| 2007 £m |
2006 (restated)1 £m |
Increase % |
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|---|---|---|---|
| Welding | 813.1 | 698.6 | +16.4 |
| Cutting and automation | 157.7 | 129.8 | +21.5 |
| Revenue | 970.8 | 828.4 | +17.2 |
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| Welding | 112.5 | 91.4 | +23.1 |
| Cutting and automation | 14.1 | 10.7 | +31.8 |
| Operating profit | 126.6 | 102.1 | +24.0 |
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| Share of profits of associates (post tax) | 3.0 | 4.3 | |
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| Capital expenditure | 40.0 | 20.6 | |
| Depreciation | (11.2) | (10.5) | |
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| Operating margin | 13.0% | 12.3% | |
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| Employees | 7,860 | 6,788 | |
1 the 2006 comparatives have been restated to reflect the change in accounting for post employment benefits
Overview of performance
In 2007, ESAB recorded another excellent performance, with sales of £970.8 million (2006: £828.4 million), an increase of 17.2 per cent, and operating profit of £126.6 million (2006: £102.1 million), an increase of 24.0 per cent. The operating margin improved to 13.0 per cent (2006: 12.3 per cent).
Out of the total sales growth of 17.2 per cent, 8.0 per cent came from consumables volume growth, 3.0 per cent from consumables product mix and price increases, 6.1 per cent from the equipment, cutting and automation businesses and 2.0 per cent from acquisitions, reduced by 1.9 per cent due to currency impacts, in particular the US dollar.
Volumes were up in all product groups, particularly welding consumables and standard equipment, continuing the trend seen in the first half of the year with continued strength in demand from shipbuilding, oil and gas and other industries. Sales grew in each region, with a particularly strong performance in South America.
The increases in operating profit and margin achieved by ESAB in 2007 reflect on-going operational improvements and high levels of capacity utilisation throughout the year.
The cutting and automation business recovered from its disappointing first half performance as it overcame the previously reported difficulties and produced an overall operating margin of 8.9 per cent for the year. As at 31 December 2007, the order books stood at record levels.