2009 HIGHLIGHTS – HOWDEN
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2009 £m |
2008 £m |
Increase % |
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| New equipment | 438.6 | 465.0 | -5.7% |
| Aftermarket | 189.2 | 162.2 | +16.6% |
| Revenue | 627.8 | 627.2 | +0.1% |
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| Order book | 441.1 | 499.3 | -11.7% |
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| Operating profit | 70.5 | 73.1 | -3.6% |
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| Share of profits of associates (post tax) | 0.0 | 0.1 | |
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| Capital expenditure | 18.4 | 14.1 | |
| Depreciation | (5.9) | (4.6) | |
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| Operating margin | 11.2% | 11.7% | |
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| Average number of employees | 3,819 | 3,856 | |
Overview of 2009 performance
Against a difficult economic and financial backdrop, Howden achieved another strong set of results in 2009 with almost unchanged revenue of £627.8 million (2008: £627.2 million), representing a decrease of 12.9 per cent at constant exchange rates.
Operating profit before exceptional items was £70.5 million (2008: £73.1 million), a decrease of 3.6 per cent (18.7 per cent decrease at constant exchange rates). The operating margin was 11.2 per cent (2008: 11.7 per cent).
The outstanding feature of the results was the growth in the aftermarket business, where revenues increased by 17 per cent to £189 million, representing 30 per cent of Howden's total revenues for the year. Revenue from new equipment sales fell by 6 per cent, with continued strength in the sales of Howden compressors partly offsetting weaker sales of fans to customers in the power, steel and cement industries.
Order book
The strength of Howden's order book at the start of the year meant that Howden's trading results in 2009 were comparatively unaffected by the difficult economic and financial conditions prevailing during the year. Total order cancellations during the year were £11 million, out of an order book of £499 million on 1 January 2009.
As at 31 December 2009, the order book stood at £441 million (31 December 2008: £499 million), a decrease of 11.7 per cent (22.0 per cent at constant exchange rates), spread broadly equally between Europe, China, North America and other emerging economies.
The order book at 31 December 2009 included some £340 million for delivery in 2010 and £101 million for delivery in 2011 or beyond.
Orders booked in the year were £513.6 million (2008: £659.0 million), a reduction of 23 per cent.
There was a marked weakening in the ordering of power generation and emission control equipment by customers in China and the USA due to economic and financial conditions and, specifically in the USA, uncertainty over energy policy and emission control legislation. Orders from customers in the metals and cement industries continued to be weak, reflecting the impact of the global recession on the steel and construction sectors. Orders for compressors from customers in the oil and gas industry remained strong.
Towards the end of 2009, new enquiries from the power industry in particular were showing some improvement and some longer-term prospects appeared to be reaching the point at which orders should be placed. In addition financing constraints, which were a feature of certain markets during 2009, appeared to have generally eased. On this basis, Howden management expects that order bookings in 2010 should increase compared with 2009.