Results for Half Year ended 30 September 2012

Business highlights

• Overall the Group produced a good performance in an uncertain macro-economic environment
• Invensys Operations Management continued to perform well in the first half with improvements in revenue, operating profit and operating margin driven by conversion of its large order book and strong growth in higher margin Software revenue
• As expected, Invensys Rail had delays in mobilisation of some of the large contracts awarded in H2 last year and in the letting of contracts under the Network Rail framework agreements; material progress is expected in H2
• Invensys Controls experienced softening demand in Appliance; good progress is expected in Commercial and Wholesale in H2

Financial performance – continuing operations

• Order intake was £1,044 million (H1 11/12: £1,086 million), down 2% at CER1 due mainly to the timing of orders at Invensys Operations Management and Invensys Controls
• Revenue was £1,200 million (H1 11/12: £1,244 million), down 2% at CER, with good growth in Invensys Operations Management more than offset by an expected decline at Invensys Rail
• Operating profit2 was £102 million (H1 11/12 £102 million), up 2% at CER, with an expected weaker performance from Invensys Rail offset by Invensys Operations Management
• Underlying earnings per share3 increased by 10% to 7.6p (H1 11/12: 6.9p) mainly due to a reduction in restructuring costs
• Operating cash inflow was £27 million (H1 11/12: £11 million outflow) with operating cash conversion of 26% mainly due to the investment in working capital in our major projects ahead of payment milestones
• Net cash was £175 million (31 March 2012: £262 million) with the reduction mainly due to working capital and pension payments
• The IAS 19 pension liability was £490 million (31 March 2012: £426 million), in part reflecting continued low interest rates
• Interim dividend increased by 6% to 1.75p per share (H1 11/12: 1.65p per share)

Outlook

• Subject to any significant changes to the global macro-economic environment, our good first half performance and strong order book supports our view that we will improve our performance for the year as a whole

Contact:
Invensys plc                   
Steve Devany                  Tel: +44 (0) 20 3155 1301
                                                        
FTI Consulting
Andrew Lorenz
Richard Mountain            Tel: +44 (0) 20 7269 7291

Chief Executive’s Statement

We have produced a good performance in the first six months of the year, a period during which there have been increased levels of uncertainty in the global macro-economic environment.  

Invensys Operations Management continued to perform well with growth in revenue and operating margins.  This was achieved through its strong order book and the diversity of its industry and geographic end markets.  The execution of the three China Nuclear contracts is progressing in accordance with our revised plans.

As expected, Invensys Rail had a slow start to the year due to the timing of orders from Network Rail and also the timing of mobilisation of some of our large export contracts.  We expect material progress in the second half of the year.

Invensys Controls experienced less volatility in demand within its Appliance business but was generally affected by the weaker economies in the US and Europe.

Our financial position remains strong with net cash on the balance sheet of £175 million despite having made some large investments in working capital to support our major projects ahead of payment milestones; this working capital position is expected to unwind as we enter the next financial year. 

We have made two bolt-on acquisitions so far this year; PHW Inc., which expands Invensys Rail’s positive train control product range to include onboard equipment, and Spiral Software, which strengthens our simulation and optimisation offerings for refinery customers in Invensys Operations Management.
Looking ahead, subject to any significant changes to the global macro-economic environment, our good first half performance and strong order book supports our view that we will improve our performance for the year as a whole.

Wayne Edmunds

Notes

1. Unless otherwise stated, % change is measured at constant exchange rates (CER) as a percentage of the H1 11/12 adjusted base and is calculated based upon underlying amounts in £’000s.
2. All references to operating profit (OPBIT) and operating margin in this announcement are before exceptional items.
3. Underlying earnings per share is before exceptional post-retirement benefits – settlement loss; and exceptional finance costs.

Presentation and conference call
Wayne Edmunds, CEO, and David Thomas, CFO, will be hosting a presentation and conference call for analysts and investors at 9.00 a.m. London time this morning:

Venue:        
City Presentation Centre
4 Chiswell Street
London
EC1Y 4UP

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

	UK:	+44(0)20 7784 1036
	US:	+1 646 254 3360
	France:	0805 631 580
	Germany:	0800 589 2673
	Italy:	800 089 737
	Spain:	800 600 526
	Confirmation Code:	6642955

The presentation will also be available via audio webcast both live and for replay purposes.  To access the audio webcast please go to http://www.invensys.com and follow the Half Year Results link.

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