the
impact of leases, ROIC decreased by 60bps to 13.4% (2023:
14.0%), driven by the decrease in adjusted operating profit after
tax. The definition and analysis of ROIC is included in the
Appendix to the Financial Statements.
Spirax Group plc Annual Report 202434
Strategic Report — Chief Financial Officer’s Review continued
Fundamentals of financial resilience
The macroeconomic environment continued to be
challenging in 2024 with global Industrial Production growth
(IP) of 1.7%, with particular challenges in North America
(-0.3%) and Europe (-0.3%). Additionally, the Group
continued to be impacted by two specific external
challenges in the Pharmaceutical & Biotechnology
(Biopharm) and Semiconductor (Semicon) sectors, which
held back sales progress in WMFTS and margin progress
in ETS respectively. Despite this challenging backdrop
the financial results reflect the relative resilience of the
business model. The Group continued to focus on organic
growth supported by its unique direct sales model and
continued to invest in key strategic initiatives that will drive
future growth including supporting decarbonisation
solutions and building additional digital capability. The
Group’s long-standing track record of increasing returns to
shareholders has continued with a proposed year-on-year
increase in ordinary dividend of 3%.
The Group’s products and solutions continue to support
critical industrial processes across a broad range of
industries and geographical markets. As in previous years,
the Group outperformed Global IP due to our solutions-
sales ability (accounting for 40% of sales) and a significant
base business in maintenance and repair sales (accounting
for 45% of sales). These sales are funded from customers’
operating budgets. The remaining 15% of sales are related
to large projects, funded from customers’ capital
expenditure budgets, which are more heavily influenced by
economic cycles. Approximately 60% of sales are to
defensive, less cyclical sectors and no single customer
accounts for more than 1% of Group sales.
Resilience over the short, medium and long term
The Group’s business model continued investments to
support future growth and strong cash conversion, position
us well to adapt to economic cycles. Our Going Concern and
viability analysis provides confidence in the robust nature of
both the business and capital structure, even when
analysed under a number of potential downside scenarios.
The Group has undertaken scenario-based modelling of
the key risks identified that could impact the business,
the results of which underpin confidence in the short
and medium-term resilience of the Group. The continued
implementation of the strategy supports longer-term
resilience, and the Group continues to closely monitor and
respond to the changing external economic, environmental,
and social factors that will impact the markets in which the
Group operates in the future.
Going Concern Statement
When managing liquidity, the Group’s principal objective is
to safeguard the ability to continue as a going concern for
at least 12 months from the date of signing the 2024 Annual
Report. The Group retains sufficient resources to remain in
compliance with all the required terms and conditions within
its borrowing facilities, with material headroom. No material
uncertainties have been identified.
The Group continues to conduct ongoing risk assessments
with its business operations and on its liquidity.
Consideration has also been given to ‘reverse stress tests’,
which seek to identify factors that might cause the Group to
require additional liquidity and form a view as to the
probability of these occurring.
The Group’s financial position remains robust, with the next
maturity of our committed debt facilities being US $150m of
Bank Term loan which matures in October 2025 and is
reflected in the cash flow forecast model. The Group’s debt
facilities contain a leverage (Net debt/EBITDA) covenant of
up to 3.5x. Certain debt facilities also contain an interest
cover (EBITDA/Net Finance Expense) covenant of a
minimum of 3.0x. The Group regularly monitors its financial
position to ensure that it remains within the terms of these
debt covenants. At 31 December 2024 leverage (net debt
divided by adjusted earnings before interest, tax,
depreciation and amortisation) was 1.6x (31 December
2023: 1.7x), interest cover (adjusted earnings before
interest, tax, depreciation and amortisation divided by net
bank interest) was 10x at 31 December 2024 (31 December
2023: 10x).
Reverse ‘stress testing’ was also performed to assess the
level of business under-performance that would be required
for a breach of the financial covenants to occur. The results
of these tests evidenced that no reasonably possible
change in future forecast cash flows would cause a breach
of these covenants. The reverse stress test cash flow
modelling does not consider any mitigating actions that
the Group would implement in the event of a severe and
extended revenue and profitability decline. Such actions
would serve to further increase covenant headroom.
Having assessed the relevant business risks (as outlined in
our Principal Risks on pages 83 to 87); the potential impact
of any climate change related risks (as outlined within the
Task Force on Climate-related Financial Disclosures section
on pages 88 to 96), and the liquidity and covenant
headroom available under several alternative scenarios (as
set out in the viability assessment below), the Directors
consider it appropriate to continue to adopt the going
concern basis in preparing the Financial Statements.
Assessment of prospects and viability
The Board assessed the prospects of the Group through its
annual strategic and five year financial planning process in
June 2024. In conjunction, it considered the Group’s current
financial position, business strategy, the Board’s risk
appetite and the potential impacts of the Group’s Principal
Risks. The eight Principal Risks that have been identified are
listed on pages 83 to 87.
The Board has adopted a five-year viability assessment,
which it believes to be appropriate as this timeframe is
covered by the Group’s forecasts; considers the nature of
the Group’s Principal Risks, a number of which are external
and have the potential to impact over short time periods;
and is in alignment with the Group’s principal committed
financing facility duration. While the Board has no reason to
believe that the Group will not be viable over a longer
period, given the inherent uncertainty involved over more
extended time periods, the Board believes that a five-year
period provides a reasonable degree of confidence while
still providing a longer-term perspective.
In making their assessment, the Board completed a robust
assessment, supported by detailed cash flow modelling, of
the Principal Risks facing the Group, including those that
would threaten its business model, future performance,
solvency, or liquidity. In addition to completing an impact
assessment of the Principal Risks, the Board considered the
probability of the occurrence of the risks, the Company’s
ability to safeguard against them and the effectiveness of
mitigating actions. In every modelled scenario the Group is
able to demonstrate that it continues to remain viable. The
scenarios modelled that support this process are as follows.
Spirax Group plc Annual Report 2024 35
Strategic Report
Assessment of viability continued
Scenarios modelled
1
Links to Principal Risks
Scenario1:RevenueFall
The Group’s operations are subjected to a material and unexpected reduction in demand due
to a crisis occurring in China. The crisis in China results in the nationalisation of the China
based operations.
Assumptions:
•
Sales: Immediate loss of revenue from Chinese businesses. Global IP declines by 8% (in
line with 2009 financial crisis), driving an 8% decline in Group Revenue in FY 2025, with
recovery back to base case from FY 2027 to FY 2029
•
Margin: Immediate loss of profit from Chinese businesses, alongside a reduction in
earnings due to decline in sales
•
FX: Due to global volatility a flight to western currencies occurs. This results in GBP
strengthening against all major APAC currencies by 20%
Risk1: Economic and political
instability
Risk2: Significant exchange
rate movement
Risk5: Loss of manufacturing
output at any Group
factory
Risk7: Inability to identify or
respond to changes in
customer needs: Digital/
non-Digital.
Scenario2:ExceptionalCharge
The Group breaches Anti Bribery and Corruption (ABC) regulations and is subjected to an
immediate regulatory fine. As a result, the Group’s reputation is impaired causing an
immediate reduction in sales.
Assumptions:
•
Sales: Non-delivery of sales growth from the 2025 Plan due to reputational damage,
resulting in a lost year of growth. Recovery in line with our medium-term plan (MTP)
projections from 2026 onwards
•
Margin: Regulatory fine equal to 10% of 2024 Group Trading Profit levied immediately
Risk8: Breach of legal and
regulatory requirements
(including ABC laws)
Scenario3:CyberAttack
A cyber attack utilising ransomware occurs and succeeds in paralysing Spirax Group
systems, including ageing ERP platforms that are utilised to provide data insights to respond
to customer demands, resulting in an inability to trade. A £25m payment is made to release
the ransomware.
Assumptions:
•
Sales: 5% of Group Sales are permanently lost due to an inability to trade. Recovery in line
with MTP projections from 2026 onwards
•
Margin: Ransomware payment of £25m is paid immediately to release systems. £20m of
additional investment in cybersecurity is made over years 2 to 5
Risk3: Ageing Enterprise
Systems
Risk4: Cybersecurity
Risk7: Inability to identify or
respond to changes in
customer needs: Digital/
non-Digital.
Scenario4:AcquisitionFailure
The four ETS businesses (Chromalox, Thermacoax, Vulcanic and Durex Industries) materially
underperform their business plan. This leads to poor results and ultimately the disposal of the
ETS division.
Assumptions:
•
Sales: ETS sales decline by 20% from 2024 results over the scenario period
•
Cost: ETS goodwill fully impaired in 2025. ETS disposed of at a multiple of 8x EBITDA during 2029
Risk6: Failure to realise
acquisition objectives
1 All scenarios modelled assume all debt maturing in the 5-year period is not refinanced
Spirax Group plc Annual Report 202436
Strategic Report — Chief Financial Officer’s Review continued
A further scenario was modelled to ascertain what level of
revenue or adjusted profit margin reduction would be
required to cause a breach of the Group’s debt covenants.
The reductions in revenue and adjusted profit margin
required to breach Group’s debt covenants were in excess of
15% within a 12-month period, significantly higher than those
modelled in the above scenarios and greater than the impact
experienced during the severe global economic downturn in
2009. This scenario assumed no mitigating actions were
taken. Mitigating actions available could include reductions in
operating and capital expenditure and shareholder dividends.
Whilst linked to the Group’s Principal Risks, the scenarios
modelled are hypothetical and designed to test the ability of
the Group to withstand such severe outcomes. In practice,
the Group has an established series of risk control measures
that are designed to both prevent and mitigate the impact of
such risks. The results of the stress testing undertaken
illustrate that the Group would be able to absorb the impact
of the scenarios considered should they occur within the
assessment time period. In all the scenarios considered the
Group remains within its debt covenants.
Viability Statement
Based on the outcomes of the scenarios and considering
the Group’s financial position, strategic plans and Principal
Risks, the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their
assessment. The Directors’ Statement regarding the
adoption of the going concern basis for the preparation of
the Financial Statements can be found on page 35
.
Long-term resilience
The Group has a long track record, over 130 years, of
consistently adapting to changing macro-economic,
environmental and social factors supported by the business
model. While the strategy and business model lessen any
material impact from the principal risk factors, the Group
nevertheless continuously reviews markets, listens to
customers and adapts solutions, while working responsibly
and in line with the Group’s Values to build long-term
sustainability.
The Group has a highly resilient business and strategy that
will remain relevant across different climate related scenarios.
We recognise the need to anticipate and mitigate the impact
of climate-related change. Although not classed as a
Principal Risk for the Group, the TCFD disclosures on pages
88 to 96 detail the anticipated impact of climate change
related change on the Group’s longer term resilience.
The commitment to net zero targets will have a profound
effect on industrial activity over the coming decades and is
an additional source of growth for our Group over at least
the next 30 years. To address the opportunities arising from
the decarbonisation of industrial thermal energy processes,
we have invested significantly in the development of
sustainable products and solutions that help customers
meet their own sustainability goals.
2025 guidance
Market environment
The global macroeconomic environment remains highly
uncertain impacting the outlook for industrial production,
which is an important driver of demand across our three
Businesses. CHR’s forecast for 2025 global IP is currently
2.1%, with growth weighted towards the second half and
sequential improvements quarter-on-quarter throughout
the year. In recent years IP forecasts have been revised
downward as the year has progressed. We remain cautious
on IP in 2025 and have adopted more conservative
assumptions in our planning.
We expect trading conditions in China to remain challenging
as customers continue to reduce investments in the
expansion of manufacturing capacity. We are also seeing
the impact of political instability in Korea, which is STS’
second largest market in Asia Pacific, and together with
China accounts for 22% of STS sales and approximately 15%
of Group sales.
Following the beginning of a recovery in Biopharm new
order intake in 2024, we expect double-digit order growth
to continue through 2025.
Exchange rates
Our organic growth guidance is based upon 2024 results as
restated for the impact of exchange rate movements in
2025. If exchange rates at the beginning of March were to
prevail for the remainder of the year, 2024 sales would be
approximately 2% lower at £1,632 million and 2024 adjusted
operating profit would be approximately 4% lower at £321
million, resulting in an adjusted operating profit margin of
19.6%.
2025 outlook
We anticipate organic growth in Group revenues consistent
with that achieved in 2024 and well ahead of IP. We expect
modestly higher growth in the second half, reflecting the
forecast trend of improving IP and ongoing recovery in
Biopharm demand though the year. As a result, Group
adjusted operating profit margin is expected to be ahead of
the currency adjusted 19.6% margin in 2024, driving
mid-single digit organic growth in adjusted operating profit.
We expect STS to deliver low-single digit organic sales
growth, with growth outside China again ahead of IP,
partially offset by weaker trading in China and Korea. We
expect margin to remain broadly level with 2024. In ETS,
we anticipate mid to high-single digit organic sales growth
supported by ongoing operational improvement and
recovery in Semicon demand, which will deliver continued
margin progress. In WMFTS, we anticipate mid-single digit
organic sales growth driven by a continuation of the
recovery in Biopharm orders and Process Industries
outperforming IP, to deliver high-single digit organic profit
growth and an increase in margin compared to 2024.
We expect corporate costs of approximately £40 million,
reflecting higher levels of investment in growth, such as
digital initiatives that are funded centrally and an unwinding
of share-based variable compensation that did not vest in
prior years. We anticipate similar net financing costs to 2024
and an effective tax rate of 27%. We expect cash conversion
of greater than 80% in 2025.
2025 restructuring
At our capital markets event in October, we set out our
intention to simplify our organisation and optimise our
manufacturing footprint, following significant expansion
over the past decade, while redeploying cost savings to
fund investment in future organic sales growth.
In January, we began the implementation of a restructuring
programme that is expected to realise annualised savings of
approximately £35 million, with 40% achieved in 2025. The
cash costs to deliver this programme will be mostly incurred
in 2025 and are expected to be approximately £35 million,
with an additional non-cash cost of £5 million. These costs
will be excluded from our adjusted operating profit and are
excluded from the margin guidance above. The expected
savings, net of reinvestment in future growth, are included
within Group, as well as Business margin guidance.
Beyond 2025 and over the medium term we will continue to
seek ways to further optimise our operations and our
manufacturing footprint, to maximise efficiency.
Louisa Burdett
Chief Financial Officer
10 March 2025
Spirax Group plc Annual Report 2024 37
Strategic Report
Ten-year financial summary
2015
£m
2016
£m
2017
£m
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
2023
£m
2024
£m
Revenue 667.2 757.4 998.7 1,153.3 1,242.4 1,193.4 1,344.5 1,610.6 1,682.6 1,665.2
Operating profit 142.8 174.1 198.9 299.1 245.0 249.0 320.9 318.8 284.4 304.6
Adjusted operating profit* 152.4 180.6 235.5 264.9 282.7 270.4 340.3 380.2 349.1 333.9
Adjusted operating profit margin* 22.8% 23.8% 23.6% 23.0% 22.8% 22.7% 25.3% 23.6% 20.7% 20.1%
Profit before taxation 139.7 171.4 192.5 288.8 236.8 240.1 314.5 308.1 244.5 258.9
Adjusted profit before taxation* 151.1 17 7.9 229.1 254.6 274.5 261.5 333.9 370.6 309.2 288.2
Profit after taxation 96.7 121.3 157.9 223.4 167.0 173.9 234.9 225.0 184.0 191.4
Adjusted cash from operations 146.2 185.0 203.8 242.9 238.1 275.8 279.0 214.9 281.7 291.5
Cash conversion 95.9% 102.4% 86.5% 91.7% 84.2% 102.0% 82.0% 56.5% 80.7% 87.3%
Capital expenditure to sales
††
5.0% 5.7% 3.8% 3.8% 5.0% 4.2% 4.8% 7.3 % 6.3% 5.6%
Basic earnings per share 129.9p 165.0p
214.4p 303.1p 226.2p 235.5p 318.3p 305.1p 249.5p 259.6p
Adjusted earnings per share* 142.6p 171.5p 220.5p 250.0p 265.7p 256.6p 338.9p 377.2p 312.4p 286.3p
Dividends in respect of the year 50.6 55.8 64.4 73.6 81.1 87.0 100.2 112.0 117.8 121.6
Dividends in respect of the year
(per share)
69.0p 76.0p 87.5p 100.0p 110.0p 118.0p 136.0p 152.0p 160.0p 165.0p
Net assets 398.3 524.4 609.5 766.9 826.3 852.3** 1,010.0 1,169.8 1,157.7 1,209.2
Return on capital employed
†
41.1% 44.8% 49.8% 51.6% 52.5% 48.9%** 59.3% 53.3% 41.6% 39.2%
Return on invested capital
†
27.1% 28.7% 22.6% 19.3% 19.0% 17.8% ** 22.9% 19.0% 14.0% 13.4%
* All adjusted profit measures exclude certain items as set out and explained in the Financial Review and in the Appendix to the Financial Statements
** 2020 has been restated following the IFRS Interpretations Committee agenda decision on configuration and customisation costs in cloud
computing arrangements (Software as a Service (SaaS)), see Note 1 to the Financial Statements for further details
† The results for 2019 to 2024 exclude the impacts of IFRS 16, which was adopted in 2019
†† Capital expenditure excludes IFRS 16 Lease repayments
Spirax Group plc Annual Report 202438
Strategic Report — Ten-year financial summary
Return on capital employed and return on invested capital %
60
50
40
30
20
10
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Percent %
ROCE ROIC
400
320
240
160
80
0
Dividends and adjusted earnings per share p
p/share
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
DPS EPS
Revenue £m
Sales Adjusted operating profit margin
Revenue and adjusted operating profit margin £m/%
Profit margin %
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
30
28
26
24
22
20
18
16
14
12
10
Spirax Group plc Annual Report 2024 39
Strategic Report
1. Organic revenue growth
†
2. Adjusted
operating profit*
3. Adjusted operating
profit margin*
4. Adjusted earnings
per share (EPS)*
5. Cash generation* 6. All-workplace
Injury rate
#
7. Group GHG emissions
(scopes 1 and 2) tonnes
CO
2
e (market-based)**
Principal Risks
1. Economic and political
instability
2. Significant exchange rate
movement
3. Ageing Enterprise systems
4. Cybersecurity
5. Loss of manufacturing output
at any Group factory
6. Failure to realise acquisition
objectives
7. Inability to identify and
respond to changes in
customer needs: digital/
non-digital
8. Breach of legal and
regulatory requirements
(including ABC laws)
Link to Principal Risk key:
Direct link
Indirect link
No link
See our Principal Risks on
pages 83 to 87 of our Risk
Management Report
For more information about
remuneration, see pages 129
to 147
† Organic growth is at constant
currency and excludes
contributions from acquisitions
and disposals, see the
Appendix to the Financial
Statements.
* Adjusted measures exclude
certain items as set out and
explained in the Financial
Review and in the Appendix to
the Financial Statements.
^ Includes 2022 acquisitions
from this date
# Per 100,000 hours worked
†† Adjusted from 1.55 following an
audit by Group H&S
** Includes Vulcanic and Durex
Industries: estimated data
2019-2022, actual data
2023-2024
Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk
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2
3
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5
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7
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Definition Definition Definition Definition Definition Definition Definition
Organic revenue growth
measures the change in revenue
in the current year compared with
the prior year from continuing
Group operations. The effects
of currency movements,
acquisitions and disposals
have been removed.
Adjusted operating profit is the
profit earned from our business
operations before interest, taxes,
the share of profit of associate
companies and certain
other items.
Adjusted operating profit margin
is defined as adjusted operating
profit expressed as a percentage
of revenue.
Adjusted EPS is a measure of the
profit performance of the Group,
taking into account the equity
structure. Adjusted EPS is defined
as the adjusted after-tax profit
attributable to equity
shareholders divided by the
weighted average number of
shares in issue.
Cash generation is adjusted
operating profit after adding back
depreciation and amortisation,
less cash payments to pension
schemes in excess of the charge
to operating profit, equity settled
share plans, net capital
expenditure excluding acquired
intangibles, working capital
changes and repayment of
principal under lease liabilities.
The number of workplace injuries
per 100,000 hours worked.
The workplace is any location in
which an employee is present as
a requirement of employment.
Employees include all permanent
and temporary staff and
contractors. All injuries that
occur in workplaces, regardless
of cause.
Scope 1 greenhouse gas (GHG)
emissions: Direct emissions
from company-owned or
controlled sources (e.g.,
vehicles, fuel combustion).
Scope 2 market-based GHG
emissions: Indirect emissions from
purchased electricity, considering
contractual and supplier-specific
emissions factors.
Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024
Sales increased by 1% organically
in Steam Thermal Solutions, by
10% organically in Electric
Thermal Solutions and by 3%
organically in Watson-Marlow
Fluid Technology Solutions.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Adjusted operating profit
decreased by 4% on a reported
basis, however, stripping out a
headwind of 8% caused by
exchange rates, it increased by
4% on an organic basis.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Adjusted operating profit margin
decreased by 60bps to 20.1%.
On an organic basis, the adjusted
operating profit margin increased
by 10bps.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Adjusted EPS decreased by 8% to
286.3 pence, in line with a
decrease in adjusted profit before
tax.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Cash conversion improved to
87%, driven by a change in
phasing of larger capital
projects and lower working
capital outflows.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Our all-workplace injury rate
decreased 2.5% during 2024^
(9% excluding our acquisitions,
1.66
††
in 2023 to 1.51 in 2024).
Furthermore, it is encouraging that
serious lost time incidents across
the Group fell from 18 to 5, which
is an indication that our wider risk
reduction strategy is continuing to
make an impact.
Read about the progress we
have made in 2024 in our three
Businesses in the Sustainability
Report on pages 56 to 77
GHG (scopes 1 and 2) decreased
by 20% compared to 2023 and by
52% against our 2019 baseline,
meeting our 2025 target a year
early. Achieved through a
combination of energy efficiency,
decarbonisation initiatives and a
transition to renewable electricity.
Read about the progress we
have made in 2024 in our three
Businesses in the Sustainability
Report on
pages 56 to 77
Link to remuneration Link to remuneration Link to remuneration Link to remuneration Link to remuneration Link to remuneration Link to remuneration
Revenue growth is a key driver
of profit generation and a
central element in the annual
planning process. Bonus
targets are driven off
annual plans and therefore
revenue growth drives a
key measure of variable
remuneration.
A significant proportion of
Executive Directors’ bonuses
are based on the achievement
of adjusted operating
profit targets.
Executive Directors’ variable
remuneration is based on a
number of financial components
of which adjusted operating
profit margin is a key driver.
Adjusted EPS growth over a
three-year period is a key
measure within the Group’s
Performance Share Plan.
Cash conversion is one of two
financial measures on which
Executive Directors’ variable
remuneration is based.
The safety of our colleagues is
central to the sustainability of
our business and has an impact
on the financial success and
profitability of the Group.
Improving the health, safety
and sustainability of our Group
is one of the personal strategic
objectives of each Executive
Director, creating a direct link
with remuneration.
GHG emission reductions over
three-year periods accounts for
20% of the Performance Share
Plan opportunity.
Key Performance Indicators
4%
-3
14
2024
2023
2022
2021
2020
£333.9m
349.1
270.4
340.3
380.2
2024
2023
2022
2021
2020
20.1%
20.7
22.7
25.3
23.6
2024
2023
2022
2021
2020
286.3p
312.4
256.6
338.9
377.2
2024
2023
2022
2021
2020
339.9 20.1 286.3
-1
17
4
Spirax Group plc Annual Report 202440
Strategic Report — Key Performance Indicators
1. Organic revenue growth
†
2. Adjusted
operating profit*
3. Adjusted operating
profit margin*
4. Adjusted earnings
per share (EPS)*
5. Cash generation* 6. All-workplace
Injury rate
#
7. Group GHG emissions
(scopes 1 and 2) tonnes
CO
2
e (market-based)**
Principal Risks
1. Economic and political
instability
2. Significant exchange rate
movement
3. Ageing Enterprise systems
4. Cybersecurity
5. Loss of manufacturing output
at any Group factory
6. Failure to realise acquisition
objectives
7. Inability to identify and
respond to changes in
customer needs: digital/
non-digital
8. Breach of legal and
regulatory requirements
(including ABC laws)
Link to Principal Risk key:
Direct link
Indirect link
No link
See our Principal Risks on
pages 83 to 87 of our Risk
Management Report
For more information about
remuneration, see pages 129
to 147
† Organic growth is at constant
currency and excludes
contributions from acquisitions
and disposals, see the
Appendix to the Financial
Statements.
* Adjusted measures exclude
certain items as set out and
explained in the Financial
Review and in the Appendix to
the Financial Statements.
^ Includes 2022 acquisitions
from this date
# Per 100,000 hours worked
†† Adjusted from 1.55 following an
audit by Group H&S
** Includes Vulcanic and Durex
Industries: estimated data
2019-2022, actual data
2023-2024
Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk Link to Principal Risk
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Definition Definition Definition Definition Definition Definition Definition
Organic revenue growth
measures the change in revenue
in the current year compared with
the prior year from continuing
Group operations. The effects
of currency movements,
acquisitions and disposals
have been removed.
Adjusted operating profit is the
profit earned from our business
operations before interest, taxes,
the share of profit of associate
companies and certain
other items.
Adjusted operating profit margin
is defined as adjusted operating
profit expressed as a percentage
of revenue.
Adjusted EPS is a measure of the
profit performance of the Group,
taking into account the equity
structure. Adjusted EPS is defined
as the adjusted after-tax profit
attributable to equity
shareholders divided by the
weighted average number of
shares in issue.
Cash generation is adjusted
operating profit after adding back
depreciation and amortisation,
less cash payments to pension
schemes in excess of the charge
to operating profit, equity settled
share plans, net capital
expenditure excluding acquired
intangibles, working capital
changes and repayment of
principal under lease liabilities.
The number of workplace injuries
per 100,000 hours worked.
The workplace is any location in
which an employee is present as
a requirement of employment.
Employees include all permanent
and temporary staff and
contractors. All injuries that
occur in workplaces, regardless
of cause.
Scope 1 greenhouse gas (GHG)
emissions: Direct emissions
from company-owned or
controlled sources (e.g.,
vehicles, fuel combustion).
Scope 2 market-based GHG
emissions: Indirect emissions from
purchased electricity, considering
contractual and supplier-specific
emissions factors.
Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024 Progress in 2024
Sales increased by 1% organically
in Steam Thermal Solutions, by
10% organically in Electric
Thermal Solutions and by 3%
organically in Watson-Marlow
Fluid Technology Solutions.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Adjusted operating profit
decreased by 4% on a reported
basis, however, stripping out a
headwind of 8% caused by
exchange rates, it increased by
4% on an organic basis.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Adjusted operating profit margin
decreased by 60bps to 20.1%.
On an organic basis, the adjusted
operating profit margin increased
by 10bps.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Adjusted EPS decreased by 8% to
286.3 pence, in line with a
decrease in adjusted profit before
tax.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Cash conversion improved to
87%, driven by a change in
phasing of larger capital
projects and lower working
capital outflows.
Read about the progress
we have made in 2024
in our three Businesses
in the Operating Review
on pages 42 to 55
Our all-workplace injury rate
decreased 2.5% during 2024^
(9% excluding our acquisitions,
1.66
††
in 2023 to 1.51 in 2024).
Furthermore, it is encouraging that
serious lost time incidents across
the Group fell from 18 to 5, which
is an indication that our wider risk
reduction strategy is continuing to
make an impact.
Read about the progress we
have made in 2024 in our three
Businesses in the Sustainability
Report on pages 56 to 77
GHG (scopes 1 and 2) decreased
by 20% compared to 2023 and by
52% against our 2019 baseline,
meeting our 2025 target a year
early. Achieved through a
combination of energy efficiency,
decarbonisation initiatives and a
transition to renewable electricity.
Read about the progress we
have made in 2024 in our three
Businesses in the Sustainability
Report on
pages 56 to 77
Link to remuneration Link to remuneration Link to remuneration Link to remuneration Link to remuneration Link to remuneration Link to remuneration
Revenue growth is a key driver
of profit generation and a
central element in the annual
planning process. Bonus
targets are driven off
annual plans and therefore
revenue growth drives a
key measure of variable
remuneration.
A significant proportion of
Executive Directors’ bonuses
are based on the achievement
of adjusted operating
profit targets.
Executive Directors’ variable
remuneration is based on a
number of financial components
of which adjusted operating
profit margin is a key driver.
Adjusted EPS growth over a
three-year period is a key
measure within the Group’s
Performance Share Plan.
Cash conversion is one of two
financial measures on which
Executive Directors’ variable
remuneration is based.
The safety of our colleagues is
central to the sustainability of
our business and has an impact
on the financial success and
profitability of the Group.
Improving the health, safety
and sustainability of our Group
is one of the personal strategic
objectives of each Executive
Director, creating a direct link
with remuneration.
GHG emission reductions over
three-year periods accounts for
20% of the Performance Share
Plan opportunity.
£291.5m
281.7
275.8
27 7.7
214.9
2024
2023
2022
2021
2020
2.31 25,317
2024
2023 ˄
2022
2021
2020
2024
2023
2022
2021
2020
291.5
2.37
††
31,659
2.62 46,559
2.22 46,745
1.75 33,715
2.31 25,317
Spirax Group plc Annual Report 2024 41
Strategic Report
Strategic Report
Market environment and operational
performance at a glance
Market environment
IP in 2024 was 1.7% or 0.8% excluding China, lower than had
been forecast at the beginning of the year. Following weak
IP in the first half, the expected second half recovery did not
materialise. Second half IP excluding China of 1.0% was well
below the forecast of 1.5% (August 2024) and our own more
conservative expectations.
IP was weak across almost all regions and negative in
both the first and second halves of the year in key markets
such as the USA, Germany, France, Italy and the UK that
represent approximately 50% of Group sales. This is only the
third time in the last four decades that IP has contracted in
these key markets at the same time. IP forecasts for China
remain uncertain, with a wide range of expectations across
different providers.
We are closely monitoring potential US tariffs on global
trade and the impact on our operations. In all three of
our Businesses, we manufacture in the USA to meet a
significant proportion of domestic demand. Through a
combination of this regional manufacturing, changes to
sourcing and price management, we are prepared to
respond to the effects of USA tariffs. The precise impact on
trading will depend on details yet to be announced by the
USA government, as well as the broader consequences for
the macroeconomic outlook.
2024 2025
Industrialproductiongrowth(IP) H1 H2 FY FY
Europe -0.2% -0.4% -0.3% 1.9%
North America -0.1% -0.4% -0.3% 0.6%
South America -1.8% 1.9% 0.0% 3.3%
Asia 2.6% 3.7% 3.1% 2.7%
Global 1.3% 2.0% 1.7% 2.1%
Global (excluding China) 0.6% 1.0% 0.8% 1.9%
Source: CHR Economics February 2025.
STS is a global leader in the design and supply of industrial
and commercial steam systems, including condensate
management, controls and thermal energy management
products and solutions. The broad range of applications
across multiple sectors that require steam to transfer large
energy loads in the form of heat, as well as our large and
geographically diverse installed base, underpin an enduring
source of MRO and solution-selling revenues for STS.
Progress in 2024:
Revenue (£)
£867.9m
(2023: £910.1m)
Adjusted operating profit (£)
£204.1m
(2023: £224.0m)
Adjusted operating profit
margin (%)
23.5%
(2023: 24.6%)
Statutory operating profit (£)
£198.9m
(2023: £205.2m)
Statutory operating profit
margin (%)
22.9%
(2023: 22.5%)
Operating units
61
Countries with a resident
direct sales presence
67
Colleagues
5,000+
OEM MachineryFood & Beverage
Pharmaceutical &
Biotechnology
Chemicals
Key industries
Read more on page 21
For more information on our
Growth Drivers see page 22
Growth Drivers
Commercial Excellence
Operational Excellence
Organisational Fitness
Digital and Services
Decarbonising Thermal Energy
Spirax Group plc Annual Report 202442
Strategic Report — Operating Review
ETS is uniquely positioned to enable the energy transition
and decarbonisation journeys of our customers. We
combine technical expertise, process insights and
proprietary technology to deliver electrical process heating
and temperature management solutions, including industrial
heaters and systems, heat tracing and a range of
component technologies. Our solutions for equipment
heating are critical in applications that require precise
control of very high temperatures and concentrated
power loads.
Progress in 2024:
Revenue (£)
£404.6m
(2023: £378.5m)
Adjusted operating profit (£)
£64.7m
(2023: £59.2m)
Adjusted operating profit
margin (%)
16.0%
(2023: 15.6%)
Statutory operating profit (£)
£46.1m
(2023: £25.8m)
Statutory operating profit
margin (%)
11.4%
(2023: 6.8%)
Operating units
36
Countries with a resident
direct sales presence
20
Colleagues
2,700+
Fluid technology solutions critically enable a wide range of
industrial processes and applications, from those requiring
sterility and accuracy to high-volume pumping of corrosive
materials. WMFTS designs and manufactures peristaltic
and niche pumps and associated fluid path technologies,
including tubing, specialised filling systems and products
for single-use applications. Our pump and fluid path
technologies provide industry-leading, sustainable solutions
to deliver secure and accurate metering, dosing, transfer
and filling for industries such as Pharmaceutical &
Biotechnology, Food & Beverage, Water & Wastewater,
Mining and Healthcare.
Progress in 2024:
Revenue (£)
£392.7m
(2023: £394.0m)
Adjusted operating profit (£)
£99.0m
(2023: £93.7m)
Adjusted operating profit
margin (%)
25.2%
(2023: 23.8%)
Statutory operating profit (£)
£90.3m
(2023: £81.2m)
Statutory operating profit
margin (%)
23.0%
(2023: 20.6%)
Operating units
47
Countries with a resident
direct sales presence
42
Colleagues
2,000+
Healthcare
Semiconductor Food & Beverage
Food & Beverage
Pharmaceutical &
Biotechnology
Water & WastewaterOil & Gas
Power Generation
Key industries Key industries
Read more on page 21 Read more on page 21
Spirax Group plc Annual Report 2024 43
Strategic Report
Against a challenging
macroeconomic backdrop, STS
continued to focus on target,
higher growth sectors and
increasing MRO and solution-sales
from our large installed base.”
Maurizio Preziosa
Managing Director, Steam Thermal Solutions
Financial progress
Demand
Demand for STS products and solutions is intrinsically
linked to IP, which was weaker in 2024 than expected at the
beginning of the year. In key STS markets such as the USA,
Germany, France, Italy and the UK, IP contracted in 2024.
Against this challenging backdrop, we continued to focus
on our target, higher growth sectors and increasing MRO
and solution-sales from our large installed base.
In China, STS has historically benefitted from strong
demand arising from the large-scale expansion of
manufacturing capacity over the last two decades,
financed from customers’ capital expenditure budgets.
Larger projects accounted for approximately 60% of China
sales in 2023, a much higher proportion than for STS
outside China. In 2023, larger project demand was also
driven by the easing of COVID-related lockdowns and
capacity expansions in the Pharmaceutical and Electric
Vehicle Battery sectors, weighted heavily to the first half of
the year. In 2024, demand was lower as a consequence of
increasing barriers to global trade, a weaker macroeconomic
environment and a reduction in our customers’ investments
in the expansion of manufacturing capacity. This was
partially mitigated by our focus on driving MRO sales
from our large installed base in China, delivering
double-digit demand growth funded from customers’
operational budgets.
Sales
Full year 2024 sales of £867.9 million with organic sales
growth of 1%. Growth improved during the second half (3%)
despite weaker than expected IP, following a 1% decline in
the first half that was driven by a challenging comparator
in China.
In the full year, sales in China (17% of STS in 2023) were
13% lower. Outside China, STS organic sales growth was
4%, well above global IP excluding China of 0.8%.
Margin
Full year adjusted operating profit of £204.1 million was 1%
higher organically and 9% lower after an adverse exchange
rate impact. Full year margin of 23.5% was in line with our
medium-term expectation for STS, although, as expected,
lower than 2023 (24.6%).
Organically, this was driven by lower sales from our higher
margin business in China; higher variable compensation
following a low payout in 2023; the partial reversal of
temporary cost containment actions taken in 2023 and
increased investment in future Growth Drivers such as Digital
and Services, Decarbonising Thermal Energy and in systems.
We continued to maintain our pricing discipline, offsetting
cost inflation to protect margin, with organic drop-through
supported by savings in manufacturing overheads.
Spirax Group plc Annual Report 202444
Strategic Report — Operating Review: Steam Thermal Solutions
Statutory results
Sales of £867.9 million were down 5% including an adverse
exchange rate impact of 6%. Statutory operating profit of
£198.9 million was down 3% from 2023, driven by a
decrease in adjusted operating profit year-on-year, off-set
by the impairment of ERP systems of £13.9 million in 2023.
Statutory operating profit margin of 22.9% increased by
40bps.
Operational progress
Commercial Excellence
Against the backdrop of challenging market conditions, we
focused on our sector expertise and the deep process
knowledge of our global direct sales force to drive growth
from self-generated solutions. Sales to customers in our
target sectors of Food & Beverage, Pharmaceuticals, Oil &
Gas and Chemicals, which account for over 40% of STS
sales, grew organically and ahead of IP in 2024. We also
continued to develop new opportunities by leveraging our
sector expertise globally, through STS teams supporting
their colleagues with process expertise: from China for the
Electric Vehicle Battery sector as our customers explore
new manufacturing locations; and from Italy for the Marine
sector to access opportunities in the USA and China.
Operational Excellence
In February, following an initial review of the STS
manufacturing footprint we announced the closure of our
manufacturing facility in Mexico, with production moving
to the USA. We have also put on hold the construction of
a new manufacturing facility for our Gestra business in
Germany as we review opportunities to maximise the
utilisation of our capacity and focus on productivity
and efficiency improvements.
Organisational Fitness
In January 2025, we commenced the simplification of our
STS EMEA organisational structure by consolidating the
number of operating companies to reduce management
layers and also by consolidating technical sales and service
capability that can be better leveraged across our operating
companies without impacting on our local direct sales capability.
We also undertook targeted overhead cost reductions in
other STS Divisions, including in Asia Pacific and our China
OpCo where we reduced our sales force in light of the
current and anticipated weaker demand environment.
The savings from our Operational Excellence and
Organisational Fitness initiatives will be reinvested in
delivering on our future growth potential (see Group
Chief Executive Officer’s Review, Strategic Update on pages
12 and 13).
Digital and Services
Following our investments in digital and the development
of connected products to gather customer data, we now
have approximately 10,000 connected assets across 1,000
customer sites. These paid-for connections are returning
data from steam traps and heat exchangers, supporting
predictive maintenance and process optimisation, and
delivering pull-through product sales.
Decarbonising Thermal Energy
During 2024, we continued to refine our proprietary
Electrofit solution (retro-fit steam boiler with ETS Low
Voltage technology) proof-of-concept pilots at two Food
& Beverage customer sites in Turkey and have launched
a pilot of our SteamVolt solution (first-fit boiler with ETS
Medium Voltage technology) with an OEM customer in
Argentina. In the first half of the year, we also invested in
emerging high temperature heat pump (HTHP) technology,
which will add to our range of electrification products.
HTHPs are a highly engineered, bespoke technology
enabling our customers to recycle waste process heat
to generate steam for use in their critical processes, while
reducing their operating costs and carbon emissions.
Outlook
We expect STS organic sales growth outside China to
continue to outperform global IP. Trading conditions in
China continue to remain challenging as a consequence of
increasing barriers to global trade, a weaker macroeconomic
environment and a reduction in our customers’ investments
in the expansion of manufacturing capacity, partially offset
by our continued focus on driving MRO growth from our
large installed base. We are also seeing the impact of
political instability in Korea. As a result, we anticipate
weaker trading in China and Korea, particularly during the
first half, with these markets accounting for 22% of STS
sales in 2024.
We will continue to maintain pricing discipline to protect
margins, while recognising that with normalising inflation
rates pricing will contribute less to organic sales growth
than in previous years.
Therefore, for 2025 we anticipate low-single digit organic
sales growth and margins to remain broadly level with 2024.
Over the medium term we expect low-to-mid single digit organic
sales growth in STS, supporting a margin of around 23.5%.
Spirax Group plc Annual Report 2024 45
Strategic Report
STS China is one of the Group’s largest operating
companies (OpCos). It was established 30 years ago and
today represents approximately 15% of Steam Thermal
Solutions (STS) sales.
Over three decades STS has successfully grown in China,
primarily through supporting Capex-related investments in
country from foreign and domestic customers as they
expanded their manufacturing capacity, leading to a
significant installed base of our products.
Over this long period, the nature of these expand and
refurbish (E&R) projects has changed in line with demand,
with the focus, during and immediately after the COVID-19
pandemic, shifting to support customers in the fast growing
Pharmaceutical and EV battery sectors.
More recently, growth in China has been affected by a
number of factors: the slowdown in foreign direct
investment; increasing barriers to trade in the form of tariffs;
as well as a deteriorating macroeconomic environment post
COVID-19, due to the slowdown in the Pharmaceutical
sector and a drop off in the EV battery sector due to
over-capacity.
This impacted demand for E&R projects funded from
customers’ capital budgets, which accounted for over 60%
of STS sales in 2023.
In early 2024, recognising that these unfavourable market
conditions were set to continue over the medium term, our
team in China began pivoting to increase their focus on, and
growing orders related to, process optimisation and MRO
activities, from this large installed base of maturing plants,
typically funded by customers’ operating budgets.
Spirax Group plc Annual Report 202446
Strategic Report — Operating Review: Steam Thermal Solutions continued
Growth focus: China MRO
Pivoting…
This activity started with workshops to develop the appropriate
Customer Value Propositions (CVPs) that address our
customers’ most common pain points and included:
•
Reviewing the installed base, built up over many years,
to identify material customer opportunities and target
the efforts of the direct sales engineers
•
Developing CVPs to help deepen knowledge of customer-
specific processes, including questions to help identify
customer problems and tools to quantify the benefit
for customers, whether through reducing cost or
increasing volumes
•
Hiring specialist MRO direct sales engineers to support
regions and sectors where we have critical mass
•
Training existing E&R sales engineers to better
understand and deliver MRO sales
•
Realigning incentive plans
As a result of their sector focus, targeting high growth
sectors such as Food & Beverage the China OpCo has
successfully been driving sales, achieving double-digit
growth from MRO in 2024.
We have also leveraged the China OpCo team’s in-depth
knowledge and large project expertise to drive growth in our
target sectors outside of China. This has been achieved
through tracking international projects being undertaken by
Chinese companies abroad, such as for the Electric Vehicle
Battery sector. The China team is sharing their intelligence
and collaborating more closely with other Spirax Group
teams operating in the relevant countries where the projects
are active.
Although it will take time for MRO and new products growth
to compensate for the decline in E&R projects, these actions
demonstrate the China team’s ambition to adapt and drive
growth in very challenging market conditions, while
continuing to meet our customers’ evolving needs.
Spirax Group plc Annual Report 2024 47
Strategic Report
…to drive growth in
achallenging market
As ETS continues to improve
operational performance,
increasing shipments and reducing
lead times, we anticipate further
strengthening of our market
position and customer
relationships.
Andrew Mines
Managing Director, Electric Thermal Solutions
Spirax Group plc Annual Report 202448
Strategic Report — Operating Review: Electric Thermal Solutions
Financial progress
Demand
Demand for ETS solutions remained robust in 2024.
Industrial Process Heating continues to carry a large
orderbook and in Industrial Equipment Heating, demand
from Semicon customers began to recover in the fourth
quarter, albeit against a very weak prior year comparative.
We are continuing to see strong interest in
decarbonisation-related electrification solutions, with a
significant pipeline of customer enquiries, including for
some material large projects. As we continue to improve
our operational performance, increasing shipments and
reducing lead times, we anticipate further strengthening
of our market position and customer relationships.
Sales
Full year 2024 sales of £404.6 million were 10% higher
organically or 7% higher after an adverse exchange rate
impact. Growth was driven by operational improvements
in Industrial Process Heating (76% of ETS 2024 sales) that
materially increased shipments from the large orderbook
carried into 2024. Following a weak first half in Industrial
Equipment Heating (24% of ETS 2024 sales), we saw a
return to growth in the second half, supported by sales to
Nuclear and Power sector customers, early signs of a
recovery in demand from the Semicon sector (10% of ETS
2024 sales and 3% of Group 2024 sales), and against a
weak comparator. As a result, ETS sales were 15% higher
organically in the second half, building on the 5% growth
in the first half.
Margin
Full year adjusted operating profit of £64.7 million was 13%
higher organically or 9% higher after an adverse exchange
rate impact. Full year margin of 16.0% was 50bps higher
organically with strong progress in Industrial Process
Heating partially offset by a lower margin in Industrial
Equipment Heating.
The strong improvement in Industrial Process Heating
margin was supported by operating leverage from
improvements in the performance of our Ogden, Utah
(USA) manufacturing facility and progress at Vulcanic.
This was partially offset by ongoing investment to deliver
operational improvements and a lower drop-through of
sales to profit on the shipment of historic orders that could
not be re-priced for inflation. During 2025, we will continue
to ship our carried forward orders, although they will
account for a lower proportion of total sales. Margins in
Industrial Equipment Heating were lower due to costs
related to the transfer of USA production from Thermocoax
to Durex Industries’ facility in Chicago, Illinois and the costs
of ERP implementation in Thermocoax France.
Statutory results
Sales of £404.6 million were up 7% including an
adverse exchange rate impact of 3%. Statutory operating
profit of £46.1 million was up 79% compared to 2023,
reflecting lower amortisation of acquired intangibles and
acquisition-related credits in the year. Statutory operating
profit margin of 11.4% was 460bps higher than in 2023.
Spirax Group plc Annual Report 2024 49
Strategic Report
Operational progress
Operational Excellence
Improving manufacturing throughput in our Chromalox
facilities was a critical area of focus for 2024 and will
continue into 2025. After several years of flat output, we
saw a material improvement in shipments, particularly from
the Ogden, Utah (USA) facility that manufactures large
Low Voltage and Medium Voltage heaters such as those
supporting our decarbonisation solutions. Management
and leadership changes have proved vital to unlocking
resolution of the operational issues that impeded progress
historically, beginning with the appointment of a new Head
of Manufacturing and a new General Manager for the Ogden
facility in the first half of 2024, a new Design Engineering
Manager in the second half of 2024 alongside other critical
hires and culminating with the appointment of a new MD for
ETS.
Within Industrial Process Heating, a key competitive
advantage and point of differentiation is providing
customers with best-in-class bespoke process heating
solutions, built with our proprietary technology and deep
process knowledge. In Chromalox, we are improving key
operational processes to meet customers’ bespoke
requirements with greater efficiency and reduced lead
times. We are introducing controls over complex designs
and better interfaces between sales, engineering and
manufacturing to address production challenges and the
significant backlog. Addressing this ‘quote-to-cash’ process
has been the new team’s focus to shorten lead times in
design engineering, improve resource planning and
production scheduling, better manage customer change
requests and thereby deliver higher throughput and improve
efficiency. An important part of this effort has been learning
from the existing best practice from within ETS and in
particular from Vulcanic.
These measures delivered a double-digit increase in
Chromalox sales, with shipments from Ogden increasing by
close to 40% leading to a backlog reduction of over 20%, as
well as improved margins through operating leverage.
Separately, the expansion of the Ogden facility, specialising
in the manufacture of Medium Voltage solutions, is progressing
well and remains on track for completion during 2025.
Ramp-up costs associated with the expansion, prior to
achieving full production, will impact on the rate of
improvement in the Industrial Process Heating margin
during 2025.
As part of our focus on maximising utilisation of
manufacturing capacity, in the USA we migrated
Thermocoax’s production to our Durex Industries site in
Chicago, Illinois. We will continue to review our ETS
manufacturing footprint to optimise production.
Organisational Fitness
We are driving improved collaboration across ETS with the
establishment of a new organisational structure, comprised of
three Sales Divisions: Industrial Process Heating, Industrial
Equipment Heating and Heat Trace. In Industrial Process
Heating, we are bringing Vulcanic and Chromalox closer
together, aligning the regional sales teams and across ETS we
are combining responsibility for all our manufacturing sites.
In Industrial Equipment Heating, Thermocoax and Durex
Industries are highly complementary, in both engineering
expertise and manufacturing processes to deliver solutions
to our customers, with significant opportunities to leverage
both brands and technologies in our target markets. We have
begun to drive closer collaboration in customer engagement
and new product development through the teams’ combined
expertise, for example in Semicon wafer fabrication
equipment manufacture where both businesses are present
in complementary parts of the wafer fabrication process.
Decarbonising Thermal Energy
Leveraging ETS’ strong research and development
capabilities in resistive heating, we have developed
additional higher voltage and higher temperature solutions
(12kV and 7.2kV) to expand the reach of our existing North
American Medium Voltage solutions (4.2kV), across Europe
and China, and into additional applications such as in the Oil
& Gas sector. These new-to-world products remain in early
phases of testing and we are selecting strategic customers
to conduct proof-of-concept pilots.
Outlook
With a strong carried forward orderbook and operational
improvements supporting increased throughput in Industrial
Process Heating, as well as early signs of recovering Semicon
demand in Industrial Equipment Heating, we anticipate mid
to high-single digit organic sales growth in 2025.
Operating leverage from increasing sales and a recovery in
higher margin Semicon sales will support continuing
improvement in the ETS margin, partly offset by a ramp-up in
operating costs at the new Medium Voltage facility in Ogden.
In the medium term, growth in our end-markets, ongoing
recovery in Semicon demand and growing contribution to our
order intake from decarbonisation-related demand, are
expected to drive above mid-single digit sales growth,
which together with progress in delivering our operational
priorities will support a 20% operating margin by 2027.
Growth focus: Low and Medium Voltage Solutions
The importance of Medium Voltage (MV) technology
As countries convert their power generation to
renewable, carbon-free sources, our electric resistive
heaters can convert that electricity into carbon-free
process heating at virtually 100% efficiency.
By leveraging the more efficient power of MV, reducing the
amount of current used to deliver that power by a
staggering 16 times when compared to traditional Low
Voltage solutions, MV delivers:
•
5 to 10 times more heating power into processes
•
Lower costs of installation and higher efficiency
•
Reduced Capex and substantial long-term operational
cost savings
The role of Chromalox, Ogden
Chromalox’s Ogden manufacturing facility in Utah, USA is
of critical importance to the growth of the ETS Industrial
Process Heat (IPH) Division and to ensuring that ETS
achieves its full potential as a significant growth engine
within Spirax Group.
Ogden is where Chromalox’s proprietary Low and Medium
Voltage heating solutions are manufactured. These heaters,
which can weigh 15,000 kg and measure up to 5.6m x 2.0m x
2.6m, are designed to meet a customer’s specific
requirement and can take beyond 24 months from design to
shipment. The size, scale and bespoke nature of these
heating solutions, combined with growing demand for IPH
solutions to support the decarbonisation of industrial thermal
energy use, has presented historic challenges for the team,
delaying shipments and creating supply bottlenecks.
Addressing historic challenges
During 2024, in response to these historic challenges
and with the support of new leadership, the Ogden team
demonstrated how they are ‘together for growth’ by
leveraging our Values of Collaboration, Customer Focus
and Excellence to unlock these supply bottlenecks.
Recognising that the customer-specific requirements for
each heater often presents new and significant challenges
when moving from the design phase into manufacturing,
work has been underway to reduce the levels of individual
configuration required for each heater. By analysing
customer needs, production processes and then building
‘block designs’ to standardise the base design elements,
the team has eliminated 20-30% of the variables required
for each heater, while still meeting the customer’s
individual requirements.
The Ogden team has also improved production planning,
redesigned the plant layout, created standardised
manufacturing processes and reduced rework and scrap rates.
Operational
Excellence…
Spirax Group plc Annual Report 202450
Strategic Report — Operating Review: Electric Thermal Solutions continued
Collaboration and best practice
The team has also worked collaboratively across ETS,
bringing in tried and tested processes from Vulcanic which
leads the production of IPH solutions in Europe. By integrating
these processes into their workflows, the Ogden team has
created more effective alignment and handover across the
quote, applied engineering, design engineering and
manufacturing phases.
Recognised for Operational Excellence
As part of our Operational Excellence focus, production teams
have used Lean Manufacturing events to enhance customer
service, cash flow and profitability. The ‘MaxiZone’ area team
held a ‘Kaizen’ event, reconfiguring the space to boost
efficiency and throughput. A similar event in the ‘Air Heater’
area also improved efficiency and throughput. Both teams were
recognised in the Group’s Operational Excellence Quarterly
Awards.
These and other initiatives being taken at Ogden are producing
encouraging results. During 2024, increasing production of LV
and MV heaters has delivered close to 40% sales growth.
Investing in growth through expansion
We are also making good progress with the Ogden expansion
project. Our US$58 million investment to add 100,000 square
feet to the facility, expanding its capacity by 60%, is
progressing well with first production due in the second half
of 2025. The shell and core have been completed on time
and within budget.
Fulfilling our potential
Strong operational performance from Odgen is critical to ETS
fulfilling its potential to deliver organic growth of above IP and
margins above 20%.
MV technology has opened up a vast new market opportunity
as these highly engineered, completely customised systems are
integral to the success of our customers’ processes. Our
heaters are installed in mission-critical applications across
industries, from solar production to petrochemicals and from
power generation to pulp and paper.
A major chemicals manufacturer wanted to decarbonise their
mission-critical chemical production process which relied on
traditional carbon-emitting direct-fired heaters to elevate their
chemical gas to 500°C at 300 PSI. Through solution-selling and
engaging directly with the customer to understand fully their
process requirements, we proposed a custom-engineered
500kW system. This was successfully delivered in 2024.
We are making clear progress:
22
Medium Voltage solutions manufactured in
2024 (2023: 19)
~40%
increase in Ogden sales in 2024
20+%
reduction in backlog
…powering growth
atChromalox, Odgen
Improved
routings
Reduced
complexity
Reduced
scrap rates
Improved resource
planning
Reduced tooling
requirements
Higher productivity/
reduced lead times
Spirax Group plc Annual Report 2024 51
Strategic Report
During 2024, WMFTS saw strong
demand growth in our focus sectors
of Water & Wastewater, Food &
Beverage and Mining and we
increased our market share.
Stuart Roby
Managing Director, Watson-Marlow Fluid Technology Solutions
Financial progress
Demand
We saw the beginnings of a recovery in Biopharm new
order intake with double-digit growth in 2024, consistent
with market commentary from some of our larger OEM
customers. This recovery was off a low base, following a
decline of over 50% by 2023, from the COVID-related peak
in 2021. The recovery was primarily driven by non-OEM
end-user customers (approximately 75% of Biopharm
sales), with an increase in both orders and sales. Orders
from large OEM customers also improved from a low base
although sales declined. As in previous years, Biopharm
sales remained above orders in 2024, supported by
the large carried forward orderbook which has now
normalised. Going forward, sales growth will be driven
by new order intake and while we anticipate continued
double-digit recovery in Biopharm orders, this will result
in mid-single digit growth in sales. The breadth and
diversification of our customer base and the smoothing
effect of the carried forward orderbook on sales, underpin
our continued expectation of a gradual recovery. Underlying
drivers of demand, particularly growth in monoclonal
antibodies, recombinant DNA and cell and gene therapies,
remain robust as reflected in end-user activity.
Demand in Process Industries is fundamentally linked to IP,
but our targeted sector focus combined with our direct
sales capability enables us to generate above IP demand
growth. During 2024, we saw strong demand growth in our
focus sectors of Water & Wastewater, Food & Beverage and
Mining and we increased our market share.
Sales
Full year 2024 sales of £392.7 million were 3% higher
organically or broadly unchanged after an adverse
exchange rate impact. Process Industries sales were
supported by strong growth in Water & Wastewater, Food &
Beverage and Mining. Biopharm sales (approximately 50%
of WMFTS sales and 12% of Group sales) were broadly flat
compared to 2023.
Margin
Full year adjusted operating profit of £99.0 million was
11% higher organically and 6% higher after an adverse
exchange rate impact. Full year margin of 25.2% was
180bps higher organically driven by operational gearing
from higher sales and supply chain efficiencies partially
offset by a full year of costs relating to our manufacturing
facility in Devens, Massachusetts (USA) and investment in
new product development.
Spirax Group plc Annual Report 202452
Strategic Report — Operating Review: Watson-Marlow Fluid Technology Solutions
Statutory results
Sales of £392.7 million were broadly flat on 2023 including
an adverse exchange rate impact of 3%. Statutory operating
profit of £90.3 million was up 11% compared to 2023,
reflecting restructuring charges that impacted the 2023
results. Statutory operating profit margin of 23.0% was
up 240bps.
Operational progress
Commercial Excellence
During 2024, we launched WM Architect, supporting
self-generated solution-selling in the Biopharm sector
through bespoke approaches to connecting disparate OEM
systems along the fluid pathway while preserving the safety
and integrity of customers’ processes. We have seen strong
sales in WM Architect (double-digit million pounds), with
products being manufactured in our Biopure, Portsmouth
(UK) facility. At the end of 2024, we also launched Qdos
H-FLO, a chemical metering and dosing pump for flow rates
up to 600 L/h and 7 bar pressure capability, which further
expands our addressable market in Process Industries
applications.
Operational Excellence
Following a review of WMFTS manufacturing footprint in the
USA, we consolidated two small facilities (Asepco and Aflex)
into our newly built Devens facility during the first half of
2024, supporting the ongoing ramp-up of that facility and
delivering a small savings benefit in the second half. We will
continue to seek additional opportunities to optimise our
manufacturing footprint as we leverage capacity in our
Devens facility.
Organisational Fitness
In January 2025, we began implementing a move away
from our geographic focus to a sector-based sales model,
to strengthen our self-generated solution-sales capability.
This sectorised approach covering Biopharm and our target
sub-sectors within Process Industries, allows us to develop
deeper insights into our customers and sector trends, as
well as build deeper technical and process expertise.
Digital and Services
In WMFTS, as a proof-of-concept pilot, we successfully
installed a fully operational machine-learning enabled
Bredel connected-pump inside a potable water treatment
application for a customer in France. This is returning
valuable data that will enable our teams to predict blockages
prior to any impact on process performance. Additional
Bredel connected-pumps are awaiting installation at
waste-to-energy (Germany) and platinum mining
(Australia) customer sites.
Outlook
During 2024, sales exceeded new order intake supported
by our strong carried forward orderbook that had built-up
during the pandemic. With our orderbook having normalised
at the end of 2024, new order intake in Biopharm and
continued demand growth in Process Industries will drive
sales in 2025. In Biopharm, double-digit growth in orders
will bring their value back into line with sales. We expect
continued growth in end-user demand, while recognising
that OEM demand is growing from a low base and remains
volatile. Process Industries sales are expected to continue
to grow ahead of IP as we grow market share further in our
chosen target sectors.
As a result, for 2025 we anticipate mid-single digit organic
sales growth in WMFTS delivering high-single digit organic
profit growth and an increase in margin.
In the medium term, we expect the continuing recovery in
Biopharm demand and continued growth in Process
Industries to support both high-single digit sales growth
and margin improvement to over 30%.
Spirax Group plc Annual Report 2024 53
Strategic Report
Growth focus: Process Industries
Precious
resources…
Dale Kavanagh, a Sales and Business
Development Manager for WMFTS, explains
how WMFTS’ sectorised approach adds value
to the UK Water & Wastewater sector, as well
as our customers and drives our growth.
What is a sectorised approach?
A ‘sectorised’ approach simply means really
focusing in on a specific sector, with a dedicated
team of specialists who can break it down into
the relevant sub-sectors. In doing so, we
develop deeper insights on customer-specific
needs, technical and process expertise, as well
as sector trends and understand how to
best position ourselves.
Why has that been important for the UK
Water & Wastewater sector
Since privatisation in 1989, the Water Services
Regulation Authority (OFWAT) has implemented
the Asset Management Plan (AMP), a five-year
cycle that monitors and directs investments
to ensure water quality remains safe
and affordable.
The AMP is delivered through 12 water and
sewerage companies, each overseeing
extensive regions, and 13 ‘water-only’
companies serving specific areas. These entities
are supported by Tier 1 and Tier 2 contractors
for new plant build and the construction of
modular systems, while daily maintenance,
repair and operations (MRO) are handled by the
companies’ in-house teams. By implementing a
sectorised approach we have been able to get
much closer to the customer, working with their
teams to educate and support in the initial
system design as well as educating the teams
responsible for MRO, on the benefits of
switching to peristaltic pumps.
In Process Industries, which accounts for ~50% of WMFTS sales, strong organic
revenue growth was driven by the focus sectors of Water & Wastewater, Food &
Beverage and Mining, despite a backdrop of weaker IP.
Dale Kavanagh
Sales and Business
Development Manager, WMFTS
Spirax Group plc Annual Report 202454
Strategic Report — [•]Strategic Report — Operating Review: Watson-Marlow Fluid Technology Solutions continued
…deserve focus
andprecision
What is WMFTS’ customer value proposition
to help deliver the AMP?
UK regulations mandate that utility companies employ
precise chemical dosing to maintain water quality
standards. Industry specifications are in place to
ensure equipment reliability and performance.
Recognising the importance of industry alignment,
WMFTS collaborated with the Water Industry Membership
organisation Pump Centre, in the development of their
new Water Industry Mechanical and Electrical
Specifications to incorporate peristaltic dosing pumps
alongside diaphragm pumps, which have historically
been the pump of choice. This engagement with the
industry regulator is part of our multi-layered stakeholder
approach to position our products and solutions.
Our Qdos range of peristaltic pumps are designed to
precisely meter and accurately dose, with repeatable
flow for fluids with wide ranging viscosities.
How is WMFTS’ approach different?
Our pumps can function on a standalone basis at a
customer site or as part of a bigger equipment ‘skid’.
Depending on the customer and application, our fluid
technology solutions are adapted and configured to meet
the customer’s specific needs. Sometimes that means
direct provision and at other times, it’s through an existing
vendor such as an OEM.
A good example of a strategic partnership is with UK
system (skid) builders that design chemical dosing
systems for the major utility companies. By educating
partners on the total ‘cost of ownership’ and ‘return on
investment’ benefits of the Qdos range, we have
secured specifications and approved supplier status
with a number of leading water utility companies.
When do we support customers directly?
Our direct sales engineers continue to ‘walk the
customer’s plant’ whether that’s to check on existing
installed equipment or to find opportunities to deliver a
more efficient, safer or sustainable outcome for the
customer. In doing so, they ensure our customers stay
informed about the incredible advantages of peristaltic
technology and the role these products and solutions
can play in delivering existing and future cycles of the
AMP. Equally, if we do not have a suitable offering, our
sales engineers are clear on this and advise the
customer accordingly, further extending our customer’s
trust in our approach.
Our relationships have been built through long-term
partnerships with customers, strategic partners and
industry regulators. We believe this will be further
strengthened by the recent reorganisation of the
WMFTS EMEA Sales division to deliver an even more
focused and sector driven approach.
Sector focus in action
After more than five years of parallel collaboration across regions with
one leading Chemical vendor customer, WMFTS signed a global pricing
agreement with them in July 2024.
The vendor supplies thousands of metering pumps to customers using
chemicals in their water treatment applications. The vendor made the
decision to switch from diaphragm pumps to Qdos peristaltic pumps
for the most demanding and critical applications due to the high levels
of accuracy and reliability needed.
Based upon their positive customer experience of working with
WMFTS in both the Americas and in Europe, as well as the quality and
benefits of the pump, the vendor signed a global pricing agreement
that has also opened doors to new markets, Asia Pacific and Latin
America, as well as new sub-sectors in Water treatment and Sanitary.
Through this focused approach, sales to this one vendor customer grew
by 60% in 2024, compared to 2023, representing over 500 Qdos
pumps sold
Spirax Group plc Annual Report 2024 55
Strategic Report
One Planet Sustainability
Strategy progress review
In 2024, we continued to advance our commitment to sustainability
through our One Planet: Engineering with Purpose Sustainability
Strategy. One Planet is a comprehensive, Group-wide strategy
designed to drive sustainability across all aspects of our operations,
from how we source materials, develop, manufacture and sell our
products, to how we create value for our customers and support our
communities, ensuring we protect people and the planet as we grow.
During 2024, the Spirax Group Executive Committee reaffirmed the
importance of our sustainability commitments with One Planet
continuing to form part our new Together for Growth Strategy.
Integrating sustainability into our core business practices, not only
contributes to a healthier planet but will also enable us to unlock
new opportunities for future innovation and growth.
Summary of progress against key targets
Our strategic initiatives have made substantial progress this year,
notably achieving our 2025 targets for greenhouse gas emissions,
water and waste reductions a year early.
We have made progress against our biodiversity net gain targets, with
our sites completing over 160 local biodiversity projects during the
year and we have matured our approach to product design, through
the development of an eco-design toolkit. We continued to embed
sustainability into our supply chain management and supported our
communities through colleague volunteering, charitable donations
and our Spirax Group Education Fund.
We also have maintained a focus on our Responsible Business
Foundations, making investments in health and safety (H&S),
supporting the professional development of our colleagues, and
ensuring that we operate ethically and in line with our values.
We also reviewed our One Planet targets, against a backdrop of
technical complexities for specific initiatives and our broader strategic
priorities, and believe they remain relevant, with the exception of the
solvent-based paint transition in our STS Business (see page 74).
As we focus on delivering sustainable growth for all our stakeholders,
this may impact the delivery of some of our 2025 targets, such as
charitable donations and colleague volunteering hours. However, our
commitment to sustainability and making progress against our targets
remains firm, while balanced against business needs.
Compliance with CSRD and EU Taxonomy
As a UK-listed company with significant business operations in Europe,
throughout 2024 we proceeded on the assumption that a number of
Spirax Group’s subsidiary entities within the EU would come into scope
of the Corporate Sustainability Reporting Directive (CSRD) from
1 January 2025, for reporting in 2026. During the year, we spent
considerable time, effort and resources to develop our approach to
CSRD and the EU Taxonomy, and prepare for implementation.
As part of our preparation for CSRD reporting, we finalised a double
materiality assessment (DMA) in 2024, engaging with representatives
from across our stakeholder groups. The DMA confirmed that our One
Planet Sustainability Strategy remains relevant and appropriate for the
Group and, combined with our Responsible Business Foundations,
covers the key topics that are material for our business, as well as
topics that are less material but as an ethical business we believe are
important to continue to pursue.
Under the European Commission’s ‘Omnibus proposal’, released on
26 February 2025, some of our European entities are expected to fall
out of scope and CSRD compliance is expected to be delayed by two
years for European entities that remain in scope for reporting. Like
Our strategic initiatives have
made substantial progress
this year, including achieving
our 2025 targets for
greenhouse gas emissions,
water and waste reductions
a year early.”
Sarah Peers
Group Sustainability Director
Strategic Report
Spirax Group plc Annual Report 202456
Strategic Report — Sustainability Report
many other companies who we engage with and benchmark
against, we have found that the extent and scope of CSRD
poses many logistical challenges, and thus the proposed
delay is a welcome announcement.
Throughout 2025, we will continue to monitor developments
closely to ensure that we are able to meet any regulatory
reporting requirements but will slow the pace of CSRD
implementation to align with the expected delayed
compliance timeline. We will continue to strengthen our data
reporting processes and controls, and remain committed to
transparent and relevant sustainability reporting that meets
the needs of stakeholders.
Controls processes and assurance provider change
Throughout 2024, we worked closely across the Group with
our Internal Controls team on the design of critical, mandatory
and best practice controls, to support compliance with
upcoming changes to the 2024 UK Corporate Governance
Code. We found that we broadly have appropriate controls
in place but identified some additional controls, particularly
around data management, that we will seek to embed
during 2025. These include increased controls around user
access to our reporting systems, enhanced data checks for
material sites and strengthened documentation of some
data policies and processes.
During 2024, following a tender process, we appointed
Deloitte as our new ESG assurance partner for key data sets
in the 2024 Annual Report (scopes 1 and 2 greenhouse gas
emissions, global and UK energy consumption, partial scope
3 greenhouse gas emissions and water use) and for CSRD
going forward.
Our Responsible Business Foundations
Our Responsible Business Foundations underpin all our
sustainability efforts. These foundations are built on our
Values and commitment to operating ethically and
responsibly. (For more information see pages 58 to 63.)
They guide our actions and decisions, ensuring that we
integrate sustainability into every aspect of our business.
During 2024, we made further progress in strengthening
our Health and Safety culture, systems and processes,
remaining focused on ensuring that our colleagues can
come to work, be themselves, thrive and return safely
at the end of their day. (Read more on page 59.)
Sarah Peers
Group Sustainability Director
Spirax Group plc Annual Report 2024 57
Strategic Report
Health and Safety
Alignment with UN SDGs
Health and Safety (H&S) is a core Value and our first priority.
Nothing is more important, which is why we endeavour to
operate beyond compliance. Across the world, our teams
proactively strive for continuous improvement and remain
vigilant to potential risks.
We encourage all colleagues to play a vital role and speak
up if they have concerns, as we have a collective responsibility
to do the right thing, even when no one is looking.
Progress
The Group H&S Excellence Framework, now moving into its
third year, remains a key enabler for our focus. It provides the
structure for continuous improvement, active engagement
and oversight on a wide range of risk reduction targets
across the Culture, Assurance, Risk and Enablement
(C.A.R.E.) framework. Alongside this internal framework, we
are aligned to external certification, with the number of Group
companies certified to H&S Management Standard ISO
45001 or equivalent at 44 (2023: 50). The reported
reduction in the number of certified Group companies, is
due to the consolidation of scoping at locations.
During the year, H&S improvement highlights included:
pedestrian and vehicle management, contractor control,
root cause analysis training and machinery safety. We
continue to support all our locations dependent on their
stage of maturity, as well as refining our assurance at all
levels, where opportunities to improve and learn have been
identified. An example being the introduction of Group H&S
audits, which in addition to thematic elements such as:
machine safety, workplace transport and contractor
management, also reviews the local implementation and
effectiveness of the framework.
Our overall H&S strategy has also been independently
reviewed by an external Chartered H&S Practitioner.
The review highlighted the positive sequential approach
of the framework, the governance oversight this brings
and an assurance that our H&S maturity is heading in the
right direction.
Mental health and wellbeing
We continue to make mental health and wider wellbeing
a priority for our Group. In 2024, we embedded further
targets on mental health into our Group Health and Safety
Excellence Framework. These now include a requirement
for each operating company to hold at least one mental
health-focused colleague event annually and to develop a
Mental Health Action Plan based on the six themes of the
MindForward Alliance (previously the Global Business
Collaboration for Better Workplace Mental Health)
leadership pledge.
During the year, we were also included in the CCLA
Corporate Mental Health UK Benchmark for the first time.
Using publicly available information, this assesses the
mental health commitment and achievements of the 100
largest UK-listed companies with more than 10,000
employees. We entered the benchmark in Tier 3 (of 5), one
of only two new entrants to achieve this. The benchmark
ranked us in the top quintile on management commitment
and policy, with suggestions around how to further
strengthen our focus on mental health governance,
innovation and performance reporting.
Completion of Group H&S Excellence Framework
(%Complete
4
)
Vulcanic
Legacy
Group
5
Durex
Industries
Bronze level 95%
Foundation level 92%
Foundation level 76%
1 Per 100,000 hours worked
2 Includes 2022 acquisitions from this date
3 Adjusted from 2.24 following an audit by Group H&S
4 Subject to continual assurance by Group H&S and Internal Audit
5 Excluding 2022 acquisitions
All-Workplace Injury Rate
1
2024
2023
2
2022
2.31
1.75
2.37
3
Serious Lost Time Accident Rate
1
0.03
0.04
0.10
2024
2023
2
2022
Spirax Group plc Annual Report 202458
Strategic Report — Sustainability Report: Responsible Business Foundations
“We need to have a conversation
about Safety”
When an unfortunate, and sadly, avoidable incident
occurred at one of our manufacturing sites resulted
in a colleague sustaining a serious injury, we didn’t
hesitate to act.
Within a few days of receiving a report of the
incident, our Group CEO and Business Unit
Managing Directors came together to record a
film for all colleagues. Its purpose was to have a
‘conversation about safety’ and to discuss what
had happened to our colleague.
On 7 February 2024, less than a week after the
incident, all 10,000+ colleagues across the Group
were asked to stop work and take part in a Safety
Stand Down. Together in their teams they watched
the film. Then using a Stop, Look, Assess and
Manage (SLAM) technique, working in smaller
groups, our colleagues were invited to discuss
openly and honestly how the incident had impacted
them and what could we all do, to make things safer.
Following the incident, the introduction of minimum
mandatory machine guarding for three types of
machinery and safe system of work criteria
were expedited.
There is no doubt that the global Safety Stand Down
was a catalyst for a deeper conversation about H&S
and set the tone for the year. And, it has played a
positive role, contributing (in part) to a 72%
reduction of Serious Incidents to 5 in 2024 (2023: 18).
To sustain this reduction, a proactive Group-wide
Safety Stand Down was held throughout February
2025. Reinforcing our continued message that
safety is our number one priority and nothing is
more important than the safety and wellbeing of
our colleagues.
‘Let’s talk about safety’ was our theme for the
2025 Safety Stand Down. Again bringing all 10,000+
colleagues together to talk openly about safety.
Through this proactive approach, the discussion
highlighted how we can all focus on ‘What if’ rather
than ‘If only’. Only by being vigilant of the potential
dangers, can we all become self-aware to the
importance of safety for us all.
* Excluding our Vulcanic business which will be completed in 2025
Safety Culture Index Score
%
67.5
59.0
72.2
68.6
Spirax Group
Steam Thermal Solutions
Electric Thermal Solutions*
Watson-Marlow Fluid Technology Solutions
Target: 80%+
Focus for 2025
•
Introduction of silver level for our Group-wide H&S
Excellence Framework
•
Implement actions following the Safety Culture Index Survey
•
Develop a competency pathway for Group H&S professionals
•
Use of localised H&S analytics to target risk reduction
and prevention methodologies
•
Expand the Group Thematic H&S Assurance Programme
with additional risk controls
•
Mental health and wellbeing will be themes in our 2025
global Colleague Engagement Survey
Measuring our safety culture
To further support our H&S journey and evolution, we
completed the independent Safety Culture Index (SCI)
across our Group. As a leading measure of H&S performance,
the SCI is a multi-category survey designed to categorise
individual perceptions, beliefs, experiences and behaviours
across a range of safety dimensions within an organisation.
With 6,542 completed surveys and a participation rate of
68% the Group score* was 67.5% which places the Group in
the 6th highest category, ‘sustainable’ (out of 7). The SCI
score ranges from -50 (Unsustainable/Volatile) to 80+%
(High Performing) and are outlined in the chart below. This
baseline highlights a positive H&S culture baseline.
Mental health was also embedded as a theme in our global
Health & Safety culture survey – an assessment of how
colleagues feel about all aspects of health, safety and
wellbeing in every operating country. We will be analysing
the results of this and next steps in 2025.
Spirax Group plc Annual Report 2024 59
Strategic Report
People and Wellbeing
Alignment with UN SDGs
We believe we have a special culture at Spirax Group.
Our colleagues across the globe play a critical role in
engineering a more efficient, safer and sustainable world
for all our stakeholders. We support them to bring their best
selves to work through four colleague promises, which
were shaped in response to feedback from our colleague
engagement survey:
•
Meaningful work creating a sustainable future for all
•
An inclusive culture based on Values
•
Development every day to fulfil your potential
•
Belonging to supportive teams and strong relationships
Progress
1. Promise one: Meaningful work
Whether developing new technologies to decarbonise
thermal energy use in industrial applications, or creating
digital innovations for our customers that combine
technology with our unique, proprietary application
knowledge, our teams are focused on providing solutions
that make our customers’ operations more efficient, safer
and improve their sustainability. Through our niche focus on
critical industrial applications that sit behind the production
of things that are essential to everyday life, we are serving
people and the planet we all rely upon.
Highlights:
•
SteamVolt solution pilot (first-fit boiler) with ETS Medium
Voltage technology
•
Investments in emerging high temperature heat pump
technology in STS
•
Leveraging ETS’ strong research and development
capabilities in resistive heating, we have developed
additional higher voltage and higher temperature solutions
(12kV and 7.2kV) using Medium Voltage technology which
are in early testing phase
•
Sales of 20 product ranges in 2024 which reduced
customer carbon emissions by 15.1 million tonnes
•
Proof of concept underway for fully operational machine-
learning pumps at customer sites
•
Development of MiM, our proprietary large language
model that curates our highly specialised technical,
sector and application knowledge to support our direct
sales engineers
2. Promise two: An inclusive culture
Our culture is based on our six core Values which help
guide all colleagues in their behaviours and decision
making. It is supported by our focus on inclusion and
equity which leads to greater diversity of thoughts,
experiences and perspectives and helps everyone
to feel supported and able to be their best at work.
* included in third-party verification
Highlights:
•
The Spirit Awards: our Values-based colleague
recognition programme recognised 18 finalists from over
300 entries across all six categories. The finalists, from all
corners of the world came together in the UK to enjoy a
four-day programme where they learned more about
different parts of the Group from fellow colleagues, took
part in sightseeing and activities before attending a Gala
Awards Ceremony hosted by the CEO and the Group
Executive Committee. See page 61.
•
Hybrid working has been part of our culture since
COVID-19 and was later enshrined within our Everyone is
Included Plan. In 2024, we conducted a hybrid working
survey to understand how it is impacting our colleagues
and teams across the Group. Overall we received 3,357
colleague responses. As an outcome of the survey, we will
be holding a Managing Hybrid Teams workshop, to
support our managers, which will be part our new Spirax
Group Management Academy launching in 2025.
•
Around the world, colleagues marked events that are
important to them as part of our commitment to inclusion.
In the UK, this included WMFTS colleagues being part of
Falmouth Pride in Cornwall for a third year and
Portsmouth Pride for the first time, with Group CEO
Nimesh Patel, STS colleagues and leaders from across the
Group teaming up at Cheltenham Pride for a second year.
3. Promise three: Development Everyday festival
Our Development Everyday festival, held April for the
second year running, is our commitment to colleagues to
support them to continually grow their skills, build their
capability and achieve their potential. Our aim is to help
colleagues have a fulfilling career and an even bigger
impact on our Group in the future. A week-long event,
the festival is an opportunity for colleagues globally to
come together to learn and develop together.
4. Promise four: Supportive teams
Our six global colleague networks help us to connect and
support everyone who is part of our Group. They help us to
celebrate what makes us unique as individuals and they
bring us together to learn how to better support each other
at work, at home and in the community. Our networks play a
vital role in helping build the strong relationships and
supportive teams where we all feel valued, seen and heard
to foster a strong sense of belonging. They are full of
passionate colleagues bringing their unique perspectives,
experiences and voices to help us make a collective
difference to our Group and the world around us.
Focus for 2025
•
Oversight and review of the results from the 2025
colleague engagement survey
•
Continue to embed colleague promises across the
Group
•
Help global colleague networks to grow and become
more self-sustaining
•
Continue to embed our Vision to guide the future
of the Group
Spirax Group plc Annual Report 202460
Strategic Report — Sustainability Report: Responsible Business Foundations continued
Global Colleague Networks
Our Disability & Difference Global
Network marked International Day of
Persons with Disabilities with a ‘colleague
voices’ blog. It also ran webinars through
the year including on Autism, heart
conditions, chronic fatigue, dyslexia and
‘hidden’ disabilities.
Our Multicultural Global Network held
its first global Ramadan webinar and
contributed to the development of a Race
Equity Leadership Toolkit to help enable
colleagues to role model anti-racist
behaviours at work, home and in the
community.
Recognising that not every colleague can
get to a Pride event, our
LGBTQ+&Friends
Global Network ran its first ever global
‘Pride Online’ festival: a series of five online
events, each run by a different part of our
Group to explore Pride, LGBTQ+ careers,
parenting, gender transition and more.
Our Women’s Global Network launched
a buddying programme and ran a
celebration week of events to mark
International Women’s Day, including
sessions on early careers, period health,
allyship and lessons from senior
leadership career journeys.
Our Mental Health & Wellbeing Global
Network celebrated International Men’s
Day with a men’s mental health discussion
and contributed to a World Mental Health
Day resource pack.
Our Working Families Global Network
created a series of Virtual Cafes to provide
parents and carers with a forum to
connect on different aspects of family life
from toddlers to teenagers and parenting
during holidays.
Our Values in action
We believe that everything we do, matters.
That’s why we created the Spirit Awards. To recognise colleagues from across Spirax Group
who go above and beyond to ‘elevate the everyday’ for people and the planet. The Awards
showcase how our colleagues make their difference through living our Values in support of
our Purpose. In 2024, we held our second Spirit Awards. From more than 300 nominations,
18 Finalists were shortlisted with the winners announced at a gala celebration in June.
Safety
Vicente Gonzalez and Karina Rodriguez,
(SpiraxSarco,Mexico)andDavid
Zawadski,(SpiraxSarco,USA). Vicente,
Karina and David collaborated across
international borders and different
languages to implement new safety
procedures. In so doing, they also inspired
local colleagues to prioritise safety above all
else, empowering them to stop any job when
they have a concern, delivered through a
common goal: our commitment to safety.
Customer Focus
JasonSmith,(DurexIndustries,USA).
Jason utilised his extensive technical
knowledge and customer-centric approach
to transform an initial complex customer
enquiry into a viable high-volume order. His
efforts led to the creation of a completely
new product, in an important and growing
market segment, for Durex Industries.
Collaboration
TeamOnePlace(Comms,IT,HR). This
group of colleagues worked together in
what was a truly collaborative, global team
effort, to connect our colleagues across the
globe through one internal platform.
Delivered in just five months, One Place,
has transformed the daily experience for
thousands of colleagues, enhancing
access, productivity and collaboration with
rich content available in 17 languages.
Excellence
Apprentice Steering Committee Team
(SpiraxSarco,UK). The team went full
circle to mentor the next generation of
talent. These eight former apprentices
volunteered to support their local
apprenticeship programme, providing
guidance and continuity for new
apprentices, who are not only new to
Spirax Group, but also to the world of work.
Respect
SravanthiMaddiboenaSiva,(Spirax
Sarco,UAE). Sravanthi’s passion for
sustainability supported her drive to
improve performance at her local OpCo.
Through multiple activities such as
mangrove biodiversity, waste collection
systems to reduce CO
2
emissions and
community engagement activities to
support underprivileged groups, Sravanthi
made a significant difference.
Integrity
MonicaBao,(WMFTS,China). Monica
worked closely with one of our customers,
on a challenging project, which required
Monica to be open and transparent. By
facing into these challenges head-on,
actively engaging with the customer,
addressing the problem and providing
solutions, Monica developed a strong
relationship built on mutual respect
and trust.
Spirax Group plc Annual Report 2024 61
Strategic Report
Inclusion and Diversity
Alignment with UN SDGs
We believe that diverse teams bring a variety of thought, skills
and perspectives that make us a more innovative and creative
business, helping us to solve our customers’ most challenging
problems. When we combine this with inclusive workplaces
where all of our colleagues can be at their best, and where
we all know how to support each other, we are better able to
achieve our individual and Group Purpose. There will always
be more to do on diversity, equity, inclusion and wellbeing.
We continue to make progress and remain committed through
our global Inclusion Plan, Everyone is Included.
Progress
Diversity Goals
The February 2025 report of the FTSE Women Leaders
Review (which is co-Chaired by our Group CEO, Nimesh
Patel) ranked us as 60th in the FTSE 100 for gender
diversity at Board and senior leadership
1
. This improvement
(2024: ranked 61st) was driven by increased gender
diversity in our Board from 40% women in 2023 to 45.5%
women at the end of 2024 and 50% women in January 2025.
We were delighted to be joined by Louisa Burdett as Group
Chief Financial Officer (CFO) and Executive Director in July
2024 and by Céline Barroche as Group General Counsel and
Company Secretary to the Board in September 2024. Our
Group Executive Committee (GEC) now benefits from being
44.4% women, with one of our ‘four key roles’
2
now also
being held by a woman.
Gender diversity of senior leadership increased from 30% to
33.3% women and we have seen small improvements in the
gender balance of our commercial leadership roles and total
global workforce, but there remains more progress to make.
We continue to meet the UK Parker Review’s goal of
having a least one ‘minority ethnic’ Director on our Board.
By December 2025, we aspire to have at least 20% (currently
18.5%) of our GEC direct reports from under-represented
ethnic groups (within a global context). In support of the
Review’s objectives, we have now also set goals for 25% of
globally-based senior leaders and 18% of UK-based senior
leaders to be from under-represented ethnic groups by
December 2027.
In line with Listing Rule 6.6.6R 9, data used to compile
diversity information is based on internal HR records for our
Executive management. For the Board of Directors, we seek
individual permission to share this data on an annual basis.
As a UK-listed company, we use the UK Office of National
Statistics ethnicity classifications for England and Wales and
also allow Directors to self-describe or opt out of sharing
this information.
In line with our Group Diversity & Inclusion Policy, we
welcome applications from candidates of all backgrounds,
including those with disabilities, long-term conditions and
neurodiverse candidates.
Read more about how we are a Disability Confident - Committed
(Level 1) employer on page 106
Advancing our race equity journey
Continuing our work with our Black and African American
colleagues in the USA, we held a two-day workshop in
Q1 2024 in North Carolina. Colleagues and senior leaders came
together to share stories and co-develop action plans. Our US
operating companies are now implementing recommendations,
including training (on topics such as bias, empathy, race
equity and wider inclusion) and updating policies.
We also introduced Juneteenth (which commemorates the
end of slavery in the USA each 19 June) as a paid holiday for
all USA colleagues in STS and WMFTS, with ETS offering a
‘floating’ day before it becomes a paid holiday for all ETS
USA colleagues in 2025.
1 Group Executive Committee (GEC) and direct reports combined
2 ‘Four key roles’: Chair, Senior Independent Director, Chief Executive
Officer, Chief Financial Officer
Diversity goals
Focus for 2025
•
Continue to make progress on Group Diversity Goals
•
Develop next iteration of Everyone is Included Inclusion Plan
(2026 – 2030)
•
Continue to support race equity work in the USA
Gender–BoardofDirectors*
Goal
40%
women
†
Goal
40%
women
†
Goal
30%
women
†
2024
45.5%
40%
60%
54.5%
2023
Female – 5 (2023: 4)
Male – 6 (2023: 6)
Non-binary and other
genders – none
Gender–seniorleadership*˄ Gender – total workforce*
2024 2024
33.3%
27.3%
30% 26%
70%
74%
66.7% 72.7%
2023 2023
Female – 21 (2023: 18)
Male – 42 (2023: 42)
Non-binary and other
genders – none
Female – 2,717 (2023: 2,588)
Male – 7,243 (2023: 7,323)
Non-binary and other
genders – no data available
* At 31 December 2024
† by December 2025
˄ ‘Senior leadership’ means
GEC and their direct reports
Read more around our Gender
and Ethnicity Diversity goals
on our website: spiraxgroup.
com/diversity-goals
Spirax Group plc Annual Report 202462
Strategic Report — Sustainability Report: Responsible Business Foundations continued
Alignment with UN SDGs
Always doing the right thing is at the heart of our culture,
underpinned by our Values of Integrity and Respect. By
operating in accordance with our Group’s Policies, as well as
adhering to all local laws and regulations, we establish and
maintain a culture of ethical behaviour throughout our global
operations. We provide training and support to help keep
our colleagues, as well as our wider Group, protected from
instances of fraud and cyber-related crime.
Progress
Internal controls
We continue to focus and monitor the continued
development of the Group’s multi-year internal controls
programme ‘G3’. This continues to bring improvements and
standardisation of financial reporting controls, using a
risk-based framework. A number of improvements have
been implemented during 2024, pleasingly none requiring
material change. Our colleagues continue to respond
positively to the benefits already being seen; we will
continue to monitor progress during the coming year.
Building on the success of G3 and with the changes to the
UK Corporate Governance Code, we will look to strengthen
our internal controls, specifically on material non-financial
reporting, operational and compliance activities.
Whistle-blowing
We encourage colleagues to be vigilant and proactive
and to report any concerns they have. Our independent,
third-party whistle-blowing service, Safecall, is available
in every country where we work in the local language,
enabling colleagues to report any suspected unethical,
illegal or concerning conduct quickly and confidentially.
Ethical Business
In 2024, 71 (2023: 51) reports were raised globally via this
service. All reports were investigated by senior management
and action taken if necessary, with summaries of reports
and related actions reviewed by the Audit Committee.
Training and colleague engagement
We continue to mandate that all colleagues with a company
email address complete our Group Essentials training
programme when joining the Company. Training and
ongoing learning by all our colleagues, helps us all remain
vigilant. By the end of the year over 7,234 (2023: 6,938)
colleagues across the Group had completed Anti-Bribery
and Corruption training and 6,862 (2023: 6,782) had
completed Corporate Criminal Offence training. Introduction
to Sustainability had been completed by 7,546 (2023: 6,575)
colleagues and Health and Safety at Work by 7,430 (2023:
7,205) colleagues.
During the year we held a ‘Stand up to Fraud’ webinar for
senior managers led by our Group CEO. The session and
discussions focused on a comprehensive review of supplier
relationships and ongoing fraud risk management training.
Gifts, Entertainment and Hospitality
In accordance with our Gifts, Entertainment, and Hospitality
Policy, we maintain an online Gifts Register. Colleagues are
required to record any gifts received or given, to ensure our
actions align with the highest ethical standards and comply
with legal requirements.
Focus for 2025
•
Refresh the Group Management Code of Conduct
•
Continue to embed G3 internal controls programme
Spirax Group plc Annual Report 2024 63
Strategic Report
Achieve net zero
greenhouse gas
emissions
Deliver biodiversity
net gain
Implement environmental
improvements in our
operations
Grow sales of products
with quantified
sustainability benefits
Embed sustainability
criteria in supply chain
management
Support the wellbeing
of people in our
communities
Key strategic targets
•
Net zero scopes 1 and 2 greenhouse gas
emissions (GHG) by 2030, with an interim
target of a 50% reduction (compared
to 2019) by 2025
•
20% reduction in Group energy use
(compared to 2019) by 2025
Approved SBTi targets
•
Reduce absolute scopes 1, 2 and 3 GHG
emissions by 50.4% by 2032 compared
to a 2021 baseline
•
Net zero GHG emissions across the value
chain by 2050
Key strategic targets
•
Deliver a biodiversity ‘offset’ equivalent
to five times our global operational
footprint by 2025
•
Deliver biodiversity net gain* of +10% for
all new manufacturing sites and facilities
•
Deliver at least one biodiversity initiative
per operating company, on site or in the
local community by 2025
* Quantification of net gain will be focused
on large development projects, where
locally-specific net gain methodologies will
be applied, similar in approach to the UK’s
DEFRA methodology
Key strategic targets
•
Reduce water consumption by 15%
(compared to 2019)
•
Achieve zero waste to landfill
•
Reduce waste generated by our sites
by 10% (compared to 2019)
•
All manufacturing sites certified to ISO
14001 standard or equivalent by the end
of 2025
•
Eliminate the use of solvent-based paints
on our sites by the end of 2025 (update:
paused in STS and ETS in 2024)
Key strategic targets
•
Quantify the sustainability benefits
and whole life cycle carbon footprint
of some existing product groups and all
new products
•
Grow sales of products with quantifiable
sustainability benefits to customers
•
Eliminate all single-use plastic (SUP)
and non-recyclable packaging by 2025,
unless specified by customer
Key strategic targets
•
80% of strategic and high risk suppliers
assessed and meeting or exceeding our
sustainability standards by 2025
Key strategic targets
•
Deliver 150,000+ hours (cumulative) of
colleague volunteering globally by 2025
•
£2 million of cash or in-kind donations
(cumulative) made by our Group
Companies by 2025
•
Establish the Spirax Group Education
Fund and donate up to £15 million
by 2030
•
Eliminate the use of solvent-based paints
on our sites by the end of 2025 (update:
paused in STS and ETS in 2024)
Progress to date
53% decrease in scopes 1 and 2 emissions
(market-based) since 2019
18% reduction in Group energy use
since 2019
62% electricity from renewable
sources in 2024*
* Includes recent acquisitions
Progress to date
92% of operating companies have
delivered at least one biodiversity initiative
since the launch of the One Planet
Sustainability Strategy in 2021
4x biodiversity ‘offset’ of our global
operational footprint since 2021
*
2,206 acres of land protected since 2021
* Includes recent acquisitions
Progress to date
21% reduction in water consumption
since 2019
8% waste to landfill in 2024 (2019: 19%)
17% decrease in waste production since
2019
Solvent-based paint eliminated in WMFTS
as of the end of 2024
Progress to date
16 life cycle assessments completed since
2021
163 colleagues trained in eco-design
£310 million of revenue from products with
quantified sustainability benefits in 2024*
15.1 million tonnes of carbon saved
annually by customers purchasing products
sold in 2024*
206.4 million GJ of energy saved annually
by customers purchasing products sold in
2024*
82.0 million m
3
of water saved annually by
customers purchasing products sold in 2024*
* From 20 product ranges included in our
3rd party verified methodology
Progress to date
1,028 suppliers in the Supplier
Sustainability Portal
96% of direct material suppliers have
signed the Supplier Sustainability Code (by
number)*
98% of direct material suppliers have signed
the Supplier Sustainability Code (by spend)*
* Percentage of the total number of suppliers
with an annual spend of over £15,000 and
suppliers that are deemed potentially high
risk on the basis of geographic location or
commodity type
Progress to date
87,587 volunteering hours delivered since
2021
£1.25 million cash or in-kind donations
made by Group companies since 2021
£3.25 million donated by the Spirax Group
Education Fund, since it began operating
in 2022
One Planet initiatives at a glance
83
52
2024
2023
2022
92
Target: 100
Baseline: 0
Operating companies that have
delivered a biodiversity initiative
cumulative % (excluding acquisitions)
Unless otherwise stated, data on pages 64 and 65 excludes 2022 acquisitions (Vulcanic and Durex Industries), to
allow users of the Annual Report to see underlying progress against our One Planet targets.
Read more about net zero GHG emissions
on pages 66 to 71
Read more about biodiversity net gain
on page 72
Group GHG emissions (scopes 1
and2) tonnes CO
2
e (market-based)
(excluding acquisitions)
25,310
26,938
2024
2023
2022
21,603
Target: 23,103
Baseline: 46,206
144,885
157,424
2024
2023
2022
139,030
Target: 135,530
Baseline: 169,412
Group energy consumption
MWh (excluding acquisitions)
163,778
203,796
2024
2023
2022
145,115
Target: 155,334
Baseline: 182,746
Total water use
m
3
(excluding acquisitions)
Read more about environmental
improvements on pages 73 and 74
6,116
6,888
2024
2023
2022
5,486
Target: 5,915
Baseline: 6,572
Total waste generation
tonnes (excluding acquisitions)
10.1
10.2
2024
2023
2022
8.1
Target: 0
Baseline: 18.7
Waste to landfill
% (excluding acquisitions)
Spirax Group plc Annual Report 202464
Strategic Report — Sustainability Report: Strategic initiatives
Achieve net zero
greenhouse gas
emissions
Deliver biodiversity
net gain
Implement environmental
improvements in our
operations
Grow sales of products
with quantified
sustainability benefits
Embed sustainability
criteria in supply chain
management
Support the wellbeing
of people in our
communities
Key strategic targets
•
Net zero scopes 1 and 2 greenhouse gas
emissions (GHG) by 2030, with an interim
target of a 50% reduction (compared
to 2019) by 2025
•
20% reduction in Group energy use
(compared to 2019) by 2025
Approved SBTi targets
•
Reduce absolute scopes 1, 2 and 3 GHG
emissions by 50.4% by 2032 compared
to a 2021 baseline
•
Net zero GHG emissions across the value
chain by 2050
Key strategic targets
•
Deliver a biodiversity ‘offset’ equivalent
to five times our global operational
footprint by 2025
•
Deliver biodiversity net gain* of +10% for
all new manufacturing sites and facilities
•
Deliver at least one biodiversity initiative
per operating company, on site or in the
local community by 2025
* Quantification of net gain will be focused
on large development projects, where
locally-specific net gain methodologies will
be applied, similar in approach to the UK’s
DEFRA methodology
Key strategic targets
•
Reduce water consumption by 15%
(compared to 2019)
•
Achieve zero waste to landfill
•
Reduce waste generated by our sites
by 10% (compared to 2019)
•
All manufacturing sites certified to ISO
14001 standard or equivalent by the end
of 2025
•
Eliminate the use of solvent-based paints
on our sites by the end of 2025 (update:
paused in STS and ETS in 2024)
Key strategic targets
•
Quantify the sustainability benefits
and whole life cycle carbon footprint
of some existing product groups and all
new products
•
Grow sales of products with quantifiable
sustainability benefits to customers
•
Eliminate all single-use plastic (SUP)
and non-recyclable packaging by 2025,
unless specified by customer
Key strategic targets
•
80% of strategic and high risk suppliers
assessed and meeting or exceeding our
sustainability standards by 2025
Key strategic targets
•
Deliver 150,000+ hours (cumulative) of
colleague volunteering globally by 2025
•
£2 million of cash or in-kind donations
(cumulative) made by our Group
Companies by 2025
•
Establish the Spirax Group Education
Fund and donate up to £15 million
by 2030
•
Eliminate the use of solvent-based paints
on our sites by the end of 2025 (update:
paused in STS and ETS in 2024)
Progress to date
53% decrease in scopes 1 and 2 emissions
(market-based) since 2019
18% reduction in Group energy use
since 2019
62% electricity from renewable
sources in 2024*
* Includes recent acquisitions
Progress to date
92% of operating companies have
delivered at least one biodiversity initiative
since the launch of the One Planet
Sustainability Strategy in 2021
4x biodiversity ‘offset’ of our global
operational footprint since 2021
*
2,206 acres of land protected since 2021
* Includes recent acquisitions
Progress to date
21% reduction in water consumption
since 2019
8% waste to landfill in 2024 (2019: 19%)
17% decrease in waste production since
2019
Solvent-based paint eliminated in WMFTS
as of the end of 2024
Progress to date
16 life cycle assessments completed since
2021
163 colleagues trained in eco-design
£310 million of revenue from products with
quantified sustainability benefits in 2024*
15.1 million tonnes of carbon saved
annually by customers purchasing products
sold in 2024*
206.4 million GJ of energy saved annually
by customers purchasing products sold in
2024*
82.0 million m
3
of water saved annually by
customers purchasing products sold in 2024*
* From 20 product ranges included in our
3rd party verified methodology
Progress to date
1,028 suppliers in the Supplier
Sustainability Portal
96% of direct material suppliers have
signed the Supplier Sustainability Code (by
number)*
98% of direct material suppliers have signed
the Supplier Sustainability Code (by spend)*
* Percentage of the total number of suppliers
with an annual spend of over £15,000 and
suppliers that are deemed potentially high
risk on the basis of geographic location or
commodity type
Progress to date
87,587 volunteering hours delivered since
2021
£1.25 million cash or in-kind donations
made by Group companies since 2021
£3.25 million donated by the Spirax Group
Education Fund, since it began operating
in 2022
Read more about sustainable products on
page 75
Read more about sustainable supply chains
on page 76
Read more about supporting our
communities on page 77
76
30
2024
2023
2022
96
Target: 100%
Baseline: 0
Suppliers who have signed the updated
Supplier Sustainability Code
by number (excluding acquisitions)
931
512
2024
2023
2022
1,028
Baseline: 0
Number of Suppliers in the
Supplier Sustainability Portal
(excluding acquisitions)
24,973
22,140
2024
2023
2022
29,417
Target: cumulative 150,000 hours (2021-2025)
Baseline: 5,311
Colleague volunteering
hours (excluding acquisitions)
1,182,307
1,030,547
2024
2023
2022
1,036,715
Baseline: 0
Spirax Group Education Fund Donations £
335,500
349,600
2024
2023
2022
224,500
Target: cumulative £2 million (2021-2025)
Baseline: 188,500
Operating company cash/in-kind
donations £ (excluding acquisitions)
Spirax Group plc Annual Report 2024 65
Strategic Report
3,687
4,115
4,023
18.8*
19.4*
2024
2023
2022
15.2
Baseline: 37.8*
GroupGHGemissionsintensity(scopes1and2)
tonnes CO
2
e per £m reported revenue (market-based)
(including acquisitions)
Net zero GHG emissions
GroupGHGemissions(scopes1and2)
tonnes CO
2
e (market-based) (including acquisitions)
13,121
7,912 17,405
31,659
18,537
33,715
12,816
2024
2023
2022
20,899
Baseline: 52,672
Scope 1 Scope 2
GroupGHGemissions(scopes1and2)
tonnes CO
2
e (location-based) (including acquisitions)
21,973
39,080
★
21,67517,405
40,510
42,337
21,437
2024
2023
2022
20,899
18,537
Baseline: 49,282
Scope 1 Scope 2
UKGHGemissions(scopes1and2)
tonnes CO
2
e (market based) (including acquisitions)
3,806
7,366
3,679
4,383
4,337
5,736
5,712
2024
2023
2022
24
46
127
Baseline: 11,896
Scope 1 Scope 2
Scope 1 Scope 2
Reaching net zero is critical to preventing the worst effects
of climate change, such as extreme weather events, rising
sea levels, and disruption to ecosystems and economies. By
striving for net zero, we can play our part to help limit global
warming, protect our environment and create a more
sustainable future for generations to come.
Progress
1
Increasing the proportion of electricity that is sourced from
renewable sources continues to be a focus for the Group.
During 2024, additional green energy contracts were
implemented at sites including Vulcanic Sonneberg
(Germany), WMFTS Shanghai (China), and across our ETS
sites in North America. These, along with a new photovoltaic
array at our WMFTS site in Falmouth (UK) and existing
self-generation capacity, mean that in 2024 62%
(2023: 52%) of our electricity was purchased or self-
generated from renewable sources, which will further
increase next year as we see the full-year benefit from
contracts entered into in 2024.
Our global fleet is continuing to transition to electric vehicles
(EVs), with 16% of our fleet now compromised of EVs (2023:
7%), aligning with our long-term goals of embracing
renewable energy solutions and reducing our reliance on
fossil fuels.
Greenhouse gas (GHG) emissions performance
We have continued to make excellent progress towards net
zero (scopes 1 and 2) across the Group, achieving our 2025
interim One Planet target a year early by reducing our
scope 1 and 2 emissions on a market-basis, excluding 2022
acquisitions, by 53% since 2019 and 15% since 2023, to
21,603 tonnes CO
2
e.
Vulcanic and Durex Industries, acquired in 2022, have
continued to integrate into the Group, working to meet our
standards and adopt our One Planet: Engineering with
Purpose Sustainability Strategy. Including these
acquisitions and re-baselining to 2019, absolute Group
CO
2
e emissions have fallen by 52% since 2019, and 20%
since 2023.
Deloitte has provided independent limited assurance in
accordance with the International Standard for Assurance
Engagements 3000 (ISAE 3000) and Assurance
Engagements on Greenhouse Gas Statements (ISAE 3410)
over selected GHG metrics for 2024, identified with ★.
Deloitte’s full unqualified assurance opinion, which includes
details of the metrics assured, can be found at spiraxgroup.
com/sustainability-downloads
The UK accounted for 15% of our Group GHG emissions
in 2024, with 3,806 tonnes being generated in total and
an intensity of 32.6 tonnes per million pounds of reported
revenue. These emissions are comprised of 3,679 tonnes
of scope 1 and 127 tonnes of scope 2 calculated using
market-based emission factors. Year-on-year, through the
combination of operational efficiencies and a change in
shift patterns at one of our key sites, our UK emissions
decreased by 13%.
2024
2023
2022
3,679
Baseline: 10,595
UKGHGemissions(scopes1and2)
tonnes of CO
2
e (location based) (including acquisitions)
Alignment with UN SDGs
1 All GHG and energy data pre-2023 labelled as ‘including acquisitions’ has been restated to include Vulcanic and Durex Industries
using estimated data, with actual data for Durex Industries and Vulcanic included from 2023.
★
Metric assured by Deloitte
* Restated due to a calculation error.
4,337
8,452
9,735
5,712
25,317
★
Spirax Group plc Annual Report 202466
Strategic Report — Sustainability Report: Strategic initiatives continued
11,240
1
11,432
1
2024
2023
2022
10,644
GroupGHGemissions(partialscope3)
tonnes CO
2
e (well-to-tank and transition and distribution)
(including acquisitions)
Scope 3 emissions
In August 2024, we submitted our re-baselined submission
to the Science-Based Targets initiative (SBTi) to include
Vulcanic and Durex Industries, which was approved in
December. This has increased our Group scope 3 emissions
significantly due to in-use phase emissions from Vulcanic.
Their operating company, Triatherm (Germany), for example,
manufacturers products in high volumes for applications
with high daily use energy, such as heating in commercial
bakeries, and are used over a long life-span (c.10 years).
They are also predominantly sold to OEM customers in
Germany, which has a high grid emissions factor, resulting
in high use-phase emissions.
Due to the complexity of calculating scope 3 emissions, we
disclose our full scope 3 emissions with a one-year time lag.
Our total Group scope 3 emissions in 2023 were 26.3 million
tonnes CO
2
e (2022:12.9 million excluding acquisitions). In
our legacy businesses, scope 3 emissions reduced by 22%
during this same period, mostly due to changes in product
mix. We have made material improvements in the accuracy
of category 1: purchased goods and services and category
4: logistics data, but scope 3 emissions are still heavily
reliant on estimations and assumptions with a large degree
of uncertainty.
In 2023, 98.5% of our total scope 3 emissions were category
11: use of sold products, primarily from products sold by our
ETS Business. These products transfer electric energy in
the form of heat into industrial processes. When calculating
these emissions, we apply local grid emissions factors for all
products sold, which is likely to over-estimate emissions as
an unknown proportion of customers will use green energy
to power their sites. Reaching our 2050 net zero target will
largely be dependent on global grid greening, which will
reduce the emissions associated with our customers’
electricity use, potentially combined with utilising customer-
specific emissions factors to take into account customers’
green energy contracts and actual product use data.
Emission reduction initiatives
As well as green energy contracts and photovoltaic arrays at
the sites mentioned, we have implemented a regional
framework agreement for sourcing green electricity
certificates across multiple ETS sites in the EMEA region,
which will decrease our scope 2 emissions by approximately
1,050 tonnes CO
2
e in 2025.
Annealing furnaces, used at our ETS sites, are one of our
largest energy users and a GHG emissions contributor. In
2024, we started a project to optimise and upgrade these
furnaces, to reduce these impacts and improve
manufacturing flexibility. In 2024, we commenced
installation of new annealing furnaces at our Chromalox
Ogden site in Utah (USA) and our Vulcanic site in Saint-
Florentin (France), which are expected to become
operational in Q1 2025. These two new furnaces are
expected to reduce energy consumption by approximately
420 MWh per year, GHG emissions by over 50 tonnes per
year, reduce atmospheric gasses, such as NOx, and fully
eliminate the use of ammonia in the Ogden furnace.
★
Metric assured by Deloitte
1 Restated to include Vulcanic and Durex (data estimated for 2022
and 2023)
26,297,438
25,051,918
2023
2021
GroupGHGemissions(fullscope3)
tonnes CO
2
e (including acquisitions)
38.3
47.6
2024
2023
2022
32.6
Baseline: 111.6
UKGHGemissionsintensity(scopes1and2)
tonnes CO
2
e per £m reported revenue (market-based)
(including acquisitions)
★
Energy performance
In 2024, total Group energy use decreased by 4% vs the
previous year, with an 18% reduction since 2019, excluding
acquisitions. Including acquisitions, total Group energy use
decreased by 3% vs the prior year and was down 16% vs
2019, with 2019 re-baselined to include acquisitions to allow
like-for-like comparison.
The UK accounted for 22% of the Group’s total energy
usage in 2024, including acquisitions, at 36,037MWh, and
decreased by 14% compared with 2023. On an intensity
basis, Group energy use decreased by 2% to 96.9MWh per
million pounds of reported revenue and UK energy use
intensity decreased by 16% year-on-year, to 308.8MWh per
million pounds of reported revenue. Energy intensity for the
UK is high compared to the Group as a whole, as we
develop, test and manufacture products in the UK for sale
across global markets.
Energy management initiatives
At our Aflex Hose site in Huddersfield (UK), we installed an
Air Source Heat Pump (ASHP) in Q2 2024, to support the
existing electric immersion heaters for heat extrusion water
baths. By analysing data using our digital metering and
monitoring technology, we have been able to calculate that
this ASHP will save an estimated 100MWh in energy in its
first full year of operation.
We have continued the roll out of our digital energy
monitoring and metering system, in our remaining legacy
and key acquisition sites, with full integration completed at
our Chromalox site in Heidelberg (Germany), Vulcanic sites
in Haguenau (France), Sonneberg (Germany), Torrelavega
(Spain) and Thermocoax in Normandy (France) in 2024.
Spirax Group plc Annual Report 2024 67
Strategic Report
Net zero GHG emissions continued
98.9*
104.0*
2024
2023
2022
96.9
Baseline: 137.3*
Group energy intensity
MWh per £m of reported revenue (including acquisitions)
366.0
428.6
2024
2023
2022
308.8
Baseline: 475.2
UK energy intensity
MWh per £m of reported revenue (including acquisitions)
166,356
180,345
2024
2023
2022
Baseline: 191,282
Group energy consumption
MWh (including acquisitions)
41,891
2024
2023
2022
Baseline: 50,663
UK energy consumption
MWh (including acquisitions)
51,673
* Restated due to a calculation error.
★ Metric assured by Deloitte
Energy management initiatives continued
Improved metering and monitoring gives sites access to
real-time data from which to identify energy saving
opportunities. For example, at our Chromalox site in
Heidelberg (Germany), assessment of data revealed that
energy for space-heating usage peaked at similar times
each day and remained constant outside of working hours
and weekends. After investigating on site with the heating
contractor, we have implemented several controls that will
deliver savings over the winter months.
In Q2 2024, we completed a programme to perform energy
reviews on eight Vulcanic manufacturing sites. These
reviews provided us with a comprehensive understanding
of the sustainability performance of these sites and
mapped their significant energy users.
Methodology Statement
We employ an ‘operational control’ definition to outline our
carbon footprint boundary. Included within that boundary
are manufacturing facilities, administrative and sales offices
where we have authority to implement our operating
policies. For all entities we have measured and reported
on our relevant scope 1, scope 2 and partial scope 3
emissions for 2024.
For all entities we have measured and reported on our
relevant scope 1, scope 2 and partial scope 3 emissions for
2024. We have used the GHG Protocol Corporate
Accounting and Reporting Standard and the GHG Protocol
Data Hierarchy, striving for the highest precision possible.
Emission factors have been used from credible publications
such as the UK Government’s (DEFRA/DECC) GHG
Conversion Factors for Company Reporting 2019- 2024,
data from the International Energy Agency (IEA) 2019-2024,
ISO 140064-1, U.S. Environmental Protection Agency, The
GHG Protocol Initiative and regionally specific
Environmental Reporting Guidelines (e.g. Australian/
Canadian Government) to calculate our total CO₂e
emissions figures on a location-basis for scopes 1 & 2.
Spirax Group reports fugitive refrigerant emissions by
identifying the types and quantities of refrigerants used,
tracking their usage and reporting refrigerant losses from
engineer logs and maintenance checks. This is converted
into CO₂e by using specific global warming potential (GWP)
values. In cases where the actual data is not readily
available Spirax Group estimates data based on previously
provided actual data. Fugitive refrigerant emissions are not
material in total when compared to overall GHG emissions.
For Scope 1 emissions, we strive to use actual data
wherever possible. When this is not always an option (such
as mobile combustion reporting) we estimate using
distance-based emission factors using appropriate
assumptions. Where actual fuel consumption is not
available, emissions are estimated based on distance
travelled and appropriate emissions factors based on
vehicle type, or lease mileage data.
To report under the market-based method for purchased
electricity (Scope 2) we have used the GHG Protocol data
hierarchy, striving for the highest precision possible. For
sites with green energy contracts, we have obtained
emissions factors for the relevant tariff and/or supplier in
the first instance, using the residual mix where supplier-
specific emissions factors (SSEFs) are not available. For
sites without green energy contracts, we follow the data
hierarchy and apply location-based factors only where
SSEFs or residual mix are not available. When entering new
green contracts, we apply SSEFs (where available) from the
start of the contract period and do not restate prior years
with SSEFs. No certified green energy contracts are
included in our market- based figures for 2019 or 2020.
For more information please see our Methodology Statement
on our website: spiraxgroup.com/sustainability-downloads
161,433 ★
36,037 ★
Spirax Group plc Annual Report 202468
Strategic Report — Sustainability Report: Strategic initiatives continued
Introduction
We are committed to achieving net zero greenhouse gas
(GHG) emissions across our entire value chain by 2050. Our
transition plan is structured around all three key scopes of
emissions, with specific targets and strategies for each.
Scopes 1 and 2 Emissions Target:
•
Achieve net zero GHG emissions for scopes 1 and 2
by 2030
Spirax Group net zero transition plan
1. Energy efficiency
Improve energy management by utilising our own digital
metering and monitoring solutions and implementing
energy reduction initiatives across our manufacturing
and non-manufacturing facilities.
Progress to date
Digital metering and monitoring in place in 24 of
our manufacturing sites; multiple energy reduction
initiatives completed, resulting in a 16% reduction in energy
consumption (including acquisitions) vs 2019.
2. Renewable electricity
Transition to 100% renewable energy sources through
verified and credible green energy contracts or self-
generation by 2030.
Progress to date
20 of our manufacturing sites had green energy contracts
in place by the end of 2024, and 7 manufacturing sites are
self-generating electricity using solar panels, with 62% of
electricity used during the year from renewable sources.
70% reduction in scope 2 emissions associated with
electricity use vs 2019.
3. Fossil fuel substitution
i. Utilise our innovative TargetZero solutions
to decarbonise steam generation,
through electrification
ii. Enable the switch of high temperature industrial
processes to low-carbon alternatives
iii. Progressively replace fossil-fuel consuming building
assets to low carbon alternatives and climate-friendly
refrigerants
Progress to date
23% reduction in scope 1 emissions from stationary
combustion vs 2019.
4.Electricvehicles(EV)
Transition to a 100% electric vehicle fleet, where
charging infrastructure allows, by 2030.
Progress to date
16% of our fleet had been transitioned to electric
vehicles by the end of 2024.
5. Offsetting
Although not a part of our strategy to date, the purchase
of credible carbon credits will be used to offset residual
emissions from hard to decarbonise processes by 2030.
Absolute scopes 1 and 2 emissions reductions (actual and forecast) 2019–2030
Definitions
•
Scope1: direct GHG emissions from sources that are
owned or controlled by Spirax Group
•
Scope2: indirect GHG emissions from the
consumption of purchased electricity, heat and steam
•
Scope3: all indirect emissions that occur in the value
chain of Spirax Group, including both upstream and
downstream emissions
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
60,000
50,000
40,000
30,000
20,000
10,000
0
tCO
2
e
-90% with
remaining
emissions offset
2025 target: 50% reduction vs 2019
Actual GHG emissions reductions
Forecast GHG emissions reductions
Spirax Group plc Annual Report 2024 69
Strategic Report
Spirax Group net zero transition plan continued
Net zero GHG emissions continued
Science-Based Targets initiative (SBTi) targets:
•
Reduce absolute scopes 1, 2, and 3 GHG emissions by
50.4% by 2032 from a 2021 base year
•
Reduce absolute scopes 1 and 2 GHG emissions 95% by
2050 from a 2021 base year and reduce absolute scope 3
emissions by 90% within the same timeframe, to achieve
net zero GHG emissions across the value chain by 2050
Total Group GHG emissions breakdown
Emissions Type 2021 2023
Scope 1 24,339 18,537
Scope 2 (market-based) 22,406 13,121
Scope 3 Category 11: Use of sold products 24,651,860 25,902,985
Scope 3 “Other”* 400,057 394,453
Scope 3 Total 25,051,918 26,297,438
Total GHG Emissions 25,098,663 26,329,096
* Categories 1, 2, 3, 4, 5, 6, 7, 9 (other categories not relevant to
Spirax Group are excluded)
Scope 3 GHG emissions
Scope 3 emissions accounted for 99.8% of the Group’s total
emissions in 2021 (our scope 3 baseline year). Of these,
98.4% of scope 3 emissions (and 98.2% of total Group
emissions) were category 11: use phase emissions,
associated with the electricity customers use to power
products that we sold in 2021, over their whole lifetimes.
The majority of these emissions are associated with the use
of industrial heating equipment from our ETS Business.
Impact of grid greening on scope 3: category 11
(use of sold products) emissions*
2021 2026 2030 2034 2038 2042 2046 2050
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
2032:SBTi near-term target
United States Europe ROW SBTi Near-Term Target
* Includes the impact of product sales growth on emissions; assumes the same
product and geographical sales mix as in 2021 is maintained to 2050.
2. Supplier engagement
We will work closely with our suppliers to reduce
emissions in the supply chain, focusing on carbon-
intensive purchased goods and services and logistics.
1. Use of sold product emissions
The majority of our scope 3 emissions are associated
with the energy consumed during the lifetime of our
products. As we grow sales, our scope 3 emissions are
expected to increase. Achieving our scope 3 reduction
targets will largely be dependent on electricity grid
greening to reduce emissions associated with the use
phase of our products. As grids become greener, the
emissions from the use of our products will
decrease accordingly.
We have modelled grid greening based on external
forecasts and believe this will drive significant
reductions in emissions over the medium-to-long
term. In the future, we may also seek to engage with
customers to encourage their adoption of green
electricity and update our reporting to use market-
based emissions factors for customers, where data
is available, both of which will accelerate our scope 3
emissions reductions.
In addition, we do not currently have access to
customer-specific product use or energy source data,
so our scope 3 calculations include assumptions over
working hours. As a result, we are likely to over-estimate
scope 3 emissions. We are currently seeking
opportunities to make data enhancements within this
category by collaborating with our carbon-intensive
customers, within category 11, with the aim of increasing
visibility of the end-user geography of products sold to
OEM customers and moving from estimated to actual
use data where possible and anticipate this will further
reduce reported scope 3 emissions.
Data source: IEA country-based forecasting to 2040,
Spirax Group estimated grid greening trajectory 2041-2050.
Spirax Group plc Annual Report 202470
Strategic Report — Sustainability Report: Strategic initiatives continued
Governance
The governance of our net zero transition plans is structured
to ensure robust oversight and accountability at every level
of the organisation, through our One Planet Sustainability
Strategy (see page 89). Our transition plan includes specific
targets and strategies for scopes 1, 2, and 3 emissions
reductions, with a near-term focus on achieving net zero in
scopes 1 and 2 emissions by 2030. Financial planning for
achieving our 2030 net zero target is embedded in our both
our annual and medium-term financial planning processes.
Regular updates and reviews are conducted to track progress,
address any challenges and ensure that our initiatives are
on track to meet our 2030 and 2050 net zero goals.
Risks
We are committed to driving progress against our net zero
targets, especially where this is within our control, and have
made excellent progress since establishing our targets in
2021. We remain confident in our ability to deliver our 2030
target, for scopes 1 and 2 emissions, but risks to achieving
this target include:
•
Availability of EV charging infrastructure: our direct
sales business model is based on customer closeness
and the ability to ‘walk our customers’ plants’ and self-
generate sales by identifying operational efficiency and
process improvement opportunities. Our sales and
service engineers are currently reliant on vehicles to
access our diverse and geographically widespread
customer base (although this is likely to reduce over time
as we increasingly use digital technology to ‘walk the
data’ for customers, without always needing to be
physically present on their sites). Today, the EV charging
infrastructure is not sufficiently advanced to allow the
transition to EVs in many of the countries in which we
operate. Therefore, achieving the required reduction in
emissions from mobile combustion is dependent on the
rapid development of charging infrastructure.
•
Managing EV charging: the majority of our sales and
service engineers return their vehicles to their homes
overnight, rather than to a central location where charging
can take place using electricity from certified renewable
sources. As a result, EV charging will largely happen at,
or near, our sales and service engineers’ homes, with
electricity that may not be from renewable sources,
meaning that the EV transition may not fully decarbonise
vehicle use.
•
Availability of green energy: we are committed to only
entering credible, third-party validated, green energy
contracts, as we transition to 100% renewable electricity
use. Achieving our 2030 target is dependent on the
availability of credible green energy contracts in the
locations in which we operate. If local regulations change
in any of the countries where we operate, reducing our
ability to validate the credibility of renewable energy
certificates, it could impact our net zero target.
•
Cost: achieving our scopes 1 and 2 net zero target,
will require investment in decarbonisation technology and
initiatives and some carbon offsets by 2030. Making
those investments requires the continuing support of
shareholders for net zero investments.
Achieving our 2050 value chain net zero target is significantly
more complex and reliant on factors outside of our control,
therefore the risks to delivering this target are materially
higher than for scopes 1 and 2. The biggest risk to achieving
our scope 3 target is:
•
Global rates of electricity grid greening: achieving
scope 3 emissions reductions is largely dependent on
grid greening to reduce the emissions associated with
the electricity used by our products during their use
phase. If grids green more slowly or to a lesser extent
than forecast, and remain reliant on fossil fuels, it would
pose a significant risk to the delivery of our 2050 target.
Conclusion
We are committed to leading the way in sustainability
and climate action. Our comprehensive net zero transition
plan outlines clear targets and strategies to achieve our
ambitious goals, ensuring a sustainable future for our
business and the planet.
Focus for 2025
•
Continue to implement energy saving initiatives, identified
through analysis of data from digital monitoring
•
Continue the implementation of net zero roadmaps,
including air source heat pump installation and annealing
furnace upgrades
•
Support the prioritised transition of our vehicle fleet to electric
Spirax Group plc Annual Report 2024 71
Strategic Report
Alignment with UN SDGs
Biodiversity is fundamental to the health and stability of
ecosystems that humans, wildlife and the planet rely on.
Biodiversity supports essential services such as pollination,
water purification, climate regulation and soil fertility. It
forms the backbone of resilient ecosystems, ensuring that
natural processes continue to function despite changing
conditions. However, the loss of biodiversity due to human
activities, such as deforestation, pollution and climate
change, poses significant risks to these vital systems.
Minimising our impact is not only an environmental
responsibility but also an economic and social one,
as healthy ecosystems underpin the prosperity of
communities and businesses alike.
Progress
Operating company initiatives
Across the Group, we have continued to deliver biodiversity
initiatives in the communities in which we operate. Excluding
acquisitions (Vulcanic and Durex Industries), we remain
on track to meet our target of having all Group operating
companies undertake at least one biodiversity initiative,
either on site or in the local community, by the end of 2025.
By the end of 2024, 92% of legacy operating companies
(2023: 83%) and 85% including acquisitions (2023: 76%)
had delivered at least one biodiversity initiative, with 100%
of STS and WMFTS operating companies meeting the
target.
‘One Plant’ initiative
Since launching the One Planet Sustainability Strategy
in 2021, we have held an annual Group-wide community
engagement campaign, aligned with one of the UN
Sustainable Development Goals (SDGs), to coincide with the
International Day of Charity on 5 September. For 2024, we
selected SDG 15: Life on Land, as the focus of our activities
and created a campaign called ‘One Plant’ to inspire our
colleagues to plant or maintain trees. A total of 641
colleagues, in 25 countries and over 50 operating
companies, participated in the campaign. For example,
Chromalox Isopad, in Heidelberg (Germany) ran workshops
on growing trees for beginners and started cultivating
seedlings from lemon seeds and avocado cores. Colleagues
also planted pear, apple, cherry, plum and maple trees in the
garden of their site and donated trees through other
organisations. Across the Group, colleagues who
participated in this initiative contributed nearly 1,000 hours
of volunteering time and planted 1,915 trees, which the
Group matched with a charitable donation to plant an
additional 1,915 trees.
Biodiversity net gain
Focus for 2025
•
Encourage the remaining legacy operating companies that
have not yet delivered a biodiversity initiative, to do so, and
continue to advance participation by recent acquisitions
•
Achieve 10% biodiversity net gain targets for at least
three sites
•
Complete the final biodiversity investment in Argentina,
to meet our target to deliver a x5 ‘offset’ of our global
operational footprint
Biodiversity net gain
We have five ongoing projects to deliver 10% biodiversity net
gain on sites where we have undertaken substantial building
projects since the One Planet Sustainability Strategy was
launched in 2021: Spirax Group Headquarters, Cheltenham
(UK), WMFTS Devens, Massachusetts (USA), Chromalox
Ogden, Utah (USA), BioPure (UK) and Thermocoax (France).
At our Group Headquarters, we have cultivated areas of
wildflower meadow, planted trees and installed bird boxes and
bug ‘hotels’ to support local biodiversity and ecosystem health.
An initial assessment has been completed by an independent
third-party ecologist and a formal assessment will be
completed in the summer of 2025, but we believe we are on
target to deliver a 10% net gain. At our WMFTS Devens site,
planting has commenced and should be completed in 2025,
to deliver the required 10% net gain. At our Chromalox
Ogden site, during 2024 we worked with consultants to
develop a biodiversity scoring methodology, based on the
DEFRA model, that is appropriate for the local habitat, in the
absence of such a methodology existing. We have identified
a local nature reserve where we hope to invest and improve
biodiversity to achieve our net gain commitment in 2025.
At BioPure and Thermocoax, these projects had completed
planning and budget approvals and construction work had
already started when we established our 10% biodiversity
net gain target. As a result, good baseline data, pre-
construction, is not available, which has made this more
challenging. These companies have taken steps to restore
biodiverse habitats on site but are falling short of net gain.
During 2024 we worked with an ecologist to identify
credible projects in the local vicinity of these sites that we
could potentially use to deliver net gain, but delivering them
will be subject to budgetary availability in 2025.
Biodiversity operational footprint ‘offset’
We have continued to invest to protect land on the Somuncurá
Plateau in Argentinian Patagonia, preserving a crucial habitat.
In 2024, we protected an additional 550 acres, equivalent to
our global direct operating footprint at the end of the year.
This takes the total land area protected to 2,206 acres, or
nearly nine square kilometres, over the past four years.
This area is classified as a crucial area for biodiversity with
multiple endemic species that are found nowhere else in
the world and critically endangered species, such as the
Laguna Raymunda Frog and the Naked Characin Fish. We
will complete one further donation in 2025 to deliver the five
times operational footprint ‘offset’ committed to as part of
our One Planet targets.
52
*
47
83
*
92
*
85
76
2024
2023
2022
Operating Companies that have completed Biodiversity
initiatives % (including acquisitions)
Baseline: 0
Target: 100%
Including acquisitions Excluding acquisitions
Spirax Group plc Annual Report 202472
Strategic Report — Sustainability Report: Strategic initiatives continued
794
5,486
Environmental improvements
The management of water and waste in our operations is
important for minimising our environmental footprint and
ensuring the sustainability of our business. Water is a critical
resource and its efficient use both preserves it and also
reduces the costs associated with water consumption.
Similarly, effective waste management is key to minimising
landfill impact, reducing pollution and improving operational
efficiency. By addressing these issues proactively, we can
contribute to a cleaner environment, lower operational costs
and align with global sustainability goals, while also meeting
the growing expectations of stakeholders and regulators.
Progress
In 2024, we further improved our management of water and
waste, driving reductions in absolute water use and waste
volumes. On a like-for-like basis, excluding our 2022
acquisitions, we exceeded our 2025 reduction targets a
year early, with a 21% reduction in water use vs 2019 and
a 17% reduction in waste volumes. By utilising our digital
monitoring and metering system to track water use across
our manufacturing sites, we have focused our efforts on
opportunities that create the maximum impact and have
been able to detect leaks and fix them quickly.
In 2024, following the development of waste and water
action plans for our five largest consumers in 2023, we
produced Group-wide waste and water management
guidelines, which were shared with our operating
companies to demonstrate best practice. Our sites have
embraced the implementation of these guidelines and we
saw reduced water consumption at 63 of our operating
companies in 2024.
In Vulcanic, during 2024 each site underwent a waste and
water assessment, delivering an executive summary to
identify top opportunities for reductions going forward.
In Q3 2024, Spirax Sarco Inc. in the USA achieved
accreditation to environmental management standard ISO
14001. Excluding acquisitions, we have five remaining
manufacturing sites that are working towards this
certification, of which we are targeting completion by four
of these in 2025, in line with our target. Certification of
Chromalox, Ogden, Utah (USA), has been paused until a
site extension is completed to prevent the need for
recertification once fully operational.
Water
As we have focused on improving efficiency of water use,
our water intensity has decreased by 10% vs 2023 and 35%
since 2019 to 94.9m
3
per million pounds of reported
revenue. Some of the largest reductions have been at our
Runnings Road site in Cheltenham (UK) as a result of Project
ClearSky, part of which was designed to recapture and
recirculate steam previously being released to the
atmosphere. At our STS site in Chennai (India) we
implemented a grey-water system to water the garden, and
at Aflex Hose in Huddersfield (UK), we are now capturing
and reusing process water previously being discharged,
contributing to a 32% reduction in water use on that site vs
2023. At WMFTS in Falmouth (UK), we upgraded taps and
toilets to water-saving equipment and in São Paulo (Brazil)
installed a rainwater harvesting system.
Total water use
m
3
(including acquisitions)
163,788
13,681
2024
2023
2022
★
Metric assured by Deloitte
Legacy companies 2022 acquisitions,
included from 2023
Baseline: 182,746
Water intensity
1
m
3
of water per £m of reported revenue
(including acquisitions)
94.9
105.5
*
129.5
*
2024
2023
2022
Baseline: 147.1
Total waste generation
tonnes (including acquisitions)
2024
2023
2022
3.8
4.0
*
4.4
*
Waste intensity
tonnes of waste per £m of reported revenue (including acquisitions)
Baseline: 5.3
Waste to landfill
% (including acquisitions)
2024
2023
2022
10
11
8
14
10
Legacy companies Total Group (including 2022
acquisitions, from 2023)
Baseline: 19%
Alignment with UN SDGs
2024
2023
2022
6,888
Legacy companies 2022 acquisitions, included
from 2023
Baseline: 6,572
6,116
1 2022 acquisitions, Vulcanic and Durex
Industries included from 2023
* Restated due to a calculation error
1 2022 acquisitions, Vulcanic and Durex Industries
included from 2023
* Restated due to a calculation error
145,115
158,045
★
12,930
6,280
665
6,781
177,469
203,796
Spirax Group plc Annual Report 2024 73
Strategic Report
Progress continued
Water continued
For the first time our water audit has included the 2022
acquisitions to reflect the reporting improvements we have
made at these sites now they are integrated as part of our
Group. Including acquisitions, we saw a 11% reduction in
water vs 2023 and a 14% reduction vs 2019, as we have not
rebaselined our data to allow like-for-like comparison.
Deloitte has provided independent limited assurance in
accordance with the International Standard for Assurance
Engagements 3000 (ISAE 3000) for Spirax Group’s water
use in 2024, identified with ★. Deloitte’s full unqualified
assurance opinion can be found at spiraxgroup.com/
sustainability-downloads.
Waste
Excluding acquisitions, overall waste generation decreased
by 10% in 2024 vs 2023 to 5,486 tonnes, as well as the
proportion of waste that was sent to landfill, at 8% (2023:
10%). Including acquisitions, overall waste generation
decreased by 7% vs 2023 to 6,280 tonnes, and the
proportion of waste to landfill also fell to 11% (2023: 14%).
Excluding acquisitions, waste generation was 17% lower in
2024 than in 2019, exceeding our 2025 target. Including
acquisitions, from 2023 onwards, we have achieved a 4%
reduction in waste vs 2019, as we have not rebaselined our
data for a like-for-like comparison to 2019.
We have been working, across multiple locations, to secure
regional partnerships with waste service providers. Securing
these partnerships will ensure that we have access to alternative
opportunities for diverting our waste from landfill from some of
our manufacturing sites and improved access to data.
At our STS site in Buenos Aires (Argentina), we implemented
an initiative to remove wastewater from sludge. This sludge,
previously being sent to landfill, is now separated into water
and a dry filter ‘cake’, which is transported off-site at a
substantially reduced weight. This resulted in a 77%
reduction in waste to landfill from this site in 2024 vs 2023.
Solvent-based paint
At WMFTS Bredel (the Netherlands), we completed installation
of our new painting line. From late 2024, products being
manufactured at this site have been painted using paint that is
considered ‘water-based’ due to the low levels of solvent.
Within our STS Business we have undertaken multiple rounds of
testing of water-based and low-solvent paints over a number of
years, with paints from multiple suppliers trialled. Unfortunately,
we have not been able to find a painting solution that meets the
temperature, moisture and pressure requirements for our
products, without adding significant extra steps in the process to
ensure paint adhesion and maintain product quality. Following
analysis of these required changes, we determined that adding
additional steps into the painting process is not a sustainable
solution at this time. In November 2024, the Group Executive
Committee, on the recommendation of the Group Sustainability
Management Committee, made the decision to pause the paint
target in STS until water-based paints advance to meet our
quality requirements.
The painting transition has also been paused at our
Chromalox, Ogden, Utah (USA) site where enhanced
engineered controls are being installed as part of the
painting line in the new extension, to improve management
of Volatile Organic Compounds.
Focus for 2025
•
Achieve targets set out in One Planet: Engineering
with Purpose in our legacy sites
•
Continue to integrate best practices into our 2022
acquisitions, including digital monitoring and insights
•
Continue to focus on identifying waste service providers
that can help us deliver our landfill free target, with a focus
on manufacturing sites in 2025
Environmental improvements continued
Water-based paints make Bredel
pumps more sustainable
Following 18 months of rigorous research and testing and
a €1.3 million investment to upgrade their painting line, in
November 2024, Bredel Hose Pumps (a WMFTS company),
completed a multi-year project to transition from solvent-
based to water-based paints during the manufacture of
peristaltic hose pumps at their site in Delden, the
Netherlands.
This project was initiated following the launch of our One
Planet Sustainability Strategy and aimed to eradicate the
use of solvent-based paints, which have high levels of
Volatile Organic Compounds (VOCs) that can contribute
to environmental contamination and impact human health.
Investments included, a conveyor belt expansion, paint
equipment modification, a new air extraction unit and site
layout changes.
Benefits of this transition include:
•
90% reduction in VOC emissions
•
8,000m³ annual reduction in natural gas usage, saving
15 tCO₂e a year
•
Increased process and operational efficiency from
reduced internal transportation
•
Reduced volumes of hazardous materials on site
•
Elimination of ATEX zones and regulations at the site
Due to the extensive testing undertaken before the
transition, Bredel’s products have maintained their
ISO 12944 standard for paint durability, quality and
corrosion resistance, which is vital as they are used in a
wide range of industries, such as mining, industrial, water
and wastewater treatment, and food and beverage, where
the pumps often need to withstand harsh conditions.
We are proud of our transition to using water-
based paints, lowering the environmental
footprint of our solutions without compromising
quality or performance. This achievement
highlights our commitment to our One Planet
Sustainability Strategy and to reducing our
environmental impact, which benefits our
communities, customers and the planet.”
Camilo Contreras
Energy Engineer, WMFTS
Spirax Group plc Annual Report 202474
Strategic Report — Sustainability Report: Strategic initiatives continued
Sustainable products
Alignment with UN SDGs
Our products and solutions are critical to our ability to
deliver our Company Purpose of engineering a more
efficient, safer and sustainable world. By focusing on
eco-design, better understanding the whole lifecycle
impacts of our products through lifecycle assessments
(LCAs) and transitioning to more sustainable packaging,
we seek to not only lessen our own and our products’
environmental footprint but support our customers and
suppliers in their sustainability efforts too.
Progress
Eco-design
Throughout 2024, we worked with a third-party specialist
to develop an eco-design toolkit. The toolkit is a set of
resources to assist the implementation of eco-design
principles within product development and engineering
change processes. It includes evaluation tools and
data to facilitate decision making and for considering
environmental impacts throughout the product lifecycle.
The toolkit sets out a four-step process, in an iterative cycle,
that includes:
Focus for 2025
•
Ensure stakeholder alignment and commitment to
embedding the eco-design toolkit in new product
development and change processes
•
Complete R&D engineer and wider training on toolkit use
•
Focus on a small number of packaging types for universal
replacement with more sustainable alternatives
they can identify opportunities to reduce the products’
environmental impacts in future product iterations.
The methodology used to determine our customer energy,
carbon and water savings shown above has been
independently assessed by Ricardo Energy & Environment.
Only products that deliver savings that can be quantified
with reasonable certainty are included in the methodology.
Packaging
We remain committed to achieving our target of eliminating
single-use and non-recyclable packaging (unless specified
by customer requirements). However, the technical and
operational complexity of meeting this target exceeds our
initial expectations, with a significant number of differing
packaging types across our sites. Coupled with local
suppliers sometimes unable to provide sustainable
alternatives, there is still work to be done. Our teams continue
to make progress in some areas. For example, WMFTS
identified a solution to eliminate the use of bubble wrap
and plastic edge protectors in their packaging. They also
progressed testing of several other packaging
type alternatives during 2024. Previous sustainable
packaging alternatives failed testing, but the solutions
identified in 2024 have been found to provide suitable
protection for products during transportation.
Against this backdrop, we are re-prioritising our focus and
efforts on specific packaging types, such as plastic tape
and document wallets, that would allow us to roll out these
solutions globally and across all Businesses. We have also
created specific Business-led workstreams, to identify
high-volume packaging types (such as flange cap
protectors), and will be working with suppliers to identify
sustainable alternatives by the end of 2025.
1. Prioritisation
Of environmental targets
2. Evaluation
Data-led design decisions
3. Action
Possible design changes that can be
considered to reduce environmental impacts
4. Implementation
Assessing and recording the environmental
aspects of design changes at each stage of
the product development process
In addition to developing the toolkit, we undertook training
workshops for our engineering colleagues across our R&D
teams in each Business, which were attended by a total of
107 colleagues. In October, we also made available a live
training session on eco-design to interested colleagues
across the Group, which was attended by 58 people.
We will further train our colleagues on the use of the
toolkit throughout 2025.
Lifecycle assessments
During 2024, colleagues in our WMFTS Business completed
a further eight LCAs on WMFTS cased pumps. These LCAs
have provided information on the whole life environmental
impacts of our products, from the extraction of raw
materials through to end-of-life disposal. The LCAs inform
colleagues about the carbon footprint of each stage of our
products’ life, the in-use phase benefits of our products,
such as material, water or chemical savings and how
Customer environment benefits
Annual estimated customer
CO
2
, energy and water savings
from a select range of 20
product categories sold in
2024.
15.1
m
tonnes of CO
2
per year
206.4m
GJ per year of
energy
82.0m
m
3
per year of
water
To put these savings
into context, that is the
equivalent of:
2.2m
people’s annual
average energy
consumption (UK)
612.0m
mature trees
absorbing CO
2
32,800
Olympic-sized
swimming pools
of water
Spirax Group plc Annual Report 2024 75
Strategic Report
Sustainable supply chains
Alignment with UN SDGs
Incorporating sustainability into supply chain management
is essential for fostering long-term business success and
environmental stewardship. Sustainable supply chains help
reduce carbon footprints, conserve natural resources and
promote ethical labour practices.
Our approach to supply chain sustainability emphasises
collaboration, education, transparency and accountability.
By fostering strong partnerships with our suppliers, we are
building a resilient supply chain that meets our future needs
while prioritising the wellbeing of people and the planet.
Progress
Supplier Sustainability Code
Our Supplier Sustainability Code (Code) outlines the
minimum requirements we expect from all direct material
suppliers (with an annual spend greater than £15,000 or
suppliers that are potentially higher risk, based on
geographic location or commodity type) in our supply
chains. By the end of 2024, 96% of our suppliers, excluding
Vulcanic, had signed the Code, declaring that they operate
in line with our minimum standards and that they seek to
ensure that their sub-tier suppliers also comply with these
standards (98% on a spend basis). This marks a significant
increase from 76% at the end of 2023.
As supply chains are not static, with new suppliers being
added regularly, it is unlikely that we will achieve 100% of
suppliers having signed the Code at any point in time, but
we continue to strive for as close to 100% as possible. Our
in-house monitoring systems allow us to effectively identify
and engage with suppliers still to sign the Code. We have
internal processes for managing suppliers with this status,
including engagement to understand why and to check they
are not in serious breach of our standards. If a supplier is
non-signing but deemed critical, Senior Leader approval is
required to use them for a period of time, while we continue
to engage with them.
Ultimately, if suppliers remain unwilling to sign the Code
following extensive engagement, we will look to move away
from them. Our preference, other than in the case of serious
breaches of standards, is to positively engage with the
supplier, to raise their standards, as we believe this is the
responsible thing to do.
Supplier Sustainability Portal
In 2024, we successfully completed the roll out of our Supplier
Sustainability Portal (Portal) to an additional 151 strategic and
higher-risk suppliers. We are now engaging with 1,082
suppliers through the Portal and are monitoring remotely a
total of 3,013 suppliers. Suppliers are requested to upload
evidence to the Portal annually or biennially, to demonstrate
they are meeting our required standards.
We continue to see increased engagement levels by
suppliers, with more evidence being provided in the Portal.
Percentage completion of the modules in the Portal is set
back to zero each year. Six months after the reset in July
2024, by the end of the year, 76% of suppliers in the Portal
had completed at least one module of which 16% had
completed all 12 modules. We expect completion rates to
further increase during the remaining six months until the
surveys are reset in July 2025.
Our procurement teams continue to work hard to engage
suppliers, explaining the importance of their participation.
In addition to onboarding new suppliers and driving
participation rates, during 2024 we began to focus more
on the quality of responses and assessing evidence
provided to verify that suppliers are meeting our minimum
standards. We have set minimum compliance thresholds
for questionnaires regarding labour rights, human trafficking
and slavery, human rights and organisational commitment,
which we expect our suppliers to meet.
In 2024, we identified suppliers who had not provided
sufficient evidence to demonstrate that they meet our
minimum standards, principally as they do not have
adequate policies and controls in place to manage and
mitigate risks. We are now engaging with those suppliers
to provide bespoke corrective action plans, including
continuous improvement options and examples of best
practice, along with clear expectations that they need to
demonstrate an improvement going forward.
During 2024, we also completed two investigations on
suppliers where we identified concerns that their supply
chains may originate in the Xinjiang Uyghur Autonomous
Region of China, in contravention of the Uyghur Forced
Labor Prevention Act. Mindful of the cultural sensitivities
for our Chinese colleagues, these investigations were
completed from the UK. In both cases the investigations
satisfactorily concluded that the suppliers were not
operating in the region. These investigations provided
strong evidence that our measures to assess and monitor
our supply chains are operating effectively and helping to
reduce risk.
Conflict Minerals
During 2024, we established a new role in the Sustainability
Function to lead a focus on Conflict Mineral reporting and risk
management. This takes advantage of the data we have
available through our Supplier Sustainability Portal. We have
reviewed our approach to managing Conflict Mineral risk
reporting and are commencing the roll out of a corrective
action plan, aligned to the OECD Due Diligence Guidance,
to engage with suppliers where there is insufficient clarity
of sourcing and processing of listed Conflict Minerals: tin,
tantalum, tungsten and gold, in our supply chains. We have
also commenced training colleagues on the importance of
managing Conflict Mineral risks.
Modern Slavery Act
We continue to take seriously our responsibilities under the UK
Modern Slavery Act and remain wholly committed to managing
our operations in a way that is modern slavery free. Our
Modern Slavery Act Statement can be found on the Spirax
Group website spiraxgroup.com/sustainability-downloads.
Focus for 2025
•
Complete the onboarding of suppliers of our Vulcanic,
WMFTS Devens (USA) and selected sales companies
to the Portal
•
Drive supplier response rates in the Portal, issue and follow
up on corrective actions to suppliers
Spirax Group plc Annual Report 202476
Strategic Report — Sustainability Report: Strategic initiatives continued
Focus for 2025
•
Develop a new, simpler, volunteering and charitable
donations platform to support increased reporting
•
Continue to deliver impactful grants to a geographically
diverse variety of educational initiatives through the
Education Fund
•
Deliver colleague communication campaigns to encourage
participation in community engagement activities
Supporting our communities
We recognise that our success is deeply intertwined with
the wellbeing of the communities in which we operate. Our
commitment to supporting our communities is firmly rooted in
our Company Purpose and stems from a belief that sustainable
growth is only achievable when we invest in the social fabric
that supports us all.
Progress
The Spirax Group Education Fund
Spirax Group’s Education Fund (Education Fund) aims to
promote inclusive and equitable access to education within
the communities in which we operate. Its primary goals are
to improve diversity in engineering, tackle poverty through
education, remove barriers to education and enhance
female access to education.
During 2024, the Education Fund, which was overseen by
two Company and two independent Trustees, made 40 new
and 30 multi-year grants with a combined value of
£1,036,715, across 36 countries. This takes the total value
of grants made during its three years of operation
to £3,249,569. Examples of grants made in 2024 include:
•
funding scholarships for three Afro-Colombian women
to study engineering at university in Colombia
•
building a new classroom at a rural primary school in Ethiopia
•
funding the creation of a mobile STEM classroom in
Argentina
•
providing a year’s worth of sanitary products for 150 girls
from low-income families in South Korea
•
establishing a STEM laboratory for secondary school
pupils in Germany, to support STEM engagement
Volunteering
In 2024, many of our colleagues demonstrated their
commitment to supporting our communities by collectively
contributing 30,741 working hours to volunteering activities,
a 20% increase vs the prior year (2023: 25,697 hours), taking
the total number of reported volunteering hours since the
One Planet Sustainability Strategy was launched in 2021 to
89,635 hours. Our colleagues’ volunteer activities spanned
various initiatives, from environmental conservation to
supporting the homeless and educational initiatives,
showcasing the diverse ways in which we strive to give
back to society.
Since launching the One Planet Sustainability Strategy,
colleague volunteering rates have significantly increased
from a previous average of around 5,000 hours a year and
we have made good progress against our 2025 target.
However, on the current trajectory we are unlikely to
achieve our 2025 target. We will continue to encourage
colleagues to make use of their annual three day entitlement
to volunteering leave, but we are confident that colleagues
are aware of and have opportunities to volunteer if they
want to, which is a key objective of the strategy.
During our STS Business’ annual leadership conference,
held as a hybrid event in 2024, we set aside time in the
agenda for teams to locally complete a volunteering activity.
Through this event, nearly 40 activities were recorded, with
appropriately 560 colleagues participating in activities
totalling nearly 1,500 hours.
Charitable donations
As we continued to face strong macroeconomic and market
headwinds in 2024, we saw a decline in charitable
donations made by our operating companies. During the
year, our operating companies made cash or in-kind
donations with a reported value of £228,200 (2023:
£340,200). Our colleagues also contributed an additional
£60,300 of donations, in Company-organised charitable
activities. Since launching the One Planet Sustainability
Strategy in 2021, our operating companies have made over
£1.25 million of charitable donations locally. While this
reflects a significant increase in donations compared to the
period before the launch of the One Planet Sustainability
Strategy, we are likely to fall short of our 2025
donation target.
During 2024, Spirax Group’s Charitable Fund (Charitable
Fund) refreshed its administration processes and donation
criteria. During the year, we donated £100,000 to a range
of local, national and international charitable causes, as we
commenced re-focusing our donations towards charities
with greater alignment to the new criteria (2023: £400,000).
Operating company cash/in-kind donations
£’000 (including acquisitions)
2023
2024
2022
349.6
340.2
Baseline: 188.5
Alignment with UN SDGs
Volunteering hours
hours (including acquisitions)
2023
2024
2022
25,697
30,741
22,140
Baseline: 5,311
228.2
Spirax Group plc Annual Report 2024 77
Strategic Report
This Annual Report and in particular the Sustainability Report, contains the information
required to comply with the Companies, Partnerships and Groups (and Non-Financial
Reporting) Regulations 2016, as contained in Sections 414CA and 414CB of the
Companies Act 2006. The table below provides key references to information that,
in conjunction with the Sustainability Report, comprises the Non-Financial and
Sustainability Information Statement for 2024.*
Reportingrequirement Group policies that guide our approach Information and risk management, with page references
Environmental matters
•
Group Sustainability Policy
Sustainability Report, pages 64 to 77
•
Group Environmental and Energy Policy
Principal Risks, pages 83 to 87
•
Group Management Code
TCFD and CFD Disclosures, pages 88 to 96
•
Supplier Sustainability Code
Our business model, pages 18 and 19
Section 172 Statement, pages 8 to 10
Company Purpose, page 14
Employees
•
Group Diversity and Inclusion Policy
Sustainability Report, page 62
•
Group Management Code
Our business model, pages 18 and 19
•
Group Human Rights Policy
Colleague Engagement Committee Report,
pages 112 to 115
•
Group Sustainability Policy
Section 172 Statement, pages 8 to 10
•
Group Health and Safety Policy – Statement
of Intent
Company Purpose, page 14
Social matters
•
Group Human Rights Policy
Sustainability Report, pages 60, 63, 76 and 77
•
Group Charitable Donations Policy
Our business model, pages 18 and 19
•
Group Employee Volunteering Policy
Section 172 Statement, pages 8 to 10
•
Supplier Sustainability Code
Company Purpose, page 14
•
Group Sustainability Policy
Respect for human rights
•
Group Human Rights Policy
Sustainability Report, page 76
•
Modern Slavery Statement
Principal Risks, page 87
•
Supplier Sustainability Code
Risk Management , page 80 to 82
Anti-corruption and
anti-bribery matters
•
Group Anti-Bribery and Corruption Policy
Sustainability Report, page 63 and 76
•
Group Gifts, Entertainment and Hospitality Policy
Principal Risks, page 87
•
Group Competition Law Compliance Policy
Risk Management Committee Report, page 120
•
Group Whistle-blowing Policy
•
Supplier Sustainability Code
Description of the business model
Our business model, pages 18 and 19
Description of the Principal Risks in relation to the above matters, including
business relationships, products and services likely to affect those areas of
risk, and how the Company manages the risks
Risk Management, pages 83 to 87
Risk Management Committee Report, pages 119
and 120
TCFD and CFD Disclosures, pages 88 to 96
Non-financial key performance indicators
Sustainability Report, pages 58 to 77
Key Performance Indicators, pages 40 and 41
* The policies listed above can be found on our website: spiraxgroup.com/governance-documents. Compliance with our policies is monitored
through the implementation of our Sustainability strategy, through our Internal Audit function and, locally, by our General Managers.
In line with the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, we have disclosed
fully against these requirements, which can be found in our TCFD report on pages 88 to 96.
Non-Financial and Sustainability
Information Statement 2024
Spirax Group plc Annual Report 202478
Strategic Report — Non-Financial and Sustainability Information Statement 2024
Group Governance Policies
Group Management Code This Code sets out the Group’s policy on the operation of its Businesses and the
procedures, controls and senior manager certification that provide the means to achieve
compliance with the Code throughout the Group and to achieve continuous improvement
in the Group’s performance.
Anti-Bribery and Corruption Policy It is Group policy to conduct its business free of any bribery or corruption. The Group will
not enter into contractual relationships with third parties that are known to engage in corrupt
practices and will not engage in the giving or receiving of bribes or favours that create a
conflict of interest. Anti-bribery and corruption training forms part of our Group Essentials
Training and must be completed by all new employees and bi-annually thereafter.
Group Whistle-blowing Policy We are committed to conducting our business with honesty and integrity and we expect
all colleagues to maintain high standards in accordance with our Group Management Code
and our core Values. A culture of openness and accountability is essential to prevent
situations occurring and to address them when they do occur. This policy aims to
encourage colleagues to report suspected wrongdoing as soon as possible, in the
knowledge that their concerns will be taken seriously and investigated as appropriate
and that their confidentiality will be respected.
Competition Law Compliance Policy It is Group policy to conduct business in accordance with the competition laws of all the
countries in which we operate. This policy outlines standards of conduct and integrity we
expect from all colleagues and the potential consequences of breaching competition laws.
Gifts, Hospitality and
Entertainment Policy
This policy sets out the Group’s position on the giving and receiving of gifts, hospitality
and entertainment, and our colleagues’ responsibilities under this policy.
Charitable Donations Policy This policy sets out the principles to be adopted in relation to charitable donations, both
cash and in-kind, and applies to all charitable donations and community engagement
activities across the Group.
Environmental Policies
Group Sustainability Policy This policy outlines the standards and commitments by which we guide operations at our
Group Functions, operating companies and colleagues of Spirax Group in a socially and
environmentally responsible manner. While these standards and commitments guide our
own operations, we also encourage suppliers and partners to abide by the standards
outlined in this policy.
Group Environmental and Energy Policy This policy underlines the commitments made in our One Planet: Engineering with
Purpose Sustainability Strategy with regard to protection of the environment, climate
change and the efficient use of resources, including water, waste management and
biodiversity enhancement.
Supplier Sustainability Code The Code represents the minimum standards that we ask our suppliers and their sub-tier
suppliers to adhere to when conducting business with Spirax Group. It covers expectations
relating to human rights, health and safety, quality management, environmental
sustainability and ethics.
Colleague and Human Rights Policies
Employee Volunteering Policy All Group colleagues are entitled to up to three days of volunteering leave per year. This
policy is intended to help and support colleagues wishing to volunteer and provides a
framework for good practice.
Group Health and Safety Policy –
Statement of Intent
This Statement outlines the commitments of intent that our Group functions and operating
companies must adhere to, in order to ensure that Health and Safety remains a core Value
and our first consideration.
Spirax Group plc Annual Report 2024 79
Strategic Report
Our approach and appetite for risk
Risk is inherent in business and to achieve our goals we
must appropriately manage certain risks. We strive for a
balanced approach, protecting our resources while pursuing
growth opportunities and staying aligned to our Purpose,
Vision and Values.
Our approach to risks is deliberate and considered:
•
We evaluate our strategic and operational risks
•
We assess our ability to control or mitigate risks
•
We consider ethical and commercial implications of
accepting risks
An informed process is crucial for making risk-based
decisions. The Board ultimately sets the appropriate Risk
Appetite for our Group, informed by recommendations from
the Risk Management Committee which has oversight for
the enterprise risk management framework on delegated
authority from the Board.
We have a low appetite for risks that could lead to health,
safety, environmental, legal or regulatory breaches.
Conversely, we have a higher appetite for economic and
political instability risks given our experience in volatile
markets and established control procedures. We recognise
the need to take risks in new territories for growth, while
maintaining effective controls and compliance with laws
and regulations.
The Group faces a variety of risks that could impact its
operations, financial performance and reputation. These
risks include, but are not limited to, market volatility,
regulatory changes, cybersecurity threats and operational
disruptions. To mitigate these risks the Group has
implemented a comprehensive enterprise risk management
framework. The Board, supported by the Risk Management
Committee and the Audit Committee, is committed to
maintaining a proactive approach to risk management,
ensuring that the Group remains resilient and well-prepared
to navigate potential challenges.
Enterprise risk management governance
and framework
The Board oversees risk management by developing and
maintaining an enterprise risk management framework,
implementing an internal control framework and through
conducting independent internal audits. The Risk
Management Committee oversees and monitors significant
risks, ensuring robust policies and procedures, reporting to
the Board on the risks facing the Group and the measures
taken to mitigate those risks. The Board reviewed this
process and is satisfied that we have a robust risk
management process in place through which, we identify,
evaluate and manage our Principal Risks and emerging risks.
To fulfil this responsibility, the Risk Management Committee
oversees the Group’s risk processes and procedures. This
oversight is supported by the Audit Committee and the
Internal Audit function, which monitors the compliance of
the Group’s operating companies with these processes and
procedures. The framework on page 81 illustrates how risk
management is governed within the Group’s structure.
To effectively mitigate risk and ensure robust governance,
we employ the ‘Three Lines of Defence’ model. This model
provides a structured approach to risk management and
internal control, enhancing our ability to identify, assess
and manage risks across the organisation.
First line of defence
Each Business is responsible for the identification,
control and management of its own risks
Second line of defence
The Risk Management Committee, with the Audit
Committee, ensures that the risk and compliance
framework is effective, to facilitate the monitoring and
management of risk with ongoing challenge and review
of the risk profile in the business
Third line of defence
Internal audits provide independent testing and
verification of compliance with policies and procedures
and monitoring of follow-up actions where required
First line of defence: operating companies
Each operating company identifies the key inherent risks for
their business together with the controls that mitigate those
risks, within an agreed residual risk appetite. Ongoing
monitoring is performed to ensure the effectiveness of
controls to mitigate the risk. Operating companies also
conduct an annual risk assessment to challenge the overall
effectiveness of their risk and control framework. Senior
managers have full accountability for risk management
within their Businesses.
Second line of defence: Group risk management and
control functions
At Group level a risk management framework and control
management framework provide oversight and support to
the operating companies. The Group functions develop and
monitor policies, procedures, risk assessments and control
effectiveness for the Group. Through ongoing monitoring
and testing of risk and controls, there is effective challenge
of the operating companies’ risk and control frameworks
and support of a continuous improvement process. This risk
and control framework is further supported by additional
oversight exercised by our Group functions, including:
Legal, Compliance, IT, HR, Sustainability, Health and Safety
and Finance.
Underpinning the Group’s control environment is our strong
corporate culture and the ‘tone at the top’ of the organisation,
which sets the standards under which all Group business is
conducted. These are captured in the six Values of the
Group that have been communicated to all colleagues. They
are also documented and reinforced through the Group
Management Code and through mandatory training.
Colleague engagement surveys are also undertaken to
validate organisational alignment to our Values.
The Group’s documented policies and procedures, which
are periodically reviewed and refreshed, set out our clear
expectations of operating companies for the operation of
controls. This includes the Group’s delegation of authorities
that has been approved by the Board and cascaded to
Risk Management
Spirax Group plc Annual Report 202480
Strategic Report — Risk Management
our Business Executive teams and their respective
operating companies.
Reviews over the effectiveness of the control environment
are performed through an annual risk and control self-
assessment process and reviews of operating companies’
activities are undertaken by Group functions. Oversight of
the financial and operational performance of our operating
companies is provided at Business and Group levels and
includes detailed quarterly financial reviews and reviews
of monthly management accounts.
Safecall, our established, independent whistle-blowing
facility is managed by the Group General Counsel and is
advertised at all operating company sites. Colleagues can use
Safecall to report concerns confidentially and anonymously
if they become aware of any activity that is inconsistent with
our principles. Concerns are investigated by the Group
General Counsel or another senior manager, as appropriate.
Third line of defence: Internal Audit
Internal Audit provides independent assurance on the
effectiveness of the first and second lines of defence. By
conducting regular audits and assessments, Internal Audit
evaluates the adequacy and effectiveness of the Company’s
risk management, control and governance processes. This
independent review helps to identify areas for improvement
and ensures that the Company’s risk management practices
are robust and effective.
The internal audit system is a crucial part of the risk
management process. Internal audits are conducted by
our Group Internal Audit team with regular reporting to
the Audit Committee.
By leveraging the Three Lines of Defence model, we
ensure a comprehensive and integrated approach to risk
management, fostering a culture of accountability and
continuous improvement.
Governance and compliance
In 2024, we maintained a strong focus on governance and
compliance, which remains central to managing risk and
has driven continuous improvements in our enterprise risk
management and control frameworks, sanction policy and
controls, supplier sustainability, Group tax evasion controls
and Health and Safety framework.
To address the risk of fraud, we launched the ‘Stand Up to
Fraud’ campaign across the Group. Each operating company
conducted an open assessment of the fraud risks specific to
their business area and developed or enhanced controls to
mitigate these risks effectively.
Bottom-up review
Group-wide risk register
Maintained and reviewed by the Risk Management Committee
Risk assurance
Internal Audit (ongoing review of effectiveness by the Audit Committee and Risk Management Committee)
Risk review (external/internal)
Carried out at regular intervals
Top down review
Group operating companies
Reports to Works with
Board
Audit Committee
Risk Management Committee
Oversees risk management processes and procedures and monitors mitigating actions put in place by the Group. Works with the
Audit Committee to monitor the effectiveness of internal controls and the audit process, including ‘deep-dives’ into specific risks
Managing risks
The following framework illustrates how risk management is governed within the Group’s structure:
Spirax Group plc Annual Report 2024 81
Strategic Report
Identify/prioritise risks
Set risk appetite
Continuous
improvement
of the process
Set operating principles
Produce and maintain detailed
policies/procedures
Validate and test compliance
with policies
Report on policy compliance
Manage exceptions
Governance and compliance continued
We have also made substantial investments in our enterprise
technology solutions and information security controls. We
will continue to assess the robustness of our governance
and compliance programmes and controls in the context
of our operational and strategic goals and will respond in
a manner which enables our Group to mitigate the
challenges presented by a dynamic risk environment.
Continuous improvement model
Other Principal Risks remain unchanged: Breach of Legal
and Regulatory Requirements (including anti-bribery and
corruption Laws), Cybersecurity, Economic and Political
Instability, Failure to Realise Acquisition Objectives, Inability
to Identify and Respond to Changes in Customer Needs,
Loss of Manufacturing Output at Any Group Factory and
Significant Exchange Rate Movement.
Additionally, the year-on-year trend for each Principal Risk
was assessed and updated with risk appetite and risk
velocity ratings validated for each of the Principal Risks. Our
Principal Risks are set out in more details on pages 83 to 87.
Emerging risks
This encompasses monitoring all risk areas, including
operational, financial, strategic, compliance, reputational,
market, security and physical risks.
Among these risks, we considered: the effects of persistent
inflation and high interest rates slowing growth and
increasing the risk of financial stress; conflicts which
continue to be a global concern in the Middle East and in
Ukraine and political changes in key markets, which may
impact global trade. We also monitor closely the changing
landscape around the increased use of tariffs.
Climate change remains an emerging risk that we closely
monitor and is listed on our risk register. The Group
Executive Committee and the Board receive regular updates
on the potential impacts of climate change. We also adhere
to the framework established by the Task Force on Climate-
related Financial Disclosures (TCFD) to facilitate the
transition to a low-carbon economy. Our TCFD disclosures
can be found on pages 88 to 96 of the Strategic Report.
An example of how we are responding to this emerging risk
is through the decarbonising of our operations, using our
proprietary technologies, entering into green energy
contracts and sourcing solar power. These initiatives also
align with our Purpose and focus on all our stakeholders.
Further reading
Risk Management Committee Report
See pages 119 and 120
Our Viability Statement
See page 120
Our Going Concern Statement
See page 35
TCFD Disclosures
See pages 88 to 96
What we did in 2024
Following the annual review of the risk register and with
responses from a top-down risk review, we updated our list
of Principal Risks. Changes to the list include inclusion of
‘Ageing Enterprise Systems’ (an update to the previously
named ‘Ineffective IT Systems’). The broader definition of
Ageing Enterprise Systems reflects our recognition that this
is becoming more relevant to our Group, as well as the
challenges and opportunities of enhancing such systems
across our Group. While still an important risk for our Group,
‘Loss of Critical Supplier’ was removed from the list of
Principal Risks in recognition of greater stability in our supply
chain, as markets have adapted to the new normal post-
COVID-19 pandemic and commodity inflation has continued
to ease.
Risk Management continued
Spirax Group plc Annual Report 202482
Strategic Report — Risk Management continued
Principal Risks
The following pages set out the Group’s Principal Risks and describe
how these link to our strategy. Each risk is defined, with an explanation
of how that risk is evolving, as well as our assessment of risk velocity
and risk appetite. Mitigating controls and measures are summarised to
demonstrate that the level of residual risk aligns to our risk appetite.
Growth Drivers
Commercial Excellence
Operational Excellence
Organisational Fitness
Digital and Services
Decarbonising
Thermal Energy
Risk theme Principal Risk Growth Driver alignment
External factors Economic and political instability
Significant exchange rate movement
Operations Ageing Enterprise Systems
Cybersecurity
Loss of manufacturing output at any Group factory
Strategic Failure to Realise acquisition objectives
Inability to identify and respond to changes
in Customer needs: Digital/non-Digital
Compliance and
responsibility
Breach of legal and regulatory requirements
(including ABC laws)
Risk appetite ratings defined:
Appetite Description
Very low Following a marginal-risk, marginal-reward approach that represents the safest strategic
route available.
Low Seeking to integrate sufficient control and mitigation methods in order to accommodate
a low level of risk, though this will also limit reward potential.
Balanced An approach which brings a high chance for success, considering the risks, along with
reasonable rewards, economic and otherwise.
High Willing to consider bolder opportunities with higher levels of risk in exchange for increased
business payoffs.
Very high Pursuing high-risk, sometimes unproven options that carry with them the potential for
high-level rewards.
Risk velocity ratings defined:
Velocity Description Timeframe
Very low Very slow impact, response time adequate to mitigate effects Felt after 12 months
Low Slow impact, robust response through strategy may mitigate effects Felt within 12 months
Medium Moderate time to impact, swift and robust response may
mitigate effects
Felt within 6 months
High Fast impact, immediate response may mitigate effects Felt within a month
Very high Very rapid impact with little or no warning. Limited time to respond
and mitigate effects
Felt within a week
Spirax Group plc Annual Report 2024 83
Strategic Report
External factors
Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor and
explanation of change
Risk
appetite
rating Rationale for rating
1. Economic and political instability
The Group operates
worldwide and maintains
operations in territories that
have historically experienced
economic or political
instability, including regime
changes. In addition to the
potential impact on our local
operations, this instability
increases credit, liquidity
and currency risks.
Very high
High
Medium
Low
Very low
•
Resilient business model, strengthened
by regular strategic business reviews
•
Well spread business by geography
and sector
•
Externally-facilitated scenario
planning exercises
•
Strong internal controls, including
internal audit and appropriate insurance
•
Operating in line with the Group
Treasury Policy, including currency
exchange hedging and cash
pooling arrangements
•
Increased liquidity through more
headroom on Group debt facilities
Executive sponsor:
Group Chief Executive
Change:
No change
Very high
High
Balanced
Low
Very low
We have the background and
know-how to successfully
manage the unique
challenges in economically
and politically volatile
territories. We are willing
to accept these challenges
where opportunities for
growth exceed the impact
of this risk.
Link to Growth Driver:
2. Significant exchange Rate Movement
The Group reports its results
and pays dividends in sterling.
Sales and manufacturing
companies trade in local
currency. With our local
presence in markets across
the globe, the nature of our
business necessarily results
in exposure to exchange
rate volatility.
Very high
High
Medium
Low
Very low
•
Maintain the spread of
manufacturing across currency
areas and a consideration of
exchange rate exposures in the
manufacturing strategy
•
Forward cover where appropriate
and in line with the Group Treasury
Policy on hedging currency
exchange movements
•
Focus on reducing manufacturing
cost, including sourcing materials
from cheaper markets, and purchasing
in the UK in foreign currency
•
Deployment of price management tools
Executive sponsor:
Chief Financial Officer
Change:
No change
Very high
High
Balanced
Low
Very low
We take a balanced view as
the risk arises as a direct
result of our global presence,
but our geographic spread
means we are not wholly
dependent on any one
currency.
Link to Growth Driver:
Principal Risks continued
Spirax Group plc Annual Report 202484
Strategic Report — Risk Management continued
Operations
Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor and
explanation of change
Risk
appetite
rating Rationale for rating
3. Ageing Enterprise Systems
Could significantly reduce our
ability to harness efficiencies
across our Group and effective
deployment of capital, slowing
down innovations and
increasing security risks
(including cyber). In turn, this
could limit our ability to meet
customer requirements and
orders, and create bottlenecks
in our business processes.
Very high
High
Medium
Low
Very low
•
Ongoing infrastructure modernisation
programmes ensuring critical physical
hardware is current
•
Significant investment in a multi-year
initiative to retire ageing IT solutions,
to evergreen cloud solutions to
mitigate the risk of obsolescence
•
Strong IT Governance has been
implemented to control changes
on Enterprise Systems
•
Operational controls are in place
through a combination of power
protection, backup, disaster recovery
as well as continual monitoring, to
ensure strong Enterprise IT solutions
•
Continued risk reduction efforts around
system support
Executive sponsor:
Chief Financial Officer
Change:
The risk has increased due to the
continued ageing of fragmented and
large number of enterprise solutions
across the Group, and the increased
pace of the market migration to
cloud solutions.
Very high
High
Balanced
Low
Very low
While this represents a
significant risk to the Group,
the diverse nature of our
operating companies and
their enterprise systems
creates a moderating effect.
With existing continued
focus and investment this
risk will be further mitigated.
Link to Growth Driver:
4. Cybersecurity
Cybersecurity risks include
theft of information, malware,
ransomware and compliance
with evolving statutory and
legislative requirements. Risks
may manifest through a direct
attack on our business or
through our supply chain
Very high
High
Medium
Low
Very low
•
Global assessment of our IT environment
against UK cyber essentials framework
and prioritising actions for improvement
•
Deploying security tools to limit the
impact and spread of ransomware
•
System access rights regularly reviewed
•
Further strengthening of security
for centrally-managed systems for
heightened protection and consistency
•
Mandatory cyber awareness training
is delivered to all new colleagues
and refreshed biennially
Executive sponsor:
Group IT Director
Change:
No change
Very high
High
Balanced
Low
Very low
Concerns of potential
impact on the business,
in addition to important
considerations surrounding
protection of personal data,
reinforce our commitment
to implement and maintain
robust security measures
across the Group.
Link to Growth Driver:
Spirax Group plc Annual Report 2024 85
Strategic Report
Operations continued
Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor and
explanation of change
Risk
appetite
rating Rationale for rating
5. Loss of manufacturing output at any Group factory
The risk includes loss of
output as a result of natural
disasters, industrial action,
accidents or other causes.
Loss of manufacturing output
from our larger plants could
cause serious disruption to
Group sales.
Very high
High
Medium
Low
Very low
•
Capacity planning and holding stock in
sales companies
•
Investment in new sites to open
alternative lines of supply
•
Conducting audits/inspections
•
Annual risk assessments and business
continuity planning
•
Reviewing and maintaining appropriate
insurance cover
•
Continuing commitment to employee
policies, ensuring satisfactory benefits
and regular engagement with
colleagues
Executive sponsors:
Managing Directors of Steam Thermal
Solutions, Electric Thermal Solutions and
Watson-Marlow Fluid Technology
Solutions
Change:
No change
Very high
High
Balanced
Low
Very low
While we have mitigated this
risk through a geographic
spread of factories, calculated
replication of capacity and
management of stock, we
have a low appetite for this
risk due to the potential
negative consequences to
the Group and its customers.
Link to Growth Driver:
Strategic
6.FailuretorealiseAcquisitionobjectives
External growth has been an
important driver for our Group.
Failure to integrate new
businesses successfully into
our Group could result in poor
performing business, lower
returns on our investment,
poor talent retention and
failure to meet customer
needs.
Very high
High
Medium
Low
Very low
•
Board approval of integration plans for
major acquisitions
•
Regular monitoring of performance by
the Board against the approved
investment case
•
Regular review of acquisition criteria in
line with strategic plan
•
Scrutiny of targets and implementation
plans by external advisers and internal
key colleagues
•
Use of retainer/escrow to provide
protection against warranty claims
•
Use of insurance as protection against
seller breach and non-disclosure
•
Ensuring valuation models show a
healthy return on investment and a
credible plan to achieve this
Executive sponsor:
Group Chief Executive
Change:
No change
Very high
High
Balanced
Low
Very low
Thorough planning and
proper due diligence can
mitigate many of the
potentially risky aspects of
an acquisition. Implementation
plans must be well-developed
and carefully pursued to
achieve the full strategic
and financial benefits.
Link to Growth Driver:
Spirax Group plc Annual Report 202486
Principal Risks continued
Strategic Report — Risk Management continued
Strategic continued
Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor and
explanation of change
Risk
appetite
rating Rationale for rating
7. Inability to identify and Respond to changes in customer needs: Digital/non-Digital
This risk could lead to a
reduction in demand from a
failure to respond to changes
in customer requirements or
technology shifts.
Very high
High
Medium
Low
Very low
•
Stronger presence of sales engineers,
compared with competitors, in the
marketplace
•
Integrating our recent acquisitions to
deepen and broaden our expertise and
to better position the Group to meet
customer demand in more sustainable
industries
•
New product ideas generated by market
development managers from close
alignment with sales engineers and
customers
•
Sales and competitor analyses
undertaken to identify any trends or
technology shifts
•
Digital strategies for the Group and
Businesses have been initiated,
supported by an investment plan that
takes into account the need for new
skills and external partnerships
•
A Group Digital Director leading the
Digital and Services Growth Driver
Executive sponsors:
Managing Director, Steam Thermal
Solutions and Group Digital Director
Change:
No change
Very high
High
Balanced
Low
Very low
The Group continues to
focus on its market
awareness and voice of the
customer, through investing
in technical, digital and sales
knowledge to continue to be
more closely attuned to our
customers.
Link to Growth Driver:
Compliance and responsibility
8.Breachoflegalandregulatoryrequirements(includingABClaws)
We operate globally and
must ensure compliance with
applicable laws and regulations
wherever we do business. As
we grow into new markets and
territories, we are exposed to
more and increasing complex
legislative frameworks.
Breaching any of these laws or
regulations could have serious
consequences for the Group,
including fines, loss of
business and reputational
damage.
Very high
High
Medium
Low
Very low
•
Ongoing global monitoring of
commercial arrangements and
agreements, with appropriate
professional advice
•
Established procedures to maintain
accreditations
•
Biennial Group-wide ABC training
•
Multi-lingual, multi-national secure
whistle-blowing hotline
•
Group Litigation Report and ongoing
monitoring of cases
•
Regular updates on Corporate
Governance and Stock Exchange rules
•
General Data Protection Regulation
compliance plan in place
•
Conducting of supplier audits
•
Engaging suppliers to commit to
compliance with the principles of the
Supplier Sustainability Code
Executive sponsor:
Group General Counsel
Change:
No change
Very high
High
Balanced
Low
Very low
We abide by the laws, rules
and regulations of the
jurisdictions in which we
operate and given the
serious consequences for
breaching these laws, rules
and regulations, we have
a very low appetite for
this risk.
Link to Growth Driver:
Spirax Group plc Annual Report 2024 87
Strategic Report
Task Force on Climate-related
Financial Disclosures (TCFD)
In accordance with the UK Climate-related
Financial Disclosure Regulations (CFD)
and Listing Rule 6.6.6R(8) we confirm that
the following pages contain disclosures
consistent with the Task Force on
Climate-related Financial Disclosures’
(TCFD) recommendations and
recommended disclosures.
Our approach is fully aligned with 10 of the 11 TCFD
recommendations. For the remaining disclosure, metrics and
targets b) disclose scope 1, scope 2 and, if appropriate, scope
3 greenhouse gas (GHG) emissions and the related risks, we
report scopes 1 and 2, but report scope 3 with a one-year
time lag, due to the complexity of collecting the data within
the timeframe of the production of the Annual Report.
In 2024, we used a third-party carbon accounting specialist
to support the recalculation of our scope 3 emissions to
include 2022 acquisitions Vulcanic and Durex Industries. Our
recalculated 2021 baseline was submitted to the SBTi and our
targets re-validated in December 2024. We also calculated
scope 3 emissions for the whole Group for 2023, which can
be found on page 67. Scope 3 is highly complex and requires
significant levels of estimation where data are not available.
We are still developing our data collection processes for
scope 3, during the year we undertook significant work to
re-baseline for recent acquisitions and we are reliant on
external support. Therefore, it was not possible to calculate
full scope 3 emissions for 2024 ahead of the reporting
deadline. We have disclosed a partial scope 3 figure
(category 3, B and C) for 2024, which can be found on page 67.
During 2024, we further improved our data collection
processes through establishing a clear timetable and
reporting expectations and also increased stakeholder
engagement. In 2025, we will work to further increase the
efficiency and speed of these calculations. We aim to
publish in-year scope 3 analysis when Spirax Group is
expected to come into scope for Corporate Sustainability
Reporting Directive (CSRD) disclosures in 2029, in respect of
full year 2028, if not before.
We will review our disclosures against the recommendations
of TCFD on an annual basis.
Governance
Describe the Board’s oversight of climate-related
risks and opportunities
In 2024, our approach to governance for the One Planet
Sustainability Strategy evolved to reflect its successful
implementation and integration into our core business
strategies. The Group Executive Committee (GEC) met
in early 2024 to review the strategy’s governance. It was
agreed that we no longer needed the GEC to act as a
Steering Committee for the strategy or to sponsor each
Strategic Initiative individually. Instead, in line with the
governance of the new Together for Growth Strategy, the
One Planet Sustainability Strategy is now overseen by a
single Executive Committee Sponsor, the Group
Sustainability Director, and one Business Executive
Committee Sponsor. This streamlined approach ensures
focused leadership and accountability for our sustainability
efforts (see Sustainability governance structure on page 89).
We maintained other key elements of our governance
framework, such as the Group Sustainability Management
Committee (GSMC), that met five times throughout 2024 to
review strategic progress and review annual improvement
priorities and areas of focus for 2025. This committee
oversees the implementation of the One Planet
Sustainability Strategy and ensures alignment with our
sustainability goals. Progress against strategic targets is
formally reported to the GEC every quarter with a One
Planet update, with ad hoc updates or strategic discussions
embedded in the regular cadence of monthly GEC meetings,
when required.
The Board of Directors continued to maintain strategic
oversight of the One Planet Sustainability Strategy, and
received four updates during 2024, at full meetings of the
Board and three updates at Audit Committee meetings.
These updates included progress on the Group’s One
Planet targets and preparation for the upcoming
requirements of CSRD. As the overall sponsor of the
Together for Growth Strategy, developed in 2024, the
Group Chief Executive Officer also remains an overall
sponsor for the One Planet Sustainability Strategy. This
robust governance structure ensures that sustainability
remains at the forefront of our business agenda, driving
continuous improvement and innovation.
The Board is responsible for the overall stewardship of
strategic risk management and internal controls. The Audit
Committee is also directly involved in the detailed review
of risks, including those outlined in these disclosures, and
reports back to the Board on its findings. During 2024,
the Audit Committee Chair attended a Risk Management
Committee meeting and the Board oversaw the review
of the Principal Risks, as well as the presence of climate
change on the Group Risk Register.
Our One Planet Sustainability Strategy is an important
mechanism by which we seek to mitigate climate-related
risks and maximise climate-related opportunities, while our
Together for Growth Strategy focuses on revenue growth,
building on our strong foundations as a Group. One Planet
supports the delivery of our Growth Drivers, enabling us to
evolve for tomorrow’s world.
Supporting customers on their decarbonisation journey is
a significant element of both our Steam Thermal Solutions
(STS) and Electric Thermal Solutions (ETS) Business
strategies and is a designated Strategic Growth Driver within
the Together for Growth Strategy. The Board provides
strategic oversight and approval of Business strategies,
ensuring that we have appropriate governance and
oversight of any market-based risks or opportunities that
could arise as a result of climate change.
Where sustainability, including carbon reduction
investments, is part of a large Capex proposal, these
investments are directly approved by the Board. Climate
impact is considered as one of the factors when making
Capex decisions, which would also include mergers,
acquisitions and other business plans. No specific carbon
Spirax Group plc Annual Report 202488
Strategic Report — TCFDandClimate-relatedFinancialDisclosure(CFD)
reduction investments were reviewed or approved by the
Board in 2024. During the year we established a formal net
zero Capex planning process to ring-fence net zero
investments during the annual financial planning cycle, with
specific net zero investments reviewed and approved by the
Group Executive Committee for inclusion in Plan 2025.
We completed a Double Materiality Assessment in 2024, in
preparation for CSRD reporting, and anticipate that, based
on current requirements, ‘ESRS E1 Climate Change’ will be a
material disclosure for reporting going forward.
Sustainability governance structure
Business Heads
of Sustainability
Divisional Directors,
Regional and General
Managers
Group Chief
Executive Officer
Board of Directors
Group Executive
Committee
Sustainability strategy project leaders and teams
Colleagues and organised colleague groups
Executive Sponsors
Sarah Peers, Group Sustainability Director and Mai Møllekær,
EMEA Divisional Director, STS
Group Sustainability Management Committee
During 2024, Committee members included: Group
Sustainability Director (Chair), Business Heads of
Sustainability, One Planet Strategic Initiative and Strategic
Project Leads, and Group Head of Diversity, Equity
and Wellbeing.
Strategy
Describe management’s role in assessing and
managing climate-related risks and opportunities
The Risk Management Committee has responsibility for
managing climate-related risks. Sarah Peers, Group
Sustainability Director, had specific delegated responsibility
for overseeing climate-related risks and mitigation activities
in 2024. Through her role as a member of the Group
Executive Committee (GEC) she ensures that climate-
related risks and opportunities are appropriately considered
in management’s day-to-day operational practices.
During 2024, we reviewed the Group’s exposure to risk using a
top-down approach, where the Committee sought views of the
Group operating companies on the risks that they considered
may affect their activities, to ensure visibility of any new or
emerging risks. Following this process, the Committee
reviewed and confirmed that adequate countermeasures are in
place to mitigate the Principal Risks in the Group Risk Register.
During 2024, management of the Group’s climate change
mitigation activities was overseen by the Board, the GEC and the
GSMC. The GSMC comprises the Group Sustainability Director,
the Business Heads of Sustainability, Strategic Initiative and
Strategic Project Leads and other relevant individuals.
Management oversight of climate-related risks and
opportunities is embedded within the One Planet
Sustainability Strategy and our Together for Growth
Strategy. Through these, the GEC and Business Executive
Committees consider climate-related risks, opportunities,
strategic implementation and progress against targets.
Describe the impact of climate-related risks and
opportunities on the organisation’s Businesses,
strategy and financial planning
Growing awareness of climate change and customer
sustainability targets will continue to provide an impetus
for business growth as we provide products, services and
solutions that increase efficiency and reduce customers’
energy use and carbon emissions. We believe that
decarbonisation provides a material opportunity for Spirax
Group and, as a result, it has been identified as a Growth
Driver in our new Together for Growth Strategy. We have
quantified the size of the addressable market as £2.4 billion
in relation to the decarbonisation of steam generation and
£4.2 billion for the decarbonisation of thermal energy beyond
steam, expanding the Group’s addressable market from
£10.7 billion to £17.3 billion. Providing us with the opportunity
to capitalise on the decarbonisation trend ahead of us.
To mitigate the risks outlined, our One Planet Sustainability
Strategy underpins our Business strategies, which in
conjunction with the voice of the customer and understanding
customer needs, allows us to develop products and
services that help them achieve their own carbon reduction
targets. We also ensure we are managing reputational risk by
reducing our own emissions, in line with our commitments to
the Science-Based Targets initiative (SBTi).
Spirax Group plc Annual Report 2024 89
Strategic Report
Strategy continued
Describe the impact of climate-related risks and
opportunities on the organisation’s Businesses,
strategy and financial planning continued
As part of our financial planning process, we have an
annual financial plan for sustainability. When considering
sustainability investments, we prioritise initiatives that
deliver the best value of £/tCO
2
e saved. In 2022, we
developed and commenced implementation of net zero
roadmaps across our manufacturing sites and are delivering
excellent progress. For more information about our net zero
roadmap, see pages 69 to 71.
Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario
With customers in almost all industries worldwide and across
168 countries, steam remains the world’s most efficient heat
transfer medium for a wide range of applications,
with multiple on site uses from the production of foods,
beverages and medicines to the generation of power. Our
STS products and services offerings are complemented by
our ETS Business, allowing us to remain highly resilient and
relevant across different climate-related scenarios.
As part of our annual viability assessment, we undertake
scenario risk modelling focusing on stress testing the
Income Statement and cash flow projections to determine
the resulting impact on the Group’s debt covenants and
liquidity headroom. This enables us to ascertain the
potential revenue or adjusted operating profit impacts
that could arise from one, or a combination, of the Group’s
Principal Risks. The key risks associated with climate
change are mitigated by management processes for two of
our Principal Risks and other relevant risks on the Risk
Register. Modelling completed as part of our viability
assessment suggests that our Principal Risks do not pose
a significant threat to the viability of our Group; therefore,
management believes that this also applies to climate risk.
For more information see pages 35 to 37 and 119 to 128.
As well as these ongoing risk management and Principal
Risk Management processes, in 2023 we worked with Willis
Towers Watson to complete quantified scenario analysis for
a range of warming scenarios (a below 2°C scenario (1.5°C
scenario), a 2–3°C scenario and a 4°C scenario), over multiple
timeframes. Physical risks were assessed under current
conditions and projected impact in the medium term (2030)
and long term (2050). These timeframes align with our One
Planet Sustainability Strategy targets and SBTi approved
net zero targets. 2030 aligns with our financial planning for
achieving net zero (scopes 1 and 2) and is also within the
delivery horizon of our 10 year strategic vision, as defined
by the Together for Growth Strategy. 2050 aligns with both
our long-term net zero target (scopes 1, 2 and 3) and is also
sufficiently far away to model for the longer-term climatic
changes that may impact the Group in the future, without
being so far out that the future is increasingly uncertain.
The chosen scenarios were in line with the Intergovernmental
Panel on Climate Change (IPCC) representative concentration
and shared social economic pathways (RCPs mapped to SSPs)
RCP 2.6 (SSP1), RCP 4.5 (SSP2) and RCP 8.5 (SSP5)
respectively. The two most extreme upper and lower scenarios
were chosen in order to ‘stress test’ the impact to the Group
under cases of maximum physical risk or transition risk
impacts. RCP 4.5 was assessed as a middle scenario.
Physical risks were identified through asset ‘exposure
diagnostic’ analysis for 239 operating locations, made up of
sales and manufacturing companies and sites. The climate
risks were derived from several data sources including Willis
Towers Watson’s Global Peril Diagnostic and Climate
Diagnostic tools, data from Munich Re hazard databases
and research in line with the IPCC reports. The findings
were then validated in workshops.
Transition risks were identified and assessed through
multiple workshops, drawing on relevant expertise from
colleagues from across the Group. For this assessment,
one scenario of RCP 2.6 (1.5°C scenario) was considered,
as it is under these conditions that transition risks would be
most relevant. Transition risk exposure was assessed on a
short-term horizon of 2025 and a medium-term time horizon
of 2030 with impacts being assessed as an annualised
amount. Transition risks were not quantified in the longer
term due to the difficulty in building assumptions around the
direction of policy out to 2050 or beyond; physical risks are
anticipated to be more relevant on those timeframes.
In addition, physical risk exposure diagnostic analysis was
completed for 45 of the Group’s suppliers, who were
selected on the basis of spend, strategic importance,
geographic location and business coverage.
Risk management
Describe the organisation’s processes for
identifying and assessing climate-related risks
The Risk Management Committee holds annual top-down
or bottom-up reviews that provide information and
evaluations that the Committee uses alongside our risk
impact, likelihood, appetite and velocity ratings to create
an effective system for assessing materiality, monitoring,
planning and developing our Group-wide approach and
culture regarding risk.
The Risk Management Committee performs a scoring
exercise each year against all our documented risks,
assessing impact, likelihood, control, velocity and appetite
for each risk. Each member of the Committee scores each
risk, which are reviewed, discussed and assessed compared
to the other risks. This process is used to assign the Principal
Risks and inclusion of other risks on the Risk Register. Existing
and emerging regulatory requirements related to climate
change are considered as part of this review.
Risk velocity was deliberated and approved as a further
measure in our Group risk management framework in 2022.
Risk velocity ratings were assigned and validated for all
Principal Risks in 2024, as set out on pages 83 to 87 and
other risks on the Risk Register, including climate change.
TCFD and CFD continued
Spirax Group plc Annual Report 202490
Strategic Report — TCFDandClimate-relatedFinancialDisclosure(CFD)continued
Describe the organisation’s processes for managing
climate-related risks
Materiality for climate change risks is based on the
enterprise risk management scales used to determine
materiality across all of our risk management processes.
Climate change-related risks are currently deemed to be low
for the Group, which is based on assessment of likelihood,
velocity, impact and control, with climate change not
identified as a Principal Risk on the Group’s Risk Register.
However, risks associated with climate change, e.g. physical
risks, notably the impact of a climate-related event on our
direct operations, specifically the loss of a manufacturing site
and transition risks, such as failure to meet changing market
or customer needs, are already managed through other
Principal Risks on the Group Risk Register. We therefore
believe that our risk management processes are adequate
and appropriate for the level of risk applicable to our Group.
For more information about how we manage risk, see the
Risk Management Committee Report on pages 119 and 120
Describe how processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management
During 2024, we reviewed the Group’s exposure to risk
using a top-down approach, where the Committee received
high quality input from the Group operating companies on
the risks that they considered may affect their activities, to
ensure new or emerging risks are not missed. Following this
process, the Committee reviewed and confirmed the
robustness of the countermeasures that Group operating
companies have in place to mitigate the Principal Risks in
the Group Risk Register.
Climate change is a risk factor that influences other risks, so
control of climate risk is embedded in and managed through
other Principal Risks, particularly Loss of manufacturing
output at any Group facility, and Inability to identify and
respond to changes in customer needs, and other risks
on the Risk Register, such as Loss of a critical supplier.
Climate change is considered a serious emerging risk,
though not currently one of the Group’s Principal Risks.
Metrics and targets
Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in
line with its strategy and risk management process
We have disclosed cross-industry TCFD metrics used to
manage our climate-related risks and opportunities.
Managing our GHG emissions to meet our net zero targets
and helping our customers to do the same mitigates climate
risk by working towards realising a low-carbon future.
•
Scopes 1, 2 and 3 GHG emissions – pages 66 and 67
•
Energy use – page 68
•
Proportion of company vehicles that are EV – page 69
•
Waste and water – page 73
•
Climate-related Executive management remuneration
– page 41
•
Customer environmental benefits – page 75
Group GHG emissions (scopes 1 and 2) are monitored as
one of our Group key performance indicators (KPIs) to
measure successful progress against our strategy. See
pages 40 and 41 for more information on our KPIs. Given
the strong engagement with and investments in net zero
initiatives across the Group, an internal carbon price is
not needed. In addition, internally we monitor several
opportunity metrics, for example the customer
decarbonisation opportunities pipeline in the ETS Business
and metrics related to our TargetZero solutions. These
metrics are not disclosed externally as they are
commercially sensitive.
In December 2023, we received approval from the SBTi for
our near and long-term targets, and net zero target for 2050,
in line with a 1.5°C trajectory. In 2024, we resubmitted our
baseline emissions to the SBTi to include 2022 acquisitions,
and the revised baseline and targets were approved in
December 2024.
Disclose scope 1, scope 2 and, if appropriate, scope
3 GHG emissions and the related risks
Scope 1, scope 2 and scope 3 disclosures can be found on pages
66 and 67
During 2022, we used a third-party to help us quantify a full
scope 3 baseline figure for 2021. This figure was calculated
using GHG Protocol-aligned scope 3 methodologies but is
heavily reliant on estimates and assumptions. In 2024, we
recalculated our 2021 baseline and calculated our 2023
scope 3 emissions to include Vulcanic and Durex Industries.
In 2025, we will be working to increase the speed of these
calculations, with a view to publishing an in-year scope 3
analysis when required as part of our CSRD disclosures.
Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets
Through our One Planet Strategy, we set targets to achieve
net zero GHG emissions (scopes 1 and 2) by 2030, and net
zero (scopes 1, 2 and 3) by 2050. Since setting these
targets, we have had additional targets validated by the
Science-Based Targets initiative (SBTi) as follows:
•
near-term target to reduce absolute scopes 1, 2 and 3
GHG emissions 50.4% by 2032 from a 2021 base year
•
long-term targets to reduce absolute scopes 1 and 2 GHG
emissions 95% by 2050 from a 2021 base year and
reduce absolute scope 3 emissions by 90% within the
same timeframe; to achieve net zero GHG emissions
across the value chain by 2050
Reflecting the central importance of the Group-wide One
Planet Sustainability Strategy to all of our forward-looking
plans, in 2022, measures for the Performance Share Plan
(PSP) changed to include a sustainability measure
accounting for 20% of the PSP opportunity, dependent on
reduction of GHG (scopes 1 and 2) over three-year periods.
For more detail see page 133.
Spirax Group plc Annual Report 2024 91
Strategic Report
Strategy – Acute physical risks
Acute physical risks are event driven, specific episodes that have the potential to inflict significant physical damage.
Risk/opportunity Description
How we manage
and mitigate this risk
Estimated
financial impact
Link to metrics
and targets
Flooding:
river and flash
flooding from
precipitation
17% of the Group’s operations by total
insured value (TIV), 42 of 239
locations, are currently exposed to
risk of river flooding, with 28 sites
(13% of TIV value) having 1%
likelihood of river flooding in a year.
TIV at risk is expected to increase to
19% by 2030, and then remain stable
at 19% to 2050 under a high (4°C)
warming scenario. The Group has
some exposure to heavy rainfall and
potential flash floods with 43% of the
TIV located in areas exposed to high
levels of precipitation, which is
forecast to increase slightly to 44% by
2050 under a high warming scenario.
The Steam Thermal Solutions site in
Shanghai (China), is the highest value
asset at the highest level of risk.
Although several sites have exposure
to flooding, the risk and potential
impact are still insignificant, with
likelihood of flooding tending towards
a 1-in-100-year-type event under
high-warming scenario, RCP 8.5.
Under RCP 8.5, it is predicted that
by 2050, 5% of our operations will
have a 10% likelihood of flooding in
a given decade.
These risks are managed through
the Principal Risk: Loss of
manufacturing output at any Group
factory and another risk on the Risk
Register: Loss of a critical supplier.
To mitigate risk, annual risk
assessments are conducted by our
insurance partner to ensure we
have appropriate insurance cover.
There have been no material
changes to insurance premiums
as a result of climate-related risks
in 2024, or recent years.
Business continuity planning and
capacity planning are used to ensure
we have spare capacity at alternative
sites and stock is held locally in sales
companies. For key commodities,
where possible, we seek to maintain
dual sourcing to negate the risk from
the loss of a critical supplier.
During 2024, two of our operations,
Spirax Sarco Spain and Spirax
Sarco Mexico, experienced minor
disruption (a combined total of five
days) from flooding, in their local
areas, which disrupted transport
links. No property was damaged
and business impact was minimal.
Low carbon
economy
(RCP 2.6 – 2030)
Hazard exposure
Residual risk
profit impact
Hothouse world
(RCP 8.5 – 2050)
Hazard exposure
Residual risk impact
Insignificant
residual risk impact
means that we have
not identified this as
a risk that requires a
specific metric or
target. The Risk
Management
Committee reviews
risks on an annual
basis so a future
change in the
residual risk impact
could lead to the
implementation of
a specific metric
or target.
Windstorm
91 locations (mostly in Europe) are in
regions exposed to strong winds
(accounting for 51% of TIV), with a 1%
annual chance of having severe wind
gusts of over 121km/h, with four sites
having a risk of winds of 161–200km/
h. The highest value asset currently
at risk from windstorm is WMFTS’ site
in Falmouth (UK). TIV at risk from
windstorms is expected to remain
stable to 2050 under a high warming
scenario, but the frequency of
windstorms is likely to increase
over time.
Even under a hothouse world
scenario, the average annual
modelled impact may increase
slightly; however, it would still be
in the insignificant range as per the
Group Enterprise Risk Management
(ERM) scale.
This risk is managed through the
Principal Risk: Loss of manufacturing
output at any Group factory and
another risk on the Risk Register:
Loss of a Critical supplier. To mitigate
risk, annual risk assessments are
conducted by our insurance
partner to ensure we have
appropriate insurance cover.
Business continuity planning and
capacity planning are used to ensure
we have spare capacity at alternative
sites and stock is held locally in sales
companies. For key commodities,
where possible, we seek to maintain
dual sourcing to negate the risk from
the loss of a critical supplier.
During 2024, two of our sites were
impacted by windstorms. Spirax
Sarco Taiwan was shut for 12 hours as
a safety measure during a typhoon,
while Spirax Sarco Brazil sustained
minor damage to the fabric of the
building. The site lost 12 hours of
production and sustained damages in
the region of £25,000. The business
impact was not material in either case.
Low carbon
economy
(RCP 2.6 – 2030)
Hazard exposure
Residual risk
profit impact
Hothouse world
(RCP 8.5 – 2050)
Hazard exposure
Residual risk impact
Insignificant
residual risk impact
means that we have
not identified this as
a risk that requires a
specific metric or
target. The Risk
Management
Committee reviews
risks on an annual
basis so a future
change in the
residual risk impact
could lead to the
implementation of
a specific metric
or target.
Key:
Hazard exposure Residual risk impact (annual profit)
Very High 5 Catastrophic > £100m
High 4 Major £50m – £100m
Medium 3 Moderate £25m – £50m
Low 2 Minor £10m – £25m
Very Low 1 Insignificant < £10m
All risk, opportunity and Total Insured Value data on this and subsequent pages of the TCFD Report are
as assessed in our 2023 climate scenario risk analysis without being updated, unless otherwise stated.
TCFD and CFD continued
Spirax Group plc Annual Report 202492
Strategic Report — TCFDandClimate-relatedFinancialDisclosure(CFD)continued
Risk/opportunity Description
How we manage
and mitigate this risk
Estimated
financial impact
Link to metrics
and targets
Fire
12% of the Group’s TIV is exposed
to at least 20 days per year of fire
weather, with Chromalox’s Ogden,
Utah (USA), site the highest value
asset with some level of risk, and
Chromalox’s Nuevo Laredo
(Mexico), site having the highest
level of risk but a lower TIV.
As global temperatures increase,
the likelihood of fire risk is
expected to increase with 19%
of TIV at risk by 2050 under a
high-warming scenario.
This risk is managed through the
Principal Risk: Loss of manufacturing
output at any Group factory and
another risk on the Risk Register:
Loss of a Critical supplier.
To mitigate risk, annual risk
assessments are conducted by our
insurance partner to ensure we
have appropriate insurance cover.
We also conduct occasional
inspections by local fire officers.
Business continuity planning and
capacity planning are used to
ensure we have spare capacity at
alternative sites and stock is held
locally in sales companies. For key
commodities, where possible, we
seek to maintain dual sourcing to
negate the risk from the loss of a
critical supplier.
Low carbon
economy
(RCP 2.6 – 2030)
Hazard exposure
Residual risk impact
Hothouse world
(RCP 8.5 – 2050)
Hazard exposure
Residual risk impact
Insignificant
residual risk impact
means that we have
not identified this as
a risk that requires a
specific metric or
target. The Risk
Management
Committee reviews
risks on an annual
basis so a future
change in the
residual risk impact
could lead to the
implementation of
a specific metric
or target.
Under current conditions, the likelihood of an acute physical risk impacting the Group’s direct operations each year is
deemed Unlikely, and the residual impact (post-mitigation) has been assessed as Insignificant (<£10 million).
For more information about the management of Principal Risks, see pages 83 to 87
Strategy–Chronicphysicalrisks
Chronic risks arise from longer-term changes in climate pattern, notably drought, heat stress and sea level rise.
Risk/opportunity Description
How we manage
and mitigate this risk
Estimated
financial impact
Link to metrics
and targets
Heat stress
Currently 45% of the TIV of the
Group’s operations (112 locations)
is exposed to heat stress, seeing
an average of >20 heatwave days
in a given year with temperatures in
excess of 30˚C. This is expected to
increase to 55% of TIV at risk from
heat stress by 2050, under a high
warming scenario.
Examples of high TIV sites
currently at risk from heat stress
include Chromalox Nuevo Laredo
(Mexico), Steam Thermal Solutions
(Mexico) and Chromalox
Tennessee (USA). Risks from heat
stress include increased costs of
running heating, ventilation, and air
conditioning (HVAC) equipment
and potential decrease in colleague
productivity.
Many of the operations currently
exposed to heat stress are in
locations where this environment
is expected and well adapted for.
Changing weather location
patterns mean that more sites may
move into areas of heat stress that
are not currently and these sites
may be less prepared.
Operations of ETS, STS and
WMFTS are exposed. This trend
could mean that increased cooling
of buildings and machinery might
be required to reduce the risk
of operational disruption and
to improve working conditions
for colleagues.
As part of continual asset
management, energy audit and
facilities update processes,
systems will be assessed and
upgraded where necessary.
Low carbon
economy
(RCP 2.6 – 2030)
Hazard exposure
Residual risk impact
Hothouse world
(RCP 8.5 – 2050)
Hazard exposure
Residual risk impact
Insignificant to
minor residual risk
impact means that
we have not
identified this as a
risk that requires a
specific metric or
target. The Risk
Management
Committee reviews
risks on an annual
basis so a future
change in the
residual risk impact
could lead to the
implementation of
a specific metric
or target.
Key:
Hazard exposure Residual risk impact (annual profit)
Very High 5 Catastrophic > £100m
High 4 Major £50m – £100m
Medium 3 Moderate £25m – £50m
Low 2 Minor £10m – £25m
Very Low 1 Insignificant < £10m
Spirax Group plc Annual Report 2024 93
Strategic Report
Strategy–Chronicphysicalriskscontinued
Risk/opportunity Description
How we manage
and mitigate this risk
Estimated
financial impact
Link to metrics
and targets
Drought
Currently 12% of the TIV of the
Group’s operations (54 locations)
is exposed to drought stress with
three or more drought months per
year. This is expected to increase
under a high warming scenario,
reaching 31% by 2050.
An example of a high value asset
with a high exposure to drought
risk today is Chromalox Nuevo
Laredo (Mexico). Drought may
impact the availability and quality
of water, which could impact
manufacturing processes including
product testing.
Drought has the potential to impact
the supply of raw materials where
inland waterways are used for
transportation, impact electricity
availability in locations with a
higher reliance on hydropower
and increase the risk of wildfires.
The operations of the Group are
not generally considered water
intensive and therefore the potential
impacts may be addressed through
adaptation and risk management.
Supply of raw materials and
electricity are managed through
a risk on the Register Risk: Loss
of a critical supplier. Mitigation
activities under this risk include
dual sourcing, managing stock
levels for high-risk commodities
and in-sourcing production
where appropriate.
Low carbon
economy
(RCP 2.6 – 2030)
Hazard exposure
Residual risk impact
Hothouse world
(RCP 8.5 – 2050)
Hazard exposure
Residual risk impact
Insignificant to
minor residual risk
impact means that
we have not
identified this as a
risk that requires a
specific metric or
target. The Risk
Management
Committee reviews
risks on an annual
basis so a future
change in the
residual risk impact
could lead to the
implementation of
a specific metric
or target.
Sea level rise
Risk of exposure from sea level rise
is 10% of assets by value, with no
change expected to 2050. The STS
site in Shanghai (China), is the
highest value asset at risk.
Scenario analysis shows that, due
to the location of our sites, our
exposure under this risk is not
expected to change under a
hothouse world scenario. This risk
is managed under the Principal
Risk: Loss of a manufacturing
Output at any Group facility.
To mitigate risk, annual risk
assessments are conducted by our
insurance partner and we have
appropriate insurance cover,
including for total loss of a site.
Low carbon
economy
(RCP 2.6 – 2030)
Hazard exposure
Residual risk impact
Hothouse world
(RCP 8.5 – 2050)
Hazard exposure
Residual risk impact
Insignificant
residual risk impact
means that we have
not identified this as
a risk that requires a
specific metric or
target. The Risk
Management
Committee reviews
risks on an annual
basis so a future
change in the
residual risk impact
could lead to the
implementation of
a specific metric
or target.
The impacts of chronic risks are likely to differ by location, with some countries already experiencing and managing high
levels of heat stress or drought, with the ability to adapt to those conditions. For other locations, historically less used to
drought or heat stress, the impacts could potentially be more disruptive. However, as we are not a highly intensive user of
water and chronic risks can largely be mitigated or adapted, the residual impact (post-mitigation) of chronic physical risks
has been assessed as Insignificant (<£10 million).
TCFD and CFD continued
Key:
Hazard exposure Residual risk impact (annual profit)
Very High 5 Catastrophic > £100m
High 4 Major £50m – £100m
Medium 3 Moderate £25m – £50m
Low 2 Minor £10m – £25m
Very Low 1 Insignificant < £10m
Spirax Group plc Annual Report 202494
Strategic Report — TCFDandClimate-relatedFinancialDisclosure(CFD)continued
Transition risks/opportunities
Transition risks arise from changes required to facilitate a low carbon economy.
Risk/opportunity Description
How we manage
and mitigate this risk Estimated financial impact
Link to metrics
and targets
Market
transition
Increasing availability of green
energy could enable electric heating
solutions to replace fossil fuel-
derived steam generation where
carbon emission concerns override
cost differences in the medium to
long term (5+ years). This will provide
opportunities across all geographical
regions and most customer sectors
for our ETS and STS Businesses as
they combine forces to electrify the
generation of steam and decarbonise
thermal energy.
Increased cost of electricity provision
and raw materials provides some
risk, as the introduction of carbon
taxes could be passed on in raw
material spend.
As market leaders in the provision of
thermal energy solutions, mitigating
this risk and maximising the
opportunity is deeply embedded in
the core business strategies of both
our STS and ETS Businesses. This
risk is mitigated through the Principal
Risk: Inability to identify and Respond
to changes in customer needs.
Mitigation includes regular voice of
customer research and research and
development/new product innovation
to lead the way in providing
innovative solutions to customers.
For more information about the
management of this Principal Risk,
see page 87.
Risk
2025
2030
Opportunity
2025
2030
Net zero
carbon
Sustainable
products
Technology
transition
Costs of upgrading and installing
infrastructure to support an electric
vehicle (EV) fleet, or costs to
transition away from fossil fuel
dependent production equipment.
The transition to low carbon
technology across our operations is
embedded in our net zero roadmaps
developed by all manufacturing sites
and at a Group level. Fossil fuel-
dependent systems and processes
have been identified and investment
plans developed, through annual and
medium-term financial planning
cycles, to phase the cost of
decarbonisation activities over time,
reducing risk.
Risk
2025
2030
Opportunity
2025 N/A
2030 N/A
Net zero
carbon
Environment
improvements
Reputation
Risk of reputational loss of Spirax Group
as a top performing, environmentally
sustainable business due to association
with fossil fuel-reliant systems over the
medium to long term (5+ years). Or,
reputational gain as we become known
as a leading decarbonisation partner
for our customers, as we implement our
Decarbonising Thermal Energy Growth
Driver through our Together for
Growth Strategy.
This very low risk is mitigated by
our strong reputation, our innovative
product developments, the introduction
of our Natural Technology marketing
strategy, all of which correctly
positions steam as a sustainable
technology and our own leading net
zero commitments and progress
against them.
Risk
2025
2030
Opportunity
2025
2030
Net zero
carbon
Sustainable
products
Key:
Hazard exposure Residual risk impact (annual profit)
Very High 5 Catastrophic > £100m
High 4 Major £50m – £100m
Medium 3 Moderate £25m – £50m
Low 2 Minor £10m – £25m
Very Low 1 Insignificant < £10m
Spirax Group plc Annual Report 2024 95
Strategic Report
Transition risks/opportunities continued
Risk/opportunity Description
How we manage
and mitigate this risk Estimated financial impact
Link to metrics
and targets
Policy and
legal transition
Carbon taxation: In country or at
borders, could lead to increased
operational costs. For example, the
EU’s Carbon Border Adjustment
Mechanism (CBAM) became
effective in October 2023, with a
two-year transition period now in
operation before carbon taxation
commences on high-carbon imports
(such as steel, iron or aluminium) into
the EU.
Building code regulations: Policy
makers may promote a switch to low
carbon buildings, for new builds or
retrofitting old buildings, which could
lead to increased costs, such as
implementing Minimum Energy
Efficiency Standards.
Climate change litigation: Risk
arising from the increasing activism
of shareholders or the public against
companies for failure to adapt to
climate change, greenwashing by
overstating positive environmental
impacts, or understating risks or
insufficient disclosure around
material financial risks.
Waste-related laws and regulation:
Driven by an aim to increase
circularity of the economy, new
regulations could impact how we
manage waste on our own sites and
potentially impact end of life
treatment of products we sell.
This risk is mitigated through our
One Planet Sustainability Strategy,
which includes net zero targets,
energy reduction commitments,
major decarbonisation projects,
conversion to an EV fleet and supply
chain management to reduce our
scope 3 emissions.
We manage and monitor existing and
upcoming legislation from a range
of sources to ensure that we can
proactively respond to upcoming
legislating risks.
Climate change litigation risk is
mitigated by our innovative product
developments, the introduction of our
Natural Technology marketing strategy,
which correctly positions steam as a
sustainable technology and our own
leading net zero commitments and
progress against them.
Risk
2025
2030
Opportunity
2025 N/A
2030 N/A
Net zero
carbon
Environment
improvements
Sustainable
products
Sustainable
supply chain
Key:
Hazard exposure Residual risk impact (annual profit)
Very High 5 Catastrophic > £100m
High 4 Major £50m – £100m
Medium 3 Moderate £25m – £50m
Low 2 Minor £10m – £25m
Very Low 1 Insignificant < £10m
Spirax Group plc Annual Report 202496
TCFD and CFD continued
Strategic Report — TCFDandClimate-relatedFinancialDisclosure(CFD)continued
Governance
In this section
97 UK Corporate Governance Code
98 Chair’s letter
100 Governance at a glance
102 Board of Directors
104 Group Executive Committee
105 Board reflections: in conversation with Louisa Burdett
106 How we are governed
107 Board activities and annual cycle
109
Board composition, succession and evaluation
110 Culture
112
Colleague Engagement Committee Report
116 Nomination Committee Report
119 Risk Management Committee Report
121 Audit Committee Report
129 Remuneration Committee Report
134 At a glance summary: Executive Directors’ remuneration
135 Annual Report on Remuneration
145 Summary Remuneration Policy
148 Directors’ Report
152 Statement of Directors’ Responsibilities
How we apply the Code
Board Leadership
and Company
Purpose
•
Sustainable Growth – Read more on pages 56 to 77
•
How we are governed – Read more in How we are governed and Statement of Responsibilities
•
Board activities and priorities – Read more in the Chair’s Statement and Board activities
•
Our stakeholders, S172 Compliance Statement and Board decision making – Read more in Board activities,
S172 Statement and stakeholder engagement
•
Board oversight of our culture and engagement with colleagues – Read more in culture and Colleague
Engagement Committee Report
Division of
Responsibilities
•
How we are governed – Read more in How we are governed
•
Board of Directors – Read more in Board biographies
•
Group Executive Committee – Read more in GEC biographies
•
Independence – Read more in Spotlight on division of responsibilities and Board composition, succession and
evaluation
Composition
Succession and
Evaluation
•
Board composition – Read more in Board composition, succession and evaluation
•
Nomination Committee Report – Read more in the Nomination Committee Report
•
Board evaluation – Read more in the Nomination Committee Report
Audit Risk and
Internal Control
•
Risk Management and internal controls, including Principal and Emerging risks – Read more in Risk
Management and the Risk Management Committee Report
•
Audit Committee Report, including Fair, Balanced and Understandable Statement – Read more in the Audit
Committee Report
Remuneration
•
Remuneration Committee Report – Read more in the Remuneration Committee Report
•
Report on Remuneration – Read more in the Remuneration Report
UK Corporate Governance Code
Statement of Compliance
For the year ending 31 December 2024, the Company reports against the Financial Reporting Council’s (FRC) UK
Corporate Governance Code 2018 (the Code), which is available at www.frc.org.uk. The Board considers that it has
applied all Principles and complied with all Provisions of the Code except Provision 21: The three-yearly review cycle was
extended by one year in light of the onboarding of a new chair of the Board in the last quarter of 2024; and in respect of
provision 19: The Chair extended his tenure beyond nine years in support of an orderly transition for our new Group CEO
in 2024. See pages 98 and 99 for a full explanation. Detailed information on our provision-by-provision compliance with
the Code can be found in the Corporate Governance section on our website, spiraxgroup.com/governance-documents.
The new FRC UK Corporate Governance Code 2024 took effect from 1 January 2025, and we will report against the new
Code next year.
Governance Report
Spirax Group plc Annual Report 2024 97
Governance Report
Chair’s letter
2024 has been an important
year with some key changes
to our Board. We continue to
enjoy strong ethnic, cultural and
gender diversity as a Board.”
Tim Cobbold
Chair
On behalf of the Board, I am pleased
to introduce Spirax Group’s Corporate
Governance Report for the year ended
31 December 2024. This Report describes
our governance arrangements, the operation
of the Board and its Committees, and how
the Board discharged its responsibilities
during the year.
Board Composition
2024 has been an important year with some key changes to
our Board. In January 2024, Nick Anderson stepped down
as Group CEO and Nimesh Patel took over the role, having
previously served as Group CFO for four years.
In July, following a rigorous succession process, Louisa
Burdett joined the Group as Chief Financial Officer, taking
over from Phil Scott who was interim CFO during the first
half of the year. Louisa is a highly experienced CFO who has
led finance functions in several large companies including
UK-listed Croda, Meggitt and Victrex. She currently serves
as a Non-Executive Director and Audit Committee Chair of
RS Group plc.
I joined the Board in September as a Non-Executive
Director and Chair Designate, taking over as Chair from
Jamie on 1 January 2025. In December 2024, Jamie Pike
who had Chaired the Board since 2018 and served as a
Non-Executive Director in the four years prior to that, retired
from the Board. I thank Jamie for leading the Group through
significant changes over the past decade and for facilitating
effective succession planning during the transition between
Nick and Nimesh during early 2024 and supporting my own
transition to the role of Chair in the later part of the year.
In January 2025, we announced that Maria Antoniou would
be joining the Board in June 2025 as a Non-Executive
Director and Remuneration Committee Chair, taking over
from Jane Kingston who will be stepping down in September
2025. More information about this appointment can be
found in the Nomination Committee Report on page 117.
As illustrated in the Board biographies on pages 102 and
103 and the Board at a glance on pages 100 and 101, we
continue, as a Board, to enjoy strong ethnic, cultural and
gender diversity.
More information on Board and leadership changes can
be found in the Nomination Committee Report on pages
116 to 118.
Board Performance
This year, the Board evaluation was again externally
facilitated by Egon Zehnder. Jamie Pike led the review,
which for consistency and in recognition of my taking over
the role of Chair in 2025, followed the same format as the
previous year, rather than consisting of a fuller review. While
this is a slight departure from Provision 21 of the Code, we
are confident that it is in our Board’s best interest. I am using
the results of the 2024 evaluation to inform my review of the
operation of our Board.
Spirax Group plc Annual Report 202498
Governance Report — [•]
Governance Report — Board leadership and Company Purpose
The results of the Board’s 2024 formal performance
evaluation which, consistent with the previous year was
carried out by external advisers Egon Zehnder and were
shared with the Board in December. The results highlighted
that the Board continues to perform well and benefits
from: a strong team identity with high collaboration and
engagement; a clearly defined vision and strategy; a
focus on sustainability and the needs of all stakeholders,
as well as a set of Committees which have a clear and
comprehensive purpose.
More details of the 2024 evaluation is provided on page 117
of the Nomination Committee Report.
Board development
Our new Together For Growth Strategy is an opportunity
for our Board to continue to identify opportunities for further
development. We need to ensure that as a collective, we
have the necessary expertise and leadership capabilities to
achieve our strategic objectives effectively. The Board skills
matrix on the next page is a useful tool in helping us identify
areas of existing expertise which we will map against our
Growth Drivers and identify skills and areas of expertise our
Board may find useful to develop.
Stakeholder engagement
The long-term success of our Group is dependent on
the way we work with all our stakeholders and continues
to require effective engagement, constructive working
practices and recognition of our stakeholders’ views in
order to create and sustain value for all.
Our colleagues are a key stakeholder group and Caroline
Johnstone has held the role of designated Non-Executive
Director for Colleague Engagement since 2019 when the
Colleague Engagement Committee was established, the
activities undertaken by the Committee are outlined in her
report on pages 112 to 115.
Details of how Spirax Group engages with wider
stakeholders and the Directors’ Statement describing
how the Board have had regard to the matters set out in
Section 172 of the Companies Act 2006, can be found on
pages 8 to 10.
The Company also engages with a number of proxy
advisory firms during the year ahead of publication of its
Notice of AGM and publication of their proxy reports in
order to, where possible, align proposed resolutions with
investor expectations.
Annual General Meeting
The Annual General Meeting (AGM) is scheduled to take
place on Wednesday 14 May 2025 and an explanation of the
resolutions sought, is set out in the Circular and Notice of
Meeting. As required by the Code, the resolutions regarding
each Director’s appointment or reappointment will be
accompanied by information on why their contribution is,
and continues to be, important to the Company’s long-term
sustainable success.
This year we are delighted once again to invite our
shareholders to the AGM which will be held at our Group
Headquarters at Charlton House, Cheltenham, UK,
where I look forward to meeting them.
Tim Cobbold
Chair
10 March 2025
Board focus for 2025
•
Support the management team to deliver our
Together For Growth Strategy as we Evolve For
Tomorrow’s World
•
Review and refresh our risk management
framework in support of ensuring compliance with
Provision 29 of the Corporate Governance Code
•
Review and refresh the Board governance and
ways of working
Major Board decisions in 2024
March 2024
Group Delegation of Authority Matrix
Link to strategy
More information
Effective governance is fundamental to the success
of any organisation, ensuring that decisions are
made efficiently, transparently, and in alignment
with the Group Strategy. A key tool in promoting
good governance is the Delegation of Authority
matrix, which underwent review, updates and
approval in 2024.
December 2024
Enterprise Resource Planning project
Link to strategy
More information
The Board approved the ERP project. Key features
include all three Businesses using the same system
platform and working to define a common design.
The goal is to create a consistent and flexible tool to
streamline operations and utilise the advantages of
the Group’s scale in design and deployment phases.
June 2024
Approval of Together for Growth Strategy
Link to strategy
More information
The Together for Growth Strategy alongside
our new Vision, was developed through extensive
engagement with various stakeholders, including
customers, industry representatives, and senior
management before being approved by the Board.
December 2024
Appointment of new Managing Director
for WMFTS
Link to Strategy
More information
The Board appointed Stuart Roby as the new
Managing Director of Watson-Marlow Fluid
Technology Solutions
Spirax Group plc Annual Report 2024 99
Governance Report
80%
Board diversity
Nationality
British
French
American
10%
10%
Gender
Male
Female
50%50%
Ethnicity
White
Ethnic Minority
20%
80%
Governance at a glance
As at 31 December 2024
Board Expertise
The following table captures some of the skills and experience of Spirax Group Board members relevant to our Together for
Growth Strategy.
Board members
Digital, AI and technology
Engineering
Financial expertise
Industrial expertise
International expertise
M&A and R&D
Operational expertise
Sales and Marketing
People and Culture
Strategy and risk management
Sustainability
For more information about our Growth Drivers see pages 22 and 23
2024 Shareholder Engagement
In 2024, we conducted almost 270 investor meetings, providing updates including:
•
2025 outlook and medium-term targets
•
Business model resilience and evolution
•
Leadership and culture evolution post changes
in management team
•
End market weaknesses and opportunities
January
•
Bank of America
SMID Cap
Conference 2024
February
•
Investor site visit to
Cheltenham
March
•
Full Year Results
Announcement
and shareholder
roadshow meetings
•
Investor site visit to
Cheltenham
•
UBS Annual Nordic
Investor meeting
•
Jefferies Pan-
European Mid-Cap
Conference
April
•
Deutsche Numis
PCFM Group Call
•
JP Morgan UK
Capital Goods
Investor site visit to
Cheltenham & Dinner
•
Paris roadshow
May
•
HSBC UK Corporate
and Investor
Conference 2024
•
AGM and
Trading Update
•
Investor site visit to
Cheltenham
•
Bank of America
Interim CFO
Fireside Chat
June
•
Jefferies Structural
Winners Fireside Chat
•
JP Morgan European
Capital Goods
Conference
Spirax Group plc Annual Report 2024100
Governance Report — [•]Governance Report — Board leadership and Company Purpose continued
Progress against diversity targets
Actual Target
Ethnic minority
2
2
Female Board members
40%
50%
Senior female within one of our ‘four key roles’
1
1
Board tenure
Average Board tenure
4 years 1 month
Chair Group Chief Executive Officer
Group Chief Financial Officer Non-Executive Director
0 108642
Years
T. Cobbold
N.B. Patel
L.S. Burdett
R. Gillingwater
A. Archon
C. Baroudel
P. France
C.A. Johnstone
J.S. Kingston
K.J. Thompson
Board length of service
0–3 years
3–5 years
5 years +
27%
46%
27%
N.J. Anderson Retired
January 2024
Group CEO
N.B. Patel
Promoted
January 2024
Group CEO
L.S. Burdett
Appointed
July 2024
Group CFO
T. Cobbold Appointed
September 2024
NED and Chair
Designate
Appointed
January 2025
Group Chair
J. Pike
Retired
December 2024
Group Chair
Board changes during the year
July
•
US roadshow
(Boston
and New York)
August
•
Half Year Results
Announcement
and shareholder
roadshow meetings
•
Analyst site visit to
Cheltenham
September
•
Morgan Stanley
CEO Unplugged
Conference 2024
•
CFO meetings with
shareholders
October
•
Capital Markets Day
•
Investor site visit to
Cheltenham
November
•
Trading Update
•
JP Morgan UK Leaders
Conference 2024
December
•
Bank of America CFO
Fireside chat
•
Investor virtual
roadshow – Canada
Spirax Group plc Annual Report 2024 101
Governance Report
Board of Directors
Tim Cobbold BSc, FCA
Chair
Appointed to the Board
September 2024. Board Chair with effect
from 1 January 2025
Areas of experience
Senior management, engineering, industrial,
operational delivery, international business,
business transformation and system
deployment, corporate finance, M&A, strategy
Background
Tim has extensive experience in leading large,
complex international listed businesses having
previously been the Chief Executive Officer of
Chloride Group plc, De La Rue plc and most
recently, UBM plc. Prior to this he held senior
management positions at Smiths Group/TI
Group where he worked for 18 years and was
a Non-Executive Director of Rotork plc until
31 December 2024. Tim is a qualified
chartered accountant and has a BSc in
Mechanical Engineering from Imperial
College, London.
External appointments
Chair and Non-Executive Director of TI Fluid
Systems plc
Nimesh Patel BSc
Group Chief Executive Officer
Appointed to the Board
September 2020
Areas of experience
International, senior management, M&A,
finance and accounting, industrial, pensions,
tax, treasury
Background
Before joining the Group in 2020, Nimesh was
Chief Financial Officer of De Beers. Prior to
that he was Group Head of Corporate Finance
at Anglo American plc, leading a team based in
London and Johannesburg. Previously,
Nimesh spent 14 years in investment banking
at both JP Morgan and as a Managing Director
at UBS. In August 2023, following a rigorous
selection process, Nimesh was appointed
Group Chief Executive Officer and took up the
position on 16 January 2024.
External appointments
Co-Chair of the FTSE Women Leaders’ Review
(formerly the Hampton-Alexander Review)
and Trustee of Barts Charity
Angela Archon MSc, BSc
Independent Non-Executive Director
Appointed to the Board
December 2020
Areas of experience
Engineering, operational, strategy,
international business, M&A, manufacturing,
senior management, Digital/AI
Background
Angela held senior executive roles at IBM,
including VP of Transformation and COO of
Watson Health. She served as Board Liaison
for The National Action Council for Minorities
in Engineering for eight years. Angela is a
member of Tau Beta Pi and has a Professional
Engineer’s license. She was a Non-Executive
Director at Switch Inc. until December 2022.
External appointments
Non-Executive Director of DT Midstream Inc.
and CommonSpirit Health
N
C
R
N
Louisa Burdett BSc, ICAEW
Group Chief Financial Officer
Appointed to the Board
July 2024
Areas of experience
Finance, finance transformation, M&A,
risk management, international business,
senior management, manufacturing
Background
Louisa is a chartered accountant and has held
senior financial positions in industrial,
manufacturing, pharmaceutical and publishing
companies. Before joining the Group in 2024,
she was Chief Financial Officer of Croda
International Plc. Prior to that Louisa was the
CFO of Meggitt plc and Victrex plc.
External appointments
Non-Executive Director and Audit Committee
Chair of RS Group plc
RK RK
Constance Baroudel MSc, BA, CEC
Independent Non-Executive Director
Appointed to the Board
August 2023
Areas of experience
Strategy, sustainability, operational, international
business, R&D, international relations
Background
Constance is the Sector Chief Executive,
Environmental & Analysis, and Chief Sustainability
Officer at Halma plc. She has held executive roles
at Halma, First Group, De La Rue, and Strategic
Decisions Group International, bringing over
20 years of experience in global organisations.
She has an MSc in International Accounting &
Finance from the London School of Economics,
an MSc in Corporate Finance & Strategy, and
a BA in International Relations from Sciences
Po Paris. Constance has also served as a
Non-Executive Director for Kier Group and
Synergy Health plc.
External appointments
None
C
N
C
R
Jane Kingston BA
Independent Non-Executive Director
Appointed to the Board
September 2016
Areas of experience
Engineering, international business,
senior management, operational, people,
remuneration
Background
Jane served as Group Human Resources
Director for Compass Group plc from 2006
until her retirement in December 2015. Before
this, she was Group Human Resources
Director for BPB plc. Jane has held roles in
various sectors, including positions with Blue
Circle Industries plc, Enodis plc, and Coats
Viyella plc, and possesses significant
international experience.
External appointments
None
N
Spirax Group plc Annual Report 2024102
Governance Report — Board leadership and Company Purpose continued
Richard Gillingwater
MBA, MA Law, Solicitor
Independent Non-Executive Director
and Senior Independent Director
Appointed to the Board
March 2021. Appointed Senior Independent
Director in August 2021.
Areas of experience
International business, investment, finance
Background
Until December 2022, Richard was Chair of
Janus Henderson Group plc. He also has held
a range of executive positions within global
investment banks including Kleinwort Benson,
Credit Suisse and Barclays de Zoete Wedd.
Richard holds an MBA from the International
Institute for Management Development, a BA
Law from Oxford University and is a qualified
solicitor.
External appointments
Senior Independent Director of Whitbread plc
and Governor at The Wellcome Trust
Caroline Johnstone BA, CA
Independent Non-Executive Director
Appointed to the Board
March 2019
Areas of experience
Finance, people, international business, M&A
Background
Caroline Johnstone has 40 years’ experience
working with large global organisations during
periods of change, including turnaround,
culture change, delivering value from mergers
& acquisitions and cost optimisation. She was
a Partner in PricewaterhouseCoopers and sat
on the UK Assurance Board with oversight of
all people matters. Caroline is a member of the
Institute of Chartered Accountants of Scotland.
Her recent roles include as Independent Chair
of Synthomer plc (until December 2024) and
Senior Independent Non-Executive Director
and Audit Committee Chair of Shepherd Group
Ltd (until June 2024).
External appointments
None
A
N
C
Kevin Thompson BSc, FCA
Independent Non-Executive Director
Appointed to the Board
May 2019
Areas of experience
Engineering, international business, senior
management, M&A, strategy, finance,
pensions, tax and treasury
Background
Kevin was Group Finance Director of Halma
plc from 1998 to 2018, having joined Halma as
Group Financial Controller in 1987. Kevin
qualified as a Chartered Accountant with
PricewaterhouseCoopers (PwC) and is a
Fellow of the Institute of Chartered
Accountants in England and Wales.
External appointments
Deputy Chair and Trustee of the Great Ormond
Street Hospital Children’s Charity
A
N
R
A
N
R
Peter France
Independent Non-Executive Director
Appointed to the Board
March 2018
Areas of experience
International business, operational, industrial,
sales and marketing, engineering, senior
management, M&A, manufacturing
Background
Peter served as Chief Executive Officer of
Asco Group from 2018 to 2023. Prior to this, he
held the position of Chief Executive Officer at
Rotork plc from 2008 to 2017, having joined the
business in 1989. During his tenure at Rotork
plc, Peter gained extensive experience in
various key roles, including Chief Operating
Officer and Director of Rotork South East Asia,
located in Singapore. He is a Chartered
Director with the Institute of Directors.
External appointments
Chief Executive Officer of TT Electronics plc
A
N
C
Céline Barroche LLM, PGDL, ACG
Group General Counsel and
Company Secretary
Appointed as Group General
Counsel and Company Secretary
September 2024
Areas of experience
International business, legal, governance,
compliance, risk management
Background
Céline has over 25 years of experience
with global businesses, managing legal
and regulatory exposure, delivery of
legal services, complex disputes, across
multi-jurisdictions, through multi-cultural
teams. She is a qualified solicitor and
chartered company secretary and has
experience in the construction industry,
automotive and private security sectors.
Prior to joining the Group, she was
company secretary and general counsel
of Allied Universal International
Key:
A
Audit Committee
N
Nomination Committee
C
Colleague Engagement Committee
R
Remuneration Committee
RK
Risk Management Committee
Denotes Committee Chair
RK
Spirax Group plc Annual Report 2024 103
Governance Report
Andrew Mines
Managing Director
Electric Thermal Solutions
Appointed to the Group Executive
Committee
November 2019
Background
Andrew joined Spirax Group as Managing
Director of WMFTS, a position he held until
September 2024 when he transferred to ETS.
Prior to joining Spirax Group, Andrew was
Executive VP, Global Construction Products of
Illinois Tool Works Inc. (ITW) and was a
member of the Group Executive Leadership
Team. Andrew had a 23-year career with ITW
comprising engineering, sales, manufacturing
and senior roles in global Automotive and
Construction sectors.
Stuart Roby
Managing Director, Watson-Marlow
Fluid Technology Solutions
Appointed to the Group
Executive Committee
January 2025
Background
Stuart joined Spirax Group from The Vita
Group where he was most recently Managing
Director after holding several leadership
positions at the company. Previously, Stuart
has worked in a range of senior management
roles in sales and manufacturing. Stuart has a
Master’s in Engineering and is a certified
Six Sigma Black Belt.
Maurizio Preziosa
Managing Director
Steam Thermal Solutions
Appointed to the Group Executive
Committee
January 2021
Background
Maurizio joined Spirax Group in 2011 as
Managing Director of Spirax Sarco Italy before
taking on the roles of the role of Regional
General Manager Southern Europe and Global
Divisional Director Gestra, Maurizio was
appointed Managing Director of Steam
Thermal Solutions in 2021. Prior to joining
Spirax Group Maurizio worked in ABB Group
with different sales management and general
management roles.
Jim Devine
Group HR Director
Appointed to the Group Executive
Committee
February 2016
Background
Before joining Spirax Group in 2016, Jim was
Group HR Director at Chemring plc and prior to
that held a range of senior HR roles at Centrica plc,
Ford Motor Company and BAE systems.
Sarah Peers
Group Sustainability Director
Appointed to the Group Executive
Committee
October 2022
Background
Sarah joined Spirax Group in 2013 as Group
Head of Corporate Communications. She
was appointed Group Head of Sustainability
in July 2020 and is now Group Director of
Sustainability. Prior to joining the Group, Sarah
worked as a qualified teacher. Sarah holds a
Doctorate in Historical Geography (specialising
in early industrial labour history) from the
University of Oxford.
Maria Wilson
Group Digital Director
Appointed to the Group Executive
Committee
September 2023
Background
Prior to joining Spirax Group in early 2023,
Maria was the Global Leader for Data Driven
Advantage with Howden, leading the vision
definition and execution of a global digital
programme focused on delivering business
growth enabled by digital technologies.
She has also completed a PhD in Fluid
Mechanics from the University of
Erlangen-Nuremberg, Germany.
Group Executive Committee
Nimesh Patel
Group Chief Executive Officer
Louisa Burdett
Group Chief Financial Officer
Céline Barroche
Group General Counsel and
Company Secretary
See biographies on Board of Directors pages 102 and 103
Spirax Group plc Annual Report 2024104
Governance Report — Board leadership and Company Purpose continued
Board reflections: in conversation with Louisa Burdett
•
The Capital Markets event in October was our first
opportunity to share some of the key decisions we’ve
taken to evolve and strengthen the Group. It set out the
significant opportunity we have for growth and how we
intend to achieve it (you can read about this on pages
12 and 13)
•
Since October we’ve been very focused on putting those
plans into action which will drive growth today, while
at the same time delivering efficiency gains which are
being invested back into targeted areas of the business
to support future growth. These investment areas include
Decarbonising Thermal Energy, Digital and Services and
systems to improve Operational Excellence. You can read
more about our progress so far as well as our future plans
on pages 22 and 23
What are the challenges and opportunities of
managing an entrepreneurial Group made up of
so many diverse operations?
•
Our organisational structure has served us well; it
developed organically as we focused on rapid growth
and expanding our sales and supply footprint. The
Group is now much larger and more complex. Growing
to over 140 operating companies and 37 manufacturing
sites, we have created a lot of duplication in processes
and systems. We know the challenges this poses for
colleagues and therefore some of the steps we are taking
are designed to simplify the organisation, optimise our
manufacturing footprint and invest in new tools, all whilst
preserving our local direct sales model
•
We have colleagues working in almost 70 countries,
supporting three distinct and complementary Businesses,
so it’s important that we give them clarity. In 2025 and
beyond, our new Vision and our Together for Growth
Strategy, outlined on pages 14 and 15 are designed to
create the conditions for future growth and success
through a consistent Group-wide framework, with
Business prioritisation and autonomy of implementation
What are your priorities for 2025 and how are
you positioned to deliver them?
•
The opportunities for our Group are clear. As part of
the Group Executive Committee, I am very focused on
delivering against these opportunities and to secure
the financial ambitions of the Group. As outlined at the
Capital Markets event in October, we are committed to
sustaining our track record of organic sales growth, as
well as progressing margin, cash and returns to meet
both our medium and long-term targets, outlined on
pages 22 and 23
•
As CFO, I have a specific responsibility to help the Group
respond to the Financial Reporting Council’s revised UK
Corporate Governance Code. The Group has made good
progress on this and our operating companies are already
benefitting from greater consistency and insight
•
Finally, we have taken the decision to align our approach
to process simplification and ERP investment across
all three Businesses. I look forward to working with a
talented Group-wide team to implement this over the
medium term
What attracted you to Spirax Group?
•
Spirax Group is a special business with a long track
record of growth and a strong reputation for deep sector
expertise and the quality of our products and solutions
•
Each of our three Businesses are strong engines of
growth, underpinned by our direct sales model and
our consultative customer approach
•
In addition, we are uniquely positioned to bring our
capabilities in steam and electric thermal energy together
to deliver industrial decarbonisation, which accounts for
around 25% of global carbon emissions
•
The Group is at an interesting inflection point as we look
to build on our historic strengths, while also evolving to
capture future opportunities, like decarbonisation. I am
really excited to be part of that journey
•
Even from the outside you can see that the Group is doing
meaningful work to create value for all its stakeholders.
That helps to unite colleagues and supports a culture that
feels collaborative and inclusive (read more about our
Purpose, Vision and Values on page 14)
•
I was attracted by, and continue to be impressed with, the
Group’s approach to inclusion, equity and diversity. We
have made ten meaningful and impactful commitments
to colleagues, whoever they are and wherever they work.
Diverse leadership at Board and Executive level supports
richer conversations and enables us to better meet the
needs and expectations of the stakeholders that we serve
What are your initial reflections on the last
six months?
•
I am so glad I joined Spirax Group and am really enjoying
my role and working with Nimesh. As well as engaging
with shareholders, I have spent time in different parts of
the Group listening to and learning from our colleagues,
which has been invaluable
The Group is at an interesting
inflection point. I am excited to
be part of that journey.”
Louisa Burdett
Chief Financial Officer
Spirax Group plc Annual Report 2024 105
Governance Report
How we are governed
The Board collectively leads the Group, monitors performance,
and upholds the Company’s culture and Values.
The Group’s governance is designed to provide a stable and
effective framework, promoting our Group’s sustainable
growth and ensuring effective leadership. This is achieved
by the Board exercising oversight of the Group Executive
Committee (GEC)’s delivery of the strategy and monitoring of
the Group’s performance. The Board’s focus is primarily on
approving the Strategy, monitoring performance, reviewing
governance, and overseeing effective risk management.
The Role of the Board and Committees
The Board holds collective responsibility for the long-term
success of Spirax Group. The business of the Company is
managed by the Board, which exercises all the powers of
the Company.
The Board follows a formal schedule of matters reserved
for its decision making, available on the Group’s website.
While the Board retains overall responsibility, it delegates
specific matters to the Board Committees and entrusts the
detailed implementation of approved matters and day-to-
day operational aspects of the business to the GEC.
Board Committees enable Directors to concentrate on
specific areas, such as remuneration, audit and risk
management, colleague engagement, Board succession
planning and talent development. With the exception of
the Risk Management Committee which is comprised of
GEC members and senior management representatives,
Committees are comprised of Non-Executive Directors.
Each Committee Chair reports to the Board on topics
discussed during meetings and highlights significant issues
that require Board attention. The Terms of Reference for
each Board Committee are reviewed annually and can be
found on the Group’s website spiraxgroup.com. The annual
reports from each Board Committee Chair are included in
this Report.
Delegation of Authority
The delegated authority matrix ensures decisions are made
at the appropriate level within the Group and supports
business efficiency. It is reviewed annually for compliance
and operational adjustments.
Supporting framework
It is the responsibility of Board members to concentrate on
broad, strategic objectives, while our colleagues manage
daily tasks and fulfil their duties. Therefore, it is essential
for the Group to adhere to specific governance principles.
The Board has developed and approved various policies
to support colleagues in achieving our goals. We have a
well established, comprehensive Code of Conduct and
supporting policies, including on whistle-blowing, anti-
bribery and corruption, and human rights, which establish
standards for conducting business activities responsibly.
All colleagues and Board members are required to adhere
to high standards of ethical business conduct and to
understand and comply with our Code of Conduct.
As a Disability Confident - Committed (Level 1) employer
in the UK, we have committed to ensuring inclusive and
accessible recruitment processes that give full and fair
consideration to applications for employment made by
disabled persons, to anticipating and providing reasonable
adjustments as required, and to supporting existing
employees continuing in work should they acquire a
disability or long-term condition (for example, through
training, reasonable adjustments, confidential counselling
through our free Employee Assistance Programme, advice
through our partnership with the Business Disability Forum
or other support).
More broadly, and in line with our Group Diversity and
Inclusion Policy, we believe in treating all people with
respect and dignity, ensuring fairness in all aspects
of employment, and making opportunities for training,
development and progress available to all of our colleagues,
including colleagues with disabilities and long-term
conditions, and neurodiverse colleagues. We support this
with activities including our global colleague networks
(further details are on page 62).
Spirax Group maintains a zero-tolerance policy towards
all forms of bribery and corruption, whether within the
organisation or in its interactions with customers, suppliers,
and other third parties. We have a well-established Whistle-
blowing Policy and offer a secure facility for colleagues to
report any suspected or observed misconduct. This facility,
managed by Safecall, an independent provider, allows
individuals to submit their concerns either through a web
portal or via telephone, with the option to remain anonymous.
We offer several policies and extensive resources, including
our Employee Assistance Programme, which gives access
to invaluable resources providing support for colleagues.
Further reading
Our Anti-Bribery and Corruption Policy and Modern Slavery
Statement can be found on our website, spiraxgroup.com/
governance-documents
Spotlight on Division of Responsibilities
The UK Corporate Governance Code mandates a
clear division of responsibilities to ensure effective
leadership and accountability, separating the roles of
the Chair and CEO to prevent power concentration. It
requires a balanced Board with Executive and Non-
Executive Directors, where Non-Executive Directors
provide independent oversight. Additionally, the Code
emphasises clearly defined roles for all Board members
and senior management, along with regular evaluations
to promote accountability and transparency.
The duties of the Chair, Group Chief Executive Officer,
Senior Independent Director, Board, and Committees
are documented and ratified by the Board. A distinct
separation exists between the leadership of the Board
and of the GEC.
Our division of responsibilities framework is available
on our website spiraxgroup.com
Spirax Group plc Annual Report 2024106
Governance Report — Board leadership and Company Purpose continued
Board and Committee meetings during the year
The Board usually meets seven times a year and as needed. In 2024, there were seven scheduled meetings and two
ad hoc meetings. Attendance details for scheduled meetings of the Board and its committees are below. Other senior
Executives and Non-Executive Directors attended by invitation. Directors should attend all Board and relevant committee
meetings unless they have prior commitments, illness, or conflicts of interest. Those unable to attend are sent the relevant
papers and provide comments in advance. All Board and Committee members receive all meeting minutes routinely.
Board and committee attendance
Board Audit
Colleague
Engagement Nomination Remuneration
Risk
Management ˄
T. Cobbold** 1/2
≠
J. Pike* 7/7 1/1
∞
N. B. Patel 7/7 5/5
L.S. Burdett 4/4 5/5
R. Gillingwater 7/7 5/5 3/3 5/5
A. Archon 7/7 3/3 3/3 5/5
C. Baroudel 7/7 3/3 3/3
P. France 7/7 5/5 3/3 3/3
C.A. Johnstone 7/7 5/5 3/3 3/3
J.S. Kingston 7/7 3/3 3/3 5/5
K.J. Thompson 7/7 5/5 3/3 5/5
* Stepped down from the Board 31 December 2024
** Joined the Board 1 September 2024
∞ Jamie Pike did not attend or Chair two Nomination Committee meetings, which related to the appointment of his replacement as Chair of the Board
≠ Due to prior commitments, Tim Cobbold was unable to attend one scheduled meeting
˄ The Risk Management Committee consists of Executive Directors, the other GEC members and the Head of Internal Audit. Full details can be found
on page 119
Board processes
The Board holds collective responsibility for the Company’s long-term success, encompassing its strategy, governance,
and internal controls and is accountable for its actions. The Board ensures that good governance practices are integrated
throughout the Group, recognising their essential role in operating a successful business. This includes a specific focus
on Environmental, Social and Governance (ESG) matters, as well as digital aspects, which have not been delegated to a
separate Board committees.
The Board reviews reports on the Group’s key activities, as well as updates from the Chairs of the Audit, Nomination,
Remuneration and Colleague Engagement Committees during each scheduled Board meeting. Additionally, the Board
receives information on significant upcoming events, environmental sustainability, health and safety issues, strategy,
investor relations, and legal matters.
The Board is responsible for the stewardship of the Group’s strategic risk management and internal control environment.
The Board is supported by the work of both the Audit Committee and the Risk Management Committee in this area. The
Board remains satisfied with the identification and monitoring of overall risk management and internal controls around
the Group and is supportive of continuous improvement in these areas. The Audit Committee, on behalf of the Board, is
currently mapping the material internal controls that underpin the Group’s reporting, to ensure that any strengthening of
controls or further assurance desired can be implemented ahead of the revised Code provision 29 coming into force from
2026. This supports our continued focus on enhancing our risk management framework.
The Chair, with help from the Group General Counsel and Company Secretary, oversees Board governance. This
includes setting meeting agendas, ensuring timely information flow, as well as facilitating dialogue between Executive
and Non-Executive Directors, promoting a transparent and open culture. Board agendas focus on strategic priorities,
performance monitoring, and significant issues.
The Group General Counsel and Company Secretary manages the Board and Committees’ forward agendas, ensuring
items are evenly distributed and scheduled for timely review. Agenda timings are managed to allow sufficient
consideration of items.
Good information flows between the Board and management are essential for effective governance. The Board, together
with senior management, ensures:
•
The agendas are appropriate for the Group and are forward looking as well as providing historical and current results
•
Papers are of an appropriate length and content for the Non-Executive Directors’ effective input
•
Sufficient time is given for Directors to read and review papers prior to meetings
•
Senior management, below GEC, regularly present to the Board
Board activities and annual cycle
Spirax Group plc Annual Report 2024 107
Governance Report
Board processes continued
This process aims to reinforce good governance within the Company’s culture and ensures that processes and procedures
are followed by providing the Board with reliable information necessary for making informed decisions and fulfilling their
statutory duties.
After every Committee meeting they attend, Deloitte (external auditor) and Korn Ferry (independent remuneration
consultants) meet separately with our Non-Executive Directors. The Board confirms that neither it, nor any of its Directors,
have any connection with Korn Ferry or Deloitte.
The Colleague Engagement Committee holds meetings with groups of colleagues independently from management. More
information on specific colleague engagement, including topics raised by colleagues and how we have responded can be
found in its Report on pages 112 to 115 and on page 111.
The Board holds an annual meeting focused on strategic development and long-term outlook. Group Executive Committee
members present strategy papers on finance, technology, growth, and stakeholder engagement for their business areas.
The Group’s Whistle-blowing Policy and independently facilitated whistle-blowing platform allow colleagues to report any
concerns related to unethical or illegal conduct within the business, with an option for anonymity. The Audit Committee
receives regular reports from the Group General Counsel and Company Secretary on whistle-blowing arrangements.
Strategy
•
Group Strategy framework
•
Medium-term plans for all three Businesses
•
One Planet: Engineering with Purpose
Sustainability Strategy
Audit and risk
•
Annual Risk Review
•
External financing facilities
•
Deep-dive on a selected Principal Risk
Performance
•
Monthly, quarterly, biannual and annual trading, as
appropriate*
•
Company share performance and shareholder/
analyst feedback*
•
Business reviews and senior management
presentations
Culture and People
•
HR and Talent
•
Whistle-blowing
ESG and Health and Safety
•
Health and Safety updates*
•
Sustainability Strategy updates*
Governance
•
Updates by Committee Chairs*
•
Updates on material legal and governance matters*
•
Compliance programmes update
* Standing items at every scheduled Board meeting
Standard items on Board Calendar
How the Board spent its time
The graphic below shows how the Board spent its time during 2024. Page 99 of this report
sets out the main decisions made by the Board during the year. In the second half of the
year, the Board also reviewed and supported managements’ proposed organisational
changes aimed at simplifying the way we work to better serve our customers. The final
decision to proceed with the proposed restructuring, was made in early 2025.
30%
Operations and Risk
30%
Strategy
10%
Sustainability
10%
Finance
10%
Governance
10%
People
Board activities and annual cycle continued
Spirax Group plc Annual Report 2024108
Governance Report — Board leadership and Company Purpose continued
We make sure that the Board is actively involved in all
important Group matters and it is effective in fulfilling its
role as a balanced Board.
In 2024, compliant with the Code, the number of Non-
Executive Directors was always more than the number of
Executive Directors (excluding the Chair). There were 11
Board members as at 31 December 2024, following Tim
Cobbold joining the Board in September 2024, ahead
of Jamie Pike’s retirement. At the time of publication,
following Jamie stepping down at the end of 2024, our
Board comprises 10 members: two Executive Directors, a
Non-Executive Chair and a further seven Non-Executive
Directors. This ensures that no one person or group of
individuals dominate the Board’s decision making. All
our Non-Executive Directors, including the Chair, are
considered independent.
Board succession and tenure
The Nomination Committee regularly reviews succession
plans considering strategy, business needs, tenure, and
diversity. For details, see the Nomination Committee Report
on pages 116 to 118.
The appointment and replacement of Directors are governed
by the Articles of Association, the UK Corporate Governance
Code, and the Companies Act 2006. Shareholders can
amend the Articles by special resolution. Directors can be
appointed either by ordinary resolution of the members
or by a resolution of the Directors. All Directors, including
the Chair, will stand for election or re-election as specified
by the Code. The Board’s recommendations regarding
appointment or reappointment are provided in the
Nomination Committee Report on page 117.
The service contracts for Executive Directors can be
terminated with 12 months’ notice. Non-Executive Directors’
appointments can be terminated with one month’s notice,
while the Chair’s appointment requires three months’
notice for termination. Further details regarding the
Directors’ service contracts are available in the Directors’
Remuneration Report on page 147.
Induction and development
New Directors receive formal induction training, including
site visits and meetings with advisers, brokers, and major
shareholders when possible. Ongoing, tailored training
is provided upon request, based on each Director’s skills
and experience. The Board undertakes governance training
annually, and the Audit Committee arranges relevant training
in areas such as ESG, cyber and financial reporting.
Directors are provided with regular updates on changes
and developments in the business, legislative, and
regulatory environments. A copy of the Directors’ statutory
duties is available at every Board meeting. Directors are
encouraged to discuss any additional training requirements
they may need with the Chair or the Company Secretary.
This topic is also addressed during the annual performance
evaluation discussions.
External listed company appointments
The Board allows Directors to accept other roles if no
major conflicts of interest exist and they can still fulfil their
Company duties. These roles help Directors gain skills
beneficial to the Company. Director commitments are
reviewed before and during their tenure to ensure proper
management of Group affairs. Any new positions must be
approved by the Chair, and significant changes in external
commitments are discussed with the Chair. During each
Board meeting and annually, all Directors disclose their
external appointments and commitments to the Board as
part of the conflicts of interest check.
The table below shows the number of external appointments
held by our Non-Executive and Executive Directors as
at 31 December 2024. More details are in the Director’s
biographies on pages 102 and 103. We only count positions
in companies with listed instruments on a regulated
exchange, following proxy advisor guidelines.
Anyone holding more than five mandates at listed
companies is considered overboarded. For this calculation,
a non-executive directorship counts as one mandate, a
non-executive chair counts as two, and an executive
director counts as three mandates.
Listed Plc Directorships
External appointments
Total no. of
mandates (in
accordance with
ISS guidelines)
including Spirax
Group
No. of other
Non-
Executive/
Chair roles
No. of other
Executive
roles
T. Cobbold
(Chair designate) 1 — 3
J. Pike (Chair) 1 — 4
L.S. Burdett 1 — 4
A. Archon 1 — 2
P. France —
11
1 4
R. Gillingwater 1 — 2
C.A. Johnstone* 1 — 3
* Caroline stepped down as Chair of Synthomer plc on 31 December 2024
Register of conflicts
The Board reviews potential conflicts between Directors and
the Company. Situational conflicts must be reported to the
Board for approval as they occur, despite a Director’s duty
to avoid them. Transactional conflicts should be notified to
the Board at the next meeting, where the Board will decide,
without the involved Director, whether to approve and how
to manage the conflict.
Board Diversity Policy
Spirax Group values and promotes diversity in various
dimensions, including ethnicity, gender, language, age,
sexual orientation, religion, socio-economic status,
physical and mental ability, thinking styles, experience, and
education. We maintain that the diverse perspectives arising
from such inclusively foster innovation and drive business
success. Effective diversity management enhances our
creativity, flexibility, productivity, and competitiveness.
Additional information on Diversity and Inclusion within the
Group can be found on page 62 of the Sustainability Report
and on our website at spiraxgroup.com/inclusion.
The purpose of our Board Diversity Policy is to ensure
an inclusive and diverse membership of the Board of
Directors resulting in optimal decision making and assisting
in the development and execution of a strategy which
promotes the success of Spirax Group for the benefit of
its shareholders as a whole, having regard to the interests
of other stakeholders. This policy applies to the Board of
Directors, Board Committees and the Group Executive
Committee and a copy of the Policy can be found on our
website spiraxgroup.com/governance-documents.
Further information on Board and Committee diversity and
succession planning can be found on pages 100 and 101,
The Board at a glance, and in the Nomination Committee
Report on pages 116 to 118.
Board composition, succession and evaluation
Spirax Group plc Annual Report 2024 109
Governance Report
One Place colleague
platform
Read more on page 61
Colleague
Networks
Read more on page 61
Spirit Awards
Read more on page 61
Coffee talks
Read more on page 114
Hybrid working
survey
Read more on page 60
Colleague
conferences
Read more on page 8
Global Safety Stand
Down event
Read more on page 59
Spark learning
platform
Read more on page 8
Culture
20
Operating companies visited
during 2024
+400
Senior leaders joining monthly calls
Driven by our culture
Our Purpose connects colleagues across the Group, as we
work together to create more efficient, safer and sustainable
outcomes for all our stakeholders. The way we work is
underpinned by shared core Values, our commitments
to inclusion and sustainability, as well as our business
model, which is common to all three Businesses. These
are all important indicators of our culture at Spirax Group
that create a framework for consistency and collaboration
while supporting local autonomy. In 2024, we launched
a new Vision, to help guide us on the next stage of our
journey. It was co-created through an approach that had
stakeholder understanding and engagement at its core and
this was achieved through an extensive internal and external
engagement programme.
Listening to, and thinking about, the needs of all our
stakeholders is central to the Board’s role, as we explain
on pages 8 and 9. Knowing what matters to stakeholders
supports, ‘why’ we do what we do, ‘what’ we do and ‘how’ we
do it. Communicating with all our stakeholders and keeping
them informed is vital to helping them form a view of Spirax
Group that is fair, balanced, and easy for them to understand.
Leading the Group through change
We cannot evolve Spirax Group without change. To be
successful, change has to evolve from the inside. Helping
colleagues understand, connect to and ultimately embrace
change is essential to any evolution, which is why regular
and engaging communications has been central to the new
leadership team’s approach. Frequent visits to our Sales
and Supply operating companies by leadership, as well as
monthly forums, hosted by the Group CEO for over 400 senior
leaders from across the Group, are two key enablers of direct
engagement. The calls are designed to keep leaders informed,
answer their questions and enable them to communicate
more effectively with their teams. During 2024, topics ranged
from explaining our financial and operational performance,
exploring capability and performance-related topics,
launching our Vision and sharing the new Strategy and
each of its Growth Drivers in more detail.
In 2025, we plan to expand the approach of these calls
into wider colleague forums to reach more deeply into the
organisation and connect colleagues more directly with
senior leadership.
Ensuring our colleagues feel a sense of belonging
The Board also supports active communication and engagement with colleagues through visiting sites and speaking to teams,
conducting the Colleague focus groups and attending key events such as the Spirit Awards.
We continue to develop meaningful touchpoints to listen to and hear from our colleagues, allowing them to have a strong voice
and provide feedback regularly throughout the year. Some of the many examples being:
Spirax Group plc Annual Report 2024110
Governance Report — Board leadership and Company Purpose continued
Our Purpose, Vision and Values
Our Purpose is to create sustainable value for all our stakeholders by engineering a more efficient, safer and sustainable
world. Our Vision is to be the trusted global leader in optimising critical thermal energy and fluid technology processes,
we are highly connected with customers, obsessed with their evolving needs, delivering solutions that serve people and
enable the transition to a low-carbon, resource-efficient world.
Our Purpose and Vision relies on a well-established business model and a strong, supportive culture. This culture stems
from colleagues living our Values (see page 61) to make their difference and create value for the stakeholders that we serve.
Our Values also guide Board decisions. We prioritise Safety and enhance Collaboration and Respect through teamwork.
We support Excellence and Customer Focus via continuous investment, site visits, and management presentations. We
uphold Integrity with transparency and strong governance processes.
In 2022, the Board approved our first Group Inclusion Plan, which has made a significant impact on the lives and wellbeing
of all colleagues across the Group who benefit from our 10 Inclusion Commitments, whoever they are and wherever they
work. To enhance inclusion and equity, we set Diversity goals in December 2023. More information on our progression
towards these goals can be found on page 62.
The Board monitors and assesses culture using the following mechanisms:
Approach How it links to the culture
Colleague
Engagement Committee
Insight in form of Business and HR leads presenting from different areas to understand
what is happening locally as drivers to improve engagement and colleague experience. This
enables discussion and visibility of how our Values are being lived through the organisation
and how aligned local culture is to the current and future strategic objectives.
Colleague Engagement
Committee focus groups
Monthly touchpoints with groups of colleagues from different business areas globally to
listen to the colleague voice, open dialogue and gain feedback on what it’s like to work
at the Group and build assurance that the desired culture is being embedded within the
organisation. This involves presenting key themes to the management teams to support
any local/Group activity that is required. During each of the operational visits undertaken
by the Board a colleague focus group took place with feedback presented to management
and the CEC.
Board site visits
A number of Board meetings are held at sites around the Group allowing Directors to have
conversations with colleagues in a more informal setting for example at lunch or on facility
tours. The Chair and Executive Directors also have their own schedule of visits to operating
companies across the Group during which they meet senior management as well as
colleagues focused on the manufacturing, sales and support activities.
Colleague survey
Gives global insight into colleague engagement and enablement that informs where focus/
action needs to be placed to support the organisation’s culture and the Group’s strategic
goals. The Survey is undertaken biennially with the last one in 2023 and the approach and
results are overseen by the Colleague Engagement Committee.
Management reports
Regular reports from the HR Director, as well as Information from the Internal Audit team on
the impact of policies and processes.
Inclusion and Diversity
Review and supervision of Diversity goals on gender and ethnicity.
Whistle-blowing and
Health and Safety
Regular reporting on matters reported through the whistle-blowing hotline as well as, health
and safety reports including trend data (such as near misses) and results of H&S investigations.
Other
Additional indicators including promptness of payments to suppliers, approach to regulators.
Spirit Awards
The Board is invited to attend the Spirit Awards Gala Ceremony. In 2024, 18 finalists were
represented from across the Group and recognised for their achievements in living our
Values to ‘elevate the everyday’. Attendance at the event gave the Directors the opportunity
to hear directly from the finalists regarding their achievements.
Board activities
The Board also attends elements of the Group Leadership and Graduate Conferences and
participates in monthly Coffee talks with colleagues who are randomly selected from across
the Group.
For details on Colleague Engagement, including topics raised and our responses, see the Colleague Engagement
Committee Report on pages 112 to 115.
Spirax Group plc Annual Report 2024 111
Governance Report
Our colleagues are excited by
the future potential opportunities
from our investment in
decarbonisation and technology.
They also recognise that
Spirax Group is navigating
through a period of change and
challenging market conditions.
The Group intends to support
colleagues through updating our
Colleague Promises in 2025.”
Caroline Johnstone
Chair of Colleague Engagement Committee
Colleague Engagement Committee Report
Committee role and responsibilities
To ensure the voice of our colleagues is heard and fully
considered in decisions of the Board, we established the
Colleague Engagement Committee (the Committee) with
the principal remit of monitoring colleague engagement
and ensuring our colleagues’ voices are heard in the
Boardroom. Having held a number of people leadership
roles within PwC and other businesses, Caroline Johnstone
was appointed as Chair of the Committee and serves
as the designated Non-Executive Director for colleague
engagement, in line with Provision 5 of the UK Corporate
Governance Code 2024.
Committee meetings and operation
The Committee held three meetings in 2024. Our Group Chief
Executive Officer and Chief Financial Officer attended all
Committee meetings, bringing added insight into colleague
engagement across the Group and enabling executive
understanding and reflection on our colleagues’ feedback.
Other Non-Executive Directors also regularly join Committee
meetings and participate in engagement activities.
The Committee develops a tailored agenda each year to
ensure interactions with and exposure to a wide range of
colleagues across geographies, Business units and parts of
the organisational structure.
The Committee’s activities create both a formal, regular and
two-way direct dialogue between the Board and colleagues,
as well as an opportunity for informal, one-on-one
interactions. The Committee Chair reports back to the full
Board after each Committee meeting with key findings and
actions arising. The main duties of the Committee include:
•
A programme of engagement activities to enable the
Board (and Non-Executive Directors (NEDs) in particular)
to have regular dialogue with and listen to colleagues
across the Group
•
Overseeing the approach to, the results of and the
action plans arising from each biennial global colleague
engagement survey, more details of which can be found
on page 114
Membership Meeting attendance
CarolineJohnstone(Chair) 100%
Angela Archon 100%
Peter France 100%
Jane Kingston 100%
Constance Baroudel 100%
How the Committee spent its time %
Direct colleague
engagement and follow-up/
discussion
Senior leadership discussion
and updates on colleague
engagement
Formal items and
Committee Planning
Current engagement
practices and survey
engagement results
71% 12%
11%
6%
Spirax Group plc Annual Report 2024112
Governance Report — [•]Governance Report — Board leadership and Company Purpose continued
Committee membership
•
Regular engagement with Group and divisional senior
management to understand engagement practices
•
Supporting the Audit Committee in ensuring procedures
are in place for colleagues to raise concerns anonymously
and in confidence, are accessible and well-publicised
Amanda Janulis, Group Divisional Counsel, is the secretary
to the Committee. During 2024, the Committee continued
to work with Amanda, as well as Jim Devine, Group HR
Director and Sarah Petherick, Group Head of Colleague
Experience.
Reviewing the effectiveness of our approach to
workforce (colleague) engagement
The Board continues to review its mechanism for workforce
engagement as required by the Code. The Board concluded
that the Committee and the colleague engagement
programme add significant value and insight both to the
Board and to executive management and the Board regularly
reflects on colleague views during Board deliberations.
The Board continues to believe that a Board level Committee,
with responsibility for Colleague Engagement is appropriate:
•
Given the size, scale and business model of our
Businesses, with operating units of varying size and
complexity worldwide
•
This approach affords dedicated time to colleague
engagement and culture generally across the Group
•
Colleagues across the Group have given positive
feedback that they feel the direct engagement with a
Board member promotes open and inclusive discussions
and valuable feedback
Moreover, our dynamic annual planning allows the
Committee to keep our engagement mechanisms fresh,
relevant and effective, in line with the requirements of
the Code.
In 2024, we conducted a benchmarking exercise of our
peer companies, reviewing the approaches to workforce
engagement of various FTSE 100 companies, as described
in each company’s Annual Report. Committee members
also shared what they see working well in other businesses.
Whilst we concluded that no major changes were required
to our approach, we did ask management to work proactively
to suggest additional events where NEDs might have
another opportunity to interact with colleagues, e.g.
Graduate or global leadership meetings.
Chair’s review of 2024
The Board’s visits in 2024 created the opportunity to meet
with colleagues across the globe, from Cornwall in the UK
to Shanghai, China and Saint-Florentin in France. The Chair
and Committee members also visited other sites in the
USA and France to hold focus groups. These face-to-face
interactions with colleagues in their own environment
provide the Committee with invaluable insight into the
day-to-day opportunities and challenges of the Group
and our colleagues.
These focus groups are hosted by me (or another NED,
particularly if it enables discussions in local language),
with colleagues from a particular Business unit, function or
strata (for example we spoke to a group of sales engineers
across the Group). In order to expand the Committee’s
reach to different parts of the Group, these events utilise
both in-person and virtual sessions and, when necessary,
an interpreter from the focus group, which we have found
works quite well.
I have reported before that I am struck by the open nature
of discussions I have with colleagues across the Group,
which has continued in 2024. In a period of evolution
for the business, the Board finds it invaluable to hear
what colleagues see as strengths and opportunities for
improvement which are summarised on page 114. This is a
key aspect of monitoring our culture across the Group and
adding insight to our Board decision making.
As always, themes emerged across the focus groups
we held in 2024 and these tend to align with feedback
from colleague surveys. Our typical areas of discussion
in 2024 were around change, the challenging economic
environment and how we live our Values, particularly Safety.
Our colleagues are excited by the future potential
opportunities from our continued investment in
decarbonisation and technology initiatives. They also
recognise that the Group is navigating through a period
of change and challenging market conditions. The Group
intends to support colleagues further through updating
our Colleague Promises in 2025 (see page 60 for further
information). These aim to clearly articulate the ‘why work
here?’, elevate everyone’s sense of pride in the Group and
emphasise the meaningful work we do.
We continued our focus on race equity in the USA in 2024.
Notably, this brought Black and African American colleagues
together with senior leaders for two days in Charlotte, North
Carolina, to explore lived experiences and how we can
make a difference at work. This led to a series of in-person
workshops for all US colleagues in STS, development of a
Race Equity Leadership Toolkit and reviews of HR policies.
We also introduced Juneteenth as a paid holiday in the USA,
commemorating the end of slavery in the USA each 19 June.
Spirax Group plc Annual Report 2024 113
Governance Report
Themes from our 2024 colleague focus groups
Our Group’s Strengths
A Safety Mindset ‘first and foremost’
Safety is consistently seen as the strongest Group Value.
Colleagues found the Safety Stand Down early in the
year to be a moving and unifying experience (see page
59). It created an opportunity to connect with colleagues
and discuss safety even more openly. New colleagues
say that Spirax Group aspires for higher standards of
safety than their previous experience. They also feel
comfortable and encouraged to challenge appropriately.
Even so, there is no complacency and there are still
areas of improvement required, with some colleagues
(particularly from recently acquired companies) valuing
more discussion of safety priorities.
A strong, Values-based culture, feeling of
belonging to supportive teams
The culture is described as the reason for many
colleagues’ long service, we hear a strong sense of
community, teamwork and the Company’s support
during personal challenges.
Parental leave and carers leave
Our colleague care/support package is seen as market-
leading and a strong caring signal to colleagues. Parental
leave is offered to colleagues of all genders, regardless of
how they became a parent.
Future opportunities for growth
Colleagues are working on multiple opportunities for
growing the Group, including capitalising on global
decarbonisation, opportunities in digital and a growing
portfolio of innovative products.
Our Group’s Opportunities for
Improvement
Collaboration and innovation
The business model provides great focus and drive
across the Group and we heard about progress and
some improvement in collaboration between supply and
sales, but there are opportunities to do more to make it
easier to collaborate between sales, supply and business
development teams. Colleagues also see opportunities
to develop our innovation processes, as the pace of
change continues to accelerate and to provide even
greater value to customers. Management’s intention to
reduce organisational complexity as part of its operational
priorities is an important part of this.
Systems and processes for efficiency
The ongoing investment in systems is recognised but
inevitably as this is a multi-year process, a feeling remains
that it could be made easier to work in certain parts of
the Group, allowing colleagues to be more efficient and
to allow increased focus on opportunities.
Streamlining top-down communication and ‘asks’
There has been significant work to simplify and streamline
communications and reduce the number of requirements
from the Group during the year but it is fair to say that this
has not yet been fully felt at the local level.
Enhancing local empowerment and responsibility
The empowerment and responsibility embodied in our
operating companies across the Group is seen as a key
part of the business model. As management implements
its organisational improvement programme, colleagues
are keen to maintain that empowerment alongside
reducing the administrative burden on smaller local
operating companies.
Direct colleague engagement and follow-up
•
Seven structured focus groups involving some 70
colleagues from different areas of the Group (seniority,
geography, Business units and functions)
•
Members of the Board and Committee attended
the annual Spirit Awards ceremony held during the
Group Leadership Conference, with approximately
80 colleagues from all areas of the Group
•
Site visits by the Board: 2024 visits included WMFTS UK
Supply, STS China and ETS Vulcanic France
•
Committee member visits in 2024 to ETS Vulcanic,
France and ETS Chromalox, USA
•
Overseeing the ongoing Group response and approach
to the Race Equity initiative in the USA
•
NED Virtual ‘Coffee Talks’ with randomly selected
colleagues
Senior leadership discussions and updates on
colleague engagement
•
Business discussions: in 2024, leaders from STS China,
WMFTS and ETS presented to the Committee
•
We fed back themes to senior management following
focus group discussions and received responses, with
actions taken as a result of the feedback
Current engagement practices and engagement
survey results
•
Annual Benchmarking of our engagement approach
•
Further insight at operating company level of the 2023
Biennial colleague engagement survey – quantitative
data with demographic filters and approximately 13,000
free form comments and demographic analysis
Key activities undertaken
Colleague Engagement Committee Report continued
Spirax Group plc Annual Report 2024114
Governance Report — Board leadership and Company Purpose continued
Management actions arising from our colleague engagement
The Committee shares and discusses the general themes from each focus group with local and divisional management
and we ask them to share with the Committee any actions that arise from the feedback. This has proved to be very effective;
just a few examples of action taken include:
Discussion Group Feedback: Management Action:
There was perceived competing
objectives between Sales and
Supply teams in a Business unit and
a consensus that collaboration could
be improved.
Leaders of the Sales and Supply organisations initiated a series of collaboration
sessions, focusing on team building and collaboration on goals. Amongst other
things, the teams implemented a temperament/communication assessment
tool, developed a shared action plan based on engagement survey results and
spun-off working groups to focus on cross-functional priorities. Early feedback
suggests positive results.
Self-directed teams This approach to collaboration and operational improvement was rolled out in
WMFTS in 2023 and was enthusiastically welcomed by colleagues as improving
collaboration in a practical way. Colleagues across the Group were very keen to
get involved and this has been rolled out now in ETS, with similar early results.
Diversity on the shop floor We had discussions with the China team which were wide ranging and positive,
despite the slowdown in economic activity. We also noted the lack of female
workers on the shop floor. The local management team reflected and decided
to prioritise increasing diversity in the next recruitment phase.
Hybrid working Colleagues in China also expressed desire for more hybrid working, where
feasible. The local management team have since introduced flexible working
systems and commuting options, amongst other enhancements.
I am happy to answer any questions or take any feedback on our Committee activities and will be available at our
Annual General Meeting in May.
Caroline Johnstone
Chair of Colleague Engagement Committee
10 March 2025
Committee focus for 2025
•
Oversight and review of the results from the 2025
colleague engagement survey
•
Monitor engagement as the Group delivers
its operational improvements and reduces
organisational complexity
•
Hold a range of focus groups across the business,
including online global networks
•
Hear from management on what they think
colleagues will seek from ‘great’ employers in
the future
Spirax Group plc Annual Report 2024 115
Governance Report
Nomination Committee Report
The 2024 Board evaluation
indicated that there remained
a strong sense of team identity
and collaboration, with high
levels of engagement and
trusted, respected relationships.”
Tim Cobbold
Chair of Nomination Committee
Committee role and responsibilities
The main role of the Nomination Committee, which is
comprised of Non-Executive Directors only, is to optimise
Board performance, consider succession planning and
recommend changes to the Board to match the skills,
knowledge and expertise of individuals to those needed
to support the Strategy and business requirements of
the Company. The full Committee Terms of Reference
can be found on our website, spiraxgroup.com/
governance-documents.
Chair’s review of 2024
This year the Committee’s focus was on recruiting a new
Chair to the Board and selecting a new Non-Executive
Director and Remuneration Committee Chair to succeed
Jane Kingston, who is due to step down from the Board in
September 2025. The Committee had three scheduled and
one ad hoc meetings during the year. Details of attendance
can be found on page 107.
Chair of the Board
The Nomination Committee commenced the search for a
new Chair in Q4 2023, led by Richard Gillingwater as the
Senior Independent Director. Jamie Pike and Non-Executive
Director candidates did not take part in the selection
process, in accordance with the UK Corporate Governance
Code (Code). The Committee, working with our external
advisers Egon Zehnder, developed a role specification,
against which candidates were evaluated. This produced
a long list and from this a shortlist was then selected,
eventually resulting in my appointment, announced in
May 2024. More information on this process was outlined
in the 2023 Annual Report on page 135. I was appointed
as a Non-Executive Director and Chair Designate with
effect from 1 September. The Committee felt that my broad
business experience with global industrial companies,
as well as my experience as CEO of three FTSE listed
businesses with a strong track record of value creation
through growth and operational delivery, positions me well
to lead and guide Spirax Group through this next chapter of
our development and evolution.
To ensure an orderly handover of Chair and Group CEO
responsibilities, the Board agreed with Jamie Pike that he
would serve as Chair until he stepped down the end of
2024. Therefore, Jamie offered himself for re-election as a
Non-Executive Director at the Company’s AGM in May 2024.
This allowed Jamie to support Nimesh Patel who took up
the role of Group Chief Executive Officer in January 2024.
How the Committee spent its time %
Chair succession planning
New NED
succession planning
WMFTS MD appointment
Reappointment of NEDs
70% 15%
5%10%
Committee membership
Membership Meeting attendance
TimCobbold(Chair)* n/a
Jamie Pike (retiring Chair)* 100%
Angela Archon 100%
Constance Baroudel 100%
Peter France 100%
Richard Gillingwater 100%
Caroline Johnstone 100%
Jane Kingston 100%
Kevin Thompson 100%
* On 31 December 2024 Jamie Pike stepped down from the
Committee and Tim Cobbold took over as chair having
joined the Committee on 1 September 2024
Spirax Group plc Annual Report 2024116
Governance Report — [•]
Governance Report — Composition, succession and evaluation
Board and Group Executive Committee composition
On 16 January 2024, Nicholas (Nick) Anderson retired after
10 years as Group Chief Executive Officer. Nimesh Patel,
previously Chief Financial Officer since July 2020, took up
the role as Group Chief Executive Officer on the same date.
This change completed the Board’s long-term succession
plan for Nick.
The Board was delighted to welcome Louisa Burdett to the
Group in July 2024 as Chief Financial Officer (CFO). Louisa
is a highly experienced CFO having led finance functions in
several large companies including UK-listed Croda, Meggitt
and Victrex. She currently serves as a Non-Executive
Director and Audit Committee Chair of RS Group plc.
The appointments of Nimesh and Louisa followed Code-
compliant, rigorous and independent procedures, supported
by our external advisers. Details of the appointment
processes are available in our 2023 Annual Report on
page 135.
Jane Kingston’s tenure as a Non-Executive Director and
Chair of the Remuneration Committee will conclude in 2025.
In 2024, the Committee began the process of searching
for a new Non-Executive Director and Remuneration
Committee Chair. Search criteria were established and
a list of suitable candidates identified. The potential
candidates were interviewed by Jamie Pike (Chair), Tim
Cobbold (Chair Designate), and Richard Gillingwater (Senior
Independent Director) and a shortlist was presented to the
full Nomination Committee. We were pleased to announce
in January 2025 that Maria Antoniou had been appointed
as a Non-Executive Director and will be joining the Group
in June 2025. She will bring extensive experience and
knowledge to the Group particularly in International
HR leadership, including change and transformation
programmes.
During the year, Peter France and Richard Gillingwater
completed their three-year terms. The Committee
recommended to the Board that both be reappointed for an
additional three years.
Andrew Mines was appointed as the Managing Director of
ETS with effect from 1 September 2024 taking over from
Armando Pazos, who left at the end of August 2024. Andrew
had previously led WMFTS since 2020. In January 2025,
Stuart Roby joined Spirax Group as Managing Director of
WMFTS. Details of the respective skills and experience of all
Board and Group Executive Committee members are set out
on pages 102 to 104.
Succession planning and attracting talent
Egon Zehnder advises the Nomination Committee and
Board to ensure proper succession planning for senior
appointments, considering both internal and external
candidates per our Diversity and Inclusion Policy. The
Board confirms that there are no connections between
its Directors and Egon Zehnder.
Further information on how appointments to the Board are
made can be found in the 2023 Annual Report on page 126.
Board and Committee effectiveness
In light of the change in Chair, the decision was made
to defer the scheduled fuller Board evaluation and
consideration of any changes to the operation of the Board
until 2025 as explained on pages 98 and 99.
Consistent with past practice, our external advisers Egon
Zehnder carried out a Board evaluation in 2024 and the
results were shared with the Board in December. Egon
Zehnder facilitated the use of a comprehensive survey
similar to the one from 2023, which was distributed
to each Board member. They were asked to provide
responses on both quantitative and qualitative aspects.
The review assessed the strengths of the Board, as well
as the Colleague Engagement, Remuneration, Audit,
and Nomination Committees, by examining individual
capabilities and contributions, as well as the interaction
and collaboration among Board members. The responses
were consolidated and anonymised, with common themes
identified for the Board to determine key actions and next
steps for improving Board and Committee effectiveness
and performance.
The 2024 evaluation indicated that there remained a strong
sense of team identity and collaboration, with high levels
of engagement and trusted, respectful relationships. The
Board continues to focus on sustainability, diversity, and
inclusion objectives, while the Committees are clearly
defined and serve specific purposes.
Ongoing improvements are being made to manage meeting
agendas, ensuring adequate time is allocated for staying
informed about industry trends, competitor activities, and
potential future threats.
Re-election of Directors
The Board has concluded that the performance of each of
the Directors standing for election or re-election continues
to be effective and that these Directors demonstrate
positive engagement to their role, including their time for the
Board and Committee meetings and any other duties. Tim
Cobbold and Louisa Burdett will stand for election following
their appointments in 2024, and all other Directors will stand
for re-election at the 2025 Annual General Meeting. An
explanation of how they contribute to the success of the
Company can be found in the Notice of AGM.
Diversity and Inclusion Policy
Our Board and Committees fully comply with and support
the principles of our Everyone is Included Inclusion Plan,
our Group Inclusion Commitments and the Group Diversity
and Inclusion Policy. The Board believes that diverse teams
bring a great variety of thought, skills, experience and
perspectives to our Group. That diversity means we are
more innovative and more creative and it helps ensure our
continued business success. It means we continue to grow
and it creates more opportunities for everyone – in short,
our difference is our strength.
We remain committed to developing a strong and diverse
Board and we have made progress in developing our
internal talent at the executive senior leadership level. More
information on this can be found on page 118. A copy of the
Board Diversity Policy and the Group Diversity and Inclusion
Policy can be found on our website spiraxgroup.com/
governance-documents.
Spirax Group plc Annual Report 2024 117
Governance Report
Inclusion, equity and wellbeing
We believe the Board benefits from diversity in gender,
age, and culture, along with commercial and industry
knowledge. The Board Diversity Policy guides our Director
appointments, ensuring a balance of diversity, skills and
expertise. We review senior management strengths annually
and consider diversity in succession planning.
The Group captures diversity data of colleagues through
voluntary disclosure via HR systems and processes (such
as onboarding) where this is possible. For the Board of
Directors, we seek individual permission to share this data
on an annual basis. Aligned to the Parker Review, we use UK
Office of National Statistics (ONS) categories for ethnicity
reporting. The information required by LR 6.6.6R(10) can
be found in the Directors’ Report on page 148 and further
information on diversity and inclusion within the Group can
be found in our Sustainability Report on page 62.
Diversity and inclusion is always a key consideration in the
Board recruitment process and is at the forefront of the
Committee’s mind when making nominations to the Board.
We place a high priority on inclusion and are dedicated to
enhancing diversity within our Group. As at 31 December
2024, the Company has met or exceeded all of the diversity
and inclusion targets outlined in LR6.6.6R(9).
Specifically, we have surpassed the target of 40% female
Board representation, with 45.5% of our Board being female
as at 31 December 2024 and 50% as at the date of this
report. Additionally, with two Board members from minority
ethnic backgrounds, we have exceeded the requirement of
at least one individual. The third target stipulates that one
of the senior Board positions (Chair, CEO, CFO, or SID) must
be held by a woman, a goal supported by the FTSE Women
Leaders Review. As of 8 July 2024, this target has also been
achieved following the appointment of Louisa Burdett as
Group CFO.
In addition, half of the Board committees, i.e. the
Remuneration Committee and the Colleague Engagement
Committee are currently Chaired by Jane Kingston and
Caroline Johnstone, respectively.
In 2024, our GEC increased to 44.4% women (2023: 22.2%,
2022: 12.5%, 2021: 0%). During the second half of 2024, the
position of WMFTS Managing Director was being shared on
an interim basis by Phil Scott and Martin Johnston whilst a
permanent replacement for Andrew Mines (who took on the
role of Managing Director for the ETS business last summer)
was appointed. We were pleased to announce that with
effect from 6 January 2025 Stuart Roby was appointed as
Managing Director of WMFTS.
In 2024, women were 31.5% of our GEC direct reports (2023:
31.4%). With changes to our GEC, senior leadership overall
was 33.3% women (2023: 30%). We remain committed to
achieving a minimum of 40% women in our senior leadership
by December 2025, a goal already achieved at Board and
GEC levels.
More information on our Diversity and inclusion journey
can be found on pages 62 and 118. As part of our wider
commitment to gender equity, Nimesh Patel, Group Chief
Executive Officer, continues his role as Co-Chair of the
FTSE Women Leaders Review which seeks to increase the
representation of women in senior leadership roles in the
FTSE 350 and top 50 private companies in the UK. Listen
to Nimesh discuss his thoughts on equality on our website
spiraxgroup.com/inclusion.
Tim Cobbold
Chair of Nomination Committee
10 March 2025
Nomination Committee Report continued
Gender diversity
Group Executive CommitteeBoard
Male Female
100%
56%44%
Male Female
40%
50%
60%
50%
2021 20212024 2024
For more information about the Board Diversity Policy see page 109
Spirax Group plc Annual Report 2024118
Governance Report — Composition, succession and evaluation continued
The challenging macroeconomic
and trading environment in
2024 required ongoing close
oversight of the risks facing our
Group.”
Nimesh Patel
Chair of Risk Management Committee
Committee membership
Membership Meeting attendance
NimeshPatel(Chair) 100%
Louisa Burdett* 100%
Céline Barroche** 100%
Andy Robson*** 100%
Jim Devine 100%
Andrew Mines 100%
Sarah Peers 100%
Maurizio Preziosa 100%
Maria Wilson 100%
Martin Johnston (Interim co-lead WMFTS/
Phil Scott (Interim co-lead WMFTS) 100%
Dan Harvey (Head of Internal Audit) 100%
* Louisa Burdett joined the Committee with effect from July 2024
** Céline Barroche joined the Committee with effect from
September 2024
*** Andy Robson stepped down in September 2024
The full Committee Terms of Reference can be found on
our website, spiraxgroup.com/governance-documents.
Committee role and responsibilities
The purpose of the Committee is to oversee the
management and control of significant risks affecting
the Group. The Committee ensures that the Group has
robust risk management policies and procedures in place,
covering all these key areas of risk. The Risk Management
Committee’s responsibilities include:
•
Annual top-down or bottom-up reviews to improve
our understanding of the risks facing the Group
•
Determining the Group’s appetite for individual
and collective risks
•
Assessing the velocity of each risk
•
Monitoring any emerging risks on the horizon
•
Managing risks within the Businesses, leveraging
the expertise of our colleagues
•
Identifying appropriate risk mitigation controls
We hold annual top-down or bottom-up reviews, alternating
each year, that provide information and evaluations, which
the Committee uses alongside the Risk Appetite and Risk
Velocity ratings for our Principal Risks to create an effective
system for monitoring, planning and developing our
Group-wide approach and culture to manage risk.
The senior managers of our operating companies are
involved in the risk assessment process. The evaluations
of the Committee, including setting the appropriate levels
of risk appetite and controls, are then communicated to all
Group operating companies.
This ongoing monitoring and engagement contributes to the
way we manage our risks. As these are dynamic, both our
Risk Register and Principal Risks reflect current conditions
across the Group and guide how we continually adapt our
risk monitoring and mitigation activities.
Group Principal Risks, our Risk Register and our controls
feed into the Group’s viability assessment.
Changes to the Committee
Nimesh Patel took over as Chair of the Risk Management
Committee in January 2024. Armando Pazos and
Andy Robson left Spirax Group in 2024. Louisa Burdett
and Céline Barroche joined the Committee as the new
Group Chief Financial Officer and Group General Counsel,
respectively. Martin Johnston and Phil Scott also joined the
committee (as joint Interim heads of the Watson-Marlow
Fluid Technology Solutions Business) until the end of 2024.
How the Committee spent its time %
Risk Register Review
Risk Management and
Controls (including Key
Risk Deep Dives)
Results review
and reporting
55% 30%
15%
Risk Management Committee Report
Spirax Group plc Annual Report 2024 119
Governance Report
Governance Report — Audit, risk and internal control
Key Activities
The Committee met five times in 2024, details of attendance
at meetings can be found on page 107. A summary of the
Committee’s activities throughout the year is set out below:
•
Review of the obligations and enhancements of the UK
Corporate Governance Code 2024
•
Review of the enterprise risk management framework,
leading to initiating a refresh of our framework, which will
continue to be a key focus throughout 2025
•
Considered results from the top-down risk review with
input from our Group operating companies
•
Review, validation and update of the Risk Register
•
Scoring of operational risks, including Risk Velocity and
Risk Appetite
•
Review of changes in Principal Risk rankings in
accordance with the scoring process
•
Ageing Enterprise Systems was added to the Risk Register
in 2023 and this risk was thoroughly reviewed during
2024. We concluded that the scope of this risk should be
expanded and that it should be elevated to a Principal Risk
in light of the fragmented and large number of different
systems in operation across the Group which will require
upgrading or replacing over time.
•
Final approval of 2024 Risk Register and Principal Risks
The Principal Risks affecting the Group, before mitigation,
are set out on pages 83 to 87.
Governance and compliance
Acknowledging ongoing geopolitical tensions and their
impact on global trade, uncertainty in the macroeconomic
environment leading to more challenging trading conditions,
the increasing demand for digital products and solutions
and the ongoing focus on tackling climate change, we
remained focused on monitoring and managing the risks
facing our Group. During 2024, we also continued to
strengthen our governance and controls, ensuring our
compliance with legal and regulatory obligations.
We took a number of key steps in 2024, including
development of a Group-wide Risk and Control Matrix
(RACM) to enhance good governance and visibility of
the effectiveness of controls against significant risks.
We appointed a Group Head of Product Compliance to
create a framework enhancing our monitoring and controls
around legal and regulatory compliance. Additionally,
Céline Barroche joined us as the new Group Legal Counsel
and Company Secretary, bringing additional expertise
to strengthen our Governance, Risk, and Compliance
frameworks.
In addition, the Group is making good progress in preparing
to comply with the requirements of the UK Corporate
Governance Code 2024 published by the Financial
Reporting Council (FRC), which introduces several updates
aimed at enhancing corporate governance practices.
Chair’s review of 2024
Summary of key focus areas
The continuing challenging macroeconomic climate in 2024
has required ongoing close oversight of the risks facing
our Group.
Principal Risk Review
The Committee led the Principal Risks review and details of
the process, outcome and rationale for changes made are
set out in the Strategic Report on pages 35 to 37 with the
Principal Risks set out on pages 83 to 87.
Geopolitical and Macroeconomic Risk
During 2024, key geopolitical issues shaped the global
landscape, including continued ongoing conflicts as well as
political elections in some of our largest markets. In turn, these
issues impacted the global macroeconomic environment,
including through the effects of persistent inflation and
high interest rates slowing growth and increasing the risk of
financial stress as well as rising barriers to global trade. We
continue to monitor and manage the impact of these risks on
our financial performance and resilience.
Enterprise Risk Management Framework and UK
Corporate Governance Code 2024
In late 2023, the anticipated updated UK Corporate
Governance Code 2024 was published by the FRC, which
introduces several key updates aimed at enhancing
transparency, accountability, and overall governance
standards. We continued our planning and governance
enhancement to ensure that we are well positioned to meet
the updated requirements of the Code.
Anti-Bribery and Corruption (ABC)
The Group remains steadfast in promoting a zero-tolerance
policy towards bribery and corruption across all its Businesses.
Read more about this, our Whistle-blowing Policy and the
training we provide on page 63 of the Sustainability Report.
Board and Audit Committee Oversight
The Board has overall responsibility for the effectiveness
of the Group’s internal controls and risk management
frameworks. Oversight of the Group’s risk management
procedures and the operation of controls is undertaken by
the Risk Management Committee and the Group Executive
Committee. Further details on how the Board and Audit
Committee manage this oversight can be found in the Audit
Committee Report on pages 121 to 128, and the Strategic
Report on pages 80 to 87.
Viability Statement
In accordance with provision 31 of the UK Corporate
Governance Code 2018, the Board has assessed the
viability of the Group, taking into account the Group’s
current financial position, strategy, the Board’s risk appetite
and the potential impacts of the Group’s Principal Risks. We
set out the eight Principal Risks we have identified, along
with our mitigation measures, in our Risk Management
section of the Strategic Report which begins on page 80.
The viability assessment and statement is set out in our
Financial Review on pages 32 to 37.
Nimesh Patel
Chair of Risk Management Committee
10 March 2025
Focus for 2025
•
Continue implementing and evolving our enterprise
risk management framework
•
Continue planning and preparations for the updated
UK Corporate Governance Code 2024 requirements
•
Annual review of the Risk Register
•
Ongoing monitoring and analysis of the Group Risk
Register, Principal Risks, emerging risks and control
effectiveness
Further reading
Risk Management and Principal Risks: See pages 80 to 87
Risk Management Committee Report continued
Spirax Group plc Annual Report 2024120
Governance Report — Audit, risk and internal control continued
A year of good progress against
a background of increasing
future requirements
and regulations.”
Kevin Thompson
Chair of Audit Committee
Audit Committee Report
Committee membership
Membership Meeting attendance
KevinThompson(Chair) 100%
Peter France 100%
Richard Gillingwater 100%
Caroline Johnstone 100%
Committee role and responsibilities
The Audit Committee’s principal responsibilities are to
oversee and provide assurance to the Board on the integrity
and quality of financial reporting, risk management, control
processes and the effectiveness of audit arrangements both
internally and externally.
The Committee’s published Terms of Reference are
reviewed annually and were last amended in October
2024. A full copy can be found on the Group’s website,
spiraxgroup.com/governance-documents.
The Committee’s annual self-assessment exercise was
considered at the August Committee meeting. The vast
majority of the responses and comments were positive,
reflecting that the Committee continues to perform well.
Areas for improvement (which included topics such
as succession planning and Committee training) were
discussed and actions agreed.
Chair’s review of 2024
I am pleased to present the 2024 Audit Committee Report
which sets out the key areas of focus during the year ended
31 December 2024.
It has been a year of good progress against a background
of increasing future requirements and regulations. The past
year can be characterised as one of continued evolution
for the organisation. Following changes in leadership within
Spirax Group, the Committee welcomed Nimesh Patel in his
capacity as Group Chief Executive Officer, Louisa Burdett
as Group Chief Financial Officer and Céline Barroche as
General Counsel and Company Secretary. On behalf of the
Committee, I would like to thank Nick Anderson, Phil Scott
and Andy Robson for their contributions to the Committee.
The Committee also welcomed Dean Cook as lead audit
partner from Deloitte, taking over from Andrew Bond. As
our new colleagues and audit partner have settled into
their roles, I have maintained regular dialogue with them,
not least to ensure the Committee is provided with the
necessary information and input to continue to enable it to
guide, challenge and advise management.
How the Committee spent its time %
External Reporting and
External Auditors
Financial Resilience,
Risk Management and
Internal Controls
Corporate Governance and
Whistle-blowing
Internal Audit and Fraud
Risk Reviews
Sustainability
Presentations by Divisional
Finance Directors
Training and Technical
Sessions
20% 10%
15%
15%
20%
10%
10%
Spirax Group plc Annual Report 2024 121
Governance Report
Chair’s review of 2024 continued
During the year, the Committee discussed the multiple
ERP systems which exist across the Group and welcomed
the significant project which is planned to rationalise and
harmonise these. Reducing complexity in both systems and
operating structures is a key area of Committee focus in the
coming year.
An area of continued development has been the embedding
of the Group’s ongoing multi-year internal controls programme
‘G3’ that is systematically improving and standardising controls
over financial reporting across the Group using a risk-based
framework. This framework is maintained and used as the
basis for focused, independent oversight and support to
ensure risks are managed effectively, as well as forming the
foundation of the planned internal controls attestation in
2026. A number of improvements have been made across
the Group with none requiring material change. The response
across the Group to progress so far has been positive with
the benefits of consistency, efficiency and greater insight
experienced within the operating companies. In 2025, we
will monitor progress as management further embed the G3
framework through a continuous testing programme, training
and developing our control environment.
Building on the progress of the G3 programme and following
the clarification by the Financial Reporting Council (FRC) on
the changes to the Corporate Governance Code in January
2024, the Committee’s attention has evolved to supporting
and challenging management to strengthen internal controls
over material non-financial reporting, operational and
compliance activities. The Committee has reviewed the
definition of materiality and received updates at each meeting
on the progress made by the project leaders within the
organisation. Members of the Committee met with the project
team to help shape the project, advising specifically on the
direction of the plan, by working back from the attestation
required.
Risk management continues to be a key area for the
Committee and we value the high quality outputs from the
Risk Management Committee. Discussions have started on
a review of the Group risk management framework in 2025
which the Committee will support with a particular focus
on horizon scanning, risk appetite and risk mitigation. The
Committee notes management’s very positive response to
fraud risks, positioning the Group well for new requirements
in relation to fraud coming later this year – see also the Risk
Management section in the report below.
In October, I had the pleasure along with my colleagues in
the Audit Committee, of meeting key personnel in France
during a visit to Vulcanic. I was able to see first-hand how
the integration has progressed since we acquired the
business in late 2022 from a Private Equity environment,
recognising the time and resources needed to achieve
Group standards of control and reporting. The Committee
has monitored the operation of the risks and control
framework in Vulcanic, including reviewing reports following
the Internal Audit team’s visit in May 2024. Good progress
is being made, with more to do over the coming year.
The Committee together with the Board, also visited our
operations in Shanghai, China and saw the local emphasis
on sustainability and the quality of reported data.
The Committee reviewed the proposed disclosure plan
and enhancements to data quality in connection with
the Task Force on Climate-related Financial Disclosures
(TCFD) as well as the roadmap to compliance with the
Corporate Sustainability Reporting Directive (CSRD) in
the coming years. As part of the roadmap, Deloitte have
provided limited assurance over six KPIs following their
appointment as our ESG assurance provider as approved
by the Committee. KPIs which are not assured by Deloitte
are internally validated and the Committee reviewed the
assurance status prior to external disclosure.
As a Committee, we continue to ensure that our External
Auditor, Deloitte, maintain high standards of audit quality
and is sufficiently challenging of management during the
course of its audit work. Our level of assurance over the
quality of the audit was further supported by a positive
outcome of the FRC review of the audit of the Spirax Group
2023 accounts. We also oversee the work of Internal Audit
and its resourcing, to monitor compliance with the Group
policies and standards. The Committee remains satisfied
with the coverage and quality of the work of both External
and Internal Audit.
Committee composition
The Committee is comprised entirely of independent
Non-Executive Directors and there were no changes
to the members of the Committee during 2024. The
Committee members have a breadth and depth of financial
and commercial experience in various industries, as well
as the industrial engineering sector in which the Group
operates. The Committee’s expertise, together with their
independence, enables them to provide robust challenge to
management, as well as to the Internal and External Auditors
to ensure their duties under the Terms of Reference are
fulfilled. For the purposes of the UK Corporate Governance
Code 2018 (the Code) the Board is satisfied that Kevin
Thompson (Chair), Richard Gillingwater and Caroline
Johnstone have recent, extensive and relevant financial
experience and the required competence in accounting.
Meetings in 2024
The Committee held five scheduled meetings during 2024
(details of attendance can be found on page 107). Outside
of formal meetings a number of the Committee members
engaged in working sessions with management during
the year to support audit and assurance activities around
the Group.
The Committee meeting agendas are tailored to ensure
all the identified areas are covered, while also allowing
for emerging topics to be included and permitting time
for sufficient discussion and review. A summary of
the Committee’s activities during 2024 is given on the
following pages.
As with prior years, relevant members of the Group’s senior
management attended Committee meetings, with the Group
Chief Executive Officer, the Group Chief Financial Officer,
the Group General Counsel and Company Secretary, the
Head of Internal Audit and the Group Finance Director as
regular attendees and each of the Group’s three Business
Finance Directors attending one of the Committee meetings
to present on their Business. This practice has been
beneficial in providing the Committee with more in-depth
business specific context during 2024.
Audit Committee Report continued
Spirax Group plc Annual Report 2024122
Governance Report — Audit, risk and internal control continued
Our priorities in 2024 More information
External reporting for Full and Half
Year Results
See Financial Reporting
on pages 123 to 125
Planning and output of External Audit,
AQIs and fees, including review of
independence
See External Audit on
pages 127 and 128
Sustainability data and reporting See Internal Controls on
pages 125 and 126
Internal controls and UK Corporate
Governance Code
See Internal Controls on
pages 125 and 126
Internal Audit assurance, planning
and output
See Internal Audit on
page 127
Other significant activities during 2024 See Financial Reporting
on pages 123 to 125
Effectiveness of External Audit, Internal
Audit and the Committee itself
See External and Internal
Audit on pages 127
and 128
Oversight of whistle-blowing
and sanctions
See Whistle-blowing on
page 126
Risk management and fraud process
and reporting
See Risk Management
on page 126
Presentations by the Finance Directors
of the Businesses
See Internal Controls on
pages 125 and 126
FRC minimum standards compliance See External Audit on
pages 127 and 128
Tax and Treasury matters, including
approval of financial arrangements
See Internal Controls on
pages 125 and 126
Internal controls and risk management
The Board has overall responsibility for the effectiveness
of the Group’s internal controls and risk management
frameworks. Oversight of the Group’s risk management
procedures and the operation of controls is undertaken by
the Risk Management Committee and the Group Executive
Committee and further detail on these processes can be
found on pages 119 and 120. The Committee supports
the Board by monitoring and assessing the effectiveness
of the Group’s internal controls processes.
The following pages detail the specific work undertaken
by the Committee and form part of this Audit
Committee Report.
I hope that you find this report useful in understanding our
work over the past year and focus for 2025, and I welcome
any comments from shareholders on my report.
Kevin Thompson
Chair of Audit Committee
10 March 2025
Ensuring a fair, balanced and
understandable Annual Report
The Board is required to provide its opinion that it
considers the Annual Report and Accounts, as a whole,
to be fair, balanced and understandable and therefore
provides the required information for shareholders to
assess the Group’s position, performance, business
model and strategy.
During 2024, the Committee considered many
components of business performance to ensure it has
a full understanding of the operations of the Group.
Key matters considered by the Committee including
elements presented at Board meetings, comprise:
•
Reviewing, understanding and challenging the key
judgements taken and estimates made
•
Risk areas set out in the Risk Management
Committee Report
•
Ensuring an appropriate balance of GAAP and non-
GAAP financial measures and disclosures
•
Receipt of regular strategy reports from the Group
Chief Executive and operational reports from the
Business Managing Directors
•
Briefing from the Group Head of Communications
on key reporting themes
•
Reviews of the budget and operational plan alongside
the financial performance
•
Considering the internal co-ordination and review of
the Group-wide input into the Annual Report which
runs alongside the formal audit process undertaken
by the External Auditor
Through all the above, alongside its monitoring of the
effectiveness of the Group’s controls, Internal Audit
and risk management, the Committee maintains a good
understanding of business performance, key areas
of judgement and decision-making processes within
the Group.
As a result, the Committee advised the Board that
it considers the Group’s Annual Report to be fair,
balanced and understandable.
Financial reporting
Committee role:
Monitor the integrity of the Group’s published financial
information and review and challenge the significant
financial reporting issues and judgements made in
connection with its preparation and presentation.
Actions and reviews undertaken during 2024:
•
All published financial reporting, including the
2024 Annual Report and Accounts, before Board
recommendation. Management prepared detailed papers
on key issues, judgements and estimates
•
Detailed analysis of management’s verification and
internal review processes for external reports
•
External Auditor Reports and progress updates in relation
to the Interim Results review and full year Group audit
Committee focus for 2025
•
Monitoring and supporting further development
in the internal controls environment in preparation
for compliance with the FRC’s revised Corporate
Governance Code
•
Reviewing the effectiveness of the risk
management framework
•
Climate-related financial reporting and
related assurance
•
Supporting the rationalisation and harmonising of
ERP systems and operating structures
Spirax Group plc Annual Report 2024 123
Governance Report
Financial Reporting continued
Actions and reviews undertaken during 2024:
continued
•
Going Concern and viability reporting, including modelling
assumptions, assessment of time period suitability,
climate change considerations, and scenario assumptions
in relation to the Group’s Principal Risks
•
Pension accounting and strategy, including assessment
of assumptions used to value the material schemes
•
Ongoing assessments of the appropriateness of the
Group’s use of Alternative Performance Measures (APMs)
Financial reporting matters and
accounting judgements
The Committee is responsible for assessing whether
suitable accounting policies have been adopted and
whether management has made appropriate judgements
and estimates when applying these policies. During 2024,
the Committee considered and addressed the significant
matters listed below. The Committee received regular
reports from management and the External Auditor
regarding these matters and they were the subject of
detailed discussions by the Committee including the
challenge of management and the External Auditor. As
a result, the Committee reached the conclusion that the
proposed accounting treatments and resultant financial
reporting were appropriate.
Pensions
Issue:
The Group operates four main defined benefit pension
schemes (three in the UK and one in the US). As at 31
December 2024, the aggregate assets of the four schemes
totalled £301.0 million, aggregate liabilities totalled £328.2
million resulting in a net liability of £27.2 million. All four
schemes are closed to future accrual.
There are judgements and estimates made in selecting
appropriate assumptions in valuing the Group’s defined
benefit pension obligations, including discount rates,
mortality and inflation (see Note 22 on pages 192 to 197).
These variables can have a material impact in calculating
the quantum of the defined benefit pension liability.
How this was addressed:
The Committee considered reports by management and
those from independent external specialists used to prepare
pension valuations. Management’s selection of assumptions
was challenged, and key assumptions were examined against
observable external benchmarks and market practices.
Based on this review (including reports from the External
Auditor) and consideration of the valuation methods applied,
the Committee is comfortable that the key assumptions
and accounting treatment are reasonable and appropriate.
Impairment Assessment
Issue:
The uncertainty in the external economic environment may
give rise to indicators of impairment of value of certain
Group assets including goodwill.
How this was addressed:
The Committee received reports from management
outlining their evaluation of goodwill, tangible and intangible
assets for any potential impairments. Management’s
assessment of the level of aggregation of assets for cash-
generating units (CGUs) and the basis for key assumptions
and judgements used within their valuation models were
considered and challenged.
As detailed in Note 14 to the Consolidated Financial
Statements on page 185 to 188 the largest goodwill balance
as at 31 December 2024 relates to the cash-generating
units of the ETS Business (£491.3 million).
Specifically, the Committee focused on the key assumptions
and the associated disclosures around the valuation of
goodwill for the ETS Business, namely:
•
The forecast operational performance in the business
plan, particularly the growth in sales and earnings before
interest and tax (EBIT), including EBIT margin forecasts
and assumptions regarding cash generation focusing in
particular on any underperformance against forecast
•
The discount rates applied to the cashflows resulting from
the business plan, specifically the determination of the
input variables used to calculate the discount rate
•
The modelling outcomes when sensitivities were applied to
represent reasonably possible changes to key assumptions
The Committee challenged both management and
the External Auditor on their analysis and conclusions,
and held detailed discussions on this area at meetings
through the year.
The Committee concluded it was comfortable that key
assumptions and associated disclosures were reasonable
and that no impairment of CGUs is required.
Management override of controls
Issue:
Internal controls are the safeguards put in place by the
Group to protect its financial resources against external and
potential internal fraud alongside ensuring the accuracy of
reported financial information. Management is responsible
for ensuring the internal controls are implemented across
the Group. As such, intervention by management in the
handling of financial information, especially in relation to
one-off or judgemental transactions and making material
decisions contrary to the internal control policy is a
significant, if unlikely, risk.
How this was addressed:
Oversight of the Group’s risk management and internal
control environment is provided by the Group Executive
and Risk Management Committees, supported by a number
of leadership and function Committee meetings that
occur regularly across the year. The Committee considers
potential management bias in the delivery of business
results to ensure fair and accurate reporting.
The Committee discussed the mitigation of control risks,
with a particular focus on the level of management reviews
taking place within the Businesses, highlighted by both
management and the Business Finance Directors in their
regular Committee presentations. The Committee also
noted the high quality of response by management to any
deviations from Group policies. The Internal Controls team
have worked closely with the Group’s finance team during
2024, strengthening the internal controls environment by
supporting compliance with critical controls.
The Committee remains satisfied with the Group’s
monitoring of the effectiveness of the risk management and
internal control systems and is supportive of the Group’s
continuous improvement journey in this area.
Audit Committee Report continued
Spirax Group plc Annual Report 2024124
Governance Report — Audit, risk and internal control continued
Other significant financial reporting issues
Going Concern, Viability Statement and
financial resilience
During 2024, the Committee remained focused on
monitoring the Group’s financial resilience and overall
liquidity position, especially given the debt-financed
acquisitions of Vulcanic and Durex Industries which
completed in the second half of 2022. The Committee
approved all the external debt financing activities undertaken
during the year, including issuance of €90 million of new US
Private Placement debt, utilising existing shelf agreements.
The Committee receives regular updates from the Treasury
Committee and noted that the Group operated throughout
2024 comfortably within the leverage ratio covenants
contained within its external financing arrangements.
The Group has continued its Viability Statement reporting
in line with best practice by (i) including an assessment
period of five years and (ii) providing sufficient detail around
the underlying scenario modelling undertaken to ensure
an explicit link between the scenarios and the Group’s
identified Principal Risks. The Committee reviewed the 2024
Going Concern and Viability Statements and were satisfied
that these represented accurate assessments of the
Company’s position at the date of the Financial Statements.
For further detail on the Going Concern and Viability
Statements and for additional information on the financial
resilience of the Group, please refer to pages 35 to 37.
Financial disclosures including Alternative Performance
Measures (APMs)
In the year, the Committee reviewed the treatment of specific
adjusting items. These included the treatment and presentation
of costs related to acquisition and disposal activities.
While the number and value of the adjusting items reduced,
they continued to be closely monitored by the Committee
to understand, review and challenge management’s
classification. The Committee considered the views of the
External Auditors and concluded that the disclosures made
by management were supported and the classifications
were appropriate in each case.
In addition, the Committee also reviewed the accounting
treatment and disclosures relating to a number of specific
transactions and situations that occurred within the
year, including the treatment and presentation of the
financial results of the Group’s operating companies
located in Argentina which are operating in a high
inflation environment.
Internal Controls
Committee role:
Review the adequacy and effectiveness of the Group’s
internal financial control environment. Receive reports from
the Risk Management Committee on operational risks and
review the Group’s Tax and Treasury policies, as well as
debt financing facilities and the approach to management of
foreign exchange risk.
Actions and reviews undertaken during 2024:
•
Review of material findings arising out of Internal and
External Audit Reports
•
Update on Group-wide training programmes (including
mandatory courses on Health and Safety, Anti-Bribery
and Corruption and Cybersecurity).
•
Annual reviews of Group Tax and Treasury policies with
the Group Head of Tax and Group Treasurer attending
the Committee meeting. Review by the Audit Committee
Chair of the minutes and actions of the Tax and Treasury
Committee meetings that took place during the year
•
Review of anticipated impacts of the incoming Pillar 2
OECD minimum tax rate legislation
•
Review of annual management papers on how the
Group monitors the effectiveness of the Group’s internal
control processes
•
Reports from the functional leaders with responsibility for
managing cybersecurity risk
•
Presentations from management detailing the progress
achieved on the G3 internal controls programme
•
In-depth presentations from the Group Sustainability
team covering sustainability reporting requirements, data
quality, processes and frameworks
•
Detailed reviews with the respective internal risk owner
for two of the Group’s identified Principal Risks
•
The Finance Director of each of the Group’s three
Businesses presented to the Committee the focus areas
for their finance functions
During the year, management in conjunction with the
Committee developed its approach to the FRC revised UK
corporate governance code announced in January 2024
and applicable from 1 January 2025 (with the exception
of provision 29 effective from 1 January 2026). Building
on the approach already successfully deployed by the
Group in respect of its financial reporting controls (‘G3’
project), a programme to document and improve controls
for three key areas, reporting (financial and non-financial),
operational risks and compliance has been developed. The
Committee offered guidance on the structure of the project.
The Committee advised on the scope of the required
controls, reviewed the proposed definition of materiality
and agreed the Group’s proposed timetable of next steps.
In the upcoming months, the Committee will oversee the
development of the Provision 29 attestation, which will be
presented to the Board for recommendation.
Spirax Group plc Annual Report 2024 125
Governance Report
Internal Controls continued
Actions and reviews undertaken during 2024:
continued
The Group currently employs a localised operating
model which results in a large number of individual IT
systems which underpin business operations and the
financial reporting processes. This strategy results in a
disaggregated control environment which is supported
by a series of manual control processes operated locally
and additional monitoring activities at a Business and
Group level. Through our control monitoring activities,
opportunities to improve the control environment are
identified, these include improving the formality of control
operations, including better retention of evidence of a
control’s operation sufficient for testing purposes; and
limitations in certain segregation of duty, user access and
change management controls. Actions are put in place
to respond to observations, which are reported to and
monitored by the Audit Committee. In addition, the ongoing
multi-year internal controls improvement programme
together with the ERP upgrade programmes provide
an important opportunity to standardise and automate
controls and processes across the Group which will further
enhance the overall control environment by creating a more
centralised and standardised operating model, together with
a more consolidated IT system landscape.
The Group has also continued to focus on mapping its
current external reporting alongside the level of assurance it
currently obtains over its external disclosures. Sustainability
reporting is a focus area for the Group as the Committee
recognises that the scope and breadth of reporting required
by a range of different regulatory bodies, alongside the lack
of established frameworks, creates challenges for all market
participants. The Committee engaged with the Group’s
Sustainability team, who conducted a deep dive into current,
upcoming and potential regulatory requirements. Given
the focus on assurance, following a tender process during
2024, Deloitte was appointed by the Group’s Sustainability
team as ESG assurance provider to give limited assurance
over ESG Annual report metrics. The Committee supports
the Group‘s continuing evolution of its Sustainability
reporting team which will focus on further embedding data
reporting processes and delivering the assurance journey
to ensure continuing compliance with existing regulations
whilst also preparing for future disclosure requirements.
More information on our risk management processes
and the key risks can be found in the Risk Management
Committee Report on pages 119 and 120 and Risk
Management section on pages 80 to 87.
Whistle-blowing
Committee role:
Review the adequacy and security of our whistle-blowing
arrangements via a confidential colleague whistle-
blowing platform (Safecall), that the Group has in place
for colleagues and is deployed across the Group. Ensure
appropriate processes are in place for the proportionate
and independent investigation of any matters raised. Also
receive reports of non-compliance with the Group’s policies
around fraud, bribery and unethical behaviour.
Actions and reviews undertaken during 2024:
•
Reviewed summaries of calls to the Group’s whistle-
blowing helpline which have been received and
investigated, or where investigation is in progress
•
Reviewed the outcome of any identified cases where
Group policies have been breached, together with
details of the actions taken by management alongside
consideration of any lessons learned
The flow of reports and actions taken indicates to the
Committee that the process is working and the Group
culture remains strong. As a result of the Committee review
it was satisfied that all the whistle-blowing arrangements
continue to operate effectively.
Risk Management
Committee role:
Review the Group’s procedures and controls relating to:
•
Fraud
•
Bribery and unethical behaviour
•
Money laundering
•
Compliance with legal and regulatory requirements
•
Risk Management Committee on operational risk reporting
and controls
Actions and reviews undertaken during 2024:
•
Received regular updates from the Group CEO on the
activities of the Risk Management Committee
•
A bottom-up fraud risk review exercise was undertaken
whereby the fraud risks and controls within all of the
Group’s operating units were assessed, in conjunction
with a senior leader focus to ensure opportunities to
commit fraud are minimised
•
Received reports from management detailing any
identified cases of fraud and the resulting actions
being taken
•
Received input from the External Auditor and from
the Internal Audit function as to their observations
and findings
•
Received updates from the Group Legal team on the
training materials used across the Group to educate
colleagues on anti-bribery, money laundering and
legal compliance.
A limited number of breaches of the Group policies were
identified during 2024. There was no material financial
loss in any of these instances. Actions undertaken by
management in the year included a ‘Stand up to Fraud’
webinar for senior managers led by the Group CEO, a
comprehensive review of supplier relationships and
ongoing fraud risk management training. The Committee
was supportive of the lessons learned during the year and
the follow-up actions taken by management to support and
reinforce adherence to Group policies.
In 2025 a review of the risk management process will be
undertaken by the Committee and the Board including a
review of the most effective involvement of all stakeholders.
Audit Committee Report continued
Spirax Group plc Annual Report 2024126
Governance Report — Audit, risk and internal control continued
Internal Audit
Committee role:
Monitor and review the effectiveness of the Internal Audit
function. Review, assess and approve the annual Internal
Audit plan and resourcing. Review the Internal Audit reports
and monitor the key issues arising.
Actions and reviews undertaken during 2024:
•
Assessed the independence and effectiveness of the
Internal Audit function
•
Monitored key performance indicators of the function
against pre-agreed targets
•
Monitored timely completion of internal audits against the
2024 audit plan and approved any changes to the plan
•
Approved the internal audit activity plan and
budget for 2025
•
Reviewed reports submitted by the Head of Internal
Audit of activities undertaken, key audit findings and
remediation actions and status reports on completion of
agreed action plans
•
Reviewed and approved the Internal Audit Charter
•
Held meetings with the Group Head of Internal Audit
without management present
The Committee is cognisant that the ongoing monitoring
and review of the effectiveness of the Group’s Internal Audit
function is a key responsibility which all our stakeholders
look to the Committee for. Throughout 2024, the Committee
monitored the effectiveness of Internal Audit activity and the
results of audits undertaken. This provided valuable input into
the Committee’s view on the effectiveness of the Group’s risk
management, control and governance framework.
During 2024, the Internal Audit team performed a total of 33
internal audits, which were all conducted through in-person
visits. By visiting the business sites and locations to conduct
the audits it provides a valuable opportunity to educate
and build strong relationships with the local operating
companies and to gather additional insights.
The insights and identified actions within the acquired
businesses form a key pillar of the integration journey as
we improve the operational and reporting standards to align
with those required by the Group.
The majority of the operating companies audited were
found to have a satisfactory control environment. Where
issues were found, remediation actions were agreed that are
tracked to completion and validated before being closed.
To the extent that any Internal Audit action items become
overdue, the Business Finance Directors are engaged to
assist with ensuring they are closed as soon as possible.
The Committee challenged management where action items
had become overdue and was satisfied that throughout
2024 that management had devoted significant resource
to the resolution of action items. The Committee receives
regular reports on closure rates and will continue to monitor
outstanding actions. During the year, progress was made in
reducing open and overdue high priority items.
In recent years the Internal Audit function has continued to
develop its analytics capabilities and is ensuring it has the
skills to support the Group’s ERP upgrade programmes, as
well as being able to take advantage of further automation
opportunities which consistent finance IT platforms will
provide. The target is for analytics to be fully embedded
across the Internal Audit process including risk assessment,
scoping, fieldwork testing and assessing the effectiveness
of remediation actions implemented. Following approval by
the Committee an additional Internal Audit team member is
being recruited in 2025. The Committee is satisfied that the
Internal Audit function has sufficient skills and resources to
discharge its responsibilities effectively.
External Audit
Committee role:
Manage the relationship with the Group’s External Auditor.
Review and approve the quality, effectiveness, scope, audit
plan, fees, and procedures of the External Audit, ensuring
independence of the External Auditor and governance of
non-audit services. Make recommendations to the Board
on the tendering of the External Audit, the appointment
process, remuneration and engagement terms of the
External Auditor.
Actions and reviews undertaken during 2024:
•
Reviewing Deloitte’s reports to the Committee covering
its interim review and Full Year audit outcome and opinion
•
Review, challenge and approval of Deloitte’s 2024 audit
plan and associated fees
•
Tracking Deloitte’s progress against its audit plan journey
– specific areas of focus included data analytics usage
•
Tracking performance against the agreed External
Audit quality indicators and conducting its Auditor
effectiveness review
•
Approval of Non-Audit Services Policy alongside
processes to govern auditor independence
•
Handover of the lead partner from Andrew Bond
to Dean Cook
•
Regular dialogue with Deloitte through the year, in
addition to Committee meeting time allocated with
External Auditor without management present
•
Recommendation to reappoint Deloitte at the 2024 AGM
The Company confirms that it has complied with the
provisions of the CMA’s Statutory Audit Services for
Large Companies Market Investigation (Mandatory Use
of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014 for the financial year
under review.
External audit effectiveness and quality
A key responsibility of the Committee is overseeing the
external audit process and assessing the audit quality.
During the year the Committee engaged in a number of
specific actions to ensure it continues to fulfil its obligations
in this area. These included:
•
Review of the Audit Committee and the External Audit
Minimum Standard: The Committee reviewed the
guidance issued by the FRC in May 2023 and completed a
mapping exercise whereby all requirements were mapped
against existing Committee processes and responsibilities
in order to confirm compliance
Spirax Group plc Annual Report 2024 127
Governance Report
External Audit continued
External audit effectiveness and quality continued
•
Output from the FRC’s Audit Quality Review (AQR): During
the year the Committee also reviewed correspondence
from the FRC’s Audit Quality Review (AQR) team, who
reviewed Deloitte’s audit of the Group’s 2023 Financial
Statements as part of its annual inspection of audit firms.
The Committee received and reviewed the final report
from the AQR team which identified no key findings or
other findings, and noted several areas of good practice.
•
Tracking of performance against Audit Quality Indicators
(AQIs): The Committee received a detailed breakdown
of performance against the agreed criteria and was
pleased to see strong performance continuing against
the agreed metrics, with opportunities for further
improvement into 2025
•
Audit plan and approach: The Committee discussed
Deloitte’s detailed audit plan and proposed approach and
the planned scope of the audit during the year, together
with the proposed materiality and the identified significant
audit risks. The number of Group operating companies
included within the scope of the audit was increased for
2024 by two (increasing revenue coverage to 73%), which
the Committee believes provides sufficient coverage
•
Audit fees: The Committee reviewed and approved
the proposed audit fees. In reviewing the audit fees,
the Committee received a detailed breakdown of the
proposed fees and was able to satisfy itself that the
agreed amount represented fair value in order to deliver
the quality and scale of audit sought
•
Internal evaluation process: Each local finance
team provides feedback on the External Audit via a
questionnaire and the results then aggregated and
presented to the Committee and Deloitte for discussion
with year-on-year movements. The overall results and
audit experience remained in line with the prior year.
•
Interaction with the Auditor: The Committee discussed
their insights from audit team member’s visits to operating
companies as well as challenging the audit team on
its work in specific areas. Throughout the year, the
Committee worked closely with Deloitte and was able to
gather good insight into the overall quality of the audit
process and the performance of key individuals within
the Deloitte team. Throughout these interactions the
Committee felt that Deloitte delivered a consistently
high-quality output and provided an appropriate
challenge to management’s assumptions, key judgements
and estimates whilst ensuring its audit process focused
on the key risk areas.
Via the combination of the activities described above,
the Committee was able to conclude that Deloitte has
provided a high quality audit, appropriately questioned and
challenged management and ensured that the Committee
has received appropriate insight and feedback detailing the
process and results. The Committee was also pleased to
see: (i) a continuing expansion of the use of data analytics
by Deloitte within the audit process this year in order to
increase efficiency and quality; and (ii) the continuing
review and controls assessment work being undertaken
by Deloitte in order to review and suggest improvements
to each of the Group’s Businesses as they continue on the
journey to upgrade their respective ERP systems.
Safeguarding Auditor independence and objectivity
The Committee recognises that the independence of the External Auditor is an essential part of the audit framework
and has adopted a policy for determining whether it is appropriate to engage the Group’s Auditor for non-audit
services. The Auditor Engagement Policy was reviewed and updated during the year to align with the latest FRC
Ethical Standards. A copy of the Auditor Engagement Policy can be found on the Group’s website, spiraxgroup.com/
governance-documents. During the year, the Group spent £0.4 million (2023: £0.2 million) on non-audit services
provided by Deloitte LLP, which included work undertaken on the interim review and ESG assurance. These non-audit
fees equate to 15% of the average Group audit fees charged over the past three years. Further details can be found in
Note 6 on page 178.
To safeguard independence and objectivity, the policy sets out that the maximum period of an audit engagement without
an external tender process taking place is 10 years (calculated from the date of the first financial year covered by the
audit engagement letter), with the statutory Audit provider to be rotated at least every 20 years. Further, and in line with
the Ethical Standard, the policy details the non-audit services that the Auditor can undertake and which of those services
are subject to the non-audit services cap. The policy states that any expenditure with the Group’s Auditor on non-audit
fees should not exceed 70% of the average audit fees charged in the last three-year period. Furthermore: (i) where
the fees for any individual engagement in relation to the non-audit services are in excess of £100,000, pre-approval
is required from the Committee; and (ii) a cumulative annual cap of £300,000 is set in respect of non-audit services
provided by the Auditor, above which all individual engagements must be pre-approved by the Committee.
In addition to the Group’s policy, the Auditor performs its own independence and compliance checks, prior to accepting
any engagement, to ensure that all non-audit work is compliant with the FRC’s Ethical Standard in force and that there is
no conflict of interest.
11 years
Current auditor tenure
Dean Cook
Auditor Partner
2024 Non-audit fees
£381,850
15% of average Group audit fees
2022
Last Auditor tender for the 2024 year end
2024
Last Partner rotation
Audit Committee Report continued
Spirax Group plc Annual Report 2024128
Governance Report — Audit, risk and internal control continued
Remuneration Committee Report
The Committee was pleased
our flexible remuneration
framework supported smooth
leadership succession during
the year and continues to drive
future growth.”
Jane Kingston
Chair of Remuneration Committee
Committee membership
Membership Meeting attendance
JaneKingston(Chair) 100%
Angela Archon 100%
Richard Gillingwater 100%
Kevin Thompson 100%
Key activities undertaken
The Remuneration Committee’s agenda followed its usual
cadence of activity, formally meeting five times in 2024
(details of attendance can be found on page 107).
January
• Reviewed forecast performance of 2023 incentive outcomes
• Discussed Annual Incentive Plan (AIP) and Performance Share
Plan (PSP) performance metrics in light of increasingly difficult
macroeconomic environment
February/March
• AIP – Approved 2023 outcomes and 2024 metrics including
personal strategic objectives
• PSP – Approved 2023 outcomes and 2024 metrics
• Reviewed 2023 Gender Pay Gap/CEO pay ratios and wider
colleague pay including UK living wage rates
• Approved 2023 Directors’ Remuneration Report
October
• Discussed external remuneration and governance landscape
• Discussed 2025 AIP and PSP measures and targets including
reviewing sustainability plans and approving amendment to
EPS metric within the PSP
December
• Discussed external remuneration and governance landscape
• Discussed internal global pay landscape
• Approved 2025 CEO and CFO remuneration arrangements
• Approved 2025 Group Executive Committee (GEC) salary increases
• Confirmed Board Chair fee for 2025
How the Committee spent its time %
Board and GEC pay
AIP achievements and target
setting
PSP achievement and
target setting
Remuneration Policy and
market updates
Annual Report
Gender Pay Gap and
wider workforce pay
Introduction
On behalf of the Board, I am pleased to present the
2024 Directors’ Remuneration Report for the year ended
31 December 2024. The Remuneration Report provides a
full overview of the structure and scale of our remuneration
framework and decisions made by the Committee as a
result of business performance this year. The intended
arrangements for 2025 are also set out in detail later in
this report on pages 145 to 147.
45%
5%
15%15%
10% 10%
Governance Report
Spirax Group plc Annual Report 2024 129
Governance Report
Governance Report — Remuneration
Remuneration Committee Report continued
Committee role and responsibilities
The main role of the Committee is to determine Executive
remuneration policies, how they are applied and to set
targets for the short and long-term incentive schemes. It
also monitors compliance with the presiding Remuneration
Policy. The Committee also determines the philosophy,
principles and policy of Executive and senior manager
remuneration, having regard to the latest legislation,
corporate governance, best practice and the Financial
Conduct Authority (FCA) Listing Rules.
The Committee takes account of wider colleague remuneration
frameworks, related policies and the alignment of incentives
and rewards with our Group culture.
Executive Director changes during 2024
As was disclosed in last year’s report, the Executive
Board changes of Nimesh Patel appointed to Group
Chief Executive Officer (Group CEO) and Louisa Burdett
appointed to Chief Financial Officer (CFO) took place
during 2024. The smooth succession of our two Executive
Directors was well supported by our Remuneration Policy
and provides strong leadership, ensuring Spirax Group is
best positioned for long-term growth.
As we disclosed in August 2023 and again in last year’s
report, Nimesh’s salary on appointment was consciously
set below the market rate for the role. This reflected
Nimesh’s appointment from his role of CFO. The Committee
shared with investors (as confirmed in the RNS detailing
Nimesh’s appointment) the intention to increase his salary
to a market level (explained as the £750,000 that was
being paid to Nick Anderson when he retired plus annual
Executive Director salary increases) within two years
of his appointment, subject to personal and business
performance. We explained that these phased increases
would likely be in excess of the standard annual salary
increases provided to the wider colleague population during
this period. As the first step in this process, the Committee
(plus other Non-Executive Board members) reviewed
the Group CEO’s personal and business performance.
The Committee was satisfied with his strong personal
performance, excellent progress made toward defining
and delivering the Together for Growth Strategy since his
appointment and the progress that is being made in difficult
economic circumstances. The Committee felt that it was
entirely appropriate to implement the first of two phased
salary increases. With annual UK workforce increases of
3.1% in 2024 and 2.2% in 2025, the market level has been
calculated to have increased from £750,000 to c.£790,000.
As shown on page 145, the Committee approved a salary
increase of 6%, effective from 1 January 2025, bringing
Nimesh’s annual salary in 2025 to £763,000. This increase
is made up of an annual Executive Director salary increase
of 2.2% and 3.8% for the first phase of the market level
adjustment. Appreciating this total increase is above the
normal increase provided to the wider UK workforce,
Nimesh volunteered to use the net amount of the total
increase to purchase shares in the Group. It is intended to
provide a similar increase to him effective 1 January 2026,
subject again to continued strong delivery and progression
of the strategic plan.
On 8 July 2024, we welcomed Louisa to the Board as the
Group’s CFO. As previously disclosed, Louisa’s salary on
appointment was £550,000. From 1 January 2025, a 2.2%
increase to £562,100 was approved by the Committee.
This increase is the same as the average pay increase for
all other UK colleagues.
As shown on page 140 of this report, as part of Louisa’s
recruitment arrangements, and in line with our approved
Recruitment Policy, arrangements were in place to
compensate for potential loss of payments from her
previous employer under both long-term and short-term
incentives. As noted on page 140, an award was made
for forfeited 2023 LTIP shares to the face value of the
shares lost. These shares were granted under the Spirax
Group 2015 PSP and will only be released to the extent
our stretching PSP metrics are achieved. As no bonus was
earned for 2023 at the previous employer, no payment
was made in this respect. Provision to compensate for
a part-year bonus lost for 2024 remains in place; any
payment will be disclosed in full in next year’s report.
Remuneration principles (alignment with UK Corporate Governance Code)
Our remuneration principles are to maintain a competitive remuneration package that promotes the long-term success
of the Group, avoids excessive or inappropriate risk taking and aligns management’s interests with those of shareholders.
Clarity Predictability Simplicity
The remuneration framework supports
the financial and strategic objectives
of the Group, encouraging transparent
communication and alignment with
shareholder interests.
The range of reward and performance
outcomes in incentives aligns with our
business model and strategy.
A simple but effective framework is
consistently applied for leadership
colleagues. Performance against key
performance indicators is rewarded and
pay outcomes for achieving targets is clear.
Risk Proportionality Alignment to culture
Incentives are structured to align with the
Group’s risk management framework. The
Committee has overarching discretion to
adjust formulaic outcomes with recovery and
withholding provisions mitigating further any
longer-term risk taking.
There is clear alignment between the
performance of the Group, the business
strategy, and the reward paid to Executive
Directors. Target remuneration is market
competitive ensuring we can attract and
retain talent appropriately.
Incentive scheme determination takes
account of Group Values, strategies and
the views of wider stakeholders including
shareholders and colleagues.
Spirax Group plc Annual Report 2024130
Governance Report — Remuneration continued
Tim Cobbold – appointment to Board Chair
Tim Cobbold was appointed as Chair Designate from 1
September 2024, becoming Board Chair from 1 January
2025. As part of the recruitment process, the Committee
reviewed the annual fee level for the Board Chair role to
ensure it was set an appropriate level. While the Committee
does not believe in slavishly following benchmark data,
it does review independent information to ensure Spirax
Group remains able to recruit high-calibre and experienced
talent to the Board. The fee level for the Board Chair role has
been reset to £400,000, which the Committee believes is
appropriate for the scale and complexity of the Group. Tim
received a pro rata standard Non-Executive Director base
fee of £70,000 for the three-month period to 31 December
2024 and as Board Chair from 1 January 2025 an annual fee
of £400,000.
As a result of the benchmarked increases in the level of
fee for the Chair and other Non-Executive Directors as
disclosed in last year’s report (see page 160 of our 2023
Annual Report), and the increase in the total number of Non-
Executive Directors on the Board from seven to eight, the
fees paid to the Non-Executive Directors during 2024 were
inadvertently in excess of the aggregate limit specified in
the Company’s Articles of Association. This discrepancy will
be addressed at the upcoming AGM by way of an ordinary
resolution, with a view to increase the cap to £1,200,000.
Further information can be found on page 136 and in
the Company’s notice of AGM available on the website
spiraxgroup.com/agm-notices.
Performance metric KPI alignment
2
Annual Incentive Plan Performance Share Plan
Organic revenue growth
From 2025
Adjusted operating profit
Adjusted earnings per share
Cash conversion
1
All-workplace injury rate
Group GHG emissions
Relative Total Shareholder Return
1 An indicator of operating profitability and/or cash generation
2 See pages 40 and 41 for more information
Strategic alignment of pay framework
There is a strong alignment between Spirax Group’s key
performance indicators and the measures and targets of
Executive Directors’ incentive schemes, as shown above.
This alignment ensures a clear linkage between business
performance and pay outcomes, supporting the Committee’s
commitment to designing pay arrangements which drive long-
term sustainable growth for the benefit of our shareholders.
The Committee annually reviews the performance metrics
of incentive schemes to ensure they remain appropriate.
We disclosed last year an amendment to an AIP measure,
replacing cash generation with cash conversion, retaining
a 20% weighting. The Committee believes this change
ensures a meaningful focus on driving strong free cash flow
performance and operational efficiencies irrespective of any
potential impact on sales in the current trading environment.
As detailed on page 138, payments under both the AIP and
PSP were impacted by the business performance relative
to targets.
The Committee will continue to closely monitor the pay
structures and incentive arrangements for Executive
Directors to ensure continued strong alignment between
the delivery of business performance and associated
remuneration arrangements.
Overall performance for 2024
As detailed earlier in this Annual Report, 2024 saw the
continuation of a challenging trading environment for the
Group which impacted financial performance.
Our Remuneration Policy is designed to ensure that a
significant percentage (c. 75%) of Executive Directors’ pay
is based on the achievement of demanding performance
targets and at risk of not being paid where financial
performance is not achieved. This provides a strong
alignment with shareholders’ interests.
During the year a challenging trading environment resulted
in achievement of threshold performance for operating
profit but a strong cash conversion outcome in the AIP.
This, together with PSP outcomes, resulted in total
remuneration for Executive Directors being significantly less
than maximum opportunity, reflecting the experience of
shareholders over the performance period.
Spirax Group plc Annual Report 2024 131
Governance Report
Remuneration Committee Report continued
AIP outcomes in 2024
Executive Director AIP payments were based primarily
on stretching Group financial performance targets which
accounted for 90% of maximum AIP payments. Financial
measures for the year comprised 70% Group adjusted
operating profit and 20% Group cash conversion.
During challenging times of business performance, the role
of the Committee is to ensure our remuneration framework
and practices are sufficiently balanced to incentivise strong
performance towards goals, as well as recognising the vast
effort which is required to deliver these results. Financial
plans for 2024 were set at the start of December and despite
the deteriorating market conditions in several geographies
and sectors, were not adjusted. The Committee reviewed
ranges around financial targets and set the 2024 operating
profit range to begin payments for delivery of -9.5% below
Target, with maximum bonus payment achievable for
exceeding Target by at least 5%. As shown later in this report,
threshold and maximum payments under the cash conversion
measure were payable for delivery of -5 to +5 percentage
points of the Target respectively.
Having reviewed the achievements against the personal
strategic objectives approved by the Committee at the start
of the year (see page 137 for more detail), the Committee
is satisfied the Executive Directors made good progress
towards these challenging measures, resulting in 8% of
opportunity for this element of the AIP (maximum 10%) for
both the CEO and CFO. Total payments made in respect of
the 2024 AIP were therefore 40% of maximum opportunity.
PSP outcomes in relation to 2022–2024
Vesting for the 2022 PSP was measured against Total
Shareholder Return (TSR), earnings per share (EPS) and
progress towards our sustainability goals, specifically
against our greenhouse gas reduction targets. Excellent
progress was made towards our first milestone to reduce
carbon emissions by 50% by 2025, with a 53% reduction
being achieved over the three-year performance period.
This exceeded the maximum target set by the Committee
resulting in full vesting under this element of the 2022 PSP.
TSR and EPS performance were both below the respective
threshold targets. As a consequence, a total of 20% of the
shares granted in respect of this 2022 scheme will vest in
March 2025.
Application of discretion
In determining the outcome of proposed payments under
the AIP and PSP, the Committee carefully considered the
achievement of financial and non-financial targets against
each performance measure, the overall performance of the
business during the year and the wider macroeconomic and
trading environment, as well as the remuneration relative
to other colleagues. The Committee made a robust and full
assessment of these factors in assessing both the incentive
outcomes and the level of total remuneration received by
each Executive Director for 2024.
Following this assessment, the Committee did not apply any
discretion to the variable pay outcomes of the AIP or PSP.
The Committee agreed that the final vesting of the PSP was
reflective of the last three years of performance and the
Policy operated as intended.
Wider colleague pay arrangements for 2024
The Committee monitors and reviews the effectiveness
of the Executive Directors’ reward framework and its
alignment with policies in the wider business to ensure the
appropriateness of senior pay arrangements in this broader
context. As part of our approach to setting country-specific
percentage increases, we were mindful of both forecast
salary inflation data and the projected Consumer Price
Index in each country together with business affordability in
the continuing period of trading uncertainty and weakness
in the global macroeconomic outlook. The wider colleague
pay review for 2024 in the UK was 3.1%.
Shareholder engagement
We have a well-established record of active and
thoughtful engagement with our key shareholders on the
issue of executive pay. In building open and transparent
communication with shareholders, the Committee will
actively engage with shareholders and representative
bodies, seeking views which are openly discussed and
considered when making any decisions about changes to
the Remuneration Policy for Executive Directors.
In the past, where advice has been provided by our
shareholders, I have outlined feedback in the relevant
Annual Report. As there were no significant changes
to the pay framework for 2024 and none are planned
for 2025, there have been no specific issues to discuss
with shareholders since the AGM in May 2024. We
remain committed to discussing with our shareholders in
advance of making any changes to the Executive Director
remuneration package or Policy and clearly explaining the
Committee’s decisions.
Wider colleague engagement
We have an open culture, welcoming ongoing feedback
from our colleagues through the various mechanisms and
channels we have in place. These methods include, but
are not limited to one-to-one performance conversations,
Works Council meetings, colleague engagement groups,
engagement surveys and line manager dialogue up through
the HR function to the Group Executive Committee and
Remuneration Committee.
The Group HR Director provides updates to the Committee
on pay and people-related issues to ensure we have
visibility of the things which really matter to our colleagues.
The Committee received regular updates in 2024 relating
to the global pay arrangements of colleagues across the
business to give the additional context needed to ensure
Executive Director and senior leader pay arrangements are
equitable across the Group. These updates included global
salary review proposals, the alignment of UK colleague
salaries against the Real Living Wage and the regional
harmonisation of colleague benefits in various locations.
In addition, in my role as Committee Chair, I welcome the
opportunity to speak with and receive direct feedback
from colleagues from across the business via colleague
focus group sessions. Colleagues taking part in these focus
groups are drawn from different Businesses, geographies,
functions and job roles. During these sessions we typically
discuss a wide variety of matters, including how our
Executive Directors and senior leaders are remunerated and
rewarded and how the Board and Committee operates as
well as the wider global frameworks on pay and benefits.
I am keen to ensure the Committee has access to
meaningful and relevant information from our colleagues,
not only to gain their views around the senior leadership
pay frameworks but also on wider colleague matters.
This year I met with small groups of colleagues who have
recently successfully completed our Global Graduate
Leadership Development programme and now transitioned
into a variety of permanent careers across the Group. As
our future senior leadership, they provided excellent insight
Spirax Group plc Annual Report 2024132
Governance Report — Remuneration continued
and a fresh perspective into the Group’s reward and benefits
provisions. As in previous sessions, we discussed Executive
Director pay and governance and the overall framework to
ensure remuneration is fair and appropriate for these roles.
Colleagues I spoke with all praised the quality of the graduate
programme and the opportunity to undertake a broad range
of assignments including international working, valuing and
maintaining the broad internal networks developed on and
off the programme including with coaches and mentors.
I was delighted that all wanted to build long-term careers
within the Group. They gave us helpful feedback around
some of the challenges of transitioning from the programme
into permanent roles including reward challenges; they all
hoped the Group could find a way to keep supporting their
development and make sure its investment in them is put to
the very best use for the Group.
Pay arrangements for 2025
The average pay increase in 2025 for UK colleagues,
including GEC members and other senior leaders, was
2.2%. The Committee reviewed this rate, together with rates
provided in each of the countries in which we operate and
was satisfied this level of increase was reflective of the
business performance during the year. Salary increases for
the Group CEO and CFO outlined previously in the report
were inclusive of this 2.2% increase.
The Committee reviews each year the overall pay
structures and performance metrics of the senior leader
reward framework. Reflecting on existing AIP and PSP
arrangements and their operation during 2024, the
Committee agreed the incentive schemes worked broadly
as intended for the year, but for 2025 is making two minor
changes as described below and permitted within the
Remuneration Policy. The intended changes will ensure the
incentive frameworks better support and drive the delivery
of the Together for Growth Strategy in the future.
For 2025, the AIP will continue to be largely focused on
the profitable performance of the Group with 55% of
maximum opportunity being measured against adjusted
Group operating profit targets. The recently updated cash
conversion metric will account for 15% of any bonus earned
and Personal Strategic Objectives will also remain at 10%.
The final 20% of the award will be determined against
organic revenue growth, defined as the growth in sales
on the prior year’s sales from Businesses which have
been included in the results of operations for more than
12 months, on a constant currency basis. After careful
consideration, the Committee believes ensuring continued
top-line organic sales growth to be a key driver of
sustainable delivery of the strategy. This change is within
the shareholder-approved Policy and maintains the total
weighting of financial performance targets within the
scheme, determining up to 90% of an Executive Director’s
bonus payment.
Although our Remuneration Policy provides for a maximum
opportunity of up to 200% of salary, the maximum payment
available under the AIP in 2025 will remain at 150% of salary
for the Group CEO and 125% of salary for the CFO.
The PSP will continue to be measured against three key
performance metrics which together focus on driving
long-term sustainable profit growth and shareholder value.
These being, EPS, relative TSR and a reduction in scopes 1
and 2 greenhouse gas (GHG) emissions.
The Committee reviewed the measures against the
long-term financial plans and determined no changes
were required under the GHG and TSR elements for the
2025 award. However, to align the way targets are set for
the EPS element, the Committee will be setting growth
targets that better reflect the level of world Industrial
Production growth (IP) over the three-year performance
period. EPS achievement will be measured relative to a
multiple of IP rather than outperformance against a fixed
growth percentage. This metric will mitigate the impact of
IP volatility on vesting outcomes and will take into account
relative financial outperformance against either a strong or
weak IP backdrop.
Our strategy is to grow sales above IP, organically, while
also improving our adjusted operating profit margin and the
Committee believes the EPS growth target should reflect
this. We are therefore setting a target range for EPS growth
of IP x 1.25 to IP x 3.5. Further details of the performance
targets associated with the 2025 grant can be found
on page 146.
The Committee is aware the share price during the year has
been below the level of last year’s grant. For the 2025 PSP,
the Committee will undertake a comprehensive assessment
at the point of vesting to determine whether or not a
windfall gain has occurred and take a decision at that time
on any appropriate action. This will be fully disclosed in the
relevant Annual Report.
Looking forward
This will be my last AGM as a NED and Remuneration
Committee Chair of the Group as I will have served nine years
in September 2025. I will be handing over the leadership of
the Committee to Maria Antoniou on her appointment to the
Board on 1 June 2025, after the May AGM. I will remain as a
Committee member until September 2025. Maria and I will be
working together to ensure a timely transition and continuity
of decision making for the benefit of the Group.
The Committee will be reviewing the Remuneration Policy
ahead of seeking shareholder re-approval at the 2026
AGM. Any proposed changes would be intended to ensure
Executive Director pay arrangements support and drive
the business strategy while remaining appropriate when
considered within the overall workforce remuneration
frameworks and the external regulatory environment.
I would like to thank our shareholders for their continued
support during the year and my tenure as Committee Chair.
I will be available at the Company’s Annual General Meeting
on 14 May 2025 to answer any questions in relation to this
Remuneration Report.
Jane Kingston
Chair of Remuneration Committee
10 March 2025
Committee focus for 2025
• Support the appointment of new Board Chair
and Remuneration Committee Chair
• Review of Remuneration Policy prior to shareholder
vote at 2026 AGM
• Continue to review the incentive arrangements to
ensure an appropriate balance of stretching but
achievable targets
Spirax Group plc Annual Report 2024 133
Governance Report
At a glance summary: Executive Directors’ remuneration
Fixed pay AIP PSP Total pay
Payments made were
40% of maximum bonus
opportunity
20% of 2022 PSP
award vested
• Base salary
• Benefits
• Pension
• Maximum opportunity:
150% of salary Group CEO
and 125% of salary CFO
• Measured against Group
operating profit (70%),
cash conversion (20%)
and personal strategic
objectives (10%)
• Maximum grant: 200%
of salary Group CEO and
175% of salary CFO
• Measured against EPS
outperformance of Global
IP (50%), relative TSR
(30%) and reduction
in greenhouse gas
emissions (20%)
• Sum total of pay elements
Executive Directors’ remuneration framework
Pay outcomes for 2024
Pay subject to performance
A significant proportion (c.75%) of an Executive
Director’s potential remuneration is only payable to
the extent the stretching performance conditions have
been achieved.
Pay at risk
After payment, there are further mechanisms in place to ensure
decisions made at the most senior levels are aligned with
shareholders’ and colleagues’ interests over a long-term period.
Share ownership
Executive Directors are required to build a substantial shareholding in the Company to ensure alignment with shareholders’ interests. This
shareholding continues to apply for two years after leaving the Company. As shown below, Nick Anderson continues to hold a significant
number of Spirax Group shares, following his retirement on 16 January 2024. Shareholding guidelines will continue to apply for Nick until
16 January 2026.
Actual shareholding – achievement against guideline
Fixed pay
To enable the Group to attract, retain
and motivate high performing Executive
Directors of the calibre required to meet
the Group’s strategic objectives.
CEO CFO
Annual Incentive Plan (AIP)
To incentivise and reward for performance
against the short-term delivery of key
metrics linked to the business strategy.
Performance Share Plan (PSP)
To incentivise, reward and retain Executive
Directors for delivery against long-term
Group performance, driving sustainable
Group performance aligned with
shareholders’ interests.
Variable pay Fixed pay
Performance period
Period subject to withholding and recovery provisions
AIP
PSP
Year 5Year 4Year 3Year 2Year 1
800%
N.B. Patel
L.S. Burdett
N.J. Anderson
(to 16 January 2024)
Policy guideline Actual shareholding
300%
200%
220%
75%
76%
25%
24%
600%400%200%0%
% of salary shareholding
637%
0%
300%
Spirax Group plc Annual Report 2024134
Governance Report — Remuneration continued
Annual Report on Remuneration
Annual Remuneration Report
Governance
Details of the Committee membership can be found page 107 and full biographies of the Committee members can be found
on pages 102 and 103. Each Committee member is an Independent Non-Executive Director and brings independence to all
aspects of Board remuneration and the application of professional advice to matters relating to remuneration. The General
Counsel and Company Secretary acted as Secretary to the Committee with support from the Assistant Company Secretary.
The Committee met five times during the year ended 31 December 2024 as shown on page 107.
No conflicts of interest with respect to the work of the Committee have arisen during the period and none of the members
of the Committee have any personal financial interest in the matters discussed, other than as shareholders. The fees of the
Non-Executive Directors are determined by the Board on the joint recommendation of the Chair and the Group CEO. The
fees of the plc Chair are determined by the Committee.
The Committee is formally constituted and operates on written Terms of Reference, which are modelled on the Code
and are available on our website, spiraxgroup.com/governance-documents.
Advice to the Committee
The Committee takes account of information from both internal and independent sources. During the year it received
external advice from Korn Ferry. Korn Ferry, appointed in 2019, advises on all aspects of the Company’s Remuneration Policy
and reviews our remuneration structures against corporate governance best practice. They also provide support to the
Company and management more generally with the monitoring of TSR performance for the PSP, non-Board benchmarking
and salary surveys. The Committee confirms that neither it nor any of its Directors has any connection with Korn Ferry, who
is a member of the Remuneration Consultants Group and complies with its Code of Conduct, which sets out guidelines
to ensure that its advice is independent and objective. The Committee reviews the performance and independence of its
adviser on an annual basis. During the period, Spirax Group incurred fees from Korn Ferry of £95,990 (plus VAT) on a time
and materials basis.
The Group’s HR Director provides updates to the Committee, as required, to ensure that the Committee is fully informed
about pay and performance issues throughout the Group. The Committee takes these factors into account when determining
the remuneration of the Executive Directors and senior executives. The Group CEO also attends at the Committee’s request
but does not participate in discussions regarding his own individual remuneration. The Committee also ran two focus groups
during the year; see page 132 for more details on these.
Audited information
The information that follows is subject to audit until otherwise indicated. To support consistency across the Annual Report,
the majority of figures provided within this report are now disclosed in thousands of pounds, rather than pounds.
Executive Directors’ single total figure of remuneration (£’000)
Base
Salary
£’000
Taxable
Benefits
£’000
Pension
£’000
Total
Fixed Pay
£’000
AIP
£’000
PSP
3
£’000
ESOP
£’000
Total
Variable Pay
£’000
Total
Pay
£’000
N. B. Patel
1
2024 711 29 71 811 432 102 2 536 1,347
2023 530 19 53 602 66 145 2 213 815
L.S. Burdett
(from 8 July 2024)
2024 265 10 30 305 137 — — 137 442
2023 — — — — — — — — —
N.J. Anderson
2
(to 16 January 2024)
2024 32 1 3 36 — — — — 36
2023 750 30 75 855 112 208 2 322 1,177
1 Nimesh Patel was appointed to the role of Group CEO on 16 January 2024. Any remuneration shown in the table above prior to this date relates to
his role as CFO.
2 Nick Anderson retired from the Board prior to the vesting of the 2022 PSP award. See page 140 for details of the vesting value of Nick’s 2022 PSP.
3 The amount shown relates to the market value of PSP awards whose performance period ended during the relevant financial year. Refer to page
139 for details of PSP awards made during 2024.
Over the 2022 PSP vesting period the share price decreased from £119.10 at grant (14 March 2022) for Nick Anderson and Nimesh Patel, to £68.91,
which was the average share price over October, November and December 2024, a decrease in value of the vesting shares of around £50.19 per
share. The amount attributable to share price appreciation in the figure above is therefore nil. As the award will not vest before the publication of
the 2024 annual results and therefore the value at vesting will not be known, the value will be restated next year in the single figure table when the
share price at vesting is known.
The value of PSP awards vesting in 2023 has been restated to reflect the actual share price on the date of vesting, £105.27.
Spirax Group plc Annual Report 2024 135
Governance Report
Annual Report on Remuneration continued
Audited information continued
Non-Executive Directors’ single total figure of remuneration (£’000)
Basic
Fees
£’000
Additional
Fees
1
£’000
Total
2
£’000
T. Cobbold
(from 1 September 2024)
2024 23 — 23
2023 — — —
J. Pike 2024 350 — 350
2023 309 — 309
R. Gillingwater 2024 70 20 90
2023 62 15 77
A. Archon 2024 70 68 138
2023 62 59 121
C. Baroudel 2024 70 — 70
2023 26 — 26
P. France 2024 70 — 70
2023 62 — 62
C.A. Johnstone 2024 70 20 90
2023 62 15 77
J.S. Kingston 2024 70 20 90
2023 62 15 77
K.J. Thompson 2024 70 20 90
2023 62 15 77
1 ‘Additional Fees’ relate to Senior Independent and Committee Chair fees and the long-haul intercontinental travel fee in addition to international
travel expenses to the UK.
2 As referenced on page 131, the aggregate fees paid to Non-Executive Directors during 2024 (inclusive of additional responsibility/travel fees
totalled £955,333, which is above the £750,000 cap specified in the Company’s Articles of Association.
Group operating
profit
70%
Group cash
conversion
20%
Personal strategic
objectives
10%
AIP
Financial metrics
Additional requirements in respect of the single total figure table of remuneration
Annual Incentive Plan (AIP)
Executive Directors participate in the AIP, which rewards them for financial and non-financial performance of the Group, details
of which are illustrated below. Metrics are reviewed annually to ensure continuing alignment with strategy and are agreed
at the start of the year. Resulting awards are determined following the end of the financial year by the Committee, based on
performance against these targets.
For the Group CEO, achievement of target performance results in a bonus of 90% of salary, increasing to 150% of salary for
maximum performance. For the CFO, achievement of target performance results in a bonus of 75% of salary, increasing to
125% of salary for maximum performance. Assessment of performance against the 2024 AIP measures is detailed below.
Financial metrics (90% of maximum opportunity)
The following table summarises the achieved performance in 2024 in respect of each of the financial measures used in the
determination of the AIP, together with an indication of actual performance relative to target.
Spirax Group plc Annual Report 2024136
Governance Report — Remuneration continued
2024 measures
Actual
performance
Achieved
(%ofTarget) Threshold Target Maximum
Group operating profit (70% weighting) £333.9m 90.9% £332.3m £367.1m £385.5m
% of metric achieved 17.1% 15% 60% 100%
Group cash conversion (20% weighting) 87% 116.4% 70% 75% 80%
% of metric achieved 100.0% 15% 60% 100%
%oftotalfinancialmetricsachieved(90%) 32.0%
Personal Strategic Objectives (10% of maximum opportunity)
The tables below detail each of the Executive Directors’ Personal Strategic Objectives for 2024. The Board were provided with
regular updates on progress towards these objectives throughout the year. The Remuneration Committee reviewed total
progress against these objectives at the end of the year at its February 2025 meeting and approved the achievements
detailed below.
N.B. Patel
Measure Achievement
Health and Safety: Reduction in serious LTAs and all-workplace injury rate reduced by 2% across the Group. In addition,
strong progress has been made on Mandatory Machine Safety and Excellence Framework, further
strengthening the Group’s safety culture.
Sustainability: Implementation of One Planet, with early achievement of GHG, water and waste reduction targets.
CSRD reporting readiness is ahead of peers, having completed Double Materiality and identified key
reporting metrics.
Colleagues: The Group-wide “Everyone is Included” plan has resulted in gender balance of the GEC, early achievement of
diversity goals for GEC/Board Directors and ethnicity balance across the senior leadership team being stable.
During the year, six colleague network groups were launched across the Group to drive continued support
for inclusion and a variety of actions taken following 2023 colleague survey including revised Colleague
Promises and a “Development Everyday” festival of learning.
Operational
Improvement:
Driving a strong focus on operational best practice, margin improvement, cost savings, supply output
and manufacturing efficiencies across the Group resulting in double-digit increase in sales in Industrial
Process Heating, achievement of procurement savings and organic profit growth in all three Businesses.
Decarbonisation: Accelerated the Group’s decarbonisation offering with development of new higher-temperature and
higher-voltage elements to cement differentiated product offering for customers. Driven collaboration
between STS and ETS to deliver combined thermal energy and TargetZero solutions. Addressable markets
for decarbonisation defined and quantified, and priority sectors identified.
Digital
and Systems:
Implementation of the Group Digital strategy to increase customer connections, develop connected
products and platforms and increase efficiencies. STS and WMFTS connected products and platforms
pilots initiated. Digital revenues significantly increased as a result of increased customer connections
(including product pull-through) and the new innovation framework supported the development of MiM
(AI) tool to increase sales engineers’ efficiency.
Total(upto10%) Achievement assessed as 8%
L.S. Burdett
Measure Achievement
Health and Safety Reduction in serious LTAs and all-workplace injury rate reduced by 2% across the Group. In addition,
strong progress has been made on Mandatory Machine Safety and Excellence Framework, further
strengthening the Group’s safety culture.
Sustainability Implementation of One Planet, with early achievement of GHG, water and waste reduction targets.
CSRD reporting readiness is ahead of peers, having completed Double Materiality and identified key
reporting metrics.
Onboarding Seamlessly integrated into new role through the completion of a comprehensive induction programme
and key OpCo visits to understand the Group. Strong relationships with CEO, peers and finance
colleagues formed. Effective and extensive interactions with shareholders during the year.
Governance Driving implementation of Group-wide G3 Finance controls to ensure alignment with the UK Corporate
Governance Code, resulting in “on track” status for Provision 29 attestation as well as progression
towards non-finance control pillars. Identified and defined improvements to enterprise risk management
to support Provision 29 together with implementation of improved training and processes for fraud
prevention include an review of supplier conflicts of interests.
Information
Technology
and Systems
Oversaw the implementation of the Group’s cybersecurity plan with the introduction of an assurance
framework and refreshed policies during the year. In addition, actively led the process to unite the three
proposed business ERPs into one global common design which will further embed standardisation,
driving efficiency for the Group.
Total(upto10%) Achievement assessed as 8%
Spirax Group plc Annual Report 2024 137
Governance Report
Annual Report on Remuneration continued
Additional requirements in respect of the single total figure table of remuneration continued
Annual Incentive Plan (AIP) continued
As a result of performance in 2024, the following payments were earned, as reflected earlier in this report:
Executive Directors
AIPachieved
1
(£’000)
AIP achieved
(%ofmaximum)
Maximum
opportunity
(%ofsalary)
AIP achieved
(%ofsalary)
N.B. Patel 432 40% 150% 60%
L.S. Burdett 137 40% 125% 50%
1 Bonus payments are calculated using FTE salary.
Under our Remuneration Policy, if an Executive Director has not reached the level of 1.5 times their shareholding requirement,
they must use the net of tax amount of 25% of AIP earned to purchase shares in the Company. These shares must be held
for a further two years. Nimesh’s shareholding requirement has been updated to reflect his appointment as Group CEO in
2024. As such, Nimesh and Louisa will be required to purchase shares out of their net AIP payment.
Performance Share Plan (PSP)
The Committee makes an annual grant of conditional shares to each Executive Director under the PSP, having reviewed the
relevant performance metrics to ensure they remain strategically aligned and sufficiently stretching. For EPS this includes a
review of analysts’ forecasts.
Vesting of the award is dependent on the achievement of targets against the three performance measures illustrated
below. These performance measures have been chosen as they are considered to be an appropriate balance of the key
performance indicators most aligned with our strategy.
Earnings per share
growth
50%
Relative total
shareholder return
30%
Reduction in
greenhouse gas
emissions
20%
PSP
Financial metrics
The Committee reviews the achievement against the targets and applies any necessary discretions to the formulaic calculation,
ensuring vesting outcomes are appropriate.
2022 PSP award (performance period measured over 2022-2024)
On 14 March 2022 the Executive Directors received share grants under the PSP, with vesting subject to the measures
outlined above. The following table summarises the relevant performance metrics and the resultant achievements.
Performance measure Weighting
Thresholdrequirement
(18%vesting)
Maximumrequirement
(100%vesting) Actual achievement
Vesting level
(of total award)
EPS growth 50% Global IP +2% pa Global IP +8% pa -12.8% 0.0%
Relative TSR 30% Median Upper quartile -54.1% 0.0%
GHG emissions 2024 20% 24% reduction 31% reduction 53% reduction 20.0%
Total 100% 20.0%
Adjusted EPS is derived from the audited Annual Report for the relevant financial year. For the purposes of the PSP, adjusted
EPS is then recalculated to exclude the acquisition of Vulcanic Group and the disposal of the Russian businesses. EPS
targets summarised above equated to a requirement to achieve at least 9.9% growth over the period for vesting to begin
under this element, with maximum vesting for the achievement of 30.2% EPS growth. Adjusted EPS decreased by 12.8%
over the period, equating to a compound annual decline of 4.5% per annum, and below the performance required to trigger
vesting under this element.
The TSR comparator group, comprising 44 companies, for the purpose of measuring relative TSR performance, was the
FTSE 350 Industrial Goods and Services Supersector constituents at the start and end of the performance period. Over
the three-year period to 31 December 2024, the Company’s TSR was calculated as -54.1%. This ranked below the required
threshold performance level for any part of this element to vest (median and upper quartile TSR in the comparator group
being 0.4% and 34.1% respectively).
Spirax Group plc Annual Report 2024138
Governance Report — Remuneration continued
Aligned with the Group’s One Planet Strategy, performance was also measured against a reduction in scopes 1 and 2 GHG
emissions. Focused improvements towards decarbonising the business resulted in a 53% reduction in emissions from the
2019 baseline (excluding Vulcanic and Durex Industries). This was above the maximum target set in 2022 to achieve a 31%
reduction in emissions by the end of 2024.
As a result of the above, 20% of the shares granted under the 2022 PSP will vest in March 2025. The Committee considers
this achievement and consequent payment to be a fair reflection of business performance throughout the performance
period and in line with shareholders’ experience.
ExecutiveDirectors
1
No. of
shares
granted
Price at
grant
Value at
grant
(£’000)
No. of
shares
vesting
Vesting
price2
Vesting
value
(£’000)
Amount
attributable
to growth
in share
price
(£’000)
N.B. Patel 7,387 £119.10 £880 1,477 68.91 102 -74
1 See page 140 for details of Nick Anderson’s 2022 PSP vesting value.
2 Three-month average closing price for October, November and December 2024.
2024 PSP award (performance period measured over 2024-2026)
Executive Directors were granted conditional shares under the 2024 PSP during the year. Grant values were determined by
reference to a share price of £103.77 with 200% and 175% of salary being awarded to the Group CEO and CFO respectively.
Executive Directors
PSP shares
granted
Face value of
award on grant
(£’000)
Last day
of the
performance
period
Vesting at
threshold
performance
N.B. Patel 13,876 1,440 31/12/2026 18%
L.S. Burdett 9,275 962 31/12/2026 18%
Vesting will take place on a straight-line basis for performance between the threshold and maximum requirements.
Performance below the threshold requirement for each performance measure will result in nil vesting for that part of the
award and at maximum full vesting will occur.
The vesting of these shares is based on the below performance metrics measured over a three-year period. In addition to
the three-year performance period, a two-year holding period applies.
Performance measure Weight Thresholdrequirement Maximumrequirement
EPS growth 50% Global IP +2% pa
1
Global IP +7% pa
Relative TSR 30% Median TSR Upper quartile TSR
Greenhouse gas emissions 2026 20% 27,449 tonnes 24,834 tonnes
1 The Global Industrial Production Growth (IP) data source is the CHR Metals Global IP Index, providing data that incorporates over 90% of global
industrial output.
The EPS element of the PSP is based on growth in excess of global industrial production growth rates, often referred to
in our industry as ‘Global IP’. Global IP is a measure the Board and management have used for some time, as there is well
documented evidence that it is the best predictor of the global and industrial markets within which the Group operates. For
these reasons, Global IP was used in the formulation of the long-term strategic plan and targets for EPS growth approved by
the Board. Adjustments are made to reflect material businesses which are acquired and sold.
The TSR element of the PSP assesses performance relative to a comparator group of companies. The 2024 TSR peer group
comprises the constituents of the FTSE 100, excluding companies in the Mining, Oil & Gas and Financial Services sectors.
This group was selected as it objectively provides a sufficiently robust number of companies to compare performance
against, including those that operate in the industrial goods and services arena, whilst also excluding companies which are
significantly different to us in terms of business operations. While the exact number of companies varies from year to year,
the comparator group for the 2024 award was 71 companies.
The remaining performance element assesses the extent to which we are meeting our sustainability goals. We have
targeted management to reduce scopes 1 and 2 GHG emissions to 27,449 tonnes or below by the end of 2026 for this part
of the award to start to vest. Maximum payout will only be achieved for emissions at or below 24,834 tonnes.
Spirax Group plc Annual Report 2024 139
Governance Report
Annual Report on Remuneration continued
Additional requirements in respect of the single total figure table of remuneration continued
Employee Share Ownership Plan (ESOP)
Executive Directors and UK colleagues are eligible to participate in an HMRC-approved Share Incentive Plan known as
the ESOP. Participation up to HMRC limits are matched on a 1:1 basis for each share purchased.
Shares acquired under the ESOP are not subject to performance measures as the aim of the ESOP is to encourage increased
colleague shareholding in the Company. In 2024, around 66% of eligible UK colleagues purchased partnership shares and
were awarded matching shares under the ESOP.
During the year Nimesh Patel purchased 29 partnership shares and was awarded 29 matching shares.
Taxable benefits
N.B. Patel L.S. Burdett N.J. Anderson
Car cash allowance £28,258 £9,375 £1,237
Private health insurance £542 £271 £23
Pension
During the year, Nimesh Patel and Louisa Burdett received 10% of their basic salary in cash which, in the year ended
31 December 2024, amounted to £71,127 and £29,756 respectively.
Board changes in 2024
Louisa Burdett was appointed to the Board as Chief Finance Officer (CFO) on 8 July 2024. Her remuneration on appointment
was in line with the approved Remuneration Policy detailed on page 147 with an annual base salary of £550,000, a car
cash allowance and pension allowance of 10% of salary. Louisa’s incentive arrangements are consistent with the Policy
for the CFO.
An additional share award was granted to Louisa Burdett to compensate her for remuneration forfeited with her previous
employer. This award comprised a PSP award vesting in 2026 with the same performance metrics as the 2023 PSP. This
award will vest, to the extent the relevant targets are achieved, on the same date as all other 2023 PSP awards. The value
of the award granted was equal to the face value award of the forfeited shares at the time of accepting the role with Spirax
Group. The award was granted on 21 November 2024 at a price of £103.00 resulting in 7,112 shares being granted. This
award will be subject to a two-year holding period, consistent with the Policy for PSP awards to Executive Directors.
Tim Cobbold joined the Board on 1 September 2024 as Chair Designate, succeeding Jamie Pike as Board Chair on 1
January 2025. On appointment, Tim received the standard annual fee for Non-Executive Directors of £70,000, increasing to
£400,000 from 1 January 2025.
Jamie Pike retired from the Board on 31 December 2024, having served as a Non-Executive Director since 2014 and Board
Chair since 2018. There were no payments for loss of office for Jamie.
Payments to past Directors
Following his stepping down from the Board on 16 January 2024, Nick Anderson remained in employment with the Group
under his previous terms and conditions until 31 March 2024 to ensure a smooth transition of leadership. Payments received
during this period comprised £156,250 salary, pension contributions of £16,180 and £6,274 taxable benefits. He has two
outstanding awards under the PSP. In accordance with the rules of the Plan, 20% of his 2022 PSP award will vest in March
2025 at an estimated value of £136,793. Nick’s remaining 2023 PSP award was pro-rated for time, reflecting his retirement.
The remaining 5,744 shares will vest in March 2026, to the extent the performance conditions are achieved. Both the 2022
and 2023 PSP awards remain subject to the two-year post-vesting holding period for Executive Directors.
Payments for loss of office
There were no payments made to Directors for loss of office during the year ended 31 December 2024.
Board changes in 2025
Jane Kingston will retire from the Board in September 2025, upon the completion of nine years on the Board. Jane will
remain a member of the Remuneration Committee from 1 June 2025, on the appointment of Maria Antoniou, to ensure a
successful handover. There will be no payments for loss of office for Jane.
Maria Antoniou will join the Board as a Non-Executive Director and Remuneration Committee Chair on 1 June 2025. From
appointment, Maria will receive the standard annual Non-Executive Director fee of £71,540 and the additional annual
Committee Chair fee of £20,000 which is in line with the NED fees shown on page 146.
External directorships
Nicholas Anderson served as a Non-Executive Director at BAE Systems plc during 2024, for which he received and retained
total fees of £4,933 to 16 January 2024.
Louisa Burdett served as a Non-Executive Director at RS Group plc in 2024, for which she received and retained total fees
of £39,713 from 8 July 2024.
Spirax Group plc Annual Report 2024140
Governance Report — Remuneration continued
Statement of Directors’ shareholding and share interests
Share ownership guidelines
The Executive Directors’ share ownership guidelines are 300% of base salary for the Group CEO and 200% of base salary for
other Executive Directors. The value of the shareholding is taken at 31 December 2024 as a percentage of 2024 base salary.
The closing share price on 31 December 2024 was £68.55.
Outstanding share interests
The following table summarises the total interests of the Directors in shares of the Company as at 31 December 2024 or the
date a Director left the Board. These cover beneficial and conditional interests. No Director had any dealing in the shares of
the Company between 31 December 2024 and 28 February 2025 (being the latest practicable date prior to publication).
Beneficial
1
PSP
awards
2
ESOP
shares
Total
31/12/2024
Total
28/02/2025
T. Cobbold (from 1 September 2024) 0 — — 0 0
J. Pike 11,061 — — 11,061 11,061
N.B. Patel 22,900 29,778 166 52,844 52,852
N.J. Anderson
(to 16 January 2024) 68,817 15,669 835 85,321 85,321
L.S. Burdett
(from 8 July 2024) 0 16,387 0 16,387 16,387
R. Gllingwater 600 — — 600 600
A. Archon 505 — — 505 505
C. Baroudel 300 — — 300 300
P. France 980 — — 980 980
C.A. Johnstone 1,091 — — 1,091 1,091
J.S. Kingston 6,370 — — 6,370 6,370
K.J. Thompson 4,900 — — 4,900 4,900
1 Includes any shares owned by connected persons.
2 Unvested shares remaining subject to performance measures.
Unvested share awards (included in the previous table)
PSP shares subject to
performance conditions
Shares not subject to
performance conditions
2022 2023 2024 2024 ESOP awards
3
N.B. Patel 7,387 8,515 13,876 58
N.J. Anderson
1
9,925 5,744 — —
L.S. Burdett
2
— 7,112 9,275 —
1 2023 PSP award reflects ‘good leaver’ treatment applied to existing awards following Nick’s retirement.
2 2023 PSP shares granted as compensation for remuneration forfeited from prior employer.
3 Excludes dividend shares awarded during the year.
0%
Spirax Group plc Annual Report 2024 141
Governance Report
N.B. Patel
L.S. Burdett
Policy guideline Actual shareholding
300%
200%
220%
400%
200%
% of salary shareholding
0%
Annual Report on Remuneration continued
Unaudited information
TSR performance graph
The graph below demonstrates the growth in value of a £100 investment in the Group compared to the FTSE 100, less
companies in the Mining, Oil & Gas and Financial Services sectors, from January 2015 to December 2024. A comparison
against the FTSE 350 Industrial Goods and Services Supersector is also provided. These comparator groups have been
chosen as the Group is a constituent of both, with the former also aligning with the TSR peer group used for PSP awards.
Aligning pay with performance
The table below shows the historical levels of the Group CEO’s pay (single figure of total remuneration) and annual variable
and PSP awards as a percentage of maximum.
CEO single figure
(£’000)
N.B. Patel
— — — — — — — — — 1,347
N.J. Anderson 1,191 1,611 2,173 2,323 2,788 2,220 3,325 3,099 1,177 36
AIP payment
(%ofmaximum)
N.B. Patel
— — — — — — — — — 40.0%
N.J. Anderson 61.4% 99.2% 100.0% 92.5% 82.6% 30.0% 98.0% 59.3% 10.0% —
PSP vesting
(%ofmaximum)
N.B. Patel
— — — — — — — — —
20.0%
N.J. Anderson 80.3% 40.0% 100.0% 100.0% 100.0% 73.9% 100.0% 100.0% 18.9% —
Spirax Group plc FTSE 350 Industrial Goods & Services Supersector FTSE 100
Jan 2015 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Dec 2024
700
600
500
400
300
200
100
0
Value (£)
Spirax Group plc Annual Report 2024142
Governance Report — Remuneration continued
Percentage change in remuneration of the Directors and colleagues
The following table provides a summary of the increases in base salary, benefits and bonus for the Directors compared to
the average increase for colleagues in the same period, for the last five years. The regulations require disclosure of the
change in remuneration of the colleagues of the Parent Company. As Spirax Group plc only employs the Executive Directors
(whose individual information is already included below), the general UK colleague population comparator group has been
used to give a more meaningful comparison.
% change on
prior year for 2020
% change on
prior year for 2021
% change on
prior year for 2022
% change on
prior year for 2023
% change on
prior year for 2024
Salary/
Fees Benefits Bonus
Salary/
Fees Benefits Bonus
Salary/
Fees Benefits Bonus
Salary/
Fees Benefits Bonus
Salary/
Fees Benefits Bonus
UK colleagues 2.9 2.9 -32.1 2.0 2.0 120.7 2.7 2.7 -26.2 7.1 7.1 -70.5 3.1 3.1 246.9
T. Cobbold
(from 1 September 2024) — — — — — — — — — — — — — — —
J. Pike 2.9 — — 2.0 — — 32.3 — — 3.0 — — 13.3 — —
N.B. Patel
(CEO from 16 January 2024) — — — 2.0 2.0 240.0 2.7 -33.4 -36.5 5.3 7.1 -83.0 36.0 50.2 552.5
N.J. Anderson
(to 16 January 2024) 2.9 2.9 -62.6 2.0 2.0 233.2 2.7 2.6 -37.9 19.0 7.1 -79.9 -95.8 -95.8 -100
L.S. Burdett
(from 8 July 2024) — — — — — — — — — — — — — — —
R. Gillingwater — — — — — — 16.6 — — 2.4 — — 17.2 — —
A. Archon — — — 2.0 — — 10.4 45.7 — 18.0 61.0 — 15.8 11.5 —
C. Baroudel
(from 3 August 2023) — — — — — — — — — — — — 171.8 — —
P. France 2.9 — — 2.0 — — 10.4 — — 3.0 — — 13.3 — —
C.A. Johnstone 2.9 — — 2.0 — — 16.6 — — 2.4 — — 17.2 — —
J.S. Kingston 2.9 — — 2.0 — — 16.6 — — 2.4 — — 17.2 — —
K.J. Thompson 2.9 — — 2.0 — — 16.6 — — 2.4 — — 17.2 — —
Group CEO pay ratio
The table below details the ratio of the Group CEO’s single figure of total remuneration to the 25th, 50th and 75th percentile
total remuneration of the Group’s full-time equivalent UK colleagues. For 2024, comparisons have been made using Nimesh
Patel’s disclosed remuneration, as he held the role of Group CEO for 96% of the year. As in previous years, Option B has
been chosen for these calculations as the data used is consistent with that collected to inform the Group’s UK gender pay
gap. To ensure the individuals identified at the three quartiles are representative of the UK workforce, the total pay and
benefits for a small number of colleagues centred around each quartile were also considered to confirm there were no
anomalies. The individuals identified were deemed appropriately representative.
Financial year Methodology 25th percentile 50th percentile 75th percentile
2024 Option B 35:1 31:1 19:1
2023 Option B 33:1 28:1 18:1
2022 Option B 91:1 65:1 51:1
2021 Option B 111:1 83:1 62:1
2020 Option B 76:1 66:1 45:1
2019 Option B 110:1 74:1 46:1
Single figure total remuneration (£’000)
CEO 25th percentile 50th percentile 75th percentile
Salary 711 33 37 61
Benefits 29 1 1 1
Bonus 432 0 1 0
PSP 102 — — —
Pension 71 3 4 7
ESOP 2 1 1 1
Total pay 1,347 38 44 70
Spirax Group plc Annual Report 2024 143
Governance Report
Unaudited information continued
Year-on-year commentary
As shown earlier in this report, a sizeable proportion of the Group CEO’s total potential remuneration is linked to
performance outcomes which will annually impact the CEO pay ratio. Total actual pay outcomes for other colleagues across
the Group are less driven by performance outcomes, as is typical in the market. For 2024, the CEO pay ratio has increased
slightly as a result of higher AIP and PSP outcomes for the Group CEO. Nimesh Patel’s total variable pay for 2024 was
£535,441, around 40% of total remuneration, compared with 27% (£322,091) of Nick Anderson’s 2023 total remuneration.
Relative importance of spend on pay
The table below demonstrates the relative importance of total pay spend relative to total colleague numbers, profit before
tax (selected as the best measure of efficiency) and dividends payable in respect of the year.
2024 2023 Change
Total pay spend £643.2m £634.2m 1.4%
Group average headcount 9,910 10,122 (2.1)%
Adjusted profit before tax £288.1m £309.2m (6.8)%
Dividends payable £121.6m £117.8m 3.2%
Statement of voting at the Annual General Meeting
At the AGM in 2024, shareholders approved the Annual Report on Remuneration 2023. The following table shows the results
which required a simple majority (i.e. 50%) of the votes cast to be in favour for the resolutions to be passed.
Votes
for %
Votes
against %
Votes
withheld
1
Remuneration Policy 2023 (2023 AGM) 54,257,130 91.09% 5,303,941 8.91% 290,647
Annual Report on Remuneration 2023 (2024 AGM) 57,808,820 96.69% 1,979,683 3.31% 11,423
1 A vote withheld does not constitute a vote in law and therefore has not been included when calculating the percentages above.
Directors’ service agreements and letters of appointment
Original
appointment date
Current agreement/
appointment/
reappointment letter Expiry date Notice period
No. of years’ service
as at
31 December 2024
Executive Directors
N.B. Patel 27/07/2020 16/01/2024 N/A 12 months 4 years, 5 months
L.S. Burdett 08/07/2024 08/07/2024 N/A 12 months 0 years, 5 months
Chair and Non-Executive Directors
T. Cobbold 01/09/2024 01/09/2024 31/08/2027 3 months 0 years, 4 months
J. Pike 01/05/2014 12/05/2021 11/05/2024 3 months 10 years, 8 months
R. Gillingwater 10/03/2021 10/03/2024 09/03/2027 1 month 3 years, 9 months
A. Archon 01/12/2020 01/12/2023 30/11/2026 1 month 4 years, 1 months
C. Baroudel 01/08/2023 01/08/2023 31/07/2026 1 month 1 years, 5 months
P. France 06/03/2018 06/03/2024 05/03/2027 1 month 6 years, 9 months
C.A. Johnstone 05/03/2019 04/03/2022 04/03/2025 1 month 5 years, 9 months
J.S. Kingston 01/09/2016 01/09/2022 31/08/2025 1 month 8 years, 4 months
K.J.Thompson 15/05/2019 15/05/2022 14/05/2025 1 month 5 years, 7 months
Chair and Non-Executive Directors
The Chair and Non-Executive Directors have letters of appointment with the Company for a period of three years, subject
to annual re-election at the AGM. Appointments may be terminated by the Company or individual with three months’ notice
for the Chair and one month’s notice for all other Non-Executive Directors. The appointment letters for the Chair and
Non-Executive Directors provide that no compensation is payable on termination, other than accrued fees and expenses.
Remuneration Policy
The Remuneration Policy which applies to this year’s Directors’ Remuneration Report, was approved on 10 May 2023 and
can be found in full in our 2022 Annual Report on pages 160 to 168 and on our website, spiraxgroup.com. A summary of this
Remuneration Policy is set out on the following pages together with details of how the Policy will be implemented for 2025.
Annual Report on Remuneration continued
Spirax Group plc Annual Report 2024144
Governance Report — Remuneration continued
Summary Remuneration Policy
Summary Remuneration Policy (approved 2023) and implementation for 2025
The table below sets out a summary of our Remuneration Policy for Executive and Non-Executive Directors and how it will
be implemented for 2025. The full Policy was approved by shareholders at the AGM on 10 May 2023 and can be found on
our website at spiraxgroup.com/governance-documents. The Policy took effect from this date and is designed to attract,
retain and motivate our leaders within a framework designed to promote the long-term success of Spirax Group as well as
align with our shareholders’ interests.
Element 2023 Policy Summary Implementation for 2025
Base salary
•
Salaries are typically reviewed annually by the
Committee considering a number of factors,
including the scale and complexity of the role,
experience of the individual, wider workforce
comparison, external market data and the impact
of any increase on the total remuneration package
Effective 1 January 2025:
•
Group CEO: £763,000
•
CFO: £562,100
See page 130 for further details
Pension
•
For UK nationals, the Company provides a defined
contribution pension arrangement on the same
terms as other colleagues or a cash allowance of
10% salary
•
Pension contributions for the
Executive Directors will be
10% of salary
Common benefits
•
The Company provides common benefits including,
company car and associated running costs or cash
alternative allowance; private health insurance and
telecommunications and computer equipment; life
assurance and long-term disability insurance
•
Executive Directors receive car
cash allowance, private health
insurance, life assurance and
long-term disability insurance
consistent with all other UK senior
leaders. Full details are shown
on page 140
Mobility- related benefits
•
The Company will pay all reasonable expenses and
applicable tax to support relocate on appointment
and repatriation to the original home country at
the end of their assignment and/or employment.
Executive Directors are not entitled to tax equalisation
•
Not applicable
Annual Incentive
Plan(AIP)
•
Executive Directors participant in this non-
contractual cash bonus scheme. Maximum
potential award of 200% of salary although
currently the maximum award level is 150%
of salary
•
Any measure can be incorporated at the
Committee’s discretion provided it is aligned to the
Group’s strategic objectives; however, at least 70%
of the bonus opportunity will be based on financial
performance
•
The Committee can adjust some performance
targets to reflect certain non-operating items and
has discretion to adjust the formulaic outcome if it
is not representative of the performance delivered
•
If an Executive Director has not reached the level
of 1.5 times their shareholding requirement, then
they must use the net of tax amount of 25% of their
bonus to increase the level of shareholding and
hold these shares for two years
•
Bonus payments are subject to clawback and/or
malus for up to three years following payment
•
Maximum annual bonus opportunity
will be 150% of base salary
(Group CEO) and 125% of base
salary (CFO)
•
Financial performance conditions
determine 90% of any bonus,
measured against the following
Group metrics:
Operating Profit (55%)
Organic Revenue Growth (20%)
Cash Conversion (15%)
•
The remainder of any bonus
payment is determined as follows:
Personal Strategic
Objectives (10%)
•
Targets will be disclosed
retrospectively for reasons
of commercial sensitivity
•
Executive Directors may be
required to use 25% of any net
bonus received to purchase shares
in the Company
Spirax Group plc Annual Report 2024 145
Governance Report
Summary Remuneration Policy continued
Summary Remuneration Policy (approved 2023) and implementation for 2025 continued
Element Operation Implementation for 2025
Performance
Share
Plan(PSP)
•
The Committee annually grants conditional shares to Executive
Directors, subject to Committee approval. Maximum potential
individual grants may be up to 250% salary although currently
the maximum grant level is 200% of salary for the Group CEO.
•
Performance is measured over a three-year period, normally
starting at the beginning of the financial year in which awards
are granted. An additional two-year post-vesting holding
period applies
•
Measures, targets and weightings are reviewed regularly by
the Committee to ensure continuing alignment with strategic
objectives. At least 50% of the award will be based on financial
and/or share price related metrics
•
The Committee has discretion to adjust the formulaic outcome
if it is not representative of the performance delivered
•
Share awards are subject to clawback and/or malus for up
to five years following initial award. Circumstances include
financial misstatement, erroneous calculations determining
bonus payments, gross misconduct, corporate failure and
reputational damage
•
PSP award levels will be 200%
of base salary (Group CEO) and
175% of base salary (CFO).
•
Performance measures are:
EPSGrowth(50%)
Threshold: 1.25x Global IP p.a.
Maximum: 3.50x Global IP p.a.
RelativeTSR(30%)
Threshold: Median TSR
Maximum: Upper quartile TSR
ReductioninGHG(20%)
Threshold: 16,592 tonnes
Maximum: 15,012 tonnes
Further details are on page 138
Employee
Share
Ownership
Plan(ESOP)
•
Eligible UK Executive Directors are entitled to participate in an
HMRC-approved Share Incentive Plan known as the ESOP
•
Participation permitted up to
HMRC limits
Shareholding
requirement
•
Directors are required to build and hold shares equivalent in value
to a minimum percentage of their salary. The required shareholding
normally has to be retained for two years after leaving Spirax Group
•
Group CEO: 300% of salary
•
CFO: 200% of salary.
See page 141 for further details.
Chair and
Non-Executive
Directors’ Fees
•
The annual fee for the Chair is reviewed annually by the
Remuneration Committee and reflects all responsibilities
undertaken. Fees for the Non-Executive Directors are reviewed
annually by the Board, with additional fees payable for further
responsibilities and time commitments, such as the role of
Senior Independent Director (SID), Committee Chair or long-haul
intercontinental travel
•
Participation in any annual bonus, incentive plan, pension scheme
or healthcare benefit provided by the Company is not permitted
•
Participation in other benefit arrangements available to the
majority of UK colleagues is permitted, subject to the Company
not incurring any additional costs
•
The Company repays reasonable expenses incurred and may
settle any tax incurred in relation to these
•
The fees paid to the Chair and Non-Executive Directors will
not exceed the amount set out in the Articles of Association
Effective from 1 January 2025,
annual base fees are:
•
Group Chair: £400,000
•
NED fee: £71,540
Additional fees are unchanged
from 2024:
•
Committee Chair: £20,000
•
SID: £20,000
•
Intercontinental travel: £12,000
Spirax Group plc Annual Report 2024146
Governance Report — Remuneration continued
Recruitment Policy
The table below summarises the Company’s policy on the recruitment of new Executive Directors. Similar considerations
may also apply where a Director is promoted to the Board. In addition, the Committee has discretion to include any other
remuneration component or award which it feels is appropriate, considering the specific circumstances of the individual, subject
to the limit on variable remuneration set out below. The rationale for any such component would be appropriately disclosed.
Element Approach
Service contract Executive Directors have rolling service agreements which may be terminated by either the
Company or the Executive Director giving 12 months’ notice. Non-compete restrictions in
the 12 months following the cessation of employment apply.
Base salary Base salary will be set on appointment taking into account the factors set out in the Policy
table. Depending on an individual’s prior experience, the Committee may set salary below
market norms, with the intention that it is realigned over time, typically two to three years,
subject to performance in the role.
Pension Pension benefits will not exceed the rate applicable to the relevant country’s workforce,
as determined by the Committee; Executive Directors who have transferred internally
from overseas may continue to participate in home country pension arrangements and/or
receive a cash allowance in line with the relevant country’s workforce.
For details of common benefits, AIP and PSP see the Remuneration Policy table on pages
145 and 146.
Mobility-related benefits Relocation may include the payment of some or all of an individual’s tax on relocation
expenses incurred within 12 months of joining.
Buyout awards The Committee may offer compensatory awards where an individual has forgone by
accepting the appointment. The terms of such awards would be informed by the amounts
being forfeited and the associated terms (for example the extent to which the outstanding
awards were subject to performance, the vehicles and the associated time horizons).
Awards would be made either through the existing share plans or in accordance with
the relevant provisions contained within the Listing Rules.
Termination Policy
Element Approach
Base salary, pension and
common benefits
Payments made will be in line with contractual notice periods.
Repatriation The Company will pay all reasonable expenses and applicable tax due where an Executive
Director has been recruited from overseas.
AnnualIncentivePlan(AIP) Whilst no entitlement to payment, it is expected where an Executive Director is confirmed
as a ‘good leaver’, payments will be made to the extent performance targets are met
subject to the Plan rules and the Policy. If the Executive Director is not a ‘good leaver’,
it is expected no payment would be made.
Performance Share
Plan(PSP)
The treatment of outstanding shares under the PSP is determined in accordance with the
PSP rules. In the case of a ‘good leaver’ the award will normally vest on the normal vesting
date to the extent the performance conditions are met, with the number of shares pro-
rated to reflect the period employed within the performance period. Otherwise, all awards
will normally lapse in full no later than the last day of employment with the Company.
The full Policy sets out further detail on the treatment of the Executive Directors’ pay arrangements, including the treatment
of share schemes in the event of a change of control or winding up of the Company.
The Company’s approach to annual salary reviews is consistent across the Group, with consideration given to the scope of
the role, level of experience, responsibility, individual performance and market pay levels. The most senior managers in the
business (approximately 350 people globally) participate in bonus arrangements with similar targets, measures and relative
weightings to that of the Executive Directors.
Target and maximum potential values are lower and determined by the grade of the manager’s role. Performance targets
are based on an appropriate combination of Group, Business and local operating company financial measures, in addition
to personal strategic objectives. Contractual terms and benefits for the wider workforce are subject to local employment
legislation and best practice.
Jane Kingston
Chair of Remuneration Committee
10 March 2025
Spirax Group plc Annual Report 2024 147
Governance Report
The Directors present their Report and the audited
Financial Statements of Spirax Group for the year
ended 31 December 2024. The following regulatory
disclosures are made in compliance with the
Companies Act 2006 (the Act), the Listing Rules (LR),
the Disclosure Guidance and Transparency Rules
(DTR) and the 2018 UK Corporate Governance Code
(the Code).
The Board has taken advantage of Section 414C (11) of the
Act to include disclosures in the Strategic Report on those
items indicated in the table at the end of this report. These,
together with this report, comprise the Directors’ Report
(the Report).
Scope of the reporting in this Annual Report
The Board has prepared a Strategic Report (including the
Chair’s Statement, the Group Chief Executive Officer’s
Review, the Financial Review, Operating Review and
Sustainability Report) which provides an overview of the
development and performance of the Group’s business in
the year ended 31 December 2024 and its position at the
end of that year, which covers likely future developments in
the business of the Company and the Group. The Strategic
Report can be found on pages 1 to 96.
For the purposes of compliance with DTR 4.1.5R (2) and
DTR 4.1.8R, the required content of the management report
can be found in the Strategic Report, including the sections
of the Annual Report incorporated by reference. For the
purposes of LR 6.6.4R, the information required to be
disclosed by LR 6.6.1R, which is not covered in this report, is
set out in the table at the end of this report.
Governance Statement
DTR 7.2.1R requires a company to include in its Directors’
Report a Governance Statement containing certain
information. However, as allowed by DTR 7.2.9, we have
chosen to set out the information in the Governance section
of the Annual Report on pages 97 to 151. The Group’s
risk management and internal control framework and the
Principal Risks and uncertainties, described on pages 83 to
87, the various Committee Reports on pages 112 to 133 and
this Directors’ Report also contains required information and
are incorporated into this Statement by reference.
Directors
The Directors who served during the year were Jamie Pike
(stepped down 31 December 2024), Nicholas Anderson
(retired 16 January 2024), Richard Gillingwater, Angela
Archon, Constance Baroudel, Peter France, Caroline
Johnstone, Jane Kingston, Kevin Thompson, Nimesh Patel,
Louisa Burdett (appointed 8 July 2024) and Tim Cobbold
(appointed 1 September 2024).
We have met or exceeded the Board composition
requirements of the Parker Review on ethnic diversity and
the FTSE Women Leaders’ Review on gender diversity on
the Board. Biographies of the Directors and details of the
gender and ethnic diversity of the Board can be found on
pages 100 and 102 to 104.
Results
The Group’s results for the year have been prepared in
accordance with the International Financial Reporting
Standards. They are set out in the Consolidated Income
Statement, which appears on page 164.
The Directors present their
report and the audited Financial
Statements of Spirax Group for the
year ended 31 December 2024.”
Céline Barroche
Group General Counsel and Company Secretary
Directors’ Report
Spirax Group plc Annual Report 2024148
Governance Report — [•]Governance Report — Regulatory disclosures
Dividend
As at 31 December 2024, the Company has distributable
reserves of £570.0 million (see the Company Statement of
Financial Position on page 214). The Directors are proposing
the payment of a final dividend of 117.5 pence (2023: 114.0
pence) which, together with the interim dividend of 47.5
pence (2023: 46.0 pence), makes a total distribution for the
year of 165.0 pence (2023: 160.0 pence). If approved at the
2025 Annual General Meeting (AGM), the final dividend will
be paid on 23 May 2025 to shareholders on the register at
the close of business on 25 April 2025.
Directors’ and Officers’ Insurance
The Company provides Directors’ and Officers’ Insurance
for Board members, as well as Directors of the Group’s
operating companies and senior officers. The Company has
also provided each Director with an indemnity to the extent
permitted by law in respect of the liabilities incurred as a
result of their holding office as a Director of the Company.
Appointment, replacement and powers of Directors
Directors may exercise all the Company’s powers, according
to the Articles of Association. The appointment and
replacement of Directors follow the Articles of Association,
the Code, and UK legislation, including the Companies Act
2006. Directors stand for election or re-election annually at
the AGM, as per the Code.
All current Directors will seek election or re-election at the
2025 AGM. The Board believes that all Directors continue to
perform effectively and are committed to their roles. They
also possess the required skills and experience, as detailed
in their biographies on pages 102 to 103.
Conflicts of interest
Under the Companies Act 2006 and the Company’s Articles
of Association, the Board must address potential conflicts
of interest. Formal procedures are in place for disclosing,
reviewing and authorising any conflicts or potential conflicts
of interest involving Directors.
The Board reviews and if necessary, authorises conflicts as
they arise and conducts an annual review of such matters.
New Directors must declare any conflicts at their first Board
meeting. The Board believes these procedures are effective.
Capital structure
As of 31 December 2024, the Company had 73,776,048
issued ordinary shares, each with one vote at general
meetings. There are no restrictions on share transfers or
voting rights, except as stated in the Articles of Association
or legislation. Directors can issue and allot ordinary shares,
subject to annual renewal by shareholders at the AGM.
On 28 February 2025, the Company held no treasury shares.
Changes in issued share capital listed on the London Stock
Exchange are detailed in Note 20 on page 190.
Share capital – special rights and restrictions
There are no specific restrictions on shareholding size or
voting rights for holders of ordinary shares under the Articles
and prevailing laws. The Directors note that only legal
restrictions, such as insider trading laws and FCA Listing
Rules, may limit the transfer of ordinary shares. Employees
may need Company approval to deal in its securities.
The Company is unaware of any shareholder agreements
restricting share transfers or voting rights. No individual has
special control over the Company’s share capital, and all
issued shares are fully paid.
Articles of Association
The Company’s Articles of Association are available from
Companies House in the UK or on the Company’s website.
Amendments require a special resolution at a general
shareholders’ meeting.
Change of control
The Group’s principal borrowing facilities include change
of control provisions that could lead to repayment and
cancellation. Executive Directors’ service agreements state
that if terminated after a takeover, they receive salary/
benefits and a lump sum for lost future bonuses.
Substantial shareholdings
The voting rights in the table below have been determined
in accordance with the requirements of the UK Listing
Authority’s Disclosure and Transparency Rules DTR 5
and represent 3% or more of the voting rights attached
to issued shares in the Company as at 28 February 2025
(being the latest practicable date prior to publication)
and 31 December 2024. There are no controlling founder
shareholders.
As at 31 December 2024 As at 28 February 2025
Substantial
shareholdings
Number of
ordinary
shares
% of
issued
share
capital
Number of
ordinary
shares
% of
issued
share
capital
BlackRock, Inc. 7,530,699 10.21% 7,445,971 10.10%
Impax Group plc 4,870,585 6.60% 4,915,208 6.66%
The Vanguard Group
Inc 3,584,647 4.86% 3,622,224 4.91%
PineStone Asset
Management Inc 3,006,005 4.07% 2,736,930 3.71%
Liontrust Investment
Partners LLP 2,238,052 3.03% 2,174,081 2.95%
Purchase of own shares
The Company had Shareholder authority to buy up to 10%
of its shares during the year but made no purchases. This
authority expires at the upcoming AGM, where a renewal
is proposed.
Employee Benefit Trust (EBT)
As of 31 December 2024 72,250 shares were held in the
EBT for fulfilling employee share awards and options.
Dividends on these shares are waived.
Auditor
The Company’s Auditor for the duration of this Annual
Report was Deloitte LLP. Initially appointed on 20 May 2014,
they were reappointed following an audit tender in 2022
and reaffirmed at the 2024 AGM. A resolution to reappoint
Deloitte LLP will be proposed at the forthcoming AGM.
Disclosure of information to the Auditor
As of this Annual Report’s approval date, each Director
confirms they are not aware of any relevant audit
information unknown to the Auditor. Each Director has
taken necessary steps to ensure they are aware of such
information and that the Auditor is informed, in accordance
with Section 418 of the Companies Act 2006.
Research and development (R&D)
The Group continues to devote significant resources to the
research, development, updating and expansion of its range
of products and solutions to remain at the forefront of its
world markets.
Spirax Group plc Annual Report 2024 149
Governance Report
Research and development (R&D) continued
The R&D functions in Steam Thermal Solutions: Spirax Sarco, Cheltenham (UK) and Gestra, Bremen (Germany); Electric
Thermal Solutions: Vulcanic, Neuilly-sur-Marne (France) and Thermocoax, Normandy (France); and WMFTS: Falmouth (UK)
and Aflex Hose, Huddersfield (UK); and the Product Development functions in Chromalox, Pittsburgh (USA) and Durex
Industries, Cary (USA) are tasked with improving the Group’s pipeline of new products, accelerating the time to launch,
expanding the Group’s addressable market and realising additional sales.
Further information on the expenditure on R&D is contained in Note 6 on page 178. The amount of R&D expenditure
capitalised, and the amount amortised, in the year, are given in Note 14 on pages 185 to 188.
Treasury and foreign exchange
The Group follows approved treasury policies and procedures, managing interest rates on borrowings and cash deposits.
It ensures compliance with banking covenants and maintains facilities to support strategic plans. These policies are
regularly reviewed. The Group avoids speculative transactions beyond normal trading activities.
To manage exchange rate risk, the Group uses forward contracts and monitors foreign currency exposures.
Political donations
The Group has a policy of not making political donations and no political donations were made during the year (2023: nil).
Diversity and inclusion
The Company collects gender and diversity data through voluntary disclosure on the HR portal or direct contact. For the
Board of Directors, we obtain individual permission to share this data annually. Directors self-describe their gender or
ethnicity. The Compliance Statement with FCA’s Listing Rules 6.6.6R(9) is in the Nomination Committee Report (pages 116 to
118). Information as of 31 December 2024 in accordance with Listing Rules 6.6.6R(10) is provided below:
Table 1: Reporting table on gender representation
Number of
Board
members
Percentage
of Board
Number of
senior
positions
on the
Board *
Number in
executive
management
Percentage
of executive
management
Men 6 54.5% 3 42 66.7%
Women 5 45.5% 1 21 33.3%
Non-binary and other genders — — — — —
Not specified/prefer not to say — — — — —
Table 2: Reporting table on ethnicity representation
Number of
Board
members
Percentage
of Board
Number of
senior
positions
on the
Board *
Number in
executive
management
Percentage
of executive
management
White British or other White (including minority White groups) 9 81.8% 3 52 82.5%
Mixed/multiple ethnic groups — — — — —
Asian/Asian British 1 9.1% 1 9 14.3%
Black/African/Caribbean/Black British 1 9.1% — 1 1.6%
Other ethnic group, including Arab — — — 1 1.6%
Not specified/prefer not to say — — — — —
* Group CEO, CFO, SID and Chair
Annual General Meeting
The AGM will be held on Wednesday 14 May 2025, at Charlton House, Cheltenham, UK. Details of the meeting and
resolutions are in the Circular to Shareholders and Notice of Meeting (Circular) on our website and sent to shareholders.
For updates, visit our website: spiraxgroup.com/agm-notices.
Shareholders can vote by submitting a Form of Proxy as per the instructions in the Circular. Vote results will be announced
to the London Stock Exchange and posted on our website shortly after the meeting.
The Strategic Report and this Directors’ Report were approved by the Board on 10 March 2025.
By order of the Board
Céline Barroche
Group General Counsel and Company Secretary
10 March 2025
Spirax Group plc Registered no. 596337
Spirax Group plc Annual Report 2024150
Directors’ Report continued
Governance Report — Regulatory disclosures continued
Additional information
Disclosure Page(s) Location in Annual Report
Asset values 163 Consolidated Statement of Financial Position
1
Charitable donations 77 Strategic Report: Sustainability Report
1
Risk management and Principal Risks 80 to 87 Strategic Report
1
Financial instruments and financial risk management 199 to 204 Note 26, Financial Statements
1
Future developments of the Group’s business 45, 49 and 53 Strategic Report
1
Employee culture and engagement (includes
employee investment and reward)
60, 61 and
112 to 115
Strategic Report: Sustainability Report
1
and
Colleague Engagement Report
Employee share schemes (includes Long-Term
Incentive Plans)
140, 141 and
192 to 197
Directors’ Remuneration Report and Note 22,
Financial Statements
2
Health and Safety and employee-related policies
including diversity and disability
58, 59 and 79 Strategic Report: Sustainability Report
1
Movements in share capital 166 Consolidated Statement of Changes in Equity
Greenhouse gas emissions 64 to 71 Strategic Report: Sustainability Report
1
Going Concern Statement 35 Strategic Report: Financial Review
Directors’ Responsibility Statement 152 Statement of Directors’ Responsibilities
Directors’ interests 141 Directors’ Remuneration Report
Stakeholder consideration and engagement 8 to 10 Strategic Report: Section 172 Statement
1
1 The Board has taken advantage of Section 414C(11) of the Act to include disclosures in the Strategic Report on these items.
2 Information required to be disclosed by LR 6.6.1R.
Spirax Group plc Annual Report 2024 151
Governance Report
The Annual Report 2024 taken as a whole, is fair,
balanced and understandable and provides the
information necessary for shareholders.”
Nimesh Patel
Group Chief Executive Officer
Board of Directors
The Directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable laws and regulations.
Company law requires the Directors to prepare consolidated
Group Financial Statements for each financial year in
accordance with IFRS as adopted by the UK. Parent
Company Financial Statements are prepared under FRS 101.
In addition, by law the Directors must not approve the
Financial Statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
Parent Company and of their profit or loss for that period.
In preparing these Financial Statements, the Directors are
required to:
•
Properly select and apply accounting policies
•
Present information, including accounting policies, in
a manner which is relevant, reliable, comparable and
understandable
•
Provide additional disclosures when compliance with the
specific requirements in IFRS are insufficient to enable
users to understand the impact of particular transactions,
other events and conditions on the entity’s financial
position and financial performance
•
Make an assessment of the Company’s ability to continue
as a going concern
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that its Financial Statements
comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Group’s website, spiraxgroup.com.
Legislation in the UK governing the preparation and
dissemination of Financial Statements may differ from
legislation in other jurisdictions.
Cautionary Statement
All Statements other than Statements of historical fact
included in this document, including those regarding the
Statement of Directors’ Responsibilities
financial condition, results, operations and Businesses of
Spirax Group plc (its strategy, plans and objectives), are
forward-looking Statements.
These forward-looking Statements reflect management’s
assumptions made based on information available at this
time. They involve known and unknown risks, uncertainties
and other important factors which could cause the actual
results, performance or achievements of Spirax Group plc to
be materially different from future results, performance or
achievements expressed or implied by such forward-looking
Statements. Spirax Group plc and its Directors accept no
liability to third parties in respect of this Report save as
would arise under English law.
Any liability to a person who has demonstrated reliance
on any untrue or misleading Statement or omission shall
be determined in accordance with schedule 10A of the
Financial Services and Markets Act 2000. Schedule 10A
contains limits on the liability of the Directors of Spirax
Group plc and their liability is solely to Spirax Group plc.
Responsibility Statement
We confirm that to the best of our knowledge:
•
The Financial Statements, prepared in accordance with
IFRS as adopted by the UK, give a true and fair view of
the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the
consolidation taken as a whole
•
The Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company and the undertakings included
in the consolidation taken as a whole, together with
a description of the Principal Risks and uncertainties
that they face
•
The Annual Report 2024 taken as a whole, is fair,
balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s financial position, performance, business
model and strategy
This Responsibility Statement was approved by the Board of
Directors on
10 March 2025 and is signed on its behalf by:
Group Chief Executive Officer
10 March 2025
Spirax Group plc Annual Report 2024152
Governance Report — Regulatory Disclosures continued
Financial
Statements
In this section
154 Independent Auditor’s Report
163
Consolidated Statement of Financial Position
164 Consolidated Income Statement
165 Consolidated Statement of Comprehensive Income
166 Consolidated Statement of Changes in Equity
167
Consolidated Statement of Cash Flows
168 Notes to the Consolidated Financial Statements
205 Appendix: Alternative performance measures
213 Company Financial Statements
214
Company Statement of Financial Position
215 Company Statement of Changes in Equity
216 Notes to the Company Financial Statements
222 Corporate information: Our Global Operations
Financial Statements
Financial Statements
Spirax Group plc Annual Report 2024 153
Report on the audit of the Financial Statements
1. Opinion
In our opinion:
•
the Financial Statements of Spirax Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) give a true and
fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2024 and of the Group’s
profit for the year then ended;
•
the Group Financial Statements have been properly prepared in accordance with United Kingdom adopted
international accounting standards and IFRS Accounting Standards as issued by the International Accounting
Standards Board (IASB);
•
the Parent Company Financial Statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
•
the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements which comprise:
•
the Consolidated Income Statement;
•
the Consolidated Statement of Comprehensive Income;
•
the Consolidated and Parent Company Statements of Financial Position;
•
the Consolidated and Parent Company Statements of Changes in Equity;
•
the Consolidated Statement of Cash Flows;
•
the related Notes 1 to 27 to the Consolidated Financial Statements and 1 to 11 for the Parent Company Financial Statements;
and
•
the Corporate Information.
The financial reporting framework that has been applied in the preparation of the Group Financial Statements is applicable
law, and United Kingdom adopted international accounting standards and IFRS Accounting Standards as issued by the IASB.
The financial reporting framework that has been applied in the preparation of the Parent Company Financial Statements is
applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United
Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the Financial
Statements section of our report.
We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant
to our audit of the Financial Statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard
as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services provided to the Group and Parent Company for the year are disclosed in Note 6 to
the Financial Statements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical
Standard to the Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
•
goodwill valuation for the Electric Thermal Solutions (ETS) Group of cash-generating units (CGU);
•
defined benefit pension liability valuation for UK schemes; and
•
revenue recognition.
Materiality
The materiality that we used for the Group Financial Statements was £15.0m (2023: £16.0m) which was
determined on the basis of 5% of forecasted adjusted profit before tax.
Scoping
We completed audits of the entire financial information on 24 reporting entities and audits of specified account
balances or specified procedures were performed on 18 reporting entities. Our audits of the entire financial
information, specified account balances and specified procedures covered 73% of total Group revenue and 83% of
profit before tax.
Significant changes
in our approach
The US defined benefit scheme no longer forms part of the defined benefit pension liability valuation key audit
matter given a buy-in transaction completed at the beginning of 2024 which has de-risked the scheme.
Our revenue recognition key audit matter is now broader covering all assertions, not just the cut-off assertion
where the audit risk level has reduced compared to the prior year. The extension of this key audit matter is due
to the significant allocation of resources and effort in the audit of the balance as a whole.
Spirax Group plc Annual Report 2024154
Financial Statements — Independent Auditor’s Report to the members of Spirax Group plc
Report on the audit of the Financial Statements continued
4. Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the Financial Statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going
concern basis of accounting included:
•
evaluated the financing facilities available to the Group including nature of facilities, repayment terms and covenants;
•
considered the business model and Principal Risks and uncertainties;
•
challenged the assumptions used in the forecasts by reference to historical performance, trading run rate, and other
supporting evidence, such as the current macroeconomic environment;
•
recalculated and assessed the amount of headroom in the forecasts (cash and covenants);
•
performed a sensitivity analysis to consider specific scenarios including a reverse stress test; and
•
assessed the appropriateness of the going concern disclosures in the Financial Statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a
going concern for a period of at least 12 months from when the Financial Statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the Directors’ Statement in the Financial Statements about whether the Directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
Financial Statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
5.1. Goodwill valuation for the Electrical Thermal Solutions (ETS) group of cash-generating units (CGU)
Key audit matter
description
The Group holds £669.7m (2023: £680.5m) of goodwill. The value of goodwill for the ETS group of CGUs as at the
balance sheet date was £491.3m (2023: £494.7m). Management performs an impairment review of the carrying value
of the CGU on an annual basis in line with the requirements of IAS 36. The impairment assessment involves
judgement in considering whether the carrying value of the CGU is recoverable.
Management performs a value in use calculation to measure the recoverable amount of the ETS group of CGUs.
There is a high level of judgement surrounding the valuation of goodwill for the ETS group due to the significant
growth anticipated in management forecasts. Key judgements include assumptions in estimating future revenue and
earnings before interest and tax (EBIT) margins in the short term (2025-2029), alongside setting an appropriate
discount rate. We have identified a key audit matter due to sensitivity of management’s valuation to these assumptions.
The Audit Committee Report on page 124 refers to impairment of goodwill and other intangibles as an area considered by
the Audit Committee. Note 1 to the Consolidated Financial Statements sets out the Group’s accounting policy for
testing of goodwill for impairment. The basis for the impairment reviews is outlined in Note 14 to the Consolidated
Financial Statements, including details of the discount rates and growth rates used. Note 14 to the Consolidated
Financial Statements also includes details of the extent to which the CGU to which the goodwill and other intangible
assets are allocated are sensitive to changes in the key inputs.
How the scope of
our audit
responded to the
key audit matter
In response to the key audit matter identified, we performed the following procedures:
•
obtained an understanding of the relevant controls relating to the goodwill impairment review process;
•
assessed the integrity of management’s impairment model through testing of the mechanical accuracy and
evaluating the application of the input assumptions;
•
evaluated the revenue and EBIT growth assumptions, held meetings with finance and commercial management
and visited a key facility within the ETS business (Ogden) to understand and assess the growth assumptions within
the impairment model;
•
considered external evidence, such as forecast IP(Industrial Production) and GDP growth, market reports
and order intake, to assess accuracy and reasonableness of management’s forecasts;
•
compared the change in model assumptions from 2023 and understood the driver of any variances;
•
evaluated historical forecasting accuracy by comparing prior year plans to actual results achieved;
•
with the involvement of our internal valuations specialist, we assessed the appropriateness of the discount rate
used utilising their knowledge and expertise;
•
performed a sensitivity analysis on the assumptions used within the model to determine the appropriate disclosure;
•
completed a stand back review by evaluating the reasonableness of the assumptions in aggregate, by comparing the EBIT
multiple of the ETS group to the EBIT multiple of the Group, and the relative Group enterprise value to the value in use; and
•
assessed the appropriateness of the related disclosures.
Key observations
From the work performed above we are satisfied that the value in use used in the goodwill impairment review for the
ETS group CGU supports the carrying value and therefore we are satisfied with the goodwill valuation of the ETS
group CGU. This was on the basis that the key assumptions, applied, when taken in aggregate, are within our
acceptable range. We consider the related disclosures to be appropriate.
Spirax Group plc Annual Report 2024 155
Financial Statements
Report on the audit of the Financial Statements continued
5. Key audit matters continued
5.2. Defined benefit pension liability valuation for UK schemes
Key audit matter
description
At 31 December 2024 the gross UK retirement benefit liability recognised in the Consolidated Statement of Financial
Position was £280.9m (2023: £313.6m). There is a risk of material misstatement relating to the judgements made by
management in valuing the defined benefit pension liabilities including the use of key model input assumptions,
specifically the discount rates, mortality assumptions and inflation rates over the three main UK schemes. These
variables can have a material impact in assessing the quantum of the retirement benefit liability. Management
involved third-party actuaries to complete valuations of the pension liabilities.
Refer to Note 1 for the Group’s policy on defined benefit plans and post-retirement benefit key sources of estimation
uncertainty, Note 22 for the financial disclosure including the key estimates and assumptions used in the defined
benefit pension plan valuations and the significant issues section of the Audit Committee Report on page 124.
How the scope of
our audit
responded to the
key audit matter
We have obtained an understanding of the relevant controls relating to the pensions cycle.
With the involvement of our internal actuarial specialists, we assessed the key assumptions applied in determining the
pension obligations for the three UK pension schemes, and determined whether the key assumptions are reasonable.
For each of the three UK schemes, we challenged management’s key assumptions by reference to illustrative
benchmark rates, sensitising any difference between management’s rates and the illustrative benchmark rates.
Additionally, we benchmarked the key assumptions against other listed companies to check for any outliers in
the data used.
We also evaluated the competence of management expert, their capabilities and objectivity and assessed
their reports considering compliance with IFRIC IAS 19 ‘The Limit on a Defined Benefit Asset’ and have considered
the appropriateness of the related disclosures.
Key observations
From the work performed, we are satisfied that the valuation of the defined benefit pension liability of the UK
schemes is appropriate and the key assumptions applied in respect of the valuation of the three UK schemes’
liabilities are reasonable.
5.3. Revenue recognition
Key audit matter
description
The Group recognised revenue of £1,665.2m (2023: £1,682.6m) through the provision of goods and services
accounted for under IFRS 15 Revenue from Contracts with Customers.
Given the disaggregated nature of the Group, the range of products, customers and markets spanning across
numerous countries and sectors, understanding the revenue recognition process and the control environment
underpinned our central risk assessment and the basis for our planned audit procedures.
Due to the large number of revenue transactions recognised across multiple businesses, this is an area which
requires a significant allocation of resources and effort in the audit.
Refer to Note 1 for the Group’s revenue recognition policy.
How the scope of
our audit
responded to the
key audit matter
Our audit response consisted of a combination of procedures varying depending on the nature of the component,
including:
•
obtaining an understanding of the relevant controls relating to the revenue cycle;
•
collaborating with data and analytics specialists to build bespoke analytics for transactions recorded in the year
for a number of in scope components. The analytics reconciled underlying transaction data with the revenue
recognised by the Group, identifying outliers in the revenue population for further investigation;
•
testing the accuracy and completeness of the data utilised in the analytics, as well as the transactions recorded,
through agreeing a sample to supporting documentation;
•
evaluating the product dispatch cycle and revenue recognition profile across the year-end period;
•
for the components not subject to bespoke analytics, evaluating a sample of items by assessing whether the
performance obligation was met in line with the revenue recognition date in accordance with the terms of trade
with customers; and
•
assessing the appropriateness of the related disclosures.
Key observations
From the procedures performed above, we consider that revenue has been appropriately recognised in the year.
Spirax Group plc Annual Report 2024156
Financial Statements — Independent Auditor’s Report continued
Report on the audit of the Financial Statements continued
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the Financial Statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both
in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Group Financial Statements Parent Company Financial Statements
Materiality
£15.0m (2023: £16.0m) £5.6m (2023: £5.6m)
Basis for
determining
materiality
We determined materiality on the basis of 5% of
forecast adjusted profit before tax (2023: 5% of forecast
adjusted profit before tax), this represents 5.2% of final
adjusted profit before tax.
Parent Company materiality is set at 3% of net assets
(2023: 3% of net assets), which is capped at 50% of the
Group performance materiality. This is consistent with
prior year.
Rationale for the
benchmark applied
We have used adjusted profit before tax for determining
materiality. This is considered to be a key benchmark as
this metric is important to the users of the Financial
Statements (investors and analysts being the key users
for a listed entity) because it portrays the performance
of the business and hence its ability to pay a return on
investment to the investors.
We have considered net assets as the appropriate
measure given the Parent Company is primarily a
holding Company for the Group.
Adjusted PBT
Group materiality
Group materiality
£15.0m
Component
materiality range
£4.5m to £5.6m
Adjusted PBT
£288.2m
Audit Committee
reporting threshold
£0.75m
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for the Financial Statements as a whole.
Group Financial Statements Parent Company Financial Statements
Performance
materiality
70% (2023: 70%) of Group materiality 70% (2023: 70%) of Parent Company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered our risk assessment, including our assessment of the
Group’s overall control environment and the level of corrected and low level of uncorrected misstatements
identified in previous audits. We have also considered changes in key management personnel of the Group.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £750,000
(2023: £800,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of
the Financial Statements.
Spirax Group plc Annual Report 2024 157
Financial Statements
Report on the audit of the Financial Statements continued
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls,
and assessing the risks of material misstatement at the Group level. Based on that assessment, we focused our Group audit
scope primarily on the audit work at 42 components (2023: 40 components). 24 (2023: 24) of these were subject to an audit of
the entire financial information, 17 components (2023: 16 components) were subject to specified account balance procedures
where the extent of our testing was based on our assessment of the risks of material misstatement and of the materiality of the
Group’s operations at those components. In addition, 1 entity (2023: none) was subjected to specified audit procedures. These
components represent the principal business units and account for 73% (2023: 72%) of the Group’s revenue and 83% (2023:
81%) of profit before tax. They were also selected to provide an appropriate basis for undertaking audit work to address the
risks of material misstatement identified above. In addition, the Group team performed audit procedures to obtain additional
coverage over certain account balances including cash, intangible assets and provisions.
The Parent Company is located in the UK and is audited directly by the Group audit team. Our work on the components,
including the Parent Company, was executed at levels of performance materiality applicable to each individual component,
which were lower than Group materiality and ranged from £4.5m to £5.6m (2023: £4.5m to £5.6m).
At the Parent Company level, we also tested the consolidation process and carried out analytical procedures to confirm our
conclusion that there were no significant risks of material misstatement of the aggregated financial information of the remaining
components not subject to audits of the entire financial information, specified account balances or specified procedures.
Revenue Profit before tax
57%
71%
27%
17%
Audit of the entire financial information
Specified account balance/procedures
Review at Group level
Audit of the entire financial information
Specified account balance/procedures
Review at group level
16%
12%
7.2. Our consideration of the control environment
The Group operates a range of IT systems which underpin the financial reporting processes. This can vary by geography
and/or reporting entity. For certain components subject to audits of the entire financial information, we identified relevant IT
systems for the purpose of our audit work. These were typically the principal Enterprise Resource Planning (ERP) systems for
each relevant component that govern the general ledger and transaction accounting balances and also included the Group’s
consolidation system. Our approach was principally designed to inform our risk assessment and, as such, with the involvement
of our IT specialists we obtained an understanding of relevant IT controls and tested the general IT controls for some
operating entities.
Consistent with the prior year, in the current year we did not plan to rely on the operating effectiveness of controls
(automated or otherwise). This strategy reflected our historical knowledge of the: disaggregated nature of the control
environment, which brings inherent segregation of duty challenges in certain smaller businesses; limited formality of the
control environment specifically around retention of evidence of a control’s operation sufficient for testing purposes; and
our understanding of the Group’s business transformation programme to upgrade legacy systems, including gaps in
associated user access and change management controls. This understanding was reconfirmed in the current year
and was factored into our planned audit approach and risk assessment.
The Group-wide G3 programme seeks to enhance the internal control framework and has both IT and business control
aspects that span multi-years. Therefore, in addition to the audit work on IT controls described above, additional audit work
on controls was limited to obtaining an understanding of the relevant controls in key financial reporting process cycles to
inform our risk assessment.
The Group continues to invest time in responding to and addressing our observations on IT and entity level controls.
Management determines their response to these observations and continues to monitor their resolution with reporting
to and oversight from the Audit Committee as explained in the Audit Committee Report on pages 122 and 123, which
includes consideration of developments in control in the context of the FRC guidance and changes to the Corporate
Governance Code. As management develops and completes the business transformation project, we expect our audit
approach to evolve in future years alongside these developments in the internal control environment.
Spirax Group plc Annual Report 2024158
Financial Statements — Independent Auditor’s Report continued
Report on the audit of the Financial Statements continued
7. An overview of the scope of our audit continued
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its
Financial Statements.
The Group has assessed the risk and opportunities relevant to climate change which has been included as an emerging
risk across the Group. This risk has also been considered and embedded into the businesses as explained in the Strategic
Report on page 82.
In combination with internal sustainability specialists, we have obtained management’s risk register and held discussions
with those charged with governance to understand the process of identifying climate-related risks, the determination of
mitigating actions and the impact on the Group’s Financial Statements. Whilst management has acknowledged that the
transition and physical risks posed by climate change have the potential to impact the medium to long term success of the
business, they have assessed that there is no material impact arising from climate change on the judgements and estimates
determining the valuations within the Financial Statements as at 31 December 2024 as explained in Note 1.
We performed our own qualitative risk assessment of the potential impact of climate change on the Group’s account
balances and classes of transaction, and did not identify any additional risks of material misstatement. We have also
evaluated the appropriateness of disclosures included in the Financial Statements and read climate-related disclosures
included in the Strategic Report to consider whether they are materially consistent with the disclosures made in Financial
Statements and our knowledge obtained in the audit.
7.4. Working with other auditors
The Group audit was conducted exclusively by a global network of Deloitte member firms under the direction and
supervision of the UK Group audit team. Detailed instructions were sent to each component audit team to set out the scope,
timing and extent of the audit. Dedicated members of the Group audit team were assigned to each component to facilitate
an effective and consistent approach to component oversight. We reviewed the work performed by component teams and
discussed the results with them, including holding planning meetings. We maintained regular communication between the
Group and component teams and remote access to relevant documents was provided. Based on our understanding of each
component, for certain components we conducted in-person site visits and additionally, we increased our interaction with
certain component audit teams based on our professional judgement.
8. Other information
The other information comprises the information included in the Annual Report, other than the Financial Statements and
our Auditor’s Report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the Financial Statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the Financial Statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the
Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether
due to fraud or error.
In preparing the Financial Statements, the Directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Spirax Group plc Annual Report 2024 159
Financial Statements
Report on the audit of the Financial Statements continued
10. Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an Auditor’s Report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these Financial Statements.
A further description of our responsibilities for the audit of the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
•
the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
•
the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error that is approved
annually by the Board, most recently on 6 March 2025;
•
results of our enquiries of management, internal audit, the Directors and the Audit Committee about their own
identification and assessment of the risks of irregularities, including those that are specific to the Group’s sector;
•
any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures
relating to:
•
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
non-compliance;
•
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged
fraud; and
•
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
•
the matters discussed among the audit engagement team including component audit teams and relevant internal
specialists, including tax, valuations, pensions, sustainability and IT specialists regarding how and where fraud might
occur in the Financial Statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for
fraud and identified the greatest potential for fraud. In common with all audits under ISAs (UK), we are also required to
perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on
provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures
in the Financial Statements. The key laws and regulations we considered in this context included the UK Companies Act,
UK Listing Rules, pensions legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the Financial
Statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty.
Spirax Group plc Annual Report 2024160
Financial Statements — Independent Auditor’s Report continued
Report on the audit of the Financial Statements continued
11. Extent to which the audit was considered capable of detecting irregularities, including fraud continued
11.2. Audit response to risks identified
As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or
non-compliance with laws and regulations.
Our procedures to respond to risks identified included the following:
•
reviewing the Financial Statement disclosures and testing to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the Financial Statements;
•
enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation
and claims;
•
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
•
reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing
correspondence with HMRC; and
•
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a
potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal
course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
including internal specialists and component audit teams, and remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the Financial
Statements are prepared is consistent with the Financial Statements; and
•
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in
the course of the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ Statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the Financial Statements and our knowledge obtained
during the audit:
•
the Directors’ Statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 35;
•
the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the
period is appropriate set out on page 35;
•
the Directors’ Statement on fair, balanced and understandable set out on page 123;
•
the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page
119;
•
the section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on page 123; and
•
the section describing the work of the Audit Committee set out on page 121.
Spirax Group plc Annual Report 2024 161
Financial Statements
Report on other legal and regulatory requirements continued
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•
we have not received all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
the Parent Company Financial Statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the Directors and subsequently at the
Annual General Meeting on 11 May 2014 to audit the Financial Statements for the year ending 31 December 2014 and
subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments
of the firm is 11 years, covering the years ending 31 December 2014 to 31 December 2024.
15.2. Consistency of the Audit Report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an Auditor’s Report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR
4.1.18R, these Financial Statements will form part of the Electronic Format Annual Financial Report filed on the National
Storage Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This Auditor’s Report provides no assurance
over whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
10 March 2025
Spirax Group plc Annual Report 2024162
Financial Statements — Independent Auditor’s Report continued
Consolidated Statement of Financial Position
at 31 December 2024
| 2024 | 2023 | ||
| Notes | £m | £m | |
| Assets | |||
| Non-current assets | |||
Property, plant and equipment | 12 | ||
Right-of-use assets | 13 | ||
Goodwill | 14 | ||
Other intangible assets | 14 | ||
Prepayments | |||
Investment in Associate | 11 | ||
Taxation recoverable | 8 | ||
Deferred tax assets | 15 | ||
| Current assets | |||
Inventories | 16 | ||
Trade receivables | 26 | ||
Other current assets | 17 | ||
Taxation recoverable | |||
Cash and cash equivalents | 23 | ||
Total assets | |||
| Equityandliabilities | |||
| Current liabilities | |||
Trade and other payables | 18 | ||
Provisions | 19 | ||
Bank overdrafts | 23 | ||
Current portion of long-term borrowings | 23 | ||
Short-term lease liabilities | 23 | ||
Current tax payable | |||
Net current assets | |||
| Non-current liabilities | |||
Long-term borrowings | 23 | ||
Long-term lease liabilities | 23 | ||
Deferred tax liabilities | 15 | ||
Post-retirement benefits | 22 | ||
Provisions | 19 | ||
Long-term payables | |||
Total liabilities | |||
Net assets | 2 | ||
| Equity | |||
Share capital | 20 | ||
Share premium account | |||
Translation reserve | 20 | ( | ( |
Other reserves | 20 | ( | ( |
Retained earnings | |||
Equity shareholders’ funds | |||
Non-controlling interest | |||
Totalequity | |||
Totalequityandliabilities |
Spirax Group plc Annual Report 2024 163
Financial Statements
Financial Statements — Group Financial Statements
Consolidated Income Statement
for the year ended 31 December 2024
| 2024 | 2023 | ||
| Notes | £m | £m | |
Revenue | 2 | ||
Operating costs | 3 | ( | ( |
Operating profit | 2 | ||
Financial expenses | ( | ( | |
Financial income | |||
Net financing expense | 2, 5 | ( | ( |
Share of loss of Associate | 11 | ( | |
Profit before taxation | 6 | ||
Taxation | 8 | ( | ( |
Profit for the year | |||
| Attributable to: | |||
Equity shareholders | |||
Non-controlling interest | |||
Profit for the year | |||
Earnings per share | 9 | ||
Basic earnings per share | |||
Diluted earnings per share | |||
Dividends | 10 | ||
Dividends per share | |||
Dividends paid during the year (per share) |
The Notes on pages 168 to 204 form an integral part of the Financial Statements.
Spirax Group plc Annual Report 2024164
Financial Statements — Group Financial Statements continued
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
| 2024 | 2023 | ||
| Notes | £m | £m | |
Profit for the year | |||
| Items that will not be reclassified to profit or loss: | |||
Remeasurement gain/(loss) on post-retirement benefits | 22 | ( | |
Deferred tax on remeasurement gain/(loss) on post-retirement benefits | 15, 22 | ( | |
( | |||
| Items that may be reclassified subsequently to profit or loss: | |||
Foreign exchange translation and net investment hedges loss | 20 | ( | ( |
(Loss)/gain on cash flow hedges net of tax | 20, 26 | ( | |
( | ( | ||
Total comprehensive income for the year | |||
| Attributable to: | |||
Equity shareholders | |||
Non-controlling interest | |||
Total comprehensive income for the year |
Spirax Group plc Annual Report 2024 165
Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
| Share | Equity | Non- | |||||||
| Share | premium | Translation | Other | Retained | shareholders’ | controlling | Total | ||
| capital | account | reserve | reserves | earnings | funds | interest | equity | ||
| Notes | £m | £m | £m | £m | £m | £m | £m | £m | |
| Balance at | ( | ( | |||||||
Profit for the year | |||||||||
| Other comprehensive (expense)/ | |||||||||
| income: | |||||||||
| Foreign exchange translation and net | |||||||||
investment hedges loss | 20 | ( | ( | ( | |||||
Remeasurement gain on post- retirement benefits | 22 | ||||||||
| Deferred tax on remeasurement gain | |||||||||
on post-retirement benefits | 15, 22 | ( | ( | ( | |||||
Loss on cash flow hedges net of tax | 20, 26 | ( | ( | ( | |||||
| Total other comprehensive | |||||||||
(expense)/income for the year | ( | ( | ( | ( | |||||
| Total comprehensive income/ | |||||||||
(expense) for the year | ( | ( | |||||||
| Contributions by and distributions | |||||||||
| to owners of the Company: | |||||||||
Dividends paid | 10 | ( | ( | ( | ( | ||||
Equity settled share plans net of tax | ( | ( | ( | ||||||
Purchase of shares from NCI | ( | ( | ( | ( | |||||
Issue of share capital | 20 | ||||||||
Employee Benefit Trust shares | 20 | ||||||||
Balance at | ( | ( |
Other reserves represent the Group’s cash flow hedges, capital redemption and Employee Benefit Trust reserves (see Note
20). The non-controlling interest is a 1.6% (2023: 2.5%) share of Spirax Sarco Korea Ltd held by employee shareholders.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2023
| Share | Equity | Non- | |||||||
| Share | premium | Translation | Other | Retained | shareholders’ | controlling | Total | ||
| capital | account | reserve | reserves | earnings | funds | interest | equity | ||
| Notes | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 1 January 2023 | ( | ||||||||
Profit for the year | |||||||||
| Other comprehensive (expense)/ | |||||||||
| income: | |||||||||
| Foreign exchange translation and net | |||||||||
investment hedges loss | 20 | ( | ( | ( | |||||
Remeasurement loss on post- retirement benefits | 22 | ( | ( | ( | |||||
| Deferred tax on remeasurement loss | |||||||||
on post-retirement benefits | 15, 22 | ||||||||
Gain on cash flow hedges net of tax | 20, 26 | ||||||||
| Total other comprehensive | |||||||||
(expense)/income for the year | ( | ( | ( | ( | |||||
| Total comprehensive (expense)/ | |||||||||
income for the year | ( | ||||||||
Contributions by and distributions to owners of the Company: | |||||||||
Dividends paid | 10 | ( | ( | ( | ( | ||||
Equity settled share plans net of tax | ( | ( | ( | ||||||
Issue of share capital | 20 | ||||||||
Employee Benefit Trust shares | 20 | ||||||||
Balance at 31 December 2023 | ( | ( |
Spirax Group plc Annual Report 2024166
Financial Statements — Group Financial Statements continued
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
| 2024 | 2023 | ||
| Notes | £m | £m | |
| Cash flows from operating activities | |||
Profit before taxation | |||
Depreciation, amortisation and impairment | 2,3 | ||
(Profit)/loss on disposal of property, plant and equipment | 6 | ( | |
Share of loss of Associate | 11 | ||
Additional contributions to pension schemes | 22 | ( | ( |
Profit on disposal of Associate | 11 | ( | ( |
Acquisition-related items | ( | ||
Restructuring-related provisions and current asset impairments | ( | ( | |
Equity settled share plans | 22 | ||
Net financing expense | 5 | ||
Operating cash flow before changes in working capital and provisions | |||
(Increase)/decrease in trade and other receivables | ( | ||
Decrease/(increase) in inventories | ( | ||
(Decrease)/increase in provisions | ( | ||
Increase/(decrease) in trade and other payables | ( | ||
Cash generated from operations | |||
Income taxes paid | ( | ( | |
Net cash from operating activities | |||
| Cash flows from investing activities | |||
Purchase of property, plant and equipment | 12 | ( | ( |
Proceeds from sale of non-current assets | |||
Purchase of software and other intangibles | 14 | ( | ( |
Development expenditure capitalised | 14 | ( | ( |
Disposal of Associate | 11 | ||
Acquisition of businesses net of cash acquired | ( | ( | |
Acquisition of businesses reimbursed consideration | |||
Interest received | 5 | ||
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Proceeds from issue of share capital | 20 | ||
Employee Benefit Trust share purchase | ( | ||
Repaid borrowings | 23 | ( | ( |
New borrowings | 23 | ||
Interest paid and interest on lease liabilities | 5 | ( | ( |
Repayment of lease liabilities | 23 | ( | ( |
Dividends paid (including minorities) | ( | ( | |
Net cash used in financing activities | ( | ( | |
Netchangeincashandcashequivalents | 23 | ( | |
Net cash and cash equivalents at beginning of the year | 23 | ||
Exchange movement | 23 | ( | ( |
Netcashandcashequivalentsatendoftheyear | 23 | ||
Borrowings | 23 | ( | ( |
Net debt at end of the year | 23 | ( | ( |
Lease liabilities | 23 | ( | ( |
Net debt including lease liabilities at end of the year | 23 | ( | ( |
Spirax Group plc Annual Report 2024 167
Financial Statements
Spirax Group plc Annual Report 2024168
Financial Statements — Notes to the Consolidated Financial Statements
1 Accounting policies continued
Basis of preparation continued
Spirax Group plc Annual Report 2024 169
Financial Statements
1 Accounting policies continued
Spirax Group plc Annual Report 2024170
Financial Statements — Notes to the Consolidated Financial Statements continued
1 Accounting policies continued
Spirax Group plc Annual Report 2024 171
Financial Statements
1 Accounting policies continued
Spirax Group plc Annual Report 2024172
Financial Statements — Notes to the Consolidated Financial Statements continued
1 Accounting policies continued
Spirax Group plc Annual Report 2024 173
Financial Statements
1 Accounting policies continued
Revenue continued
Spirax Group plc Annual Report 2024174
Financial Statements — Notes to the Consolidated Financial Statements continued
2 Segmental reporting
As required by IFRS 8 Operating Segments, the segmental structure reflects the current internal reporting provided to the
Chief Operating Decision Maker (considered to be the Board) on a regular basis to assist in making decisions on resource
allocation to each segment and to assess performance.
The Group is organised into three segments with the following core product expertise:
•
Steam Thermal Solutions – Industrial and commercial steam systems
•
Electric Thermal Solutions – Electrical process heating and temperature management solutions
•
Watson-Marlow Fluid Technology Solutions – Peristaltic and niche pumps and associated fluid path technologies
No changes to the structure of operating segments have been made during the current year.
Analysis by operating segment
2024
| Total | |||
| operating | |||
| Revenue | profit | Operating | |
| £m | £m | margin | |
Steam Thermal Solutions | 867.9 | 198.9 | 22.9% |
Electric Thermal Solutions | 404.6 | 46.1 | 11.4% |
Watson-Marlow Fluid Technology Solutions | 392.7 | 90.3 | 23.0% |
Corporate | — | (30.7) | |
Total | 1,665.2 | 304.6 | 18.3% |
Net financing expense | (43.7) | ||
Share of loss of Associate | (2.0) | ||
Profit before tax | 258.9 |
2023
| Total | |||
| operating | |||
| Revenue | profit | Operating | |
| £m | £m | margin | |
Steam Thermal Solutions | 910.1 | 205.2 | 22.5% |
Electric Thermal Solutions | 378.5 | 25.8 | 6.8% |
Watson-Marlow Fluid Technology Solutions | 394.0 | 81.2 | 20.6% |
Corporate | — | (27.8) | |
Total | 1,682.6 | 284.4 | 16.9% |
Net financing expense | (39.9) | ||
Share of (loss)/profit of Associate | — | ||
Profit before tax | 244.5 |
The following table details the split of revenue by geography for the combined Group:
| 2024 | 2023 | |
| £m | £m | |
Europe, Middle East and Africa | 721.3 | 718.7 |
Asia Pacific | 338.2 | 357.4 |
Americas | 605.7 | 606.5 |
Total revenue | 1,665.2 | 1,682.6 |
Revenue generated by Group companies based in the USA is £455.5m (2023: £454.2m), in China is £160.8m (2023: £177.8m),
in Germany is £147.8m (2023: £153.2m), in France is £130.7m (2023: £131.3m), in the UK is £116.7m (2023: £110.0m) and in
the rest of the world is £653.7m (2023: £656.1m).
Spirax Group plc Annual Report 2024 175
Financial Statements
2 Segmental reporting continued
Net financing income and expense
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Income | Expense | Net | Income | Expense | Net | |
| £m | £m | £m | £m | £m | £m | |
Steam Thermal Solutions | 3.1 | (3.5) | (0.4) | 4.1 | (3.3) | 0.8 |
Electric Thermal Solutions | 1.1 | (1.4) | (0.3) | 0.8 | (1.6) | (0.8) |
Watson-Marlow Fluid Technology Solutions | 1.6 | (1.6) | — | 0.9 | (1.2) | (0.3) |
Corporate | 7. 2 | (50.2) | (43.0) | 5.5 | (45.1) | (39.6) |
Total net financing expense | 13.0 | (56.7) | (43.7) | 11.3 | (51.2) | (39.9) |
Net assets
| 2024 | 2024 | 2023 | 2023 | |
| Assets | Liabilities | Assets | Liabilities | |
| £m | £m | £m | £m | |
Steam Thermal Solutions | 693.9 | (190.8) | 714.1 | (203.7) |
Electric Thermal Solutions | 1,139.9 | (84.4) | 1,128.8 | (82.7) |
Watson-Marlow Fluid Technology Solutions | 403.9 | (38.8) | 429.3 | (43.6) |
Corporate | 28.3 | (9.4) | 31.9 | (1.1) |
2,266.0 | (323.4) | 2,304.1 | (331.1) | |
Liabilities | (323.4) | (331.1) | ||
Net deferred tax | (29.4) | (37.2) | ||
Net tax payable | (12.7) | (14.7) | ||
Net debt including lease liabilities | (691.3) | (763.4) | ||
Net assets | 1,209.2 | 1,157.7 |
Non-current assets in the USA were £684.1m (2023: £689.1m), in France were £353.2m (2023: £388.7m), in the UK were
£276.3m (2023: £251.1m), in Germany were £151.2m (2023: £161.0m) and in the rest of the world were £193.3m (2023:
£193.7m).
Capital additions, depreciation, amortisation and impairment
| 2024 | 2023 | |||
| 2024 | Depreciation, | 2023 | Depreciation, | |
| Capital | amortisation | Capital | amortisation | |
| additions | and impairment | additions | and impairment | |
| £m | £m | £m | £m | |
Steam Thermal Solutions | 37.7 | 33.0 | 48.2 | 47.9 |
Electric Thermal Solutions | 48.4 | 37.7 | 32.2 | 40.3 |
Watson-Marlow Fluid Technology Solutions | 18.9 | 31.0 | 66.6 | 24.5 |
Corporate | 4.6 | 2.0 | 14.1 | — |
Group total | 109.6 | 103.7 | 161.1 | 112.7 |
Capital additions include property, plant and equipment of £74.3m (2023: £84.0m) and intangible assets of £18.5m
(2023: £25.0m). Right-of-use asset additions of £16.8m (2023: £52.1m) occurred during the 12-month period to
31 December 2024. Capital additions split between the USA, UK and rest of the world are USA £49.5m (2023: £68.7m),
UK £22.9m (2023: £43.6m) and rest of the world £37.2m (2023: £48.8m).
Spirax Group plc Annual Report 2024176
Financial Statements — Notes to the Consolidated Financial Statements continued
| 2024 | 2023 | |
| £m | £m | |
Cost of inventories recognised as an expense | 396.5 | 402.5 |
Staff costs (Note 4) | 640.5 | 630.4 |
Depreciation, amortisation and impairment | 103.7 | 112.7 |
Other operating charges | 219.9 | 252.6 |
Total operating costs | 1,360.6 | 1,398.2 |
4 Staff costs and numbers
The aggregate payroll costs of persons employed by the Group were as follows:
| 2024 | 2023 | |
| £m | £m | |
Wages and salaries | 528.4 | 523.1 |
Social security costs | 85.1 | 82.0 |
Pension costs | 29.7 | 29.1 |
Total payroll costs | 643.2 | 634.2 |
The average number of persons employed by the Group (including Directors) during the year was as follows:
2024 | 2023 | |
United Kingdom | 2,411 | 2,608 |
Rest of the world | 7,499 | 7,514 |
Group average | 10,122 |
| 2024 | 2023 | |
| £m | £m | |
| Financial expenses | ||
Bank and other borrowing interest payable | (51.7) | (46.9) |
Interest expense on lease liabilities | (3.1) | (2.2) |
Net interest on pension scheme liabilities | (1.9) | (2.1) |
(56.7) | (51.2) | |
| Financial income | ||
Bank interest receivable | 13.0 | 11.3 |
Net financing expense | (43.7) | (39.9) |
Net bank interest | (38.7) | (35.6) |
Interest expense on lease liabilities | (3.1) | (2.2) |
Net interest on pension scheme liabilities | (1.9) | (2.1) |
Net financing expense | (43.7) | (39.9) |
Spirax Group plc Annual Report 2024 177
Financial Statements
| 2024 | 2023 | |
| £m | £m | |
Depreciation of property, plant and equipment | (38.9) | (35.5) |
Depreciation of right-of-use assets | (17.6) | (16.2) |
Amortisation of acquired intangibles | (34.1) | (37.2) |
Amortisation of other intangibles | (7.4) | (8.1) |
Non-current asset impairment | (5.7) | (15.7) |
Leases exempt from IFRS 16 (short term, low value or variable lease payments) | (2.9) | (3.1) |
Exchange difference gains | 1.1 | 1.8 |
Profit/(loss) on disposal of non-current assets | 3.8 | (0.1) |
Research and development | (11.3) | (16.8) |
| 2024 | 2023 | |
| Auditor’s remuneration | £m | £m |
Audit of these Financial Statements | 0.7 | 0.7 |
| Amounts receivable by the Company’s Auditor and its Associates in respect of: | ||
Audit of Financial Statements of subsidiaries of the Company | 2.2 | 1.9 |
Total audit fees | 2.9 | 2.6 |
Audit-related assurance services | 0.4 | 0.2 |
Total non-audit fees | 0.4 | 0.2 |
Total Auditor’s remuneration | 3.3 | 2.8 |
| 2024 | 2023 | |
| £m | £m | |
Salaries and short-term benefits | 2.6 | 2.4 |
Post-retirement benefits | 0.1 | 0.1 |
Share-based payments | 0.1 | 0.3 |
Total Directors’ remuneration | 2.8 | 2.8 |
Spirax Group plc Annual Report 2024178
Financial Statements — Notes to the Consolidated Financial Statements continued
8 Taxation
| 2024 | 2023 | |
| £m | £m | |
| Analysis of charge in the year | ||
| UK corporation tax: | ||
Current tax on income for the year | 7.7 | 9.4 |
Adjustments in respect of prior years | (0.3) | (0.1) |
7.4 | 9.3 | |
| Foreign tax: | ||
Current tax on income for the year | 68.1 | 75.3 |
Adjustments in respect of prior years | (0.7) | (0.7) |
67.4 | 74.6 | |
Total current tax charge | 74.8 | 83.9 |
| UK deferred tax: | ||
Origination and reversal of timing differences | (3.3) | (11.4) |
Adjustment in respect of prior years | (0.3) | 0.7 |
(3.6) | (10.7) | |
| Foreign deferred tax: | ||
Origination and reversal of timing differences | (3.2) | (8.6) |
Adjustment in respect of prior years | (0.5) | (4.1) |
(3.7) | (12.7) | |
Total deferred tax credit | (7.3) | (23.4) |
Tax on profit on ordinary activities | 67.5 | 60.5 |
Reconciliation of effective tax rate
| 2024 | 2023 | |
| £m | £m | |
Profit before tax | 258.9 | 244.5 |
Expected tax at blended rate of 26.7% (2023: 26.6%) | 69.2 | 65.0 |
Increased withholding tax on overseas dividends | 6.8 | 7.6 |
Non-deductible expenditure and incentives | (2.2) | 0.8 |
Over provided in prior years | (1.8) | (4.2) |
Other reconciling items | (4.5) | (8.7) |
Total tax in Consolidated Income Statement | 67.5 | 60.5 |
Effective tax rate | 26.1% | 24.7% |
The Group’s tax charge in future years will be affected by the proportion of profits arising and the effective tax rates
in the various countries in which the Group operates. The rate may also be affected by the impact of any acquisitions.
The Group is subject to a tax adjustment in Argentina that seeks to offset the impact of inflation upon taxable profits.
Current high levels of inflation in Argentina have a meaningful impact on the Group’s tax charge. The adjustment gave a
reduction in the Group’s effective tax rate in the year of 110bps being £2.8m on a statutory basis (2023: 260bps being
£6.4m), included within ‘Other reconciling items’ in the reconciliation above. Whilst we include the expected impact of this
adjustment in our guidance for the effective tax rate, this is difficult to accurately forecast.
The Group has also benefitted from one-off investment tax incentives in the USA giving a reduction in the Group’s effective
tax rate in the year of 90bps being £2.3m on a statutory basis (2023: £nil), included within ‘Non-deductible expenditure
and incentives’ in the reconciliation above.
The Group monitors income tax developments in the territories in which it operates.
On 14 July 2023, the government of the United Kingdom, where the parent company is incorporated, enacted the Pillar Two
income taxes legislation effective from 1 January 2024. Under the legislation, the parent company is required to pay top-up
tax on profits of its subsidiaries that are taxed at an effective tax rate of less than 15%. This increased the Group’s effective
tax rate in the year by 50bps being £1.3m on a statutory basis (2023: £nil). The benefit of the Argentinian inflation
adjustment gives rise to most of the Pillar Two income tax.
The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for
deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets
and liabilities related to Pillar Two income taxes.
Spirax Group plc Annual Report 2024 179
Financial Statements
8 Taxation continued
Reconciliation of effective tax rate continued
In October 2017, the European Commission (EC) opened a State Aid investigation into the UK’s Controlled Foreign Company
(CFC) regime. In April 2019, the EC published its final decision that the UK CFC Finance Company Exemption (FCE)
constituted State Aid in certain circumstances, following which the UK Government appealed the decision to the EU General
Court. In June 2022, the EU General Court dismissed the UK Government’s appeal following which the UK Government
lodged a further appeal to the European Court of Justice. The UK Government’s appeal has been successful with the
European Court of Justice annulling the decision of the EC.
The Group received, paid and appealed Charging Notices totalling £4.9m, expects to recover this in 2025 and has
recognised a current receivable for the full amount at the year-end balance sheet date. The Group has not recognised a
receivable for any repayment interest, estimated at £0.3m, on the amount of £4.9m. HMRC has enquired into the benefit
received during 2019, which the Group estimates to be £1.1m. No provisions have been recognised at the year-end balance
sheet date for this amount.
No tax (after double tax relief for underlying tax) is expected to be payable on the future remittance of retained earnings
of overseas subsidiaries.
The expected tax at blended rate is the product of accounting profit arising in each country multiplied by the statutory tax
rates in each country.
9 Earnings per share
2024 | 2023 | |
Profit attributable to equity shareholders (£m) | 191.2 | 183.6 |
Weighted average shares (million) | 73.7 | 73.6 |
Dilution (million) | 0.2 | 0.2 |
Diluted weighted average shares (million) | 73.9 | 73.8 |
Basic earnings per share | 259.6p | 249.5p |
Diluted earnings per share | 258.9p | 248.9p |
Basic and diluted earnings per share calculated on an adjusted profit basis are included in the Appendix.
The dilution is in respect of the Performance Share Plan.
10 Dividends
| 2024 | 2023 | |
| £m | £m | |
| Amounts paid in the year: | ||
Final dividend for the year ended 31 December 2023 of 114.0p (2022: 109.5p) per share | 84.0 | 80.7 |
Interim dividend for the year ended 31 December 2024 of 47.5p (2023: 46.0p) per share | 35.0 | 33.8 |
Total dividends paid | 119.0 | 114.5 |
| Amounts arising in respect of the year: | ||
Interim dividend for the year ended 31 December 2024 of 47.5p (2023: 46.0p) per share | 35.0 | 33.8 |
Proposed final dividend for the year ended 31 December 2024 of | 86.6 | 84.0 |
Total dividends arising |
The proposed dividend is subject to approval in 2025. It is therefore not included as a liability in these Financial Statements.
No scrip alternative to the cash dividend is being offered in respect of the proposed final dividend for the year ended
31 December 2024.
Spirax Group plc Annual Report 2024180
Financial Statements — Notes to the Consolidated Financial Statements continued
| Associate | Associate | |
| 2024 | 2023 | |
| £m | £m | |
Cost of investment | 3.3 | 3.0 |
Share of equity | — | — |
Total investment in Associate | 3.3 | 3.0 |
| Country of incorporation | Proportion of ownership interest | ||
| Name of Associate | and operation | and voting power held | Principal activity |
Sustainable Process Heat GmbH | Germany | 12.0% | Manufacturing and selling |
| Country of incorporation | Proportion of ownership interest | ||
| Name of Associate | and operation | and voting power held | Principal activity |
Kyoto Group AS | Norway | 15.0% | Manufacturing and selling |
Spirax Group plc Annual Report 2024 181
Financial Statements
12 Property, plant and equipment
2024
| Fixtures, | ||||||
| Freehold | Leasehold | fittings, | ||||
| land and | land and | Plant and | tools and | Assets under | ||
| buildings | buildings | machinery | equipment | construction | Total | |
| £m | £m | £m | £m | £m | £m | |
| Cost: | ||||||
At 1 January 2024 | 1 97.6 | 50.2 | 253.9 | 125.3 | 50.8 | 67 7.8 |
Exchange adjustments | (4.9) | (0.5) | (6.5) | (3.2) | 0.5 | (14.6) |
192.7 | 49.7 | 247.4 | 122.1 | 51.3 | 663.2 | |
Additions | 13.7 | 2.4 | 27.4 | 14.2 | 16.6 | 74.3 |
Transfers | 4.5 | 1.5 | 5.2 | 0.5 | (8.7) | 3.0 |
Disposals | (4.4) | (0.3) | (7.7) | (11.7) | (0.3) | (24.4) |
At 31 December 2024 | 206.5 | 53.3 | 272.3 | 125.1 | 58.9 | 716.1 |
| Depreciation: | ||||||
At 1 January 2024 | 39.8 | 12.8 | 140.7 | 69.4 | — | 262.7 |
Exchange adjustments | (1.4) | (0.3) | (3.4) | (2.0) | — | (7.1) |
38.4 | 12.5 | 137.3 | 67.4 | — | 255.6 | |
Charged in year | 6.6 | 2.0 | 18.6 | 11.7 | — | 38.9 |
Impairment | — | — | 0.7 | — | 5.0 | 5.7 |
Transfers | 0.8 | 0.1 | 2.3 | (0.3) | — | 2.9 |
Disposals | (1.3) | (0.4) | (7.1) | (11.3) | — | (20.1) |
At 31 December 2024 | 44.5 | 14.2 | 151.8 | 67.5 | 5.0 | 283.0 |
| Net book value: | ||||||
At 31 December 2024 | 162.0 | 39.1 | 120.5 | 57.6 | 53.9 | 433.1 |
2023
| Fixtures, | ||||||
| Freehold | Leasehold | fittings, | ||||
| land and | land and | Plant and | tools and | Assets under | ||
| buildings | buildings | machinery | equipment | construction | Total | |
| £m | £m | £m | £m | £m | £m | |
| Cost: | ||||||
At 1 January 2023 | 165.1 | 53.6 | 244.4 | 121.5 | 58.2 | 642.8 |
Exchange adjustments | (4.4) | (3.3) | (6.6) | (4.5) | (2.0) | (20.8) |
160.7 | 50.3 | 237.8 | 117.0 | 56.2 | 622.0 | |
Additions | 3.4 | 1.3 | 27.9 | 10.6 | 40.8 | 84.0 |
Transfers | 35.9 | — | 3.1 | 5.5 | (45.8) | (1.3) |
Disposals | (2.4) | (1.4) | (14.9) | (7.8) | (0.4) | (26.9) |
At 31 December 2023 | 1 97.6 | 50.2 | 253.9 | 125.3 | 50.8 | 677.8 |
| Depreciation: | ||||||
At 1 January 2023 | 38.5 | 12.9 | 139.2 | 67.7 | — | 258.3 |
Exchange adjustments | (1.1) | (0.8) | (3.7) | (2.2) | — | (7.8) |
37.4 | 12.1 | 135.5 | 65.5 | — | 250.5 | |
Charged in year | 4.8 | 2.1 | 17.2 | 11.4 | — | 35.5 |
Impairment | — | — | 1.8 | — | — | 1.8 |
Transfers | — | — | (0.2) | 0.3 | — | 0.1 |
Disposals | (2.4) | (1.4) | (13.6) | (7.8) | — | (25.2) |
At 31 December 2023 | 39.8 | 12.8 | 140.7 | 69.4 | — | 262.7 |
| Net book value: | ||||||
At 31 December 2023 | 157.8 | 37.4 | 113.2 | 55.9 | 50.8 | 415.1 |
All impaired assets have been impaired down to a recoverable amount of £nil. In 2024 a £5.7m impairment was recognised
within Watson-Marlow Fluid Technology Solutions within Group operating profit; £5.0m within assets under construction
and £0.7m within plant and machinery. In the prior year a £1.8m impairment was recognised as a result of the restructure of
the Watson-Marlow Fluid Technology Solutions Business, also within Group operating profit.
The net amount transferred relates to property, plant and equipment transferred to other intangible assets (see Note 14).
Spirax Group plc Annual Report 2024182
Financial Statements — Notes to the Consolidated Financial Statements continued
13 Leases
| Leased fixtures, | ||||
| Leased land | Leased plant | fittings, tools | Total right-of- | |
| and buildings | and machinery | and equipment | use assets | |
| £m | £m | £m | £m | |
| Cost: | ||||
At 1 January 2024 | 120.1 | 24.4 | 2.6 | 147.1 |
Exchange adjustments | (2.2) | (1.2) | (0.1) | (3.5) |
117.9 | 23.2 | 2.5 | 143.6 | |
Additions | 9.3 | 7.3 | 0.2 | 16.8 |
Disposals | (3.9) | (3.0) | (0.9) | (7.8) |
At 31 December 2024 | 123.3 | 27.5 | 1.8 | 152.6 |
| Depreciation: | ||||
At 1 January 2024 | 32.9 | 14.1 | 1.7 | 48.7 |
Exchange adjustments | (1.2) | (0.7) | 0.1 | (1.8) |
31.7 | 13.4 | 1.8 | 46.9 | |
Charged in the year | 12.7 | 4.6 | 0.3 | 17.6 |
Disposals | (4.0) | (2.6) | (0.9) | (7.5) |
At 31 December 2024 | 40.4 | 15.4 | 1.2 | 57.0 |
| Net book value: | ||||
At 31 December 2024 | 82.9 | 12.1 | 0.6 | 95.6 |
Spirax Group plc Annual Report 2024 183
Financial Statements
13 Leases continued
Right-of-use assets continued
| Leased fixtures, | ||||
| Leased land | Leased plant | fittings, tools | Total right-of- | |
| and buildings | and machinery | and equipment | use assets | |
| £m | £m | £m | £m | |
| Cost: | ||||
At 1 January 2023 | 86.2 | 21.6 | 3.1 | 110.9 |
Exchange adjustments | (3.1) | (0.6) | (0.2) | (3.9) |
83.1 | 21.0 | 2.9 | 1 07.0 | |
Additions | 44.4 | 7.4 | 0.3 | 52.1 |
Disposals | (7.4) | (4.0) | (0.6) | (12.0) |
At 31 December 2023 | 120.1 | 24.4 | 2.6 | 147.1 |
| Depreciation: | ||||
| At 1 January 2023 | 28.2 | 13.3 | 2.2 | 43.7 |
Exchange adjustments | (0.9) | (0.4) | (0.1) | (1.4) |
27.3 | 12.9 | 2.1 | 42.3 | |
Charged in the year | 11.5 | 4.5 | 0.2 | 16.2 |
Disposals | (5.9) | (3.3) | (0.6) | (9.8) |
At 31 December 2023 | 32.9 | 14.1 | 1.7 | 48.7 |
| Net book value: | ||||
At 31 December 2023 | 87.2 | 10.3 | 0.9 | 98.4 |
| 2024 | 2023 | |
| £m | £m | |
Depreciation expense on right-of-use assets | 17.6 | 16.2 |
Interest expense on lease liabilities | 3.1 | 2.2 |
Expense relating to short-term leases | 2.1 | 1.9 |
Expense relating to leases of low value assets | 0.6 | 0.9 |
Expense relating to variable lease payments not included in the measurement of the lease liability | 0.2 | 0.3 |
Income from sublease right-of-use assets | — | (0.1) |
Total impact on profit before tax | 23.6 | 21.4 |
Spirax Group plc Annual Report 2024184
Financial Statements — Notes to the Consolidated Financial Statements continued
| Acquired | Development | Computer | Total other | ||
| intangibles | costs | software | intangibles | Goodwill | |
| £m | £m | £m | £m | £m | |
| Cost: | |||||
At 1 January 2024 | 616.4 | 36.5 | 97.8 | 750.7 | 688.2 |
Exchange and other adjustments | (9.5) | (0.4) | (1.1) | (11.0) | (10.9) |
606.9 | 36.1 | 96.7 | 739.7 | 67 7.3 | |
Additions | — | 3.9 | 14.6 | 18.5 | — |
Transfers from property, plant and equipment | — | — | 0.2 | 0.2 | — |
Disposals | (24.1) | (5.3) | (4.6) | (34.0) | — |
At 31 December 2024 | 582.8 | 34.7 | 106.9 | 724.4 | 67 7.3 |
| Amortisation: | |||||
At 1 January 2024 | 209.9 | 19.3 | 72.7 | 301.9 | 7.7 |
Exchange adjustments | (5.5) | (0.1) | (1.0) | (6.6) | (0.1) |
204.4 | 19.2 | 71.7 | 295.3 | 7.6 | |
Charged in the year | 34.1 | 2.6 | 4.8 | 41.5 | — |
Transfers from property, plant and equipment | — | — | 0.1 | 0.1 | — |
Disposals | (24.1) | (5.3) | (3.5) | (32.9) | — |
At 31 December 2024 | 214.4 | 16.5 | 73.1 | 304.0 | 7.6 |
| Net book value: | |||||
At 31 December 2024 | 368.4 | 18.2 | 33.8 | 420.4 | 669.7 |
| Acquired | Development | Computer | Total other | ||
| intangibles | costs | software | intangibles | Goodwill | |
| £m | £m | £m | £m | £m | |
| Cost: | |||||
At 1 January 2023 | 632.6 | 34.9 | 88.6 | 756.1 | 710.8 |
Exchange and other adjustments | (19.8) | (0.2) | (2.9) | (22.9) | (22.6) |
612.8 | 34.7 | 85.7 | 733.2 | 688.2 | |
Additions | 3.6 | 7.2 | 14.2 | 25.0 | — |
Transfers from property, plant and equipment | — | 1.7 | (0.4) | 1.3 | — |
Disposals | — | (7.1) | (1.7) | (8.8) | — |
At 31 December 2023 | 616.4 | 36.5 | 97.8 | 750.7 | 688.2 |
| Amortisation: | |||||
At 1 January 2023 | 176.8 | 22.0 | 57.0 | 255.8 | 7.5 |
Exchange adjustments | (4.1) | (0.1) | (1.5) | (5.7) | 0.2 |
172.7 | 21.9 | 55.5 | 250.1 | 7.7 | |
Charged in the year | 37.2 | 3.0 | 5.1 | 45.3 | — |
Impairment | — | — | 13.9 | 13.9 | — |
Transfers from property, plant and equipment | — | — | (0.1) | (0.1) | — |
Disposals | — | (5.6) | (1.7) | (7.3) | — |
At 31 December 2023 | 209.9 | 19.3 | 72.7 | 301.9 | 7.7 |
| Net book value: | |||||
At 31 December 2023 | 406.5 | 17.2 | 25.1 | 448.8 | 680.5 |
Spirax Group plc Annual Report 2024 185
Financial Statements
14 Goodwill and other intangible assets continued
| Manufacturing | |||||
| Brand names | designs and | Non-compete | Total | ||
| Customer | and | core | undertakings | acquired | |
| relationships | trademarks | technology | and other | intangibles | |
| £m | £m | £m | £m | £m | |
| Cost: | |||||
At 1 January 2024 | 179.6 | 326.7 | 81.9 | 28.2 | 616.4 |
Exchange and other adjustments | (2.2) | (4.9) | (1.2) | (1.2) | (9.5) |
177.4 | 321.8 | 80.7 | 27.0 | 606.9 | |
Disposals | (0.5) | — | — | (23.6) | (24.1) |
At 31 December 2024 | 176.9 | 321.8 | 80.7 | 3.4 | 582.8 |
| Amortisation: | |||||
At 1 January 2024 | 62.8 | 81.7 | 38.9 | 26.5 | 209.9 |
Exchange adjustments | (2.2) | (1.2) | (0.8) | (1.3) | (5.5) |
60.6 | 80.5 | 38.1 | 25.2 | 204.4 | |
Charged in the year | 12.3 | 16.6 | 4.6 | 0.6 | 34.1 |
Disposals | (0.5) | — | — | (23.6) | (24.1) |
At 31 December 2024 | 72.4 | 97.1 | 42.7 | 2.2 | 214.4 |
| Net book value: | |||||
At 31 December 2024 | 104.5 | 224.7 | 38.0 | 1.2 | 368.4 |
| Manufacturing | |||||
| Brand names | designs and | Non-compete | Total | ||
| Customer | and | core | undertakings | acquired | |
| relationships | trademarks | technology | and other | intangibles | |
| £m | £m | £m | £m | £m | |
| Cost: | |||||
At 1 January 2023 | 181.9 | 338.1 | 84.2 | 28.4 | 632.6 |
Exchange and other adjustments | (5.9) | (11.4) | (2.3) | (0.2) | (19.8) |
176.0 | 326.7 | 81.9 | 28.2 | 612.8 | |
Additions | 3.6 | — | — | — | 3.6 |
At 31 December 2023 | 179.6 | 326.7 | 81.9 | 28.2 | 616.4 |
| Amortisation: | |||||
At 1 January 2023 | 51.9 | 67.0 | 34.8 | 23.1 | 176.8 |
Exchange adjustments | (1.0) | (2.4) | (0.5) | (0.2) | (4.1) |
50.9 | 64.6 | 34.3 | 22.9 | 172.7 | |
Charged in the year | 11.9 | 17.1 | 4.6 | 3.6 | 37.2 |
At 31 December 2023 | 62.8 | 81.7 | 38.9 | 26.5 | 209.9 |
| Net book value: | |||||
At 31 December 2023 | 116.8 | 245.0 | 43.0 | 1.7 | 406.5 |
Spirax Group plc Annual Report 2024186
Financial Statements — Notes to the Consolidated Financial Statements continued
14 Goodwill and other intangible assets continued
| 2024 | 2023 | |
| Goodwill | Goodwill | |
| £m | £m | |
Steam Thermal Solutions | 119.5 | 125.8 |
Electric Thermal Solutions | 491.3 | 494.7 |
Watson-Marlow Fluid Technology Solutions | 58.9 | 60.0 |
Total goodwill | 669.7 | 680.5 |
| Period of | Period of | |||||||
| 2024 | annual | 2023 | annual | |||||
| Short to | 2024 | cashflow | Short to | 2023 | cashflow | |||
| 2024 | medium-term | Long-term | forecast | 2023 | medium-term | Long-term | forecast | |
| Operating segment | Discount rate | growth rate | growth rate | (years) | Discount rate | growth rate | growth rate | (years) |
Steam Thermal Solutions | 13.7% | 3.5% – 4.7% | 3.8% | 5 | 13.7% | 5.0% – 6.3% | 3.8% | 5 |
Electric Thermal Solutions | 11.7% | 7.7% – 10.1% | 3.2% | 5 | 11.3% | 6.3% – 17.1% | 3.2% | 5 |
| Watson-Marlow Fluid | ||||||||
Technology Solutions | 12.4% | 8.0% – 9.0% | 3.4% | 5 | 12.6% | 11.0% – 11.4% | 3.5% | 5 |
Spirax Group plc Annual Report 2024 187
Financial Statements
14 Goodwill and other intangible assets continued
Impairment continued
| 1 January | Recognised | Recognised | Recognised | 31 December | ||
| 2024 | in income | in OCI | in equity 2024 | |||
| £m | £m | £m | £m | £m | ||
Accelerated capital allowances | (21.0) | (2.3) | — | — | (23.3) | |
Provisions | 10.4 | (0.5) | — | (0.6) | 9.3 | |
Losses | 27.5 | 3.3 | — | — | 30.8 | |
Inventory | 6.3 | 1.2 | — | — | 7.5 | |
Pensions | 13.3 | (1.2) | (1.1) | — | 11.0 | |
Acquired intangibles | (80.3) | 0.9 | — | 1.5 | (77.9) | |
Leases – right-of-use assets | (21.1) | 1.1 | — | 0.2 | (19.8) | |
Leases – liabilities | 21.6 | (0.9) | — | (0.2) | 20.5 | |
Other temporary differences | 6.1 | 5.7 | 0.7 | — | 12.5 | |
Group total | (37.2) | 7.3 | (0.4) | 0.9 | (29.4) | |
| 1 January | Recognised | Recognised | Recognised | 31 December | ||
| 2023 | in income | in OCI | in equity | Acquisitions | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Accelerated capital allowances | (22.8) | 1.4 | — | 0.4 | — | (21.0) |
Provisions | 11.8 | (0.7) | — | (0.7) | — | 10.4 |
Losses | 16.2 | 11.3 | — | — | — | 2 7.5 |
Inventory | 7.3 | (0.9) | — | (0.1) | — | 6.3 |
Pensions | 13.2 | (0.7) | 1.1 | (0.3) | — | 13.3 |
Acquired intangibles | (91.0) | 9.2 | — | 2.3 | (0.8) | (80.3) |
Leases – right-of-use assets* | (14.4) | (7.3) | — | 0.6 | — | (21.1) |
Leases – liabilities* | 15.1 | 7.1 | — | (0.6) | — | 21.6 |
Other temporary differences | 5.5 | 4.0 | (2.1) | (1.3) | — | 6.1 |
Group total | (59.1) | 23.4 | (1.0) | 0.3 | (0.8) | (37.2) |
| 2024 | 2023 | |
| £m | £m | |
Deferred tax asset | 34.2 | 31.0 |
Deferred tax liability | (63.6) | (68.2) |
Net deferred tax liability | (29.4) | (37.2) |
Spirax Group plc Annual Report 2024188
Financial Statements — Notes to the Consolidated Financial Statements continued
15 Deferred tax assets and liabilities continued
Movement in deferred tax during the year 2023 continued
16 Inventories
| 2024 | 2023 | |
| £m | £m | |
Raw materials, consumables and components | 118.6 | 130.4 |
Work in progress | 27.7 | 40.2 |
Finished goods and goods for resale | 106.9 | 114.6 |
Total inventories | 253.2 | 285.2 |
The write-down of inventories recognised as an expense during the year was £6.6m (2023: £15.2m). This comprises a cost
of £7.5m (2023: £15.6m) to write down inventory to net realisable value reduced by £0.9m (2023: £0.4m) for reversal of
previous write-down reassessed as a result of customer demand.
The value of inventories expected to be recovered after more than 12 months is £14.8m (2023: £15.1m).
There is no material difference between the Statement of Financial Position value of inventories and their replacement cost.
None of the inventory has been pledged as security.
| 2024 | 2023 | |
| £m | £m | |
Contract assets | 23.2 | 17.0 |
Prepayments | 31.9 | 24.9 |
Other tax related receivables | 12.2 | 13.4 |
Other deposits made | 3.7 | 2.9 |
Derivative assets | — | 1.8 |
Other receivables | 4.1 | 11.4 |
Total other current assets | 75.1 | 71.4 |
| 2024 | 2023 | |
| £m | £m | |
Trade payables | 86.0 | 79.2 |
Contract liabilities | 39.0 | 32.9 |
Social security | 9.9 | 9.5 |
Accruals | 98.9 | 95.2 |
Other tax related payables | 13.9 | 14.2 |
Pension creditors | 3.4 | 3.0 |
Fair value of deferred consideration | 7.3 | 4.9 |
Other payables | 3.3 | 12.3 |
Derivative liabilities | 1.3 | — |
Total trade and other payables | 263.0 | 251.2 |
Spirax Group plc Annual Report 2024 189
Financial Statements
| Legal, | |||
| Product | contractual | ||
| warranty | and other | Total | |
| 2024 | £m | £m | £m |
At 1 January 2024 | 2.0 | 15.1 | 1 7.1 |
Additional provision in the year | 0.6 | 4.8 | 5.4 |
Utilised or released during the year | (0.9) | (7.5) | (8.4) |
Exchange adjustments | (0.3) | (2.1) | (2.4) |
At 31 December 2024 | 1.4 | 10.3 | 11.7 |
| Legal, | |||
| Product | contractual | ||
| warranty | and other | Total | |
| 2023 | £m | £m | £m |
At 1 January 2023 | 2.7 | 15.5 | 18.2 |
Additional provision in the year | 0.4 | 9.3 | 9.7 |
Utilised or released during the year | (0.5) | (8.5) | (9.0) |
Exchange adjustments | (0.6) | (1.2) | (1.8) |
At 31 December 2023 | 2.0 | 15.1 | 17.1 |
| 2024 | 2023 | |
| £m | £m | |
Current provisions | 5.4 | 9.5 |
Non-current provisions | 6.3 | 7.6 |
Total provisions | 11.7 | 17.1 |
| 2024 | 2023 | |||
| £m | £m | |||
| Ordinary shares of 26 12/13p (2023: 26 12/13p) each: | ||||
Authorised 111,428,571 | (2023: | 111,428,571) | 30.0 | 30.0 |
Allotted, called up and fully paid 73,776,048 (2023: 73,776,048) | 19.8 | 19.8 |
Spirax Group plc Annual Report 2024190
Financial Statements — Notes to the Consolidated Financial Statements continued
20 Called-up share capital and reserves continued
| 1 January | Change | 31 December | |
| 2024 | in year 2024 | ||
| £m | £m | £m | |
Net investment hedge reserve | 5.6 | 4.7 | 10.3 |
Translation reserve | (66.0) | (30.4) | (96.4) |
Total translation reserve | (60.4) | (25.7) | (86.1) |
| 1 January | Change | 31 December | |
| 2023 | in year 2023 | ||
| £m | £m | £m | |
Net investment hedge reserve | (2.7) | 8.3 | 5.6 |
Translation reserve | 20.2 | (86.2) | (66.0) |
Total translation reserve | 17.5 | (77.9) | (60.4) |
| 1 January | Change | 31 December | |
| 2024 | in year 2024 | ||
| £m | £m | £m | |
Cash flow hedges reserve | 1.3 | (2.3) | (1.0) |
Capital redemption reserve | 1.8 | — | 1.8 |
Employee Benefit Trust reserve | (16.0) | 7.7 | (8.3) |
Total other reserves | (12.9) | 5.4 | (7.5) |
| 1 January | Change | 31 December | |
| 2023 | in year 2023 | ||
| £m | £m | £m | |
Cash flow hedges reserve | (3.7) | 5.0 | 1.3 |
Capital redemption reserve | 1.8 | — | 1.8 |
Employee Benefit Trust reserve | (21.5) | 5.5 | (16.0) |
Total other reserves | (23.4) | 10.5 | (12.9) |
| 2024 | 2023 | |
| £m | £m | |
Capital expenditure contracted for but not provided | 13.7 | 14.5 |
Spirax Group plc Annual Report 2024 191
Financial Statements
22 Employee benefits
Retirement benefit obligations
The Group operates a wide range of retirement benefit arrangements, which are established in accordance with local
conditions and practices within the countries concerned. These include funded defined contribution and funded and
unfunded defined benefit schemes.
Other matters
In June 2023, the High Court judged that amendments made to the Virgin Media scheme were invalid because the scheme’s
actuary did not provide the associated Section 37 certificate necessary. The High Court’s decision has wide ranging implications,
affecting other schemes that were contracted-out on a salary-related basis and made amendments between April 1997 and
April 2016. The Court of Appeal upheld the 2023 High Court ruling in July 2024 and the Group subsequently kicked-off the
process of determining any potential impact for the Schemes. An investigation was undertaken by the Group and Trustees
of the Schemes to review the amendments and minutes during the relevant period. From this review, the Group are satisfied
that this ruling would not have any impact on the Defined Benefit Obligation of the Schemes.
In December 2024, the Company agreed to a buy-in of the Spirax-Sarco Executives’ Retirement Benefits Scheme. The
change has been treated as a change in investment strategy, with the impact coming through as part of the actuarial gain/
(loss) on asset in OCI. The income from the policies exactly matches the amount and timing of all benefits payable to all
members of the UK Scheme.
Principal Risks
The pension schemes create a number of risk exposures. Annual increases in benefits are, to a varying extent from scheme
to scheme, dependent on inflation so the main uncertainties affecting the level of benefits payable are future inflation levels
and the actual longevity of the membership. Benefits payable will also be influenced by a range of other factors including
member decisions on matters such as when to retire and the possibility to draw benefits in different forms. A key risk is that
additional contributions are required if the investment returns fall short of those anticipated when setting the contributions
to the pension schemes. All pension schemes are regulated by the relevant jurisdictions. These include extensive legislation
and regulatory mechanisms that are subject to change and may impact on the Group’s pension schemes. The IAS 19 liability
measurement known as defined benefit obligation (DBO) and the service cost are sensitive to the actuarial assumptions
made on a range of demographic and financial matters that are used to project the expected benefit payments, the most
important of these assumptions being the future inflation levels and the assumptions made about life expectation. The DBO
and service cost are also very sensitive to the IAS 19 discount rate, which determines the discounted value of the projected
benefit payments. The discount rate depends on market yields on high quality corporate bonds. Investment strategies are
set with funding rather than IAS 19 considerations in mind and do not seek to provide a specific hedge against the IAS 19
measurement of DBO. As a result the difference between the market value of the assets and the IAS 19 DBO may be volatile.
Further information on the investment strategy for the UK schemes can be found in the Financial Review on pages 32 to 37.
Sensitivity analysis to changes in discount rate and inflation are included on page 196.
Spirax Group plc Annual Report 2024192
Financial Statements — Notes to the Consolidated Financial Statements continued
22 Employee benefits continued
Principal Risks continued
The financial assumptions used at 31 December were:
| Assumptions weighted by value of liabilities % per annum | ||||
| Overseas pensions | ||||
| UK pensions | and medical | |||
| 2024 | 2023 | 2024 | 2023 | |
| % | % | % | % | |
Rate of increase in salaries | n/a | n/a | 2.6 | 2.7 |
Rate of increase in pensions | 3.0 | 2.9 | 2.0 | 2.3 |
Rate of price inflation | 3.2 | 3.0 | 2.0 | 2.2 |
Discount rate | 5.4 | 4.5 | 4.8 | 4.4 |
Medical trend rate | n/a | n/a | 7.5 | 7.5 |
The UK pensions are closed to future accrual; therefore, the rate of increase in salaries is not applicable.
The weighted average duration of the defined benefit obligation at 31 December 2024 was approximately 13 years (2023:
13 years) for the Spirax-Sarco Employees’ Pension Fund, 8 years (2023: 8 years) for the Spirax-Sarco Executives’ Retirement
Benefits Scheme and 13 years (2023: 18 years) for the WMFTS Pension Fund.
The mortality assumptions for the material defined benefit schemes at 31 December 2024 and 31 December 2023 were:
| Spirax-Sarco Employees’ | At 31 December 2024: 100% of the SAPS 3 normal tables, CMI 2023 future improvements, |
| Pension Fund | 1% long-term trend, smoothing factor of 7 and weights parameter of 100%. |
| At 31 December 2023: 100% of the SAPS 3 normal tables, CMI 2022 future improvements, | |
| 1% long-term trend, smoothing factor of 7 and a w parameter of 10 above the core. | |
| Spirax-Sarco Executives’ | At 31 December 2024: 84%/87% (male/female) of SAPS 3 light normal, CMI 2023 future |
| Retirement Benefits | improvements, 1% long-term trend, smoothing factor of 7 and weights parameter of 100%. |
| Scheme | At 31 December 2023: 84%/87% (male/female) of SAPS 3 light normal, CMI 2022 future |
| improvements, 1% long-term trend, smoothing factor of 7 and a w parameter of 10 above | |
| the core. | |
WMFTS Pension Fund | At 31 December 2024: 102% of the SAPS 3 pensioner tables, CMI 2023 future improvements, |
| 1% long-term trend, smoothing factor of 7 and weights parameter of 100%. | |
| At 31 December 2023: 102% of the SAPS 3 pensioner tables, CMI 2022 future improvements, | |
| 1% long-term trend, smoothing factor of 7 and a w parameter of 10 above the core. | |
US Pension Scheme | At 31 December 2024: SOA Pri-2012 Amount-Weighted Blue Collar Mortality Tables with |
| MP2021 – Retiree/Disabled/Contingent Survivor tables | |
| At 31 December 2023: SOA Pri-2012 Amount-Weighted Blue Collar Mortality Tables projected | |
| generationally with MP2021. |
By way of example the mortality tables indicate the following life expectancy across the UK schemes:
2024 life expectancy at 65 | 2023 life expectancy at 65 | |||
Current age | Male | Female | Male | Female |
65 | 21.0 | 23.8 | 21.9 | 24.5 |
50 | 21.7 | 24.5 | 22.8 | 25.5 |
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which,
due to the timescale covered, may not necessarily be borne out in practice.
Spirax Group plc Annual Report 2024 193
Financial Statements
22 Employee benefits continued
Principal Risks continued
The amounts recognised in the Consolidated Statement of Financial Position are determined as follows:
| Overseas pensions | ||||||
| UK pensions | and medical | Total | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Fair value of schemes’ assets | 254.8 | 285.8 | 55.2 | 51.7 | 310.0 | 337.5 |
Present value of funded schemes’ liabilities | (280.9) | (313.6) | (54.4) | (56.9) | (335.3) | (370.5) |
(Deficit)/Surplus in the funded schemes | (26.1) | (27.8) | 0.8 | (5.2) | (25.3) | (33.0) |
Present value of unfunded schemes’ liabilities | — | — | (17.2) | (18.4) | (17.2) | (18.4) |
| Retirement benefit liability recognised in the Consolidated | ||||||
Statement of Financial Position | (26.1) | (27.8) | (16.4) | (23.6) | (42.5) | (51.4) |
Related deferred tax asset | 6.5 | 6.9 | 4.5 | 6.4 | 11.0 | 13.3 |
Net pension liability | (19.6) | (20.9) | (11.9) | (17.2) | (31.5) | (38.1) |
Fair value of scheme assets
| Overseas pensions | ||||||
| UK pensions | and medical | Total | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Quoted equities | 53.9 | 44.6 | 7.7 | 29.7 | 61.6 | 74.3 |
Quoted bonds | 77.8 | 109.0 | 39.6 | 15.4 | 117.4 | 124.4 |
Other | 69.4 | 45.0 | 0.8 | 0.5 | 70.2 | 45.5 |
Total with quoted market price | 201.1 | 198.6 | 48.1 | 45.6 | 249.2 | 244.2 |
Cash and cash equivalents | 26.3 | 43.8 | 1.2 | 0.7 | 27.5 | 44.5 |
Unquoted equities | 1.3 | 2.7 | — | — | 1.3 | 2.7 |
Unquoted bonds | 0.3 | 0.7 | — | — | 0.3 | 0.7 |
Real estate | 12.6 | 14.4 | — | — | 12.6 | 14.4 |
Derivatives | — | 12.2 | — | — | — | 12.2 |
Other | 13.2 | 13.4 | 5.9 | 5.4 | 19.1 | 18.8 |
Total other securities | 53.7 | 87.2 | 7.1 | 6.1 | 60.8 | 93.3 |
Total market value in aggregate | 254.8 | 285.8 | 55.2 | 51.7 | 310.0 | 337.5 |
The actual return on plan assets was a decrease of £12.2m (2023: an increase of £20.8m).
The UK pensions assets include investments in Liability Driven Investment (LDI) funds. LDI funds allow the schemes to
hedge a larger proportion of the underlying interest rate exposure that exists within the schemes liabilities. As a result of
the structure of LDI funds the schemes may be required to provide additional cash collateral to the LDI funds in order to
maintain the current level of hedging should market interest rates increase materially. The LDI funds of £57.4m (2023: £71.5m)
are included within the quoted bonds in the table above.
The movements in the defined benefit obligation recognised in the Consolidated Statement of Financial Position during the
year were:
| Overseas pensions | ||||||
| UK pensions | and medical | Total | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Defined benefit obligation at beginning of year | (313.6) | (309.2) | (75.3) | (84.5) | (388.9) | (393.7) |
Current service cost | — | — | (0.1) | (0.1) | (0.1) | (0.1) |
Past service credit | — | — | 0.2 | — | 0.2 | — |
Interest cost | (13.7) | (14.1) | (3.2) | (3.8) | (16.9) | (17.9) |
Administration costs | — | — | (0.5) | (0.6) | (0.5) | (0.6) |
Remeasurement gain/(loss) | 28.1 | 2.7 | 4.0 | (1.5) | 32.1 | 1.2 |
Actual benefit payments | 17.7 | 17.4 | 4.8 | 5.3 | 22.5 | 22.7 |
Experience gain/(loss) | 0.6 | (10.4) | (1.9) | 0.4 | (1.3) | (10.0) |
Settlements | — | — | — | 5.9 | — | 5.9 |
Currency gain | — | — | 0.4 | 3.6 | 0.4 | 3.6 |
Defined benefit obligation at end of year | (280.9) | (313.6) | (71.6) | (75.3) | (352.5) | (388.9) |
Spirax Group plc Annual Report 2024194
Financial Statements — Notes to the Consolidated Financial Statements continued
22 Employee benefits continued
Fair value of scheme assets continued
The movements in the fair value of plan assets during the year were:
| Overseas pensions | ||||||
| UK pensions | and medical | Total | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Value of assets at beginning of year | 285.8 | 284.6 | 51.7 | 5 7.0 | 337.5 | 341.6 |
Expected return on assets | 12.6 | 13.1 | 2.4 | 2.7 | 15.0 | 15.8 |
Remeasurement (loss)/gain | (30.6) | 1.0 | 3.4 | 4.0 | (27.2) | 5.0 |
Contributions paid by employer | 6.8 | 5.3 | 2.1 | 2.0 | 8.9 | 7.3 |
Actual benefit payments | (17.7) | (17.3) | (4.8) | (5.4) | (22.5) | (22.7) |
Administration costs | (2.1) | (0.9) | — | (6.0) | (2.1) | (6.9) |
Currency gain/(loss) | — | — | 0.4 | (2.6) | 0.4 | (2.6) |
Value of assets at end of year | 254.8 | 285.8 | 55.2 | 51.7 | 310.0 | 337.5 |
The estimated employer contributions to be made in 2025 are £7.5m.
The history of experience adjustments is as follows:
| 2024 | 2023 | 2022 | 2021 | 2020 | |
| £m | £m | £m | £m | £m | |
Defined benefit obligation at end of year | (352.5) | (388.9) | (393.7) | (605.4) | (630.3) |
Fair value of schemes’ assets | 310.0 | 337.5 | 341.6 | 560.7 | 531.7 |
Retirement benefit liability recognised in the Statement of Financial Position | (42.5) | (51.4) | (52.1) | (44.7) | (98.6) |
Experience adjustment on schemes’ liabilities | (1.3) | (10.0) | (16.0) | (2.9) | 11.4 |
As a percentage of schemes’ liabilities | 0.4% | 2.6% | 4.1% | 0.5% | 1.8% |
Experience adjustment on schemes’ assets | (27.2) | 5.0 | (222.4) | 35.7 | 46.5 |
As a percentage of schemes’ assets | 8.8% | 1.5% | 65.1% | 6.4% | 8.7% |
The expense recognised in the Consolidated Income Statement was as follows:
| Overseas pensions | ||||||
| UK pensions | and medical | Total | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Current service cost | — | — | (0.1) | (0.1) | (0.1) | (0.1) |
Administration costs | (2.1) | (0.9) | (0.5) | (0.6) | (2.6) | (1.5) |
Past service credit | — | — | 0.2 | — | 0.2 | — |
Net interest on schemes’ liabilities | (1.1) | (1.1) | (0.8) | (1.0) | (1.9) | (2.1) |
Total expense recognised in Consolidated Income Statement | (3.2) | (2.0) | (1.2) | (1.7) | (4.4) | (3.7) |
The expense is recognised in the following line items in the Consolidated Income Statement:
| 2024 | 2023 | |
| £m | £m | |
Operating costs | (2.5) | (1.6) |
Net financing expense | (1.9) | (2.1) |
Total expense recognised in Consolidated Income Statement | (4.4) | (3.7) |
Spirax Group plc Annual Report 2024 195
Financial Statements
22 Employee benefits continued
Fair value of scheme assets continued
The gain or loss recognised in the Statement of Comprehensive Income (OCI) was as follows:
| Overseas pensions | ||||||
| UK pensions | and medical | Total | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
| Remeasurement effects recognised in OCI: | ||||||
Due to experience on DBO | 0.6 | (10.4) | (1.9) | 0.4 | (1.3) | (10.0) |
Due to demographic assumption changes in DBO | (0.3) | 10.2 | — | — | (0.3) | 10.2 |
Due to financial assumption changes in DBO | 28.4 | (7.5) | 4.0 | (1.5) | 32.4 | (9.0) |
Return on assets | (30.6) | 1.0 | 3.4 | 4.0 | (27.2) | 5.0 |
Total remeasurement (loss)/gain recognised in OCI | (1.9) | (6.7) | 5.5 | 2.9 | 3.6 | (3.8) |
| Deferred tax on remeasurement (loss)/gain and change in rate | ||||||
recognised in OCI | 0.5 | 1.7 | (1.6) | (0.6) | (1.1) | 1.1 |
Cumulative loss recognised in OCI at beginning of year | (59.1) | (54.1) | (10.8) | (13.1) | (69.9) | (67.2) |
Cumulative loss recognised in OCI at end of year | (60.5) | (59.1) | (6.9) | (10.8) | (67.4) | (69.9) |
Sensitivity analysis
The effect on the defined benefit obligation at 31 December 2024 of an increase or decrease in key assumptions is as follows:
| Overseas | |||
| pensions and | |||
| UK pensions | medical | Total | |
| £m | £m | £m | |
| (Decrease)/increase in pension deficit: | |||
Discount rate assumption being 1.0% higher | (30.6) | (6.6) | (37.2) |
Discount rate assumption being 1.0% lower | 34.8 | 7.9 | 42.7 |
Inflation assumption being 1.0% higher | 21.4 | 1.3 | 22.7 |
Inflation assumption being 1.0% lower | (20.0) | (1.1) | (21.1) |
Mortality assumption life expectancy at age 65 being one year higher | 9.2 | 2.3 | 11.5 |
The above sensitivities reflect reasonable possible changes in the assumptions and therefore have been selected on this basis.
The average age of active participants in the UK schemes at 31 December 2024 was 55 years (2023: 55 years) and in the
overseas schemes 46 years (2023: 47 years).
Additional contributions to pension schemes
| 2024 | 2023 | |
| £m | £m | |
Defined benefit arrangements | (2.5) | (1.6) |
Defined contribution arrangements | (27.2) | (26.7) |
Total expense recognised in operating costs | (29.7) | (28.3) |
Defined benefit arrangements | 8.9 | 7.3 |
Defined contribution arrangements | 27.2 | 26.7 |
Total contributions paid by employer | 36.1 | 34.0 |
Additional contributions to pension schemes | 6.4 | 5.7 |
| 2024 | 2023 | |
| £m | £m | |
Performance Share Plan | 1.3 | 4.3 |
Employee Share Ownership Plan | 1.8 | 1.8 |
Total expense recognised in Consolidated Income Statement | 3.1 | 6.1 |
Spirax Group plc Annual Report 2024196
Financial Statements — Notes to the Consolidated Financial Statements continued
22 Employee benefits continued
| 2020 | 2021 | 2022 | 2023 | 2024 | |
| Grant | Grant | Grant | Grant | Grant | |
Grant date | 12 March | 4 May | 14 March | 13 March | 21 March |
Mid-market share price at grant date | 7,775.0p | 11,770.0p | 11,910.0p | 10,880p | 10,377p |
Number of employees | 104 | 106 | 108 | 138 | 124 |
Shares under scheme | 140,934 | 89,806 | 92,951 | 145,505 | 142,275 |
Vesting period | 3 years | 3 years | 3 years | 3 years | 3 years |
Probability of vesting | 74.3% | 73.9% | 76.1% | 81.2% | 79.7% |
Fair value | 5,779.2p | 8,698.0p | 9,057.6p | 8,829.1p | 8,273.6p |
| 2020 | 2021 | 2022 | 2023 | 2024 | |
| Grant | Grant | Grant | Grant | Grant | |
Grant date | 1 October | 1 October | 1 October | 1 October | 1 October |
Exercise price | 11,102.0p | 15,043.3p | 10,348.3p | 9,413.0p | 6,855.0p |
Number of employees | 1,373 | 1,400 | 1,671 | 1,644 | 1,539 |
Shares under scheme | 12,480 | 9,429 | 16,832 | 19,256 | 23,863 |
Vesting period | 3 years | 3 years | 3 years | 3 years | 3 years |
Expected volatility | 25% | 26.5% | 28.7% | 26.5% | N/A |
Risk-free interest rate | 0.1% | 0.2% | 4.0% | 4.9% | N/A |
Expected dividend yield | 1.5% | 1.0% | 1.0% | 1.2% | N/A |
Fair value | 11,956.9p | 16,382.2p | 11,579.7p | 10,486.4p | 6,855.0p |
Spirax Group plc Annual Report 2024 197
Financial Statements
| 1 January | Acquired | Exchange | 31 December | ||
| 2024 | Cash flow | debt * | movement | 2024 | |
| £m | £m | £m | £m | £m | |
Current portion of long-term borrowings | (3.6) | (123.9) | |||
Non-current portion of long-term borrowings | (875.9) | (706.2) | |||
Total borrowings | (879.5) | (830.1) | |||
Lease liabilities | (96.7) | 16.6 | (16.5) | 1.5 | (95.1) |
Borrowings | (879.5) | 26.2 | — | 23.2 | (830.1) |
Changes in liabilities arising from financing | (976.2) | 42.8 | (16.5) | 24.7 | (925.2) |
Cash at bank | 359.7 | (11.6) | — | (13.9) | 334.2 |
Bank overdrafts | (146.9) | 44.1 | — | 2.5 | (100.3) |
Net cash and cash equivalents | 212.8 | 32.5 | — | (11.4) | 233.9 |
Net debt including lease liabilities | (763.4) | 75.3 | (16.5) | 13.3 | (691.3) |
Net debt | (666.7) | 58.7 | — | 11.8 | (596.2) |
| 1 January | Acquired | Exchange | 31 December | ||
| 2023 | Cash flow | debt * | movement | 2023 | |
| £m | £m | £m | £m | £m | |
Current portion of long-term borrowings | (202.9) | (3.6) | |||
Non-current portion of long-term borrowings | (731.3) | (875.9) | |||
Total borrowings | (934.2) | (879.5) | |||
Lease liabilities | (65.2) | 16.1 | (49.9) | 2.3 | (96.7) |
Borrowings | (934.2) | 28.3 | — | 26.4 | (879.5) |
Changes in liabilities arising from financing | (999.4) | 44.4 | (49.9) | 28.7 | (976.2) |
Cash at bank | 328.9 | 46.5 | — | (15.7) | 359.7 |
Bank overdrafts | (85.1) | (62.8) | — | 1.0 | (146.9) |
Net cash and cash equivalents | 243.8 | (16.3) | — | (14.7) | 212.8 |
Net debt and lease liability | (755.6) | 28.1 | (49.9) | 14.0 | (763.4) |
Net debt excluding lease liability | (690.4) | 12.0 | — | 11.7 | (666.7) |
Spirax Group plc Annual Report 2024198
Financial Statements — Notes to the Consolidated Financial Statements continued
25 Purchase of businesses
2024
No subsidiaries were acquired during 2024.
2023
During the prior year the Group acquired distributors resulting in a total cash outflow of £5.2m and creating acquired
intangibles of £3.6m. No other subsidiaries were acquired during 2023. Additionally, the fair value of the assets acquired
as part of the 2022 acquisition of Vulcanic (and its related companies) as well as Durex Industries were reassessed. The
outcome of this reassessment was an immaterial decrease in goodwill for Durex Industries and an offsetting immaterial
increase in goodwill for Vulcanic.
Spirax Group plc Annual Report 2024 199
Financial Statements
26 Derivatives and other financial instruments continued
Fair values of financial assets and financial liabilities continued
| 2024 | 2024 | 2023 | 2023 | |
| Carrying | Fair | Carrying | Fair | |
| value | value | value | value | |
| £m | £m | £m | £m | |
| Financial assets: | ||||
Cash and cash equivalents | 334.2 | 334.2 | 359.7 | 359.7 |
Trade, other receivables and contract assets | 357.0 | 357.0 | 346.3 | 346.3 |
Total financial assets | 691.2 | 691.2 | 706.0 | 706.0 |
| 2024 | 2024 | 2023 | 2023 | |
| Carrying | Fair | Carrying | Fair | |
| value | value | value | value | |
| £m | £m | £m | £m | |
| Financial liabilities: | ||||
Borrowings | 830.1 | 822.8 | 879.5 | 888.5 |
Lease liabilities | 95.1 | 95.1 | 96.7 | 96.7 |
Bank overdrafts | 100.3 | 100.3 | 146.9 | 146.9 |
Trade payables | 86.0 | 86.0 | 79.2 | 79.2 |
Other payables and contract liabilities | 68.2 | 68.2 | 67.3 | 67.3 |
Long-term payables | 6.2 | 6.2 | 11.4 | 11.4 |
Accruals | 98.9 | 98.9 | 95.2 | 95.2 |
Total financial liabilities | 1,284.8 | 1,277.5 | 1,376.2 | 1,385.2 |
| Financial | ||||
| Fixed rate | Floating rate | liabilities on | ||
| financial | financial | which no | ||
| Total | liabilities | liabilities | interest is paid | |
| 2024 | £m | £m | £m | £m |
Euro | 694.7 | 507.4 | 120.0 | 67.3 |
US dollar | 370.8 | 181.9 | 127.6 | 61.3 |
Sterling | 113.3 | 4.2 | 4 7.1 | 62.0 |
Renminbi | 34.0 | 1.4 | — | 32.6 |
Other | 72.0 | 14.4 | 0.4 | 57.2 |
Group total | 1,284.8 | 709.3 | 295.1 | 280.4 |
Spirax Group plc Annual Report 2024200
Financial Statements — Notes to the Consolidated Financial Statements continued
26 Derivatives and other financial instruments continued
Interest rate risk profile of financial liabilities continued
| Financial | ||||
| Fixed rate | Floating rate | liabilities on | ||
| financial | financial | which no | ||
| Total | liabilities | liabilities | interest is paid | |
| 2023 | £m | £m | £m | £m |
Euro | 758.8 | 628.8 | 66.7 | 63.3 |
US dollar | 363.2 | 310.7 | 1.8 | 50.7 |
Sterling | 149.0 | 20.7 | 90.1 | 38.2 |
Renminbi | 39.5 | 5.1 | — | 34.4 |
Other | 65.7 | 16.2 | 1.2 | 48.3 |
Group total | 1,376.2 | 981.5 | 159.8 | 234.9 |
| 2024 | 2023 | ||||
| Nominal | Year | Carrying value | Carrying value | ||
| Currency | interest rate | of maturity | £m | £m | |
Unsecured private placement – $185.0m | $ | 5.3% | 2028 | 147.9 | 145.3 |
Unsecured bank facility – $150.0m | $ | 5.7% | 2025 | 119.9 | 117.8 |
Unsecured private placement – €140.0m | € | 3.9% | 2027 | 119.2 | 124.7 |
Unsecured private placement – €125.0m | € | 4.2% | 2029 | 103.5 | 108.4 |
Unsecured private placement – €120.0m | € | 2.4% | 2026 | 99.6 | 104.4 |
Unsecured private placement – €110.0m | € | 4.4% | 2030 | 91.0 | 95.4 |
Unsecured private placement – €90.0m | € | 3.9% | 2031 | 74.5 | — |
Unsecured bank facility – €90.0m | € | 3.8% | 2026 | 74.5 | 78.0 |
Unsecured bank facility* | £ | 5.5% | 2025 | 49.2 | 81.7 |
Unsecured bank facility* | € | 2.9% | 2025 | 45.4 | 64.4 |
Unsecured bank facility* | $ | 7.0% | 2025 | 5.6 | 0.1 |
Unsecured bank facility* | € | 2.9% | 2025 | 0.1 | 0.2 |
Unsecured bank facility* | € | 4.6% | 2029 | — | 95.5 |
Unsecured bank facility* | £ | 5.9% | 2029 | — | 10.0 |
Unsecured bank facility* | € | 3.9% | 2024 | — | 0.5 |
Total outstanding borrowings | 930.4 | 1,026.4 |
Spirax Group plc Annual Report 2024 201
Financial Statements
26 Derivatives and other financial instruments continued
| Floating | Financial assets | |||
| Fixed rate | rate | on which no | ||
| financial | financial | interest is | ||
| Total | assets | assets | earned | |
| 2024 | £m | £m | £m | £m |
Euro | 221.4 | 8.6 | 55.1 | 157.7 |
US dollar | 203.1 | 0.3 | 84.2 | 118.6 |
Sterling | 44.0 | — | 17.6 | 26.4 |
Renminbi | 55.7 | 3.5 | 11.0 | 41.2 |
Other | 167.0 | 6.1 | 24.8 | 136.1 |
Group total | 691.2 | 18.5 | 192.7 | 480.0 |
| Floating | Financial assets | |||
| Fixed rate | rate | on which no | ||
| financial | financial | interest is | ||
| Total | assets | assets | earned | |
| 2023 | £m | £m | £m | £m |
Euro | 211.6 | 7.9 | 76.5 | 127.2 |
US dollar | 193.5 | 1.1 | 1.7 | 190.7 |
Sterling | 41.8 | 0.1 | 16.4 | 25.3 |
Renminbi | 67.6 | 2.8 | 23.4 | 41.4 |
Other | 191.5 | 11.3 | 41.4 | 138.8 |
Group total | 706.0 | 23.2 | 159.4 | 523.4 |
| Trade, other | |||||
| payables, accruals | |||||
| and contract | Lease | ||||
| liabilities | Overdrafts | liabilities | Long-term | Total | |
| 2024 | £m | £m | £m | borrowings | £m |
In six months or less, or on demand | 227.0 | 100.3 | 9.9 | 17.4 | 354.6 |
In more than six months but no more than twelve | 26.1 | — | 9.3 | 141.5 | 176.9 |
In more than one year but no more than two | 3.2 | — | 16.9 | 199.8 | 219.9 |
In more than two years but no more than three | 2.1 | — | 13.2 | 285.2 | 300.5 |
In more than three years but no more than four | 0.4 | — | 9.2 | 11.2 | 20.8 |
In more than four years but no more than five | — | — | 6.6 | 113.9 | 120.5 |
In more than five years | 0.5 | — | 54.9 | 173.8 | 229.2 |
Total contractual cash flows | 259.3 | 100.3 | 120.0 | 942.8 | 1,422.4 |
Statement of Financial Position values | 259.3 | 100.3 | 95.1 | 830.1 | 1,284.8 |
Spirax Group plc Annual Report 2024202
Financial Statements — Notes to the Consolidated Financial Statements continued
26 Derivatives and other financial instruments continued
Maturity of financial liabilities continued
| Trade, other | |||||
| payables | |||||
| and contract | Lease | ||||
| liabilities | Overdrafts | liabilities | Long-term | Total | |
| 2023 | £m | £m | £m | borrowings | £m |
In six months or less, or on demand | 233.4 | 146.9 | 9.6 | 2.7 | 392.6 |
In more than six months but no more than twelve | 9.0 | — | 9.1 | 1.2 | 19.3 |
In more than one year but no more than two | 2.1 | — | 16.3 | 119.8 | 138.2 |
In more than two years but no more than three | 6.2 | — | 13.8 | 183.4 | 203.4 |
In more than three years but no more than four | 1.5 | — | 11.2 | 122.9 | 135.6 |
In more than four years but no more than five | 0.2 | — | 7.9 | 145.3 | 153.4 |
In more than five years | 0.7 | — | 56.4 | 310.0 | 367.1 |
Total contractual cash flows | 253.1 | 146.9 | 124.3 | 885.3 | 1,409.6 |
Statement of Financial Position values | 253.1 | 146.9 | 96.7 | 879.5 | 1,376.2 |
| Less than | 6 to 12 | More than | ||
| 6 months | months | 12 months | Total | |
| 2024 | £m | £m | £m | £m |
| Contracted cash in/(out): | ||||
Sterling | 64.1 | 60.2 | — | 124.3 |
Euro | (16.7) | (9.6) | — | (26.3) |
US dollar | (36.0) | (32.5) | — | (68.5) |
Other | (21.5) | (11.9) | — | (33.4) |
Total contractual cash flows | (10.1) | 6.2 | — | (3.9) |
| Less than | 6 to 12 | More than | ||
| 6 months | months | 12 months | Total | |
| 2023 | £m | £m | £m | £m |
| Contracted cash in/(out): | ||||
Sterling | 54.9 | 67.5 | — | 122.4 |
Euro | (20.5) | (22.3) | — | (42.8) |
US dollar | (13.6) | (18.8) | — | (32.4) |
Other | (19.6) | (24.9) | — | (44.5) |
Total contractual cash flows | 1.2 | 1.5 | — | 2.7 |
Spirax Group plc Annual Report 2024 203
Financial Statements
26 Derivatives and other financial instruments continued
| 2024 | 2023 | |
| £m | £m | |
Expiring in one year or less | — | — |
Expiring in more than one year but no more than two years | — | — |
Expiring in more than two years but no more than three years | — | — |
Expiring in more than three years | 400.0 | 294.5 |
Total Group undrawn committed facilities | 400.0 | 294.5 |
| Gross | Impairment | Net | Gross | Impairment | Net | |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
Not past due date | 250.2 | (0.2) | 250.0 | 236.6 | (1.0) | 235.6 |
0–30 days past due date | 36.2 | — | 36.2 | 35.0 | (0.2) | 34.8 |
31–90 days past due date | 16.5 | (0.1) | 16.4 | 17.3 | (0.1) | 17.2 |
91 days to one year past due date | 12.2 | (1.0) | 11.2 | 13.9 | (1.7) | 12.2 |
More than one year | 7.1 | (7.1) | — | 7.3 | (7.3) | — |
Group total | 322.2 | (8.4) | 313.8 | 310.1 | (10.3) | 299.8 |
| 2024 | 2023 | |
| £m | £m | |
Balance at 1 January | 10.3 | 13.7 |
Additional impairment | 4.4 | 3.0 |
Amounts written off as uncollectable | (1.9) | (0.4) |
Amounts recovered | (0.5) | (0.4) |
Impairment losses reversed | (3.4) | (5.1) |
Exchange differences | (0.5) | (0.5) |
Balance at 31 December | 8.4 | 10.3 |
27 Events after the balance sheet date
In January 2025, the Group announced the implementation of a restructuring programme to fund investment in long-term
organic sales growth and to simplify the organisation. The costs to deliver this programme in 2025 are expected to be
approximately £40m. This is expected to be included as an adjusting item in the 2025 results.
Spirax Group plc Annual Report 2024204
Financial Statements — Notes to the Consolidated Financial Statements continued
The Group reports under International Financial Reporting Standards (IFRS) and also uses alternative performance measures
where the Board believes that they help to effectively monitor the performance of the Group and users of the Financial
Statements might find them informative. Certain alternative performance measures also form a meaningful element of
Executive Directors’ variable remuneration. Please see the Annual Report on Remuneration 2024 on pages 135 to 144 for
further detail. A definition of the alternative performance measures and a reconciliation to the closest IFRS equivalent are
disclosed below. The term ‘adjusted’ is not defined under IFRS and may therefore not be comparable with similarly titled
measures reported by other companies. Adjusted performance measures are not considered to be a substitute for, or
superior to, IFRS measures.
Adjusted operating profit
Adjusted operating profit excludes items that are considered to be significant in nature and/or quantum at either a Group
or an operating segment level and where treatment as an adjusted item provides all our stakeholders with additional useful
information to assess the period-on-period trading performance of the Group. The Group excludes such items including
those defined as follows:
•
Amortisation and impairment of acquisition-related intangible assets
•
Costs associated with the acquisition or disposal of businesses
•
Gain or loss on disposal of a subsidiary and/or disposal groups
•
Reversal of acquisition-related fair value adjustments to inventory
•
Changes in deferred and contingent consideration payable on acquisitions
•
Costs associated with a material restructuring programme
•
Material gains or losses on disposal of property
•
Accelerated depreciation, impairment and other related costs on non-recurring, material property redevelopments
•
Material non-recurring pension costs or credits
•
Costs or credits arising from regulatory and litigation matters
•
Other material items which are considered to be non-recurring in nature and/or are not a result of the underlying trading
of the business
•
Related tax effect on adjusting items above and other tax items which do not form part of the underlying tax rate
A reconciliation between operating profit as reported under IFRS and adjusted operating profit is given below.
2024
£m
2023
£m
Operating profit as reported under IFRS 304.6 284.4
Amortisation of acquisition-related intangible assets 34.1 37.2
Asset related impairment 5.7 1.8
Disposal of Associate (3.2) (0.4)
Acquisition-related items (7.3) 5.7
Significant software related impairment — 13.9
Restructuring costs — 5.2
Reversal of acquisition-related fair value adjustments to inventory — 1.3
Total adjusting items 29.3 64.7
Adjusted operating profit 333.9 349.1
Spirax Group plc Annual Report 2024206
Financial Statements — Appendix: Alternative performance measures
Adjusted earnings per share
2024 2023
ProfitfortheyearattributabletoequityholdersasreportedunderIFRS(£m) 191.2 183.6
Items excluded from adjusted profit (£m) 29.3 64.7
Tax effects on adjusted items (£m) (9.5) (18.3)
Adjustedprofitfortheyearattributabletoequityholders(£m) 211.0 230.0
Weighted average shares (million) 73.7 73.6
Basic adjusted earnings per share 286.3p 312.4p
Diluted weighted average shares (million) 73.9 73.8
Diluted adjusted earnings per share 285.6p 311.8p
Basic adjusted earnings per share are defined as adjusted profit for the period attributable to equity holders divided by
the weighted average number of shares. Diluted adjusted earnings per share are defined as adjusted profit for the period
attributable to equity holders divided by the diluted weighted average number of shares. Basic and diluted EPS calculated
on an IFRS profit basis are included in Note 9.
Dividend cover
Dividend cover is calculated as adjusted earnings per share divided by dividends per share.
Adjusted cash flow
A reconciliation showing the items that bridge between net cash from operating activities as reported under IFRS to an
adjusted basis is given below. Adjusted cash from operations is used by the Board to monitor the performance of the Group,
this reflects the cash generation of our underlying business. It is calculated based on the Group’s statutory cash generated from
operations and adjusted for net capital expenditure, adjusting items, tax paid and repayment of principal under lease liabilities.
2024
£m
2023
£m
Net cash from operating activities as reported under IFRS 312.8 298.6
Restructuring and acquisition-related costs 2.4 10.8
Net capital expenditure excluding acquired intangibles from acquisitions (83.6) (102.3)
Income tax paid 76.5 90.7
Repayments of principal under lease liabilities (16.6) (16.1)
Adjusted cash from operations 291.5 281.7
Adjusted cash conversion in 2024 is 87% (2023: 81%). Cash conversion is calculated as adjusted cash from operations
divided by adjusted operating profit. The adjusted cash flow is included in the Financial Review on page 34.
The impact of adjustments to operating profit as reported under IFRS of £29.3m (2023: £64.7m) on net change in cash
and cash equivalents is a total inflow of £7.4m (2023: £5.6m outflow). Included within cash generated from operations is
acquisition-related items inflow of £4.2m (2023: £0.8m outflow) and restructuring costs of £nil (2023: £5.2m). Included
within net cash used in investing activities is profit on disposal of businesses of £3.2m (2023: £0.4m).
Cash generation
Cash generation is one of the Group’s key performance indicators used by the Board to monitor the performance of the
Group and measure the successful implementation of our strategy. It is one of two financial measures on which Executive
Directors’ variable remuneration is based.
Cash generation is calculated as adjusted operating profit after adding back depreciation and amortisation, less cash
payments to pension schemes in excess of the charge to operating profit, equity settled share plans, net capital expenditure
excluding acquired intangibles, working capital changes and repayment of principal under lease liabilities. Cash generation
is equivalent to adjusted cash from operations, a reconciliation between this and net cash from operating activities as
reported under IFRS is shown in the table above.
Return on invested capital (ROIC) and return on capital employed (ROCE)
The Group distinguishes between invested capital and capital employed when calculating return on capital. Invested capital
represents the total capital invested in the business and is equal to total equity plus net debt and therefore includes the
impact of acquisitions and disposals. Capital employed is invested capital less certain non-current assets and non-current
liabilities and therefore reflects capital that is more operational in nature. Both of these return metrics are used to ensure a
full assessment of business performance.
Spirax Group plc Annual Report 2024 207
Financial Statements
Return on invested capital (ROIC)
ROIC measures the post-tax return on the total capital invested in the Group. It is calculated as adjusted operating profit
after tax divided by average invested capital. Average invested capital is defined as the average of the closing balance at
the current and prior year end. Taxation is calculated as adjusted operating profit multiplied by the adjusted effective tax rate.
An analysis of the components is as follows:
2024
£m
2023
£m
Total equity 1,209.2 1,157.7
Net debt including lease liabilities 691.3 763.4
Total invested capital 1,900.5 1,921.1
Average invested capital 1,910.8 1,923.2
Average invested capital (excluding leases) 1,813.8 1,840.4
Operating profit as reported under IFRS 304.6 284.4
Adjustments (see adjusted operating profit) 29.3 64.7
Adjusted operating profit 333.9 349.1
Taxation (88.5) (89.0)
Adjusted operating profit after tax 245.4 260.1
Adjusted operating profit after tax (excluding leases) 243.1 258.4
Return on invested capital 12.8% 13.5%
Return on invested capital (excluding leases) 13.4% 14.0%
Return on capital employed (ROCE)
ROCE measures effective management of fixed assets and working capital relative to the profitability of the Group. It is
calculated as adjusted operating profit divided by average capital employed. Average capital employed is defined as the
average of the closing balance at the current and prior year end. More information on ROCE can be found in the Financial
Review on page 34.
An analysis of the components is as follows:
2024
£m
2023
£m
Property, plant and equipment 433.1 415.1
Right-of-use assets 95.6 98.4
Software and development costs 52.0 42.3
Prepayments 1.8 1.9
Inventories 253.2 285.2
Trade receivables 313.8 299.8
Other current assets 75.1 71.4
Tax recoverable 10.6 13.6
Trade, other payables and current provisions (268.4) (260.7)
Current tax payable (23.3) (28.3)
Capital employed 943.5 938.7
Average capital employed 941.1 915.6
Average capital employed (excluding leases) 844.1 832.8
Operating profit 304.6 284.4
Adjustments (see adjusted operating profit on page 206) 29.3 64.7
Adjusted operating profit 333.9 349.1
Adjusted operating profit (excluding leases) 330.7 346.8
Return on capital employed 35.5% 38.1%
Return on capital employed (excluding leases) 39.2% 41.6%
Spirax Group plc Annual Report 2024208
Financial Statements — Appendix: Alternative performance measures continued
Return on capital employed (ROCE) continued
A reconciliation of capital employed to net assets as reported under IFRS and disclosed in the Consolidated Statement of
Financial Position is given below.
2024
£m
2023
£m
Capital employed 943.5 938.7
Goodwill and acquired intangibles 1,038.1 1,087.0
Investment in Associate 3.3 3.0
Post-retirement benefits (42.5) (51.4)
Net deferred tax (29.4) (37.2)
Non-current provisions and long-term payables (12.5) (19.0)
Lease liabilities (95.1) (96.7)
Net debt (596.2) (666.7)
Net assets as reported under IFRS 1,209.2 1,157.7
Net debt including lease liabilities
A reconciliation between net debt and net debt including lease liabilities is given below. A breakdown of the balances that
are included within net debt is given within Note 23. Net debt excludes lease liabilities to be consistent with how net debt is
defined for external debt covenant purposes, as well as to enable comparability with prior years.
2024
£m
2023
£m
Net debt 596.2 666.7
Lease liabilities 95.1 96.7
Net debt including lease liabilities 691.3 763.4
Net debt to earnings before interest, tax, depreciation and amortisation (EBITDA)
To assess the size of the net debt balance relative to the size of the earnings for the Group, we analyse net debt as a
proportion of EBITDA. EBITDA is calculated by adding back depreciation and amortisation of owned property, plant and
equipment, software and development to adjusted operating profit. Net debt is calculated as cash and cash equivalents less
bank overdrafts and external borrowings (excluding lease liabilities). The net debt to EBITDA ratio is calculated as follows:
2024
£m
2023
£m
Adjusted operating profit 333.9 349.1
Depreciation and amortisation of property, plant and equipment, software and development 46.3 44.1
(Profit)/loss on disposal of property, plant and equipment (3.8) 0.1
Earnings before interest, tax, depreciation and amortisation 376.4 393.3
Net debt 596.2 666.7
Net debt to EBITDA 1.6 1.7
The components of net debt are disclosed in Note 23.
Organic measures
As we are a multi-national Group of companies, who trade in a large number of currencies and also acquire and sometimes
dispose of companies, we also refer to organic performance measures throughout the Annual Report. These strip out the
effects of the movement in exchange rates and of acquisitions and disposals. The Board believe that this allows users of the
accounts to gain a further understanding of how the Group has performed. Exchange translation movements are assessed
by re-translating prior period reported values to current period exchange rates. Exchange transaction impacts on operating
profit are assessed on the basis of transactions being at constant currency between years.
The incremental impact of any acquisitions that occurred in either the current period or prior period is excluded from the
organic results of the current period at current period exchange rates. For any disposals that occurred in the current or prior
period, the current period organic results include the difference between the current and prior period financial results only
for the like-for-like period of ownership. No acquisitions or disposals took place in the current or prior year.
The organic percentage movement is calculated as the organic movement divided by the prior period at current period
exchange rates, excluding disposals for the non-like-for-like period of ownership. The organic bps change in adjusted
operating margin is the difference between the current period margin, excluding the incremental impact of acquisitions and
the prior period margin excluding disposals for the non-like-for-like period of ownership at current period exchange rates.
Spirax Group plc Annual Report 2024 209
Financial Statements
Organic measures continued
A reconciliation of the movement in revenue and adjusted operating profit compared to the prior period is given below.
2023
£m
Exchange
£m
Organic
£m
2024
£m Organic Reported
Revenue
Steam Thermal Solutions 910.1 (51.1) 8.9 867.9 1% (5)%
Electric Thermal Solutions 378.5 (10.0) 36.1 404.6 10% 7%
Watson-Marlow Fluid Technology Solutions 394.0 (13.2) 11.9 392.7 3% —
Total 1,682.6 (74.3) 56.9 1,665.2 4% (1)%
Adjusted operating profit
Steam Thermal Solutions 224.0 (21.4) 1.5 204.1 1% (9)%
Electric Thermal Solutions 59.2 (2.1) 7.6 64.7 13% 9%
Watson-Marlow Fluid Technology Solutions 93.7 (4.6) 9.9 99.0 11% 6%
Corporate (27.8) — (6.1) (33.9)
Total 349.1 (28.1) 12.9 333.9 4% (4)%
Adjusted operating margin 20.7% 20.1% 10bps (60)bps
The term ‘sales’ is used interchangeably with ‘revenue’ when describing the financial performance of the business. Drop
through is calculated as the organic increase in adjusted operating profit divided by the organic increase in revenue.
Analysis by operating segment
2024
Revenue
£m
Adjusted
operating
profit
£m
Adjusted
operating
margin
Steam Thermal Solutions 867.9 204.1 23.5%
Electric Thermal Solutions 404.6 64.7 16.0%
Watson-Marlow Fluid Technology Solutions 392.7 99.0 25.2%
Corporate — (33.9)
Total 1,665.2 333.9 20.1%
Net financing expense (43.7)
Share of loss of Associate (2.0)
Profit before tax 288.2
2023
Revenue
£m
Adjusted
operating
profit
£m
Adjusted
operating
margin
Steam Thermal Solutions 910.1 224.0 24.6%
Electric Thermal Solutions 378.5 59.2 15.6%
Watson-Marlow Fluid Technology Solutions 394.0 93.7 23.8%
Corporate — (27.8)
Total 1,682.6 349.1 20.7%
Net financing expense (39.9)
Share of (loss)/profit of Associate —
Profit before tax 309.2
Spirax Group plc Annual Report 2024210
Financial Statements — Appendix: Alternative performance measures continued
Operating costs
2024
Adjusted
£m
2024
Adjustments
£m
2024
Total
£m
2023
Adjusted
£m
2023
Adjustments
£m
2023
Total
£m
Cost of inventories recognised as an expense 396.5 — 396.5 401.2 1.3 402.5
Staff costs (Note 4) 643.2 — 643.2 630.4 — 630.4
Depreciation, amortisation and impairment 63.9 39.8 103.7 60.4 52.3 112.7
Other operating charges 227.7 (10.5) 217.2 241.5 11.1 252.6
Total operating costs 1,331.3 29.3 1,360.6 1,333.5 64.7 1,398.2
Total cost of inventories recognised as an expense includes the reversal of acquisition-related fair value adjustments to
inventory £nil (2023: £1.3m).
Total depreciation, amortisation and impairment includes amortisation of acquisition-related intangible assets of £34.1m
(2023: £37.2m) and an impairment of assets within Watson-Marlow Fluid Technology Solutions of £5.7m. In the previous
period it included an impairment of software related assets of £13.9m and an impairment of assets within Watson-Marlow
Fluid Technology Solutions as a result of the restructure in the business of £1.8m as well as profit on the sale of the
Chromalox’s manufacturing operations in Soissons of £0.6m which had been fully impaired in the prior year.
Total other operating charges include acquisition-related income of £7.3m relating to the acquisition of Vulcanic and Durex
Industries and profits on the disposal of Kyoto Group AS, an associate investment, of £3.2m. In the previous period, other
operating charges included restructuring costs of £7.5m in Watson-Marlow Fluid Technology Solutions to right-size
manufacturing capacity as well as a credit of £1.7m for the release of restructuring costs booked in the previous period for
the closure of Chromalox’s manufacturing operations in Soissons (France). Total operating charges also included
acquisition-related items of £5.7m relating to the acquisitions of Vulcanic and Gestra Malaysia and profits on the disposal of
Econotherms (UK) Ltd, an associate investment, of £0.4m.
The reconciliation for each operating segment for adjusting items is analysed below:
2024
Amortisation
ofacquisition-
related
intangible
assets
£m
Asset related
impairment
£m
Disposal of
Associate
£m
Acquisition-
related items
£m
Total
£m
Steam Thermal Solutions (5.2) — — — (5.2)
Electric Thermal Solutions (25.9) — — 7.3 (18.6)
Watson-Marlow Fluid Technology Solutions (3.0) (5.7) — — (8.7)
Corporate — — 3.2 — 3.2
Total (34.1) (5.7) 3.2 7.3 (29.3)
2023
Amortisation
of acquisition-
related
intangible
assets
£m
Reversal of
acquisition-
related fair
value
adjustments
to inventory
£m
Restructuring
costs
£m
Acquisition-
related items
£m
Disposal of
Associate
£m
Impairments
£m
Total
£m
Steam Thermal Solutions (4.5) — — (0.4) — (13.9) (18.8)
Electric Thermal Solutions (29.5) (1.3) 2.3 (4.9) — — (33.4)
Watson-Marlow Fluid Technology
Solutions (3.2) — (7.5) — — (1.8) (12.5)
Corporate — — — (0.4) 0.4 — —
Total (37.2) (1.3) (5.2) (5.7) 0.4 (15.7) (64.7)
Electric Thermal Solutions restructuring costs credit of £2.3m is made up of a £1.7m release of restructuring costs booked in
the previous period and £0.6m in relation to the sale of a previously fully impaired asset.
Spirax Group plc Annual Report 2024 211
Financial Statements
Tax on adjusting items
2024
Adjusted
£m
2024
Adjustments
£m
2024
Total
£m
2023
Adjusted
£m
2023
Adjustments
£m
2023
Total
£m
Analysis of charge in year
UK corporation tax:
Current tax on income for the year 7.7 — 7.7 9.4 — 9.4
Adjustments in respect of prior years (0.3) — (0.3) (0.1) — (0.1)
7.4 — 7.4 9.3 — 9.3
Foreign tax:
Current tax on income for the year 71.8 (3.7) 68.1 81.4 (6.1) 75.3
Adjustments in respect of prior years (0.7) — (0.7) (0.7) — (0.7)
71.1 (3.7) 67.4 80.7 (6.1) 74.6
Total current tax charge/(credit) 78.5 (3.7) 74.8 90.0 (6.1) 83.9
UK deferred tax:
Origination and reversal of timing differences (2.6) (0.7) (3.3) (6.5) (4.9) (11.4)
Adjustment in respect of prior years (0.3) — (0.3) (0.4) 1.1 0.7
(2.9) (0.7) (3.6) (6.9) (3.8) (10.7)
Foreign deferred tax:
Origination and reversal of timing differences 0.4 (3.6) (3.2) (4.7) (3.9) (8.6)
Adjustment in respect of prior years 1.0 (1.5) (0.5) 0.4 (4.5) (4.1)
1.4 (5.1) (3.7) (4.3) (8.4) (12.7)
Total deferred tax credit (1.5) (5.8) (7.3) (11.2) (12.2) (23.4)
Tax on profit on ordinary activities 77.0 (9.5) 6 7.5 78.8 (18.3) 60.5
Reconciliation of effective tax rate
2024
Adjusted
£m
2024
Adjustments
£m
2024
Total
£m
2023
Adjusted
£m
2023
Adjustments
£m
2023
Total
£m
Profit before tax and share of profit/(loss) of Associate 290.1 (31.2) 258.9 309.2 (64.7) 244.5
Expected tax at blended rate 76.4 (7.2) 69.2 80.5 (15.5) 65.0
Increased withholding tax on overseas dividends 6.8 — 6.8 7.6 — 7.6
Non-deductible expenditure and incentives (1.6) (0.6) (2.2) 0.2 0.6 0.8
Over provided in prior years (0.3) (1.5) (1.8) (0.8) (3.4) (4.2)
Other reconciling items (4.3) (0.2) (4.5) (8.7) — (8.7)
Total tax in Consolidated Income Statement 77.0 (9.5) 6 7.5 78.8 (18.3) 60.5
Effective tax rate 26.5% 30.4% 26.1% 25.5% 28.3% 24.7%
The effective tax rate on an adjusted profits basis is calculated as a percentage of profit before tax and share of profit/(loss)
of Associates.
Spirax Group plc Annual Report 2024212
Financial Statements — Appendix: Alternative performance measures continued
Company Statement of Financial Position
at 31 December 2024
Notes
2024
£m
2023
£m
Assets
Non-current assets
Property, plant and equipment 11 23.4 20.7
Loans to subsidiaries 3,9 99.3 104.0
Investment in subsidiaries 2 759.5 758.8
Investment in Associate 2 — 3.0
Deferred tax assets 6 14.5 8.2
Post-retirement benefits 7 1.2 5.5
897.9 900.2
Current assets
Loans to subsidiaries 3,9 0.4 0.4
Due from subsidiaries 9 53.0 68.5
Other current assets 4 7.0 7.8
Cash and cash equivalents 10.1 39.2
70.5 115.9
Total assets 968.4 1,016.1
Equityandliabilities
Current liabilities
Trade and other payables 5 11.5 5.8
Due to subsidiaries 9 99.0 90.4
Current portion of long-term borrowings 10 0.3 0.3
Short-term borrowings 49.2 81.8
160.0 178.3
Net current (liabilities)/assets (89.5) (62.4)
Non-current liabilities
Long-term borrowings 10 99.3 112.5
Deferred tax liabilities 6 0.2 0.2
Due to subsidiaries 9 6.3 7.0
105.8 119.7
Total liabilities 265.8 298.0
Net assets 702.6 718.1
Equity
Share capital 8 19.8 19.8
Share premium account 92.0 90.1
Other reserves 8 20.9 14.7
Retained earnings 569.9 593.5
Totalequity 702.6 718.1
Totalequityandliabilities 968.4 1,016.1
The loss before dividends received was £25.1m (2023: £28.4m). Dividends from subsidiary undertakings of £129.2m
(2023: £169.1m) are excluded from this amount. Total profit recognised during the year was £104.1m (2023: £140.7m).
These Financial Statements of Spirax Group plc, company number 00596337, were approved by the Board of Directors
and authorised for issue on 10 March 2025 and signed on its behalf by:
N.B. Patel L. S. Burdett
Director Director
Spirax Group plc Annual Report 2024214
Financial Statements — Company Financial Statements
Company Statement of Changes in Equity
for the year ended 31 December 2024
Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1 January 2024 19.8 90.1 14.7 593.5 718.1
Profit for the year — — — 104.1 104. 1
Other comprehensive income:
Cash flow hedges net of tax — — (2.3) — (2.3)
Remeasurement loss on post-retirement benefits — — — (4.1) (4.1)
Deferred tax on remeasurement loss on post-retirement benefits — — — 1.0 1.0
Total other comprehensive income for the year — — (2.3) (3.1) (5.4)
Total comprehensive income for the year — — (2.3) 101.0 98.7
Contributions by and distributions to owners of the Company:
Dividends paid — — — (119.0) (119.0)
Equity settled share plans net of tax — — — (5.5) (5.5)
Issue of share capital — 1.9 — — 1.9
Employee Benefit Trust shares — — 7.7 — 7.7
Investment in subsidiaries in relation to share options granted — — 0.7 — 0.7
Balance at 31 December 2024 19.8 92.0 20.8 570.0 702.6
for the year ended 31 December 2023
Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1 January 2023 19.8 88.1 2.0 581.8 691.7
Profit for the year — — — 140.7 140.7
Other comprehensive income:
Cash flow hedges net of tax — — 5.0 (0.9) 4.1
Remeasurement gain on post-retirement benefits — — — 1.6 1.6
Deferred tax on remeasurement gain on post-retirement benefits — — — (0.4) (0.4)
Total other comprehensive income for the year — — 5.0 0.3 5.3
Total comprehensive income for the year — — 5.0 141.0 146.0
Contributions by and distributions to owners of the Company:
Dividends paid — — — (114.5) (114.5)
Equity settled share plans net of tax — — — (14.8) (14.8)
Issue of share capital — 2.0 — — 2.0
Employee Benefit Trust shares — — 5.5 — 5.5
Investment in subsidiaries in relation to share options granted — — 2.2 — 2.2
Balance at 31 December 2023 19.8 90.1 14.7 593.5 718.1
Other reserves represent the Company’s share-based payments, capital redemption and Employee Benefit Trust reserves
(see Note 8).
The Notes on pages 216 to 221 form an integral part of the Financial Statements.
Spirax Group plc Annual Report 2024 215
Financial Statements
1 Accounting policies
Spirax Group plc (the Company) is a public limited company incorporated and domiciled in England, United Kingdom
(registration number 00596337) and is limited by shares. The Company is the ultimate parent of Spirax Group and is
included in the Consolidated Financial Statements of Spirax Group. The Company’s principal activity is to manage corporate
costs and activities. The registered address of the Company is Charlton House Cirencester Road, Charlton Kings,
Cheltenham, Gloucestershire, United Kingdom, GL53 8ER.
The Company meets the definition of a qualifying entity under FRS 100. The separate Company Financial Statements are
presented as required by the Companies Act 2006 and have been prepared on the historical cost and going concern basis,
and in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. As permitted by FRS 101, the
Company has applied the exemptions available in respect of the following:
•
share-based payments;
•
financial instruments;
•
a Cash Flow Statement and related notes;
•
disclosures in respect of capital management;
•
the effects of new but not yet effective IFRSs;
•
disclosures in respect of the compensation of key management personnel; and
•
international tax reform – Pillar Two model rules
Under Section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own Income
Statement. As permitted by the audit fee disclosure regulations, disclosure of non-audit fees information is not included
in respect of the Company.
The Company’s accounting policies are the same as those set out in Note 1 of the Consolidated Financial Statements,
except as noted below.
The Directors have concluded that no critical judgements or key sources of estimation uncertainty have been made in the
process of applying the Company’s accounting policies.
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Loans to or from other Group undertakings and all other payables and receivables are initially recorded at fair value, which is
generally the proceeds received. They are then subsequently carried at amortised cost.
2 Investments in subsidiaries and associates
2a Investment in subsidiaries
2024
£m
2023
£m
Cost:
At 1 January 758.8 756.6
Share options issued to subsidiary company employees 0.7 2.2
At 31 December 759.5 758.8
Investments are stated at cost less provisions for any impairment in value.
Details relating to subsidiary undertakings are given on pages 223 to 228. Except where stated, all classes of shares were
100% owned by the Group at 31 December 2024. The country of incorporation of the principal Group companies is the same
except those companies identified as a holding company on pages 223 to 228.
2b Investment in associates
During the year, the Company increased its ownership of Kyoto Group AS (Kyoto) from 15.0% to 18.9% and then subsequently
disposed of its investment in Kyoto for 80.2m NOK (£5.6m) which resulted in a profit on disposal of £3.2m. In line with prior
year, the Company reports the share of profit/(loss) for the year on a 6 month time lag, therefore 18 months of results have
been recognised in the current year, this does not have a material impact on the Company’s results. The Company’s share of
loss recognised during the year in relation to Kyoto is £2.0m.
Spirax Group plc Annual Report 2024216
Financial Statements — Notes to the Company Financial Statements
3 Loans to subsidiaries
2024
£m
2023
£m
Cost:
At 1 January 104.4 306.4
Interest 2.5 3.9
Repayments (2.5) (200.3)
Exchange adjustment (4.7) (5.6)
At 31 December 99.7 104.4
The terms and conditions of loans to subsidiaries at 31 December 2024 were as follows:
Currency
Nominal
interest rate
Year of
maturity
2024
£m
2023
£m
Spirax-Sarco Overseas Limited € 2.4% 2026 99.7 104.4
Total loans to subsidiaries 99.7 104.4
Due within one year 0.4 0.4
Due after more than one year 99.3 104.0
4 Other current assets
2024
£m
2023
£m
Prepayments and accrued income 7.0 6.0
Derivative assets — 1.8
Total other current assets 7.0 7.8
5 Trade and other payables
2024
£m
2023
£m
Accruals 10.2 5.8
Derivative liabilities 1.3 —
Total trade and other payables 11.5 5.8
Trade and other payables are due within one year.
6 Deferred tax assets and liabilities
Movement in deferred tax during the year 2024
1 January
2024
£m
Recognised
in income
£m
Recognised
in OCI
£m
31 December
2024
£m
Other temporary differences 9.3 4.5 0.8 14.6
Pensions liability (1.3) — 1.0 (0.3)
Company total 8.0 4.5 1.8 14.3
Movement in deferred tax during the year 2023
1 January
2023
£m
Recognised
in income
£m
Recognised
in OCI
£m
31 December
2023
£m
Other temporary differences 10.5 0.2 (1.4) 9.3
Pensions liability (1.4) 0.5 (0.4) (1.3)
Company total 9.1 0.7 (1.8) 8.0
Deferred tax assets and liabilities arising in the same tax jurisdiction have been offset where there is a legally enforceable
right to set off current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same
taxation authority. Below is the analysis of the deferred tax balances after the offset for 2024.
2024
£m
2023
£m
Deferred tax asset 14.5 8.2
Deferred tax liability (0.2) (0.2)
Net deferred tax asset 14.3 8.0
Spirax Group plc Annual Report 2024 217
Financial Statements
7 Employee benefits
Pension plans
The Company is accounting for pension costs in accordance with International Accounting Standard 19.
In December 2024, the Company agreed to a buy-in of the Spirax-Sarco Executives’ Retirement Benefits Scheme. The
change has been treated as a change in investment strategy, with the impact coming through as part of the actuarial gain/
(loss) on asset in OCI. The income from the policies exactly matches the amount and timing of all benefits payable to all
members of the UK Scheme.
The disclosures shown here are in respect of the Company’s defined benefit obligations. Other plans operated by the
Company were defined contribution plans.
The total expense relating to the Company’s defined contribution pension plans in the current year was £1.2m (2023: £1.2m).
At 31 December 2024 the post-retirement mortality assumptions in respect of the Company defined benefit scheme follows
84%/87% (male/female) of SAPS S3 light normal, CMI 2022 future improvements, 1.0% long-term trend, smoothing factor of
7, w parameter of 10% above the core. At 31 December 2023 the post-retirement mortality assumptions in respect of the
Company defined benefit scheme follows 84%/87% (male/female) of SAPS S3 light, CMI 2021 future improvements, 1.25%
long-term trend, smoothing factor of 7, 0.25% initial addition and a w parameter of 10%.
These assumptions are regularly reviewed in light of scheme-specific experience and more widely available statistics.
The financial assumptions used at 31 December were:
Weighted average
assumptions used to define
the benefit obligations
2024
%
2023
%
Rate of increase in pensions 3.0% 2.9%
Rate of price inflation 3.2% 3.0%
Discount rate 5.4% 4.5%
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions,
which due to the timescale covered, may not necessarily be borne out in practice.
Fair value of scheme assets:
2024
£m
2023
£m
Equities — 6.3
Bonds — 17.1
Other 1.2 19.3
Insurance contracts 33.5 —
Total market value in aggregate 34.7 42.7
£nil (2023: £27.6m) of scheme assets have a quoted market price in an active market.
The actual return on plan assets was a loss of £4.6m (2023: a gain of £3.2m).
The amounts recognised in the Company Statement of Financial Position are determined as follows:
2024
£m
2023
£m
Fair value of scheme’s assets 34.7 42.7
Present value of funded scheme’s liabilities (33.5) (37.2)
Retirement benefit asset recognised in the Statement of Financial Position 1.2 5.5
Related deferred tax (0.3) (1.3)
Net pension asset 0.9 4.2
The movements in the defined benefit obligation (DBO) recognised in the Statement of Financial Position during the year were:
2024
£m
2023
£m
Defined benefit obligation at beginning of year (37.2) (38.6)
Interest cost (1.6) (1.7)
Remeasurement gain 2.3 0.3
Actual benefit payments 3.0 2.8
Defined benefit obligation at end of year (33.5) (37.2)
Spirax Group plc Annual Report 2024218
Financial Statements — Notes to the Company Financial Statements continued
7 Employee benefits continued
Pension plans continued
The movements in the fair value of plan assets during the year were:
2024
£m
2023
£m
Value of assets at beginning of year 42.7 42.5
Expected return on assets 1.8 1.9
Remeasurement (loss)/gain (6.4) 1.3
Administration costs (0.4) (0.2)
Actual benefit payments (3.0) (2.8)
Value of assets at end of year 34.7 42.7
The estimated employer contributions to be made in 2025 are £nil.
The history of experience adjustments is as follows:
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
Defined benefit obligation at end of year (33.5) (37.2) (38.6) (55.2) (55.2)
Fair value of scheme’s assets 34.7 42.7 42.5 60.3 60.8
Retirement benefit recognised in the Statement of Financial Position 1.2 5.5 3.9 5.1 5.6
Experience adjustment on scheme’s liabilities (0.2) 0.1 0.9 3.5 (5.0)
As a percentage of scheme’s liabilities 0.6% 0.3% 2.3% 6.3% 9.1%
Experience adjustment on scheme’s assets (6.4) 1.3 (16.1) 2.4 2.6
As a percentage of scheme’s assets 18.4% 3.0% 37.9% 4.0% 4.3%
The expense recognised in the Company Income Statement was as follows:
2024
£m
2023
£m
Current service and administration cost (0.4) (0.2)
Net interest on scheme’s assets and liabilities 0.2 0.2
Total expense recognised in Income Statement (0.2) —
Statement of Comprehensive Income (OCI):
2024
£m
2023
£m
Remeasurement effects recognised in OCI:
Due to experience on DBO 0.2 (0.1)
Due to demographic assumption changes in DBO 0.1 1.0
Due to financial assumption changes in DBO 2.0 (0.6)
Return on assets (6.4) 1.3
Total remeasurement (loss)/gain recognised in OCI (4.1) 1.6
Deferred tax on remeasurement amount recognised in OCI 1.0 (0.4)
Cumulative loss recognised in OCI at beginning of year (10.3) (11.5)
Cumulative loss recognised in OCI at end of year (13.4) (10.3)
Sensitivity analysis
The effect on the defined benefit obligation at 31 December 2024 of an increase or decrease in key assumptions is as follows:
Increase/(decrease) in pension defined benefit obligation £m
Discount rate assumption being 1.00% higher (2.4)
Discount rate assumption being 1.00% lower 2.6
Inflation assumption being 1.00% higher 1.7
Inflation assumption being 1.00% lower (1.7)
Mortality assumption life expectancy at age 65 being one year higher 1.1
The above sensitivities reflect reasonable possible changes in the assumptions and therefore have been selected on this basis.
Share-based payments
Disclosures of the share-based payments offered to employees of the Company are set out below. The description
and operation of each scheme is the same as outlined in the Group disclosure.
Spirax Group plc Annual Report 2024 219
Financial Statements
7 Employee benefits continued
Performance Share Plan
The relevant disclosures in respect of the Performance Share Plan grants are set out below.
2020
Grant
2021
Grant
2022
Grant
2023
Grant
2024
Grant
Grant date 12 March 4 May 14 March 13 March 21 March
Mid-market share price at grant date 7,775.0p 11,770.0p 11,910.0p 10,880.0p 10,377p
Number of employees 19 15 13 15 16
Shares under scheme 82,607 45,815 42,573 52,259 66,713
Vesting period 3 years 3 years 3 years 3 years 3 years
Probability of vesting 74.3% 73.9% 76.1% 81.2% 79.7%
Fair value 5,779.2p 8,698.0p 9,057.6p 8,829.1p 8,273.6p
8 Called-up share capital and reserves
2024
£m
2023
£m
Ordinary shares of 26 12/13p (2023: 26 12/13p) each
Authorised 111,428,571 (2023: 111,428,571) 30.0 30.0
Allotted, called up and fully paid 73,776,048 (2023: 73,776,048) 19.8 19.8
49,244 (2023: 35,794) shares with a nominal value of £13,258 (2023: £9,637) were issued in connection with the Group’s
Employee Share Ownership Plan with external consideration of £1.9m (2023: £2.0m) received by the Company.
In 2024 no shares were purchased into an Employee Benefit Trust (EBT). In the prior year, the Parent Company purchased
114,000 shares representing 0.15% of called-up share capital with a nominal value of £30,692 for a consideration of
£12,749,424. The shares were placed in an EBT to be used in connection with the Group’s Employee Share Scheme.
At 31 December 2024 72,250 shares (2023: 139,907) were held in an Employee Benefit Trust and available for use in
connection with the Group’s Employee Share Schemes. 16 senior employees of the Company have been granted options
on ordinary shares under the Performance Share Plan (details in Note 7).
Other reserves in the Company Statement of Changes in Equity on page 215 are made up as follows:
1 January
2024
£m
Change
in year
£m
31 December
2024
£m
Share-based payments reserve 27.6 0.7 28.3
Cash flow hedges reserve 1.3 (2.3) (1.0)
Capital redemption reserve 1.8 — 1.8
Employee Benefit Trust reserve (16.0) 7.7 (8.3)
Total other reserves 14.7 6.1 20.8
Share-based payments reserve
This reserve records the Company’s share-based payment charge that is recognised in reserves.
Cash flow hedges reserve
This reserve records the Company’s cumulative net change in the fair value of forward exchange contracts where they
are designated as effective cash flow hedge relationships
Capital redemption reserve
This reserve records the historical repurchase of the Company’s own shares.
Employee Benefit Trust reserve
The Company has an Employee Benefit Trust which is used to purchase, hold and issue shares in connection with the
Group’s Employee Share Schemes. The shares held in Trust are recorded in this separate reserve.
9 Related party transactions
2024
£m
2023
£m
Dividends received from subsidiaries 129.2 169.1
Current loans due from subsidiaries at 31 December 0.4 0.4
Non-current loans due from subsidiaries at 31 December 99.3 104.0
Current amounts due from subsidiaries at 31 December 53.0 68.5
Current amounts due to subsidiaries at 31 December 99.0 90.4
Non-current amounts due to subsidiaries at 31 December 6.3 7.0
Amounts due to and from Group undertakings are unsecured and have various repayment terms depending on the
loan agreement.
Spirax Group plc Annual Report 2024220
Financial Statements — Notes to the Company Financial Statements continued
10 Financial instruments
The terms and conditions of outstanding loans at 31 December 2024 are as follows:
Currency
Nominal
interest rate
Year of
maturity
Carrying
value
£m
Unsecured private placement – €120m € 2.4% 2026 99.7
Total outstanding loans 99.7
Current portion of long-term borrowings due before 31 December 2025 0.4
Long-term borrowings payable after 31 December 2025 99.3
Total outstanding loans 99.7
Currency
Nominal
interest rate
Year of
maturity
Carrying
value
£m
Unsecured private placement – €120.0m € 2.4% 2026 104.3
Revolving Credit Facility – Drawdown £10.0m £ 5.9% 2028 8.5
Total outstanding loans 112.8
Current portion of long-term borrowings due before 31 December 2024 0.3
Long-term borrowings payable after 31 December 2024 112.5
Total outstanding loans 112.8
At 31 December 2024, the Company had available a revolving credit facility which was undrawn at the end of the year
(2023: £10.0m drawn), of which all conditions precedent had been met.
The Company participates in a number of Group cash pooling arrangements. The sterling zero balance account pool,
for which the Company holds the header account, is presented gross within cash and cash equivalents or short-term
borrowings, with the accounts relating to subsidiaries being shown within amounts due to or from subsidiaries.
11 Other information
Dividends
Dividends paid by the Company are disclosed in Note 10 of the Consolidated Financial Statements.
Property, plant and equipment
The Company holds freehold property with a cost of £27.3m (2023: £23.6m), accumulated depreciation of £3.9m
(2023: £2.9m) and a net book value of £23.4m (2023: £20.7m).
Employees
The average number of employees of the Company during the year was 140 (2023: 129).
Directors’ remuneration
The remuneration of the Directors of the Company is shown in the Annual Report on Remuneration 2024 on pages 135 to
144.
Auditor’s remuneration
Auditor’s remuneration in respect of the Company’s annual audit has been disclosed on a consolidated basis in the
Company’s Consolidated Financial Statements as required by Section 494(4)(a) of the Companies Act 2006.
Contingent liabilities and capital commitments
The Company has no contingent liabilities. No capital commitments exist at 31 December 2024 in respect of the completion
of the Group Head Office building in Cheltenham (UK) (2023: £3.9m).
Spirax Group plc Annual Report 2024 221
Financial Statements
Steam Thermal Solutions – EMEA
Country/Territory Company name Registered office address
Belgium Spirax Sarco NV Industriepark 5, B-9052 Zwijnaarde, Belgium
Czech Republic Spirax Sarco spol sro Prazska 1455, 102 00 Praha, Hostivar, Czech Republic
Egypt Spirax Sarco Egypt LLC 19 Farid Street, Heliopolis, Cairo, Egypt
Spirax Sarco Energy Solutions LLC (H) 19 Farid Street, Heliopolis, Cairo, Egypt
Finland Spirax Oy Niittytie 25 A 24, 01300 Vantaa, Helsinki, Finland
France Spirax Sarco SAS Zone Industrielle des Bruyères 8 Avenue le Verrier, 78190 Trappes, France
Spirax-Sarco France HoldCo SAS (H) 23 Route de Château-Thierry, 02200 Noyant-et-Aconin, Soissons, France
Gestra France SAS Zone Industrielle des Bruyères, 8 Avenue Le Verrier 78190 Trappes, France
Spirax Sarco North and West Africa SAS Zone Industrielle des Bruyères, 8 Avenue Le Verrier, 78190 Trappes, France
Germany Spirax Sarco GmbH Regelapparate Reichenaustr. 210, 78467 Konstanz, Germany
Spirax-Sarco Germany Holdings GmbH (H) Reichenaustr. 210, 78467, Konstanz, Germany
Gestra AG Muenchener Str. 77, 28215, Bremen, Germany
Gestra HoldCo GmbH (H) Muenchener Str. 77, 28215, Bremen, Germany
Hungary Spirax-Sarco Kft 1103 Budapest Koér utca 2/A, Hungary
Italy Spirax Sarco Srl Via Per Cinisello 18, 20834 Nova Milanese, Italy
Italgestra Srl Via Per Cinisello 18, 20834 Nova Milanese, Italy
Kenya Spirax Sarco East Africa Limited Clifton Park, Mombasa Road, Nairobi, Kenya
Morocco Spirax Sarco Maghreb Secteur 3, Lot 146, Rue Arfoud, Bureaux 5 et 6, commerce 2-12000 Temara,
Morocco
Netherlands Spirax-Sarco Netherlands BV Industrieweg 130A, 3044 AT, Rotterdam, Netherlands
Spirax-Sarco Engineering BV (H) Industrieweg 130A, 3044 AT, Rotterdam, Netherlands
Spirax-Sarco Investments BV (H) Industrieweg 130A, 3044 AT, Rotterdam, Netherlands
Spirax-Sarco Netherlands Holdings
Coöperative WA (H)
Sluisstraat 7, 7491 GA Delden, Delden, Netherlands
Norway Spirax Sarco AS Vestvollveien 14A, N-2019 Skedsmokorset, Norway
Poland Spirax Sarco Sp Zoo Jutrzenki 98, 02-230, Warszawa, Poland
Gestra Polonia Sp Zoo ul Ku Ujściu 19, PL 80-172, Gdansk, Poland
Portugal Spirax Sarco Equipamentos Ind Lda Rua Quinta do Pinheiro, No 8 and 8A, 2794-058 Carnaxide, Portugal
Gestra Portugal, Lda Avenida Dr Antunes Guimaraes, Numero 1159, Porto 4100-082, Portugal
Romania Spirax-Sarco SRL 2-4 Traian Street, Cluj-Napoca Municipality, Cluj County, Romania
South Africa Spirax Sarco Investments (Pty) Limited (H) Corner Brine Avenue and Horn Street, Chloorkop Ext 23, Gauteng 1624,
South Africa
Spirax Sarco South Africa (Pty) Limited Corner Brine Avenue and Horn Street, Chloorkop Ext 23, Gauteng 1624,
South Africa
Spain Spirax-Sarco SAU C/ Sant Josep, 130 08980 Sant Feliu de Llobregat, Barcelona, Spain
Spirax-Sarco Engineering SLU (H) C/ Sant Josep, 130 08980 Sant Feliu de Llobregat, Barcelona, Spain
Gestra Espanloa SA Calle Luis Cabrera 86-88, 28002, Madrid, Spain
Sweden Spirax Sarco AB Evenemansgatan 40, 169 56 Solna, Sweden
Switzerland Spirax Sarco AG Gustav-Maurer-Strasse 9, 8702 Zollikon, Switzerland
Turkey Spirax Sarco Valf Sanayi ve Ticaret A.S Serifali Mevkii, Edep Sok No 27, 34775 Yukari Dudullu – Ümraniye, Istanbul, Turkey
United Arab
Emirates
Spirax Sarco Trading LLC 38-0, R338 Um Hurair Second, Dubai, United Arab Emirates
United Kingdom Spirax-Sarco Limited* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco America Limited (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco America Investments
Limited* (H)
Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco Investments Limited* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco Overseas Limited* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Gestra Holdings Limited* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Gestra UK Limited Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Cotopaxi Limited Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Key:
* Direct subsidiary owned by Spirax Group plc (H) Holding company.
Spirax Group plc Annual Report 2024 223
Financial Statements
Financial Statements — Our Global Operations
Steam Thermal Solutions – Asia Pacific
Country/Territory Company name Registered office address
Australia Spirax Sarco Pty Limited 14 Forge St., Blacktown, NSW 2148, Australia
China Spirax Sarco Company Limited 6F-3, No. 12, Lane 270, Sec. 3, Pei Shen Road, Shen Keng District, New Taipei
City 22205, Taiwan, Greater China Zone
Cotopaxi Energy Technology Development
(Beijing) Co. Ltd
Room 506, Unit 101 Floor 2-7, Building No. 1, 3 Chuangda Road, Chaoyang
District, Beijing, China 100102
Spirax-Sarco Engineering (China) Limited No 800 XinJun Ring Road, Pujiang Hi Tech Park, Shanghai, China
Spirax Sarco Hong Kong Company Limited Unit 1507, 15th Floor, Prosperity Center, 25 Chin Yip Street, Kwun Tong,
Kowloon, Hong Kong, Greater China Zone
Spirax Sarco Trading (Shanghai) Co
Limited
No 800 XinJun Ring Road, Pujiang Hi Tech Park, Shanghai, China
Gestra (Shanghai) Fluid Control
Technology Co Limited
Room 333 3rd Floor of 4th Area Building 1, No.2001 North Yanggao Road
China (Shanghai) Free Trade Pilot Zone, Shanghai, China
India Spirax-Sarco India Private Limited Plot No. 6, Central Avenue, Mahindra World City, Chengalpattu Taluk,
Kancheepuram District 603004, India
Indonesia PT Spirax Sarco Indonesia Kawasan Infinia Park Blok C-99, Jl. Dr Sahardjo No. 45, Manggarai Tebet,
Jakarta Selatan 12850, Indonesia
Japan Spirax Sarco Godo Gaisha 261-0025, 2-37 Hamada, Mihama-ku, Chiba, Japan
Malaysia Gestra Steam Solutions Sdn Bhd 18 Tidak Melebihi Baru Ditubuhkan, Malaysia
Spirax-Sarco Sdn Bhd No 10, Temasya 18, Jalan Pelukis U1/46A, 40150 Shah Alam, Selangor,
Malaysia
New Zealand Spirax Sarco Limited 6 Nandina Avenue, East Tamaki, Auckland 2013, New Zealand
Philippines Spirax-Sarco Philippines Inc 2308 Natividad Building, Chino Roces Avenue Extension, Makati City,
Philippines
Singapore Spirax Sarco Pte Limited 21 Changi South Avenue 2, #01-01 Singapore 486630, Singapore
Spirax-Sarco APAC Investments Pte
Limited
21 Changi South Avenue 2, #01-01 Singapore 486630, Singapore
Gestra Singapore Private Limited 21 Changi South Avenue 2, #01-01 Singapore 486630, Singapore
South Korea Spirax Sarco Korea Limited Steam People House, 99 Sadangro 30gil, Dongjak-gu, Seoul, Republic of Korea
Thailand Spirax Sarco (Thailand) Limited 38 Krungthepkreeta Road, Khlong Song Ton Nun, Lat Krabang, Bangkok
10520, Thailand
Vietnam Spirax Sarco Vietnam Co Limited 4th Floor, 180 Nguyen Van Troi Street, Ward 8, Phu Nhuan District, Ho Chi
Minh City, Vietnam
Steam Thermal Solutions – Americas
Country/Territory Company name Registered office address
Argentina Spirax Sarco SA Av. del Libertador 498, 12th Floor, Buenos Aires C1001ABR, Argentina
Brazil Spirax Sarco Ind e Com Limiteda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo,
06705-050, Brazil
Hiter Controls Engenharia Limiteda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo,
06705-050, Brazil
Canada Spirax Sarco Canada Limited 383 Applewood Crescent, Concord, ON L4K 4J3, Canada
Chile Spirax-Sarco Chile Limiteda Las Garzas 930, Galpón E, Quilicura, Santiago de Chile, Chile
Inversiones Spirax-Sarco Chile Limiteda (H) Las Garzas 930, Galpón D, Quilicura, Santiago de Chile, Chile
Colombia Spirax Sarco Colombia SAS Carretera Panamericana No 3-150, Jamundi, Valle del Cauca, Cali, Colombia
Mexico Spirax Sarco Mexicana, SAPI DE CV Boulevard Alianza 30B, Parque Industrial CPA, Ciénega de Flores Nuevo León,
CP 65550, Mexico
Peru Spirax Sarco Peru SAC Av. Guillermo Dansey 2124, Lima, Lima, Perú
United States Spirax Sarco Inc 1209 Orange Street, Wilmington, DE 19801, United States
Sarco International Corp (H) 1209 Orange Street, Wilmington, DE 19801, United States
Spirax Sarco Investments, Inc (H) 251 Little Falls Drive, Wilmington, DE 19808-1674, United States
Gestra USA, Inc 1209 Orange Street, Wilmington, DE 19801, United States
Key:
* Direct subsidiary owned by Spirax Group plc (H) Holding company.
Spirax Group plc Annual Report 2024224
Financial Statements — Our Global Operations continued
Electric Thermal Solutions
Country/Territory Company name Registered office address
Australia Vulcanic TEE Pty Limited 7 Buckman Cl, Toormina NSW 2452, Australia
Belgium Vulcanic SA Uitbreidingstraat 60-62, 2600 Berchem, Belgium
Brazil Chromalox Engenharia Limiteda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo, 06705-050,
Brazil
Canada Canadian Heat Acquisition Corp (H) 7051 68th Ave NW, Edmonton, Alberta, T6B 3E3, Canada
China Chromalox Precision Heat Control
(Shanghai) Co Limited
88 Taigu Road, Suite A2, 4th Floor – Fenggu Building, Shanghai, 200131, China
Chromalox Precision Heat Control
(Suzhou) Co Limited
T02, No 1801, Pangjin Road, Pangjin Industrial Park, Wujiang, Suzhou, 215200,
China
France Constructions Electro-Thermiques
D’Alsace SAS
42 Rue des Aviateurs, 67500 Haguenau, France
Etirex SAS 23 Route de Château Thierry, Noyant-et-Aconin, Soissons, Cedex, F 02203, France
Loreme SAS 12 Rue des Potiers d’Etain, 57070 Metz, France
RS Isolec SAS 45 Avenue des Acacias, 45120 Cepoy, France
Thermocoax Developpement SAS 40 Boulevard Henri Sellier, 92150 Suresnes, France
Thermocoax SAS Usine de Planquivon, Athis-de-l’Orne, 61430 Athis-Val de Rouvre, France
Vulcanic Assets SAS (H) 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Vulcanic Group Holding SAS (H) 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Vulcanic SAS 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Germany Chromalox Isopad GmbH Englerstraße 11, 69126 Heidelberg, Germany
Vulcanic GmbH Donaustraße 21, 63452 Hanau, Germany
Vulcanic Triatherm GmbH Flurstraße 9, 96515 Sonneberg, Germany
India Chromalox India Precision Heat and
Control Private Limited
1st Floor, 6 Unicom House, A-3 Commercial Complex, New Delhi, Janakpuri,
110058, India
Mexico ELW Industrial S. de R. L. de C.V. Carretera Nacional, K.M. 8.5, Modulo Industrial de America, Lote #5, Nuevo
Laredo, Tamaulipas, 88277, Mexico
Singapore Chromalox Precision Heat and Control
(Singapore) Pte Limited
No 11 Woodlands Close, #05-34, Singapore, 737854, Singapore
Spain Vulcanic Termoelectrica SLU Carretera de Viernoles no.32, 39300 Torrelavega, Cantabria, Spain
RSI Spain SLU 5 Avenida Nogent, Montornes del Valle, Bercelona
Thailand Chromalox (Asia Pacific) Limited 383/2, The Village Business Centre, Unit D16-A, Moo 12, Sukhumvit Road,
Nongprue, Banglamung, Chon Buri, 20151, Thailand
United Arab
Emirates
Chromalox Gulf DWC, LLC PO Box 390012, Office No: E-2-0226, Business Park, Dubai Aviation City,
United Arab Emirates
United Kingdom Chromalox (UK) Limited AMP House, 2nd Floor, Dingwall Road, Croydon, Surrey CR0 2LX, United Kingdom
Thermocoax UK Limited Tower House, Lucy Tower Street, Lincoln LN1 1XW, United Kingdom
Vulcanic UK Limited Windward Barn, Honningham Thorpe Business Park Norwich Road, Colton,
Norwich NR9 5BZ, United Kingdom
United States 190 Detroit Street, LLC 2280 Hicks Rd., STE 500 Rolling Meadows, IL 60008, United States
305 Cary Point, LLC 190 Detroit Street, Cary, IL 60013, United States
325 Cary Point, LLC 190 Detroit Street, Cary, IL 60013, United States
Cary Detroit, LLC 190 Detroit Street, Cary, IL 60013, United States
Chromalox, Inc. 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, United States
Durex HoldCo Corp (H) 1209 Orange Street, Wilmington, DE 19801, United States
Durex International, LLC 251 Little Falls Drive, Wilmington, DE 19808-1674, United States
Heat Acquisition Corp (H) 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, United States
Thermocoax, Inc 1209 Orange Street, Wilmington, DE 19801, United States
Vulcanic EML, LLC 5907 Breen Drive, Houston, TX 77086, United States
Vulcanic US, Inc (H) Capitol Services, Inc., 108 Lakeland Ave., Dover, DE 19901, United States
Key:
* Direct subsidiary owned by Spirax Group plc (H) Holding company.
Spirax Group plc Annual Report 2024 225
Financial Statements
Watson-Marlow Fluid Technology Solutions
Country/Territory Company name Registered office address
Australia Watson-Marlow Pty Limited Unit 15, 19-26 Durian Place, Wetherill Park, NSW 2164, Australia
Austria Watson-Marlow Austria GmbH Rathaus Viertel 3/1 OG/TOP 311, Guntramsdorf A 2353, Wien, Austria
Belgium Watson-Marlow NV Industriepark 5, B-9052 Zwijnaarde, Belgium
Brazil Watson-Marlow Bredel Ind e Com de
Bombas Limiteda
Alameda Oceania, 63, Polo Empresarial Tamboré, Santana de Parnaiba,
São Paulo, CEP 06543-308, Brazil
Canada Watson-Marlow Canada Inc 383 Applewood Crescent, Concord, ON L4K 4J3, Canada
Chile Watson-Marlow Bombas Chile Limiteda Las Garzas 930, Galpón E, Quilicura, Santiago de Chile, Chile
China Shanghai Watson-Marlow Limited No. 211, Wenjing Road, Shanghai Minhang District, China
Watson-Marlow Co Limited No.9 Lane 270 Sec. Beishen Road, Shenkeng District, New Taipei City 222,
Taiwan, Greater China Zone
Colombia Watson-Marlow Colombia SAS Carretera Panamericana No 3-150, Jamundi, Valle del Cauca, Cali, Colombia
Czech Republic Watson-Marlow sro Pražská 1455/18a, 102 00 Praha 10, Czech Republic
Denmark Watson-Marlow Flexicon A/S Frejasvej 2, 4100 Ringsted, Denmark
Finland Watson-Marlow Finland Oy Niittytie 25 A 24, 01300 Vantaa, Helsinki, Finland
France Watson-Marlow SAS 9 Route De Galluis, Zi Les Croix, 78940 La Queue Lez Yvelines, France
Germany Watson-Marlow GmbH Kurt-Alder-Str. 1, 41569 Rommerskirchen, Germany
Hungary Watson-Marlow Kft Lajos ucta 30, Budapest 1023, Hungary
India Watson-Marlow India Private Limited Mahalaxmi Icon, S. No. 132/2A-3A, Near Sai HP Petrol Pump, Pune-Mumbai
Bypass Road, Tathawade, Pune, Maharashtra, 411 033, India
Ireland Watson-Marlow Limited Unit 1013, Gateway Business Park, New Mallow Rd., Cork, Ireland
Italy Watson-Marlow Srl Via Padana Superiore 74/D, 25080 Mazzano, Brescia, Italy
Japan Watson-Marlow Co Limited 4-23-21 Ukima Kita-ku, Tokyo 115-0051, Japan
Malaysia Watson-Marlow SDN BHD 6th Floor, Akademi Etiqa No. 23 Jalan Melaka, 50100 Kuala Lumpur W.P.,
Malaysia
Mexico Watson-Marlow S de RL de CV Boulevard Alianza 30B, Parque Industrial CPA, Ciénega de Flores Nuevo León,
CP 65550, Mexico
Netherlands Watson-Marlow BV Oslo 9 – 11, 2993LD Barendrecht, Netherlands
Watson-Marlow Bredel BV Sluisstraat 7, 7491 GA, Delden, Netherlands
Watson-Marlow Bredel Holdings BV (H) Sluisstraat 7, 7491 GA, Delden, Netherlands
New Zealand Watson-Marlow Limited Unit F, 6 Polaris Place, East Tamaki, Auckland 2013, New Zealand
Norway Watson-Marlow Norge AS Vestvollveien 14A, 2019 Skedsmokorset, Norway
Philippines Watson-Marlow Inc 10th Floor EGI Rufino Plaza, Sen. Gil Puyat Avenue, Corner Taft Avenue,
Barangay, 38 Pasay City, Fourth District, Philippines
Poland Watson-Marlow Sp Zoo Al. Jerzego Waszyngtona 146, 04-076 Warszawa, Poland
Singapore Watson-Marlow Pte Limited 421 Tagore Industrial Avenue, #01-13, Singapore 787805, Singapore
South Africa Watson-Marlow Bredel SA (Pty) Limited Unit 6 Cradleview Industrial Park, Cnr Beyers Naude Drive and Johan Street,
Laser Park, South Africa
Spain Watson-Marlow SLU Tuset, 20 3 – 08006, Barcelona, Spain
Sweden W-M Alitea AB Hammarby Fabriksväg 29-31, SE-120 30 Stockholm, Sweden
Switzerland Watson-Marlow AG Gustav-Maurer-Strasse 9, 8702 Zollikon
United Arab
Emirates
Watson Marlow FZCO Office Number FZJOA2005, Jafza One, Jebel Ali Free Zone, Dubai,
United Arab Emirates
United Kingdom Aflex Hose Limited Dyson Wood Way, Bradley, Huddersfield HD2 1GZ, United Kingdom
BioPure Technology Limited Bickland Water Road, Falmouth, Cornwall TR11 4RU, United Kingdom
Watson-Marlow Limited* Bickland Water Road, Falmouth, Cornwall TR11 4RU, United Kingdom
United States Watson-Marlow America Manufacturing
Inc
37 Upton Drive, Wilmington, MA 01887, United States
Watson Marlow Inc 37 Upton Technology Park, Wilmington, MA 01887, United States
Watson-Marlow Flow Smart Inc 1675 South State St., Suite B, Dover, DE 19901, United States
Key:
* Direct subsidiary owned by Spirax Group plc (H) Holding company.
Spirax Group plc Annual Report 2024226
Financial Statements — Our Global Operations continued
Dormant companies
Country/Territory Company name Registered office address
Canada Canadian Heat Holding Corp 6600-100 King Street W., 1 First Canadian Place, Toronto, Ontario M5X 1B6, Canada
France Heat Holding France SAS 23 Route de Château-Thierry, 02200 Noyant-et-Aconin, Soissons, France
Hong Kong Chromalox Hong Kong Holdings
Limited (H)
33/F, Shui On Centre, Nos 6-8 Harbour Road, Wanchai, Hong Kong
United Kingdom Gervase Instruments Limited* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Heat Holding (UK) Limited Lansdowne Building, 2 Lansdowne Road, Croydon CR9 2ER, United Kingdom
SARCO Limited* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Sarco Thermostats Limited Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco Engineering Limited Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax Manufacturing Company Limited Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco Europe Limited* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
Spirax-Sarco International Limited* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER,
United Kingdom
United States Heat Asset Acquisition Corp. 251 Little Falls Drive, Wilmington, DE 19808-1674, United States
Mexican Heat Holding Corp. c/o RA PO Box 20380, Carson City, Nevada 89706, United States
Mexican Heat Holding, LLC 160 Greentree Dr., Suite 101, Dover, Delaware 19904, United States
Ogden Manufacturing Co. 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, United States
The global operations listed on pages 223 to 227 are registered companies. All shares unless otherwise indicated are
ordinary shares.
In addition to these operations, we have a number of other operating units, including an Associate company; a company
that is part owned with a third-party trust; branches of Spirax Sarco steam or WMFTS companies; and several WMFTS
businesses that operate via Spirax Sarco steam business companies. The Spirax Group Education Fund, established in 2021,
is not included in the Consolidated Financial Statements as under IFRS 10 the Group does not have control of this fund.
Details of these operations can be found on page 228.
Key:
* Direct subsidiary owned by Spirax Group plc (H) Holding company.
Spirax Group plc Annual Report 2024 227
Financial Statements
Notes
1. All subsidiaries in the tables on pages 223 to 227 are indirect subsidiaries
of Spirax Group plc, unless indicated*. All subsidiaries listed are ultimately
100% owned by the Group, except as follows:
Company % owned by the Group
Spirax Sarco Egypt 98.867%
Spirax Sarco Energy Solutions LLC,
Egypt
98.992%
Spirax Sarco Korea Ltd 98.4%
Spirax-Sarco Philippines Inc 99.998%
Spirax Sarco Services SA PTY Limited 48.51%. (51.49% is owned
by a third-party trust, The
Tomorrow Trust). The
Group has control of the
company and exposure, or
rights, to variable returns
from its investment in the
investee.
Spirax Sarco (Thailand) Ltd 99.995%
2. In addition to the subsidiaries in the tables on pages 223 to 227,
we have the following operations:
Steam Technology Solutions:
Country Operating as a branch of
Cambodia Spirax Sarco Pte Limited, Singapore
Denmark Spirax-Sarco Limited, UK
Ghana Spirax-Sarco Limited, UK
Greece Spirax-Sarco Limited, UK
Ireland Spirax-Sarco Limited, UK
Pakistan Spirax-Sarco Limited, UK
Saudi Arabia Spirax-Sarco Limited, UK
Slovakia Spirax Sarco Spol. s.r.o.
Sri Lanka Spirax-Sarco India Private Limited, India
Tanzania Spirax-Sarco Limited, UK
Uganda Spirax-Sarco Limited, UK
Zambia
Spirax Sarco South Africa (Pty) Limited,
South Africa
Watson-Marlow Fluid Technology Solutions:
Country Operating as a branch of
Serbia Watson-Marlow Austria GmbH
Operating via
Argentina Spirax Sarco SA, Argentina
China Spirax-Sarco Engineering (China) Limited
Indonesia PT Spirax-Sarco Indonesia
South Korea Spirax Sarco Korea Limited
Thailand Spirax Sarco (Thailand) Limited
Vietnam Spirax Sarco Vietnam Co Limited
This complete list of our global operations, including subsidiaries,
forms part of the audited Financial Statements. For more information
see Note 2 in the Company Financial Statements.
3. UK registered subsidiaries exempt from audit:
Company name Company number
BioPure Technology Limited 03665190
Chromalox (UK) Limited 04325451
Cotopaxi Limited 07038605
Gestra UK Limited 10639879
Spirax-Sarco America Limited 07829847
Spirax-Sarco Investments Limited 00100995
Spirax-Sarco Overseas Limited 01472201
Gestra Holdings Limited 11612492
Spirax-Sarco America Investments Limited 11639451
Heat Holding (UK) Limited 04325456
Aflex Hose Limited 01088141
Thermocoax U.K. Limited 03504380
Vulcanic UK Limited 07194498
The companies listed above qualify to take the statutory audit exemption
as set out within Section 479A of the Companies Act 2006 for the period
ended 31 December 2024. Spirax Group plc will guarantee the debts and
liabilities of the companies claiming the statutory audit exemption at the
balance sheet date in accordance with Section 479C of the Companies
Act 2006.
4. Spirax Group plc indirectly holds 12% of the Ordinary shares of
Sustainable Process Heat GmbH (registered office: Zur Kaule 1, 51491
Overath, Germany) via Spirax-Sarco Germany Holdings GmbH.
Spirax Group plc Annual Report 2024228
Financial Statements — Our Global Operations continued
Secretary and registered office
C. Barroche
Group General Counsel and Company Secretary
Tel: +44 (0)1242 535000
Email: group.legal@spiraxgroup.com
Web: spiraxgroup.com
Auditor
Deloitte LLP
Financial advisers
Rothschild
JPMorgan Securities plc (JPMorgan Cazenove)
Financial PR
Teneo
Bankers
Barclays Bank PLC HSBC Bank PLC
BNP Paribas Citibank, N.A.
Crédit Industriel et Commercial ING Bank, N.V.
UniCredit Bank AG Wells Fargo Bank, N.A.
Corporate brokers
JPMorgan Securities plc (JPMorgan Cazenove)
Morgan Stanley & Co. International plc
Registrars
The Company’s Registrar is Equiniti Limited.
Equiniti provide a range of services to shareholders.
Extensive information including many answers to frequently
asked questions can be found online.
Use the QR code to register for free at www.shareview.co.uk
Equiniti’s registered address is:
Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA
Solicitors
Baker & McKenzie LLP
Important dates
Annual General Meeting 14 May 2025
2025 Half Year Results 12 August 2025
Final dividend**
Ordinary shares quoted ex-dividend 24 April 2025
Record date for final dividend 25 April 2025
Final dividend payable 23 May 2025
** Subject to shareholder approval at the AGM
Spirax Group’s commitment to environmental stewardship is reflected
in this Annual Report, which has been printed on Revive 100 Silk,
which is 100% post-consumer recycled, FSC
®
certified and totally
chlorine free (TCF) paper. Printed in the UK by Park Communications
using vegetable-based inks, with 99% of dry waste being diverted
from landfill. The printer is a CarbonNeutral
®
company. Both the mill
and the printer are certified to ISO 14001 (Environmental Management
System) and ISO 9001 (Quality Management System).
Please recycle.
Produced by
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Design Portfolio
229Spirax Group plc Annual Report 2024
Officers and Advisers
Financial Statements
Spirax Group plc
Charlton House
Cirencester Road
Cheltenham
Gloucestershire
GL53 8ER
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