Earnings call transcript: Spectris Q1 2025 sees mixed sales, strong acquisitions

Spectris PLC reported a mixed performance in its first-quarter earnings call for 2025, with sales showing a decline on a like-for-like basis but an increase when accounting for recent acquisitions. The company’s stock price saw a significant decline, down over 38% year-over-year, reflecting investor concerns over market softness and sector-specific challenges. According to InvestingPro analysis, the stock appears undervalued at current levels, presenting a potential opportunity for value investors.

Key Takeaways

• Q1 sales decreased by 2% on a constant currency basis, but acquisitions boosted sales by 5%.
• The order book increased to £529 million, indicating strong future demand.
• Spectris’ profit improvement program is ahead of schedule, aiming for significant savings by 2025.
• Market challenges persist, particularly in clean tech and automotive sectors.

Company Performance

Spectris faced a challenging Q1 2025, with like-for-like sales down 8%. However, the company’s strategic acquisitions of Micromeritics and Syapse have been integrated successfully, contributing to a 5% increase in sales on a constant currency basis. The order book’s growth by 4% to £529 million suggests robust demand for the future. Despite market softness, especially in Europe and specific sectors like clean tech and automotive, Spectris maintains a strong competitive position in testing and measurement.

Financial Highlights

• Q1 sales: Down 2% on constant currency; up 5% with acquisitions.
• Order book: £529 million, up 4% on constant currency.
• Net debt: £5.2 million at March end.
• Book to bill ratio: 1.07.

Outlook & Guidance

Spectris remains optimistic about its future performance, expecting strong growth in adjusted operating margins and a second-half recovery in 2025. The company anticipates delivering at least £30 million in savings from its profit improvement program by 2025, with a projected incremental profit contribution of £60 million. Supporting this optimistic outlook, InvestingPro data shows the company has maintained dividend payments for 34 consecutive years, with an attractive current dividend yield of 4.16%. Despite ongoing challenges, Spectris is confident in its ability to mitigate tariff impacts and improve working capital.

Executive Commentary

Andrew Heath, CEO of Spectris, expressed confidence in the company’s trajectory, stating, "We continue to expect strong progress in 2025." He highlighted the success of the profit improvement program, noting, "Our profit improvement program is tracking ahead of plan." Heath also reassured stakeholders about the company’s preparedness to navigate market uncertainties: "We are well prepared to take action and help mitigate against what might happen in the broader market environment."

Risks and Challenges

• Market softness: Continued weakness in clean tech, battery materials, semiconductor, and pharma sectors.
• Automotive challenges: Particularly tough conditions in the European market.
• Tariff impacts: Potential risks from tariffs, though the company has strategies to mitigate these.
• Economic conditions: Broader macroeconomic pressures could impact growth.

Spectris’ Q1 2025 results reflect a company navigating a complex market environment with strategic acquisitions and a focus on operational efficiencies. While challenges remain, the company’s forward-looking strategies and strong order book position it for potential growth in the coming quarters.

Full transcript - Spectris PLC (SXS) Q1 2025:

Sarah, Moderator, Spectris: Good morning. Thank you for attending today’s Spectris first quarter training update call. My name is Sarah, and I’ll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Andrew Heath, Chief Executive.

Please go ahead.

Andrew Heath, Chief Executive, Spectris: Thank you, and good morning, everyone, and welcome to our first quarter conference call. I’m Andrew Heath, Chief Executive of Spectris, and I’m joined by Andrew Noon, our Chief Financial Officer. During the first quarter, we made good strategic progress on integrating our acquisitions, which are performing very well. And we also made continued significant progress on our profit improvement program. We highlighted in our full year results in February that end market softness was likely to continue into 2025, and that has been the case, with further uncertainty impacting specific end markets.

In this environment, we continue to make strong progress in delivering on our strategy and are working closely with our customers. We’re having lots of constructive conversations with them. However, it is clearly taking longer than usual for our customers to make decisions and place orders. As a result, in the first quarter, sales were down 2% on a constant currency basis. And when looking at the new perimeter of the group, including acquisitions, but excluding disposals that we made in 2024, sales actually increased 5% on a constant currency basis.

I’m very pleased with the performance of the acquisitions. They are all performing well, in line with expectations and continuing to grow. The great thing is that they provide even more opportunity for us to work with our customers. For instance, the addition of Micromeritics and Syapse alongside Mold Palisborne has already delivered incremental new orders. On a like for like basis, excluding the impact of acquisitions, sales were down 8% in the period, driven by a number of distinct factors.

In Spectra Scientific, like for like sales were down 11%. CleanTech, specifically battery materials activity, remains at very low levels. Academia has been impacted by market uncertainty and semiconductor and pharma were notably weak. We saw delays in customer ordering, as I’ve said, with our in period book and turn business being notably low, very much towards the end of the period. By region, European sales held up, while Asia and particularly North America were lower.

On orders though, we did see positive growth in semis and also primary materials. Inspector Dynamics like for like sales were down 3%. Automotive was down significantly and that’s particularly driven by Europe and as was consumer electronics. On the positive side, we saw good growth in machine manufacturing and continuing strength in aerospace and defense. On the order side, orders were up in North America and Asia Pacific, albeit held back by the automotive decline I mentioned in Europe.

Encouragingly, the group, our order book increased at the end of the first quarter to GBP $529,000,000, which is 4% up on a constant currency basis, with a book to bill of 1.07. It’s also reassuring to see that APLOG has gone off to a good start and is trending well ahead of last year, albeit against a soft comparator, which improves our like for like position. This is particularly the case in Scientific, where we’ve seen a much stronger relative performance in April. Since Liberation Day, we have not seen any notable decline in orders and sales despite some deliveries being delayed, such that April is supportive of our outlook. Moving on to what we are seeing in the market and how we are reacting to the uncertainty.

Looking at the world today, now, it is unclear how things will play out, and it will take a while longer for clarity to emerge. What we do know, however, is that we expect to be able to offset the direct impact of tariffs. Our businesses benefit from strong differentiated market positions, they have good pricing power and we have the ability to implement surcharges. I think it’s important to remember our businesses are vital partners to our customers and where our products are essential, whether that be in driving innovation or in testing and measuring critical parameters. Our businesses also have a global operational footprint with a significant presence in The U.

S. And ultimately, if we have to, we have the ability to reconfigure our supply chains and operations relatively quickly. We also acknowledge that it is too early to assess the second order effects of the tariffs. Potential indirect impact of tariffs that is on end market demand. But again, we are focusing on what we can control.

We already took action last year, putting in place our profit improvement program. The program is ahead of target with at least £30,000,000 of savings to be delivered in 2025, very much weighted to the second half and a run rate of at least 50,000,000 in 2026. As a reminder, our profit improvement program comprises three core elements: firstly, general cost restructuring secondly, cost synergies from our acquisitions and thirdly, ERP. On the general restructuring, we mainly completed that work by the end of last year and we are already getting the benefits from the savings. On the acquisitions, the integration is well advanced and we expect to have completed the majority of the integration activity by the middle of this year.

We have certainly been encouraged by the strong start of acquisitions in May 2025. And in both Spectra Scientific and Spectra Dynamics, our expanded propositions are resonating really well with customers. And as I mentioned earlier, we are already benefiting from new incremental orders from a stronger combined offering, giving us upside confidence on our revenue synergy projection. The cost synergies are also progressing ahead of plan. And again, we see upside to the targets that we have previously announced.

And on the ERP, we are now moving into the optimization phase of the implementations in both Malvern Panettisville and HBK. Together, our profit improvement program and the contribution from the acquisitions we made last year will provide at least £60,000,000 of incremental profit contribution in 2025. Additionally, given the uncertain market backdrop, we are retaining a tight control on costs and are taking further action. Turning now to the balance sheet.

: At the end

Andrew Heath, Chief Executive, Spectris: of the period, net debt was GBP 5,200,000.0 at the March. Improvement compared to the December was mostly driven by working capital seasonality. Bringing leverage back down to within our one to 2x target range remains a key priority for the group, as we’ve said previously. And as previously discussed, we have a number of levers, most notably improvements in working capital to support deleveraging through this year. Spectris is a high quality business with leading positions in attractive structural growth markets.

In the downturn, we’ve seen have been unusual in its length as we discussed in our full year results. I mean demand has been soft for two years now. But with the strategic actions we have taken, we are very well placed to benefit strongly when markets recover. As we said, we always outperform when they do. Coming now to the outlook for 2025.

As we already said, we expect to be able to mitigate the direct impact of tariffs. This, combined with the continued strong strategic execution that I’ve outlined this morning, means we currently continue to expect strong growth in adjusted operating margin in 2025, in line with market expectations. We are mindful though of the uncertain macroeconomic backdrop and any potential indirect tax impacts on end market demand. However, as I said, it’s simply too early to determine how this will play out and how it will affect customer buying behavior. We’re also mindful of the recent strengthening of Sterling.

So in summary, while end market softness in the first quarter materialized as expected, we continue to make excellent strategic progress. There is clearly a headwind, but we have a number of levers that we are pulling and April’s trading performance is reassuring. Our profit improvement program is tracking ahead of plan. Our acquisitions are being successfully integrated and are performing well. And our enhanced offerings across our two core divisions, as I said, are already resonating strongly with customers.

The actions we have taken and continue to take have increased the quality and resilience of the group with two world class divisions capable delivering robust growth through the cycle at attractive margins with strong cash conversion.

: And

Andrew Heath, Chief Executive, Spectris: with that, Anshul and I are very happy to take your questions.

Sarah, Moderator, Spectris: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad now. To remove your question, press star followed by 2. Again, to ask a question, press star 1. As a reminder, if you are using speakerphone, please remember to pick pick up your handset before asking a question.

We will pause here briefly as question are are registered. Our first question comes from the line of Lash Mahindra Raja from JPMorgan. You may proceed.

: Good morning. All of us. Thanks for the the call and and and taking my questions. I’ve got a couple if that’s okay. The first is just on Spectra Scientific.

You you just called out some of the the end markets within it, but if you sort of can get a bit more color on on sort of the degree and, I guess, the softness in some of those markets, I guess, in particular, pharma and academia. That would be great. That’s the first question. The second was just on April trading, obviously, of interesting commentary there around how that’s better. I I don’t know if you can quantify that.

And also, do you think there’s any sort of pre buying in there potentially ahead of tariffs? And then thirdly, just an update on China would be quite helpful as well. I think there’s a bit of stimulus coming through in the back end of last year. I don’t know if you’ve seen any of that in the third quarter.

Andrew Heath, Chief Executive, Spectris: Lars, thanks very much for your question. So I mean, just in terms of sort of color on Scientific, as I said a moment ago, we, in the first quarter, we continue to see weakness in clean tech, particularly on battery materials. There’s still plenty of activity on the R and D space around battery materials that we supply our products and see that’s holding up well. But it’s been very much the decline that we saw really starting being at last year around really more the manufacturing side of factories. There’s a lot of battery capacity built through 2021 through to 2023.

And then with the sort of slowing levels of EV vehicles that we’re all well aware of, that meant there was sufficient battery capacity. So some sales into the manufacturing, sort of the quality assurance side of the market still remains at very low levels. I mean, on this, I also talked about semiconductor. The semiconductor sales were down in Q1. To some extent, that’s against a bit of a tough comp because we were coming off quite strong order intake in semis in 2023.

We were still burning through some of that at the beginning of last year. As I said, actually, the order side, semis was up for us in Q1. So we saw positive growth in semis as we’ve been in prime materials. And on the pharma side, generally, it’s still weak. We did see quite a big upswing in the fourth quarter.

We talked about the full year results. That momentum hasn’t carried on. Just looking at how others have reported over the last period, It typically is taking you to be able to see consumable spend picking up in pharma, but instrument sales generally still being quite suppressed. So that’s sort of consistent with what the rest of the market is seeing. And then in terms of April trading, I mean, I think in particular, we clearly had a quite soft comp versus last year.

You’ll remember we launched the first ERP implementation scientific in Mobile Palace in April. And we talked to the half year last year about sort of $20,000,000 of sales got deferred over that half year boundary. Clearly, Political is now using the new system. It’s all up and running. We don’t have any of that operational disruption.

We’re driving efficiencies. So against the soft comp, actually, we’re scientific orders and sales on a sort of on a reported basis will be up double digits for April than what we’re seeing in flash numbers for April. So they had a very strong month admittedly against the soft comp, even if you normalize for that soft comp, it’s still up. So that’s quite reassuring. And then on your pre buy points, I don’t I’m not aware that we really saw any significant pre buying.

If anything, what we’ve seen since Liberation Day is in certain end markets, particularly sort of shipping into sort of from The U. S. Into China, we have had customers request us delay shipping some products to take off of the tariff impact. So if anything, I don’t think we’ve had a pre buyer phase, but we have seen in April a bit of a as I’ve seen in my script, there are some orders we’ve not been able to deliver in April because customers have asked us to hold back because of just the way the tariffs are currently sitting. Interestingly, have had news this week coming out of China that the Chinese government is considering putting the exemptions on to some of the counter tariffs the products coming out of The U.

S. And there are certain exemptions for certain end markets. And I think that should be favorable to us from what we understand.

: Thank you. And then just on China stimulus for Q4. Yes.

Andrew Heath, Chief Executive, Spectris: So I mean, for China overall, China is holding up quite well. I mean, we’re not sort of, I’d say, seeing any sort of I think you’ve mentioned stimulus. I’m saying we’re sort of seeing any sort of direct impact of stimulus impacting China. But if we look at sort of China through Q1, actually China was quite robust. We were up for all of this in scientific in Q1 across Asia.

China was pretty important, sort of flat year over year. And Dynamics was slightly down, mainly driven by sort of slightly weaker auto.

: Perfect. Thanks very much.

: Thank you.

Sarah, Moderator, Spectris: Thank you. The next question is from Jonathan Hearn with Barclays. You may proceed.

Jonathan, Analyst, Barclays: Hey, guys. Good morning. Just a few questions for me, please. The first one, just coming back to orders. Can you just give us a feel for the order intake by division in Q1?

And also just following up on your earlier comment, obviously, it would have started to improve the scientific in April. How has been the trend for Dynamics, please? So that was the first one. Do you want to should we go one by line or I can do more at once?

Andrew Heath, Chief Executive, Spectris: Stephen, you’re taking the questions, Jonathan.

Jonathan, Analyst, Barclays: Yes. Okay. So let’s say, first one is on the second one, just in terms of obviously that weakness you saw in the book and ship business within Scientific at the back end of the quarter, Can you just give us a feel for how important or the size of that book and ship business is within Scientific? And then the third one was just coming back to tariffs. Obviously, you’re saying that you can pass on obviously tariffs through surcharges.

Does that also apply to the backlog to the order book? Can you pass on those sort of potential tariff surcharges to the backlog essentially? Those are the three questions, please.

Andrew Heath, Chief Executive, Spectris: Okay. I think sort of first and foremost, look at order of performance in Q1 is your first question. I mean, it was scientific was broadly aligned with sales dynamics, again, sort of similar to those sales number that we reported. So but we still had a book to bill of Y-seven, so slightly better in both cases. So I think it’s sort of both divisions were broadly sort of tracking the same orders as they were to sales and broadly in line with the sort of book to bill for the group level.

Your point on the book and ship in the month for Scientific or in the period, I mean, sort of typically speaking, we would expect to see the order of magnitude of about sort of 15,000,000 to $20,000,000 of sort of book and turn every month within our Scientific version. There are some of our products we make to stock now and we’re shipping from stock. So we have limited visibility on those things in terms of all the backlog. But, you know, say it’s about 15,000,000 to 20,000,000 per month range. And if you want to get I mean, I think, to some extent, the sort of scientific sales number looks a bit dramatic.

But, you know, that 11% is effectively equivalent to 20,000,000 of sales in Q1. So it’s a relatively small amount of sales. That’s quite a big impact. So I think as we’ve talked previously, Q1 is always our lowest quarter. And as such, it’s not really a particularly good barometer of the year.

So I think I wouldn’t read too much into it. And again, we certainly towards the end of Q1, we saw that sort of in period book and turn business did slow up as customers would have paused into waiting to see what was going to happen on the tariff front. But the sales when we look to April actually, we’ve not had any sort of we can’t see any material impact really from the tariffs post the April 2 other than some customers asking us to delay shipments. So I think we take that as reassuring for the time being. And then I guess I mean on the tariff point, maybe I should deal with that, I’m sure we have questions on tariffs.

As I said in my opening, we have good financing power. We have the ability in our Ts and Cs with our customers to actually be able to do a of pass through these sorts of impacts and effects through a surcharge. We did the same during sort of post COVID period where there was exceptional freight costs in that period. We were able to pass along those exceptional freight costs through the surcharges. So we fully anticipate being able to do the same again.

As I said, when you look at our sort of geographic footprint, you also have to we’re well placed around the world, which gives us some flexibility. But you also have to look, it’s quite a nuanced picture really. You have to look at sort of where the competition are also based on where they’re shipping from relative to us. And broadly, we don’t see sort of any competitive disadvantage in terms of geographic location competitors relative to us. And in some cases, we actually see we have an opportunity and where we’re based in The U.

S. For instance and our competitors aren’t. It is quite highly nuanced, but the important message we’re giving today is that we expect to be able to offset the direct impact of tariffs as a consequence of both contractual means and footprints and sort of just relative position from a competitive perspective. And as I said, again, my opening, we’re a very asset light business. We’ve reconfigured our supply chains quite a bit over the last five, six years since tariff one point We saw the impacts of the first range of tariffs back in 2019.

They really had the whole COVID period and challenges getting shipments out to China in particular. So we took the opportunity to reconfigure our supply chains. And we now have less than 4% of our purchases come out of China for the products we ship sort of outside of China. So we have

: a

Andrew Heath, Chief Executive, Spectris: very limited, very small exposure on tariffs on components that we’re sending into our products. So it’s not very helpful and then ultimately, know, I said, we’re very asset light. So, you know, it’s relatively easy for us to reconfigure our assembly approach that we need to. We have good footprint around the world and space that we can move into. And we have a challenge there, which is just more one of our regions are quite complex and it’s a matter of getting the right people trained up and then certifying those locations.

But ultimately, if we had to move things, could move into sort of building local geography we had to.

Jonathan, Analyst, Barclays: That’s very clear. Thank you for the

: color. Thank

Sarah, Moderator, Spectris: you. The next question is from Mark Davies Jones with Stifel. You may proceed.

Mark Davies Jones, Analyst, Stifel: Thanks. Morning, Andrew. Two for me, please. Firstly, you said automotive was was very weak. I guess, no surprise in terms of that market backdrop.

But is that right across the board, is that also impacted the virtual testing side? Because I have heard some suggestions that some of those European OEMs are trying to get more virtual to catch up with the speed to market of the Chinese. That’s the first one. And the second one is Trump related but not tariff related. Have you had a look at how much of your U.

S. Business ultimately depends on federal funding? Because obviously, we’ve seen something like an attack on universities, threats of big cuts to the National Institutes of Health, etcetera. How material is that in terms of an ultimate end customer for the group?

Andrew Heath, Chief Executive, Spectris: Okay. So let me talk to you on the automotive piece. I mean, I’d say, I mean, on auto, actually, I mean, our sales in Q1 were actually up in North America on an automated. Think that’s against quite a weak comp. We saw auto sales pull back heavily in Q1 last year with the decline of the sort of EV programs.

Sales leasing commercially in Q1 this year were up in North America. The big impact really was in Europe as we talked about, which is just I think going through quite a structural change now. I think it’s a clear realization that the industry in Europe is going to have to change dramatically to compete not just with tariffs but also with the wise, the quality of Chinese produced vehicles. So I think in short term, we’re to continue to see some of that disruption come through. The point on the sort of on the virtual test side, it’s a good one.

Last year, virtual test, we grew revenue high teens last year. So despite the challenges that the automotive industry is going through, there is clearly an accelerated adoption of the virtual test simulation, sort of, you know, hardware and process and all the exome loop, you know, side of virtual test, which is, you know, which we are definitely benefiting from. So in Q1, our virtual test orders were slightly down. So that’s mainly because we had a quite tough comp against last year, which we sold quite a few large simulator orders. So I don’t think we can take Q1 as a barometer for that.

And I think we would expect to see what we saw last year, which is you said, a lot of the automated OEMs recognize that they’ve got some structural changes coming. They’ve got a radically reduced cost and they need to get their products to market soon and be more competitive. And we’re really embracing the virtual tools as the way forward. So we’re still, I’m still very bullish on virtual tests and that’s clearly an area of focus and investment for us. And then secondly, just on your second point about exposure to U.

S. Federal funding, I can’t give you anything like a precise answer. I think if you look at sort of defense sales in total for us, it’s about 4% or 5% of our group revenue. That’s obviously sort of split broadly between The U. S.

And Europe. So maybe sort of two ish, three ish percent of our sort of defense sales into The US. If we look at academia, again, think typically, know, lot of 10% of sort of, you know, 9%, ten % of group academia sales is about 3%, four % of that goes into North America. So, know, clearly, there’s been a lot of talk about those and its impact on government funding towards academia. The reality is, you know, both US academic institutes have been living over the past ten years with progressively less and less government funding.

And now this has clearly accelerated that, but, with the threat of it. But, you know, I think that, you know, they’ve been they have got used to sort of having less reliance on US government funding going to corporates and support the funding. Actually in The U. S. In Q1, our R and D sales were actually just slightly up.

Whether there was a bit of pre buying, I don’t know, but they’re actually slightly up. But I think, you know, we have seen instances from customers where it is causing delays, not least the one space customer where, you know, we had an order of over $1,000,000 that, you know, they weren’t able to place in q one, which is a renewal of the software just because of the extra constraints that they’re coming out, you know, coming out from the US government. They will place that order in Q2, it just has delayed things. So we are seeing sort of that sort of knock on, but I think overall, at the moment, it’s manageable.

Mark Davies Jones, Analyst, Stifel: Thank you very much. That’s helpful.

Sarah, Moderator, Spectris: Thank you. The next question is from Andrew Douglas with Jefferies. You may proceed.

: Good morning, team. Thank you for your call. I’ve got two questions left because most of them have been covered. I just want to understand a bit more about the shape of the current year. I think, historically, we’re expecting kind

Andrew Heath, Chief Executive, Spectris: of broadly

: and then a recovery in organic growth in the second half. Is that still the case? Because I just want to figure out how you can get to unchanged full year guidance on whether you’re maybe taking some of the sales growth out of your expectations, but maybe better PIP benefits or maybe other stuff that’s happening. I’m just trying to understand how we can get from a minus eight organic in the first half to an unchanged full year guidance. And if we are still expecting an improvement in the second half with Los Angeles, are you expecting the unwind maybe of the working capital position?

I’m assuming that helped you in the first half in terms of getting your debt down. Just trying to understand the dynamics of that working capital shape if we do indeed have a better second half.

Andrew Noon, Chief Financial Officer, Spectris: Good morning, and thanks, Andy, for the question. At the end of the year, we of last year, we did get gains of 35%, sixty five % shape. We’re still expecting that on profitability and today, we but you’re absolutely right. It’s it’s a flattish h one and then lifting up into into h two is exactly the timing assumption that we’re making at the moment. And we’ve always said the profit improvement program is more weighted to the second half.

And of course, our profit improvement actions have no relationship to market growth factors. And we’ve always said GBP 10,000,000 in H1 and GBP 20,000,000 in H2. And we’re buying on that number at the end of Q1, which we’ve actually noted about 90 heads and additional to the guidance we gave last year in the first quarter. So tracking really, really well, and I’m pleased to say that early indications is that it will be slightly better than that $30,000,000 number. But that’s obviously probably coming up reaching into the second half at the moment.

So you’re absolutely correct. In terms of working capital, it remains the number one priority, and we are laser focused on it as we get into sort of each one. It’s always difficult checking the requirements of things for inventory when the first set of numbers are down slightly from expectations. But I think the encouragement on the order book and also April, we’re just remaining on track with the working capital, 40,000,000,000 improvements that we’ve already discussed. I’m quite happy with the progress.

We’ve gotten a team on that. And I think I also shared with you at the end of the year that we had higher inventory at Q4 and higher each debt and we’re progressing well on that particular piece of work.

: One quick follow-up, if I may. What gives you guys the confidence that we’re going to get that second half recovery? Is it just a kind of moving to a more normalized tariff backdrop so we don’t know what the total game is? Or have you been given indications by your customers that we should expect the second half? I’m just trying to figure out why we should have such a marked improvement in that second half notwithstanding a slow start to the current year.

Andrew Heath, Chief Executive, Spectris: Mean, Andy, think we can come back to what we said in our statement, in that we can certainly offset the direct impact to tariffs. The second order effects, it’s still too early to determine. I don’t think we don’t know, don’t anybody knows, our customers obviously don’t know either. I’m reassured by April. In 2020 with COVID, we saw April contracts really sharply.

We haven’t seen that happen here. So it feels that people are taking sort of an issue at the moment. Our order book gives us visibility out to sort of July, August. When we come back in the half year, we’ll obviously be able to then provide a greater update.

: Thanks for your help, guys.

Andrew Heath, Chief Executive, Spectris: Thank thank you.

Sarah, Moderator, Spectris: There are currently no question registered at this time. Again, as a reminder, it is star one to ask the question. There are no more questions waiting at this time. So I’ll pass the conference back. All right.

Lovely. Thank have our next question from Stephen Platt with HSBC. You may proceed.

: Yeah. Morning, guys. Sorry. I’m a slow mover today. I have two more.

First of all, Cyapse and Micromeretics. Can you talk a little bit how things are going for them? You said integration is going well, but you had a minus 10% decline in The U. S. Micromeritics had obviously quite a lot of fintech exposure.

Can you talk us a little bit through how things are looking there? And my second question is on the order book. You said it’s up 4%, and that is a reported number. Contribution from your acquisition this year, roughly 10%. So can you tell us how the order intake was developing in the first half?

And actually, how does order contribution from the new acquisitions look like at the moment? Thank you.

Andrew Heath, Chief Executive, Spectris: Thank you, Stefan. So as I said, look, in terms of the acquisitions for both Saipemagro and Thiego, we’re really well pleased with the quality of the assets that we bought. There have been no surprises. The quality of the business, the products, but also the people and the fit that we expected. So we absolutely met our expectations or exceeded expectations.

I mean, has actually continues to grow really strongly. In orders and sales were up 30% in Syapse in Q1 as an example. We’ve moved all of our existing handheld instruments from our analytical into the Syapse business. So we’ve basically made SIAPs sort of off center of excellence if you like around hand belts. That has already started to pay a preach in terms of new incremental orders.

The existing our existing sort of new hand held instruments from all valid school. We’ve actually had increased levels of sales as a consequence of combining that with SIOP’s team, basically giving both the sales and distribution channels for the basket of products. And that’s going very well. And also, I mean, they’ve also accelerated one of the innovations of bringing the two technical teams together. We’ve actually accelerated a new product going to market.

Lots of really good news out there. Mind Promethics, really strong business, strong team, strong capabilities, super fit with our own palatable business. As I said, we’ve already received new orders from customers who haven’t previously bought from all other businesses. That cross sell is starting to bear fruit. And certainly, sales pipeline opportunity has expanded significantly as a consequence of just having the ability to talk to more customers without the basket of products.

That’s going very well. In Q1, MicroEdit did have a tough comp in fairness. One that they had quite a bit of backlog they were burning through from 2023 being at 2024. If you normalize for that, they’re still growing strongly. And it’s a combination with all financial, the opportunities and the revenue synergies platform, it’s combined platforms up over 10%.

And the rollout is a consequence of having this broader basket of offering to a broader number of customers. All that is hugely positive. Likewise, within Dynamics with PietroChris, I mean, that only came in December. The integration with Verizon is now broadly complete, it’s much smaller business. I was out in Ditram with Angela back in March, which is based in California, serving The U.

S. Aerospace and defense, particularly sort of commercial space. They’re super excited to now have access to the Gaeser Chris Crystal because it can really expand their product range and get them into areas of testing and monitoring of spacecraft that they wouldn’t otherwise able to do for the temperature limitations. They see big opportunities to grow that. So I think it just come back to the final point on the order intake.

I’ll just refer you back to Jonathan’s question, in terms of just the shape of orders. Can follow the orders have followed the like for like sales, slightly better because of the book to bill. And within the acquisitions, they are certainly running in line with our expectations in the business plan. Certainly, it won’t be normalized, let’s say, for various just in terms of trends, we can really see the continued growth from all the businesses.

: Okay, super. One follow-up, if I may. You think about the minus 11% in Scientific and obviously being the higher profitability business with a bigger drop through, Should we be worried on the underlying profitability at that point? Or is it basically as you said, you’re going to complete everything with your measures that you’re in control, cost measures and tight control of costs?

Andrew Heath, Chief Executive, Spectris: Yes. So I think the simple answer to that, Stefan, is if you look at April, scientific, as I said, both orders and sales on the reported basis, they were up double digits in April. So we fully I think it’s against a softer comparison. But it does mean through Q2 that we will recover scientific back to sort of a flat position. The full year results, we said we expected the half year to be sort of flattish last year.

And we saw that’s still our expectation. So you’re concerned around the Q1 minus 11% and the profit impact, that will recover progressively through April, May and June is our prediction. Thank you. No, thanks very much.

Sarah, Moderator, Spectris: Sir, no questions for me at this time.

Andrew Heath, Chief Executive, Spectris: All right. Let wrap up then. So look, by way of closing, thank you very much for joining the call. We really appreciate it. Clearly, there’s a lot going on in the world at the moment.

But I think my message to you and the key takeaways are that we are very much focused on execution, focusing on what we can control. And as such, we continue to expect strong progress in 2025. Yes, Q1 was a little softer. However, as I said, it’s not a good barometer for the year. And our reported sales in the new periods of delivery are up, book to bill rates than one and April’s performance is reassuring, as we just talked about.

Our profit improvement program is running ahead of target. The acquisitions are performing very well and we see upside in both cost and revenue synergies and we can offset the direct impact of tariffs. And importantly, think we are well prepared to take action and help mitigate against what might happen in broader market environment. We do have a very high quality business and strategic actions that we are taking and have taken are and have increased our resilience and also position us strongly when markets recover. So thank you very much for joining and look forward to catching up with you all quite soon.

Thank you very much. That

Sarah, Moderator, Spectris: concludes the Spectris first quarter training update call. Thank you for your participation. You may now disconnect your lines.

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