Rotork : Annual Report and Accounts 2023

Contents

Strategic report

Rotork is a market-leading global provider of mission-critical intelligent flow control solutions for oil & gas, water and wastewater, power, chemical process and industrial applications. Rotork helps customers around the world to improve efficiency, reduce emissions, minimise their environmental impact and assure safety. The Group employs about 3,300 people, has assembly facilities in 17 locations and serves 170 countries through a global service network.

Corporate governance

Financial statements

Strong delivery of Growth+ strategy

Non-financial highlights

ESG scores

• • Order intake was 7.8% higher year-on-year on an OCC basis with orders ahead at all divisions

• • Revenue increased 12.0% year-on-year despite a significant foreign exchange headwind which strengthened through the second half. On an OCC basis sales grew 13.6% year-on-year

• • Adjusted operating margins were 60bps higher year-on-year at 22.9%

Financial highlights

Orders (£m)

23 724

22 682

21 614

Revenues (£m)

23

22 642

21 569

+7.8%

Orders were 7.8% higher year-on-year on an organic constant currency (OCC) basis

+13.6%

Revenues were 13.6% ahead year-on-year (OCC)

Adjusted EPS (p)

719

• • We incorporated an emissions reduction target linked to our SBTi targets into our long term incentive plan

• • Our total scope 1 and market based scope 2 greenhouse gas emissions reduced by 11%

• • The Rotork IQTF electric actuator was established as the leading actuator for upstream oil & gas choke valve applications

• • Eco-transition portfolio sales grew faster than the Group overall

Adjusted operating profit (£m) and margin (%)

23 22 21

14.6p

Basic EPS was 13.2p

14.6

23 22 21

£164m

Reported operating profit was £149m

Adjusted figures and organic constant currency ('OCC') figures are alternative performance measures and are used consistently throughout these results. They are defined in full and reconciled to the statutory measures in note 2 of the Financial Statements.

Profit before tax (£m)

23 22 21

£151m

• • MSCI ESG: AAA

• • Sustainalytics: ESG Industry Top Rated

• • S&P CSA: Ranked in the top 10% globally in the Machinery and Electrical Equipment industry

124

Profit before tax was 21% higher year-on-year

Dividend per share (p)

151

23 7.2

22 6.7

21 6.4

7.2p

Annual dividend increased by 7.5% year-on-year

Rotork Annual Report 2023

What we do

Global presence

Offices

Rotork is a market-leading global provider of mission-critical intelligent flow control solutions

Assembly facilities

Americas

Employees 534 Offices 11 Assembly facilities 4 Revenue

£201m

Divisional split

EMEA

Employees 1,773 Offices 24 Assembly facilities 9 Revenue

£280m

Oil & Gas

The leading supplier of electric critical duty actuators and related services to the global Oil & Gas sector with the largest installed base and site services team. Our products and services are used by customers across their upstream, midstream and downstream segments to automate and electrify processes, assure safety and eliminate fugitive emissions.

Read more P.28

Revenue £328m +16%

Adjusted operating margin

25.5%

A supplier of specialist actuators and instruments for niche applications in the broad chemical, process industry and industrial sectors. The division identifies and solves critical challenges for customers across

Adjusted operating margin reliability, efficiency and safety 24.0%

a broad range of end markets including speciality and other chemicals, metals and mining, critical HVAC, pharmaceutical, steel and cement.

Read more P.26

Revenue £214m +8%

Supplier of premium actuators, predominantly electric, and gearboxes for applications in the water and power generation sectors. Our products and services are used to solve water challenges and in climate change

Adjusted operating margin management, quality and scarcity 26.2%

adaptation and alternative energy, as well as to automate, electrify and digitalise our customers' processes.

Read more P.29

Revenue £177m +11%

At a glance

What makes Rotork a market leader?

Rotork's market position is driven by our technical capabilities, the quality and reliability of our products and services and our reputation in the market. Our products must satisfy challenging and complex certification requirements which differ from industry to industry and geography to geography, meaning barriers to entry are relatively high

Safety, productivity and efficiency

Extraction

Our products are used in the extraction of high value materials such as oil & gas, metals and minerals

Processing

They are used to automate material processing plants, such as refineries and chemical facilities

Transportation

Rotork products provide critical safety functions during the transportation of fluids e.g. via pipelines

Storage

Controlling the flow of fluids in and out of storage tanks and shutting them down in an emergency

IQ3 Pro electric actuators are used for critical control duties on high-voltage direct current transformer platforms in the UK's North Sea.

Utilisation

Our products are regularly used in the utilisation of fluids - for example producing hydrogen from water

Heating and cooling

They are used in severe service HVAC applications such as in semiconductor fabrication plants and data centres

Recovery

Rotork products have an important role to play in the circular economy, e.g. carbon capture and storage

Recycling

They often play a key role in recycling processes, for example of reclaimed and effluent water

Rotork is a market-leading global provider of mission-critical intelligent flow control solutions

The customer is at the centre of everything we do, from first enquiry to installation to aftersales care

1

Identify our customers' automation challenges Our customers rely upon Rotork for innovative solutions to safely control the flow of their liquids, gases and powders. We proactively seek out their product and service needs and develop solutions that offer improved efficiency, assured safety and environmental protection and are tailored to their precise requirements.

2

Innovation and development of products and services

The innovative research and development activities across Rotork ensure cutting-edge products are available for every application across the markets we serve. Our new product development is particularly focused on products that help improve our customers' efficiency and environmental performance.

Lifecycle services & support

We offer dedicated, expert service and support from initial inquiry, to product installation, and through Rotork Site Services, long-term aftersales care including planned and predictive maintenance and end-of-life decommissioning.

We are a global business with product manufacturing sites located around the world.

We have been widely acknowledged as the market leader in flow control for over 60 years, recognised for our comprehensive, high-quality range of products and solutions.

Our products are available with extensive certifications, including for use in hazardous areas and safety applications, and as explosion proof.

World class product manufacturingIndustry leading application engineering

Our factories operate to the highest international standards and supply our quality products to our customers on time and at short notice if required.

The value we created in 2023

Our offering

We launched 5 new products and services in 2023. Sustainability is a high priority for our teams working in innovation and product development.

5

no. of product launches

Our routes to market

Employees

We offer our employees a safe working environment, fair pay, terms and conditions, equality and fairness in the workplace and engagement on important issues.

£187m

wages, salaries etc. paid

The environment

We delivered a good set of results across our key environmental metrics in 2023, including a 11% reduction in total scope 1 and market-based scope 2 tCO2e emissions.

-11%

CO2 emissions, YoY

Shareholders

We have a strong track record of creating shareholder value and have increased our ordinary dividend each year for more than 20 years.

£59m

dividends paid

Own sales Our highly experienced sales and application engineering teams

Channel partners

Industrial distributors and manufacturer's agents

Rotork Site Services

Our market leading global aftersales and service team

End users

Specification approval

Understanding customer needs and confirming our products meet them

OEMs Customers who incorporate Rotork components into their products and systems

20%

EPCs, contractors and integrators Third-party infrastructure construction and speciality automation partners

Rotork Annual Report 2023

Global megatrends driving our top line growth

Our growth is driven by significant long-term megatrends, from automation to new energies, as well as our own self-help initiatives

Global megatrends driving our top line growth continued

2023 was the first full year of our Growth+ strategy and I'm pleased to report we have made significant progress. The market response to our Target Segment strategic pillar has been very encouraging

Dorothy Thompson, CBE Chair

Chair's statement 2023 was the first full year of our Growth+ strategy and my first year as Rotork's Chair. We launched the strategy in 2022, designed to deliver profitable growth by targeting the right market segments, providing value to our customers, innovating our products and services, and enabling a sustainable future.

Solid progress has been made in delivering the strategy. From 2021 to 2023, we delivered revenue growth of 26% and EBITA growth of 29%. The market response to our Target Segment strategic pillar has been very encouraging. We have made significant progress on Customer Value, increasing our customer focus through investing in people and rolling out new systems and processes.

In 2023, our Chief Technology Officer implemented a full review of our process for innovation of products and services, resulting in a more agile approach focused on customer needs and delivering sustainable products. During the year, we delivered important product and service launches, including the latest release electric actuator, the IQ3 Pro, and enhanced our Intelligent Asset Management digital offerings. Under our Innovation pillar, the acquisition of Hanbay has expanded our technology capabilities and strengthened our decarbonisation product suite.

Energy transition & sustainability Enabling the energy transition and delivering sustainable products and operations is at the heart of our Growth+ strategy.

During 2023, we made significant progress in the North American upstream electrification segment, with the IQTF range being established as the leading electric actuator for choke valve wellhead automation. Replacing a process gas-powered pneumatic actuator with an electric IQTF actuator eliminates any methane emissions from operating the valve.

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Rotork plc published this content on 26 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2024 14:12:36 UTC.