2006/07 Second Quarter Results for the three months ended 30 September 2006

2006/07 SECOND QUARTER RESULTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2006
 

Another good performance demonstrating further progress
 

Highlights

• Orders from continuing operations¹ were £635 million (Q2 2005/06: £657 million), down 2%
at constant exchange rates (CER), with growth held back by delays in the formal awards of
some large contracts at Rail Systems
• Revenue from continuing operations was £633 million (Q2 2005/06: £604 million), up 7% at
CER
• Operating profit² from continuing operations was £61 million (Q2 2005/06: £45 million), up
41% at CER
• Operating margin² of continuing operations was 9.6% (Q2 2005/06: 7.5%)
• Net profit was £165 million (Q2 2005/06: £39 million), after crediting £120 million gain on
the IBS³ disposal
• Operating cash inflow excluding legacy items was £55 million (Q2 2005/06: £73 million)
• Free cash outflow excluding legacy items was £25 million (Q2 2005/06: £29 million inflow)
after payment of £31 million costs relating to the 2006 Refinancing⁴
• Net debt at 30 September 2006 was £291 million (30 June 2006: £730 million5), after receipt
of proceeds from the Rights Issue4 and the IBS disposal
 

Ulf Henriksson, Chief Executive Officer of Invensys plc, commented:

“I am pleased with the overall progress that we have made in the second quarter which has
enabled Invensys to report another good set of results. Orders were down slightly in the quarter
mainly due to delays in the receipt of formal awards of some large contracts in Rail Systems. At
CER, revenue was up 7% at £633 million, operating profit was up 41% at £61 million and operating
cash flow excluding legacy items was £55 million, representing cash conversion of 90%⁶.

“Process Systems and Rail Systems continue to perform well and I am encouraged that both APV
and Controls are demonstrating that the actions we have taken to improve their performances are
beginning to show results. In particular, Controls has been able to improve its underlying
performance although there is weakening in demand within those parts of its business that serve
the US new residential housing market.

“Our balance sheet now reflects the benefits of the 2006 Refinancing and the receipt of the
proceeds of the IBS disposal, resulting in net debt of £291 million at the end of the quarter.
“The Group achieved a good performance in the first half of this financial year, which has seen
some benefits from the continuing actions being taken within each of the businesses to improve
their performance and reduce the quarterly variability of their results. Although the prospects for
some of Controls’ markets are unpredictable, the Board remains confident that the Group will
make further progress in the second half of the financial year.“


Contact

Invensys plc

Steve Devany
tel: +44 (0) 20 7821 3758
 

Peter Niklewicz
tel: +44 (0) 20 7821 2121

Maitland
 

Emma Burdett/Suzanne Bartch
tel: +44 (0) 20 7379 5151

Notes

^1. Continuing operations are Controls, Process Systems, Rail Systems, APV and Eurotherm.
^2. All references to operating profit (OPBIT) and operating margin in this announcement are
before exceptional items.
^3. Discontinued operations in 2006/07 comprise Invensys Building Systems operations in the US
and Asia Pacific (IBS) and, in addition, ABS EMEA, Lambda and Baker in 2005/06.
^4. Definitions used in the Prospectus dated 25 May 2006 shall have the same meanings when
used in this announcement, unless the context requires otherwise.
^5. Total Group net debt at 30 June 2006 included £5 million of borrowings classified as “held
for sale” in the consolidated balance sheet.
^6. Cash conversion is calculated as operating cash flow (excluding legacy items) as a percentage
of OPBIT.

Safe Harbor

This announcement contains certain statements that are forward-looking. These statements
involve risk and uncertainty because they relate to events and depend on circumstances that will
occur in the future. Forward-looking statements are not guarantees of future performance. The
Group's actual results of operations, financial condition and liquidity, and the development of the
industries in which the Group operates, may differ materially from those made in or suggested by
these statements and a number of factors could cause the results and developments to differ
materially from those expressed or implied by these forward-looking statements.
 

For the full text of the Invensys Q2 2006/07 press release, click here to be taken to the Invensys Results Day Centre.