2024-03-05 16:13:13 ET
Rotork plc (RTOXF)
Q4 2023 Results Conference Call
March 05, 2024 4:00 AM ET
Company Participants
Kiet Huynh - CEO, Member of Management Board & Director
Jonathan Davis - Finance Director, Member of Management Board & Director
Conference Call Participants
Stephan Klepp - HSBC
Lushanthan Mahendrarajah - JPMorgan
Margaret Schooley - Redburn
Aurelio Tejedor - Morgan Stanley
Colin Moody - RBC
Mark Jones - Stifel, Nicolaus & Company
Rory Smith - UBS
Andrew Douglas - Jefferies
Jonathan Hurn - Barclays
Calum Battersby - Berenberg
Bruno Gjani - BNP
Dominic Convey - Numis
Harry Philips - Peel Hunt
Presentation
Kiet Huynh
Good morning, everyone. Thank you for joining us. As we discuss our 2023 full year results. It's great to see so many of you here today. Alongside me is Jonathan Davis, and we also have Dorothy Thompson, our Chair; and Andrew Carter, Head of Investor Relations in the audience. We're also pleased to have Ben Peacock here today. Ben joins us on the 11th of March as CFO replacing Jonathan, who is retiring.
So we've just got some technical difficulties. Okay. So before we go into the results highlights, I just wanted to take a few minutes to talk about the key drivers that underpins Rotork's medium and long-term growth potential and shows why we're confident that Rotork can continue to deliver mid to high single-digit revenue growth over time.
Rotork divisions are extremely well placed to benefit from the industrial megatrend of automation, electrification and digitalization, which are accelerating. We've seen this in a number of our Target Segments, including the electrification of wellhead chokes in upstream Oil & Gas, the automation of fire damping systems in data center HVAC applications and digitalization for our Intelligent Asset Management tools to monitor our electric actuators for preventative maintenance and elimination of unplanned downtime.
Sustainability is a key foundation of our strategy. Our technologies and solutions are key enablers for the energy transition, as well as our customers' increased focus to reduce their carbon footprint.
A large number of our end markets are within high growth potential, sustainability driven markets such as water and wastewater, LNG, new energy markets including offshore winds through HVDC applications, carbon capture and hydrogen production.
Rotork Site Services is also a key contributor to our growth. RSS is a key differentiator within the industry, with attractive margins it's growing faster than the group for many years, and we're confident it will continue to do so. Our Growth+ strategy encompasses all of these elements and in short we believe we have the right strategy to take us forward.
Before I hand over to Jonathan to discuss the results in more detail. I want to share a few financial highlights with you. We delivered a very strong set of results in 2023, especially in the second half. Orders were up nearly 8% year-on-year on an OCC basis. Water & Power and Oil & Gas saw particularly strong order growth, with CPI orders also ahead, but reflecting slower activity in China. Having faced increased lead times for our PCBs at the start of the year we overcame these challenges as the year went on and accelerated in the second half to deliver full year results close to 14% OCC.
Operating margins recovered strongly in the second half leaving full year margins up 60 basis points at just under 23%. We achieved this margin improvement whilst at the same time making Growth+ related investments in business development and business transformation to improve customer value....
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Rotork plc (RTOXF) Q4 2023 Earnings Call Transcript