Invensys update

Invensys update
Invensys plc (“Invensys”) issues the following statement.

Current trading
The Group’s trading performance for the second quarter is in line with the guidance given for the half- and full-year. Invensys remains confident that its growth and operational programmes should deliver an improving year-on-year trend in Group performance during the second half.

Product Recall – Climate Controls
Following twelve reported failures of the TS-11 gas valve manufactured by its Climate Controls business, Invensys is conducting a voluntary recall of specific identified batches. Certain valve types of a second product range, the 7000 Series, have also been quarantined following a single reported failure. Testing is underway to validate their safety in various applications, but remains at an early stage.

Based on current estimates, costs for the TS-11 recall are expected to be up to approximately £10 million. The Group’s current best estimate of costs for the 7000 Series if a recall is required is in the range of £5-20 million. If confirmed, these outflows will be treated as an operational exceptional item and funded from existing resources over several years. These exceptional costs are not expected to deflect the Group's progress from its recovery programme, as set out at the time of the refinancing.

Chief Executive of Invensys, Rick Haythornthwaite, said:
“Eight months after announcing our refinancing, trading performance clearly shows that our businesses are benefiting from the Group’s new financial stability. We remain on track to meet both our half- and full-year guidance.

“In terms of the product recall in Climate Controls, customer safety is our number one priority. We are currently erring on the side of caution with our quarantine and are working to rapidly identify and recall the relevant population of valves.”

Investor Seminar

The Group is today holding a seminar on its Appliance Controls business at 2pm in the Cazenove Auditorium at 20 Moorgate, London EC2R 6DA. The seminar will be repeated for US investors on 7 October at 8.00am at the New York Palace Hotel in New York. All presentations from the seminar will be available on the Group website, invensys.com.

The next seminars will cover Process Systems in the week of 6 December 2004 and Rail Systems in the week of 28 February 2005. Details of these events will appear on our website in due course.

Contact:
Invensys plc Victoria Scarth / Mike Davies tel:+44 (0) 20 7821 3755
Maitland Emma Burdett / Fiona Piper tel:+44 (0) 20 7379 5151

Notes to Editors:
Product recall
The TS-11 valve is used to regulate the flow of gas in commercial cooking applications. It has been manufactured in high volumes for many years, during which time it has operated with an excellent safety record.

Following a change in the manufacturing process in February 2003, the recall is only expected to apply to units produced between that date and August 2004. Customers are being notified and filings made to the US Consumer Product Safety Commission, although the valve’s applications are almost wholly commercial.

Certain valves in the 7000 Series – which regulate the flow of gas in a wide range of applications – from the same date bands are being quarantined pending completion of further testing by independent engineering specialists. To date, only a single report of an alleged failure in the field has been received.
Production of both valves has recommenced, using a revised process.

About Invensys
Invensys is a global automation, controls and process solutions Group. Our products, services, expertise and ongoing support enable intelligent systems to monitor and control processes in many different environments. The businesses within Invensys help customers in a variety of industries - including hydrocarbons, chemicals, oil and gas, power and utilities, rail, construction, environmental control, white goods, telecommunications, paper, food and beverage, dairy, pharmaceuticals and personal care - to perform with greater efficiency, safety and cost-effectiveness.

Process Systems provides products, services and solutions for the automation and optimisation of plant operation in the process industries, such as hydrocarbons (oil and gas), chemicals, power and utilities and metals and mining. Process Systems technologies, including industry-leading brands such as Foxboro, Triconex, SimSci-Esscor and Wonderware, help to make plants function more efficiently and safely.

Process Systems occupies a top-three position in the DCS (Distributed Control System), safety, simulation and HMI (Human-Machine Interface – the software that represents plant information in a comprehensible form) markets; its products are installed in over 50,000 plants across the world.

Eurotherm is a leading global supplier of control, data and measurement solutions and services to industrial and process customers. Eurotherm helps many industries, including plastics, pharmaceuticals, food and beverage and glassmaking, to measure and control variables such as pressure and temperature and record vital data. Eurotherm’s product range includes distributed process automation systems and machine control incorporating single and multi-loop control, operator displays, data management and graphic recorders.

APV’s knowledge and expertise in the food, beverage, personal care, pharmaceutical and chemical industries has made it a leading supplier of process equipment, turnkey plant solutions and value-increasing services. With nearly 1,000 engineers and 700 sales personnel across 48 countries, APV delivers return on investment across the world and throughout plant life cycles.

Rail Systems is a multinational leader in the design, manufacture, supply, installation, commissioning and maintenance of safety-related rail signalling and control systems, as well as a complete range of rail signalling products. Working directly for rail authorities or with partners or contractors who provide other elements of a complete solution, Rail Systems businesses have established market-leading positions in the US, UK and Spain.

Climate Controls is a leading provider of the components, systems and services used across the world to make commercial and residential buildings safer, more comfortable and more efficient. With industry-recognised names such as Ranco, Eberle, Robertshaw and Firex, Climate Controls has significant presence in the heating, ventilation, air conditioning, commercial refrigeration and residential building alarms markets.

Appliance Controls provides electronic and electro-mechanical systems and components to appliance and related industries. These include motor controls, thermostats and design software for refrigerators and freezers, washing machines and dishwashers, water coolers and a wide variety of other appliances used in homes and businesses. With the broadest product offering worldwide, and a history of more than 100 years of innovation, Appliance Controls helps customers to meet consumer demand for reliable, stylish and energy-efficient appliances.

Invensys also currently owns two businesses, Lambda and Baker, which are identified for sale.
Lambda is a leading producer of standard and modified power supplies for the industrial automation, test and measurement and telecommunications markets.

Baker provides equipment, services and complete process solutions to the bakery, biscuit, confectionery and snack industries.

The Invensys Group is listed on the London Stock Exchange. With over 35,000 employees operating in 60 countries, Invensys helps customers to improve their performance and profitability, building value for end users and shareholders alike.