Preliminary Announcement for the year ended 31 March 2010

Posted 24 May 2010

An improved performance through the recession gives us confidence for growth as markets recover

Financial highlights – continuing operations

Group order book increased to £2,307 million (2009: £2,083 million), up 11% (10% at CER2) with 40% now represented by orders from emerging markets
Order intake was £2,473 million (2009: £2,806 million), down 12% (17% at CER); order intake is up 21% compared with two years ago
Revenue was £2,243 million (2009: £2,284 million), down 2% (8% at CER)
Operating profit before exceptional items3 rose 2% (down 4% at CER) to £248 million (2009: £244 million) and operating profit after exceptional items rose 25% (up 18% at CER) to £223 million (2009: £178 million)
Operating margin rose from 10.7% to 11.1% with each division producing double digit operating margins in the second half
Basic earnings per share rose 6% to 18.5p (2009: 17.4p)
Operating cash flow was £265 million (2009: £298 million) and operating cash conversion was 107% (2009: 122%); free cash flow was £100 million (2009: £296 million) reflecting the incidence of one-off cash inflows last year including the PPP settlement credit
Recommended final dividend of 2.0p per share (2009: 1.5p per share); total dividends of 3.0p per share (2009: 1.5p per share)
Continued strong financial position with no debt, net cash totalling £363 million and an investment grade rating from Standard & Poor’s

Contact:

Invensys plc Steve Devany tel: +44 (0) 20 7821 3758
Annabel Michie tel: +44 (0) 20 7821 2121

Financial Dynamics Andrew Lorenz
Richard Mountain tel: +44 (0) 20 7269 7291

Ulf Henriksson, Chief Executive of Invensys plc, commented:

“Our improved performance through the recession gives confidence for growth as markets recover.

“The past year, during which we have experienced the worst global economic climate in decades, has been one of considerable achievement for Invensys. This was realised through a combination of preparedness for the recession and agility in responding to it.

“Throughout the recession, we increased our investment in research and development and continued to invest in restructuring so as to reposition the business for growth and to be even stronger as the economy recovers. I am particularly pleased that, for the past two years, our order book has grown by 78% because of success in winning large orders, especially in emerging markets. This illustrates customer confidence in our technology and in our abilities to deliver value.

“At Invensys Operations Management, we have made progress in executing our strategy to help our customers to be more efficient and empowered. Throughout the world, we are winning large and complex oil and gas and power projects. In May 2010, we were awarded a contract for the control and safety solutions for two further nuclear reactors in China, following the contract for four reactors in December 2008. Although we continued to experience a decline in demand, particularly in North America and Europe, the order pipeline of prospects is growing. Operating margins returned to double digits in the second half.

“At Invensys Rail, we have made progress in executing our strategy to help customers increase capacity at the same time as lowering their cost of ownership. We continue to improve our market position in core regional markets and are expanding into new targeted regional markets – for example in the resignalling of three metro lines in São Paulo – due to our technology and execution capabilities. The pipeline of order prospects is large and I am looking forward to continued success as a leading technology provider for the rail and transportation industry.

“At Invensys Controls, we have executed our strategy well. Despite a reduction in revenue, profitability has improved due to new product launches, restructuring and investment. We are seeing signs that the overall consumer market is beginning to recover, especially in the United States, and the operational gearing within the business will further help performance as volumes recover.

“We also had another good financial performance with operating cash conversion of 107%. Our balance sheet remains strong, which is reflected in the investment grade rating from Standard & Poor’s.

“Looking forward, we are positive about the outlook based upon our large order book and our current view of economic conditions. We expect the Group to continue to deliver improved performance in the current year, with the phasing of profit similar to last year.”

Notes

The financial information for the year ended 31 March 2010 is audited and has been prepared under the Group’s accounting policies for the year ended 31 March 2010. The Group’s accounting policies for the year ended 31 March 2010 are those contained in the 2009 Annual Report and Accounts except for certain changes set out in Note 1 of this statement, “Basis of preparation”.

Unless otherwise stated, % change is measured at constant exchange rates (CER) as a percentage of the 2009 adjusted base and is calculated based upon underlying amounts in £’000s.

Unless otherwise stated, references to operating profit (OPBIT) and operating margin in this announcement are before exceptional items.

Conference call
Ulf Henriksson, Chief Executive, and Wayne Edmunds, Chief Financial Officer, will be hosting a presentation and conference call for analysts and fund managers at 9.00am BST this morning:

Venue: J.P. Morgan Cazenove
20 Moorgate
London
EC2R 6DA

Dial-in details (please note that the passcode is required).

UK: +44 20 7806 1968
US: +1 718 247 0885
France: 0800 942 824
Germany: 0800 673 8352
Italy: 800 979 137
Spain: 900 974 453

Passcode: 1568034 or “Invensys”

The presentation will be audio webcast live with slides, which can be accessed at:

Please click here

A recording will be available at this address shortly after the completion of the call. This announcement and the presentation materials are also available at http://www.invensys.com