AESSEAL reports 47% sales and 78% EBITDA growth over a 2 year period
AES Engineering Ltd, trading as the AESSEAL Group, a Rotherham based specialist designer and manufacturer of mechanical seals, reports continued market-leading performance in its annual results to 31 December 2011.
AESSEAL is a specialist in the design and manufacture of mechanical seals, engineered seal support systems and related products for a wide range of applications in diverse industry sectors. AESSEAL is already the fourth largest manufacturer of its kind worldwide, and is on-track for grander ambitions as it expects to record its 30th year of continued sales and profit growth.
2011 Financial Highlights
- Sales of £123.9m, up 19.5%
- EBITDA of £22.8m, up 22.9%
- Operating profit rose to £18.2m, 14.7% of total sales, up from 13.2% in 2010
- Group net assets were £54.7m, up 22%
- Today, 90% of sales are from outside of the UK, with sales to North America and emerging markets contributing strongly to sales growth over the period
- 47% sales growth and 78% EBITDA growth over the last two years
- A Compound Annual Growth Rate (CAGR) of 20% over 29years
In spite of continued difficult trading conditions and particular uncertainty in Europe, AESSEAL has reported another year of strong results for 2011 with sales and profits rising by 19.5% and 23% respectively. This brings the headline growth rate since 2009 to 47% in sales and 78% in EBITDA.
During 2011 strong progress was made against AESSEAL Group strategy to differentiate the company through the provision of exceptional customer service and an outstanding range of engineered technology products, with significant investment in a number of areas.
Specifically, AESSEAL invested in stock, which rose £4m year on year. This was done to provide faster delivery to more customers and to support AES’s world-class delivery promise. Furthermore, AES employment levels rose by 5% overall to 1331 during 2011, with an increase of 25%in direct customer facing employees. This is part of the company’s strong value proposition, as this hard work allows the company to act as free seal reliability consultants to the company’s customers. Product development included a greatly extended API product suite, offering a full range of seals and systems for hydrocarbon applications and the development of dry gas seal technology for compressors, providing a ‘credible alternative’ to the more dominant suppliers in this sector. M&A also underpinned the expansion of AES’s product offering with AESPUMP’s acquisition of Absolute Vacuum in the UK and two key acquisitions within the core US market.
These results are particularly encouraging for the UK amid current political rhetoric about the need for UK-based SMEs to increase exports. Lord Green, Minister for Trade and Investment wants to increase the number of UK firms trading overseas from 20 percent to 25 percent, which would add an estimated £30 billion to the UK economy. This is part of a larger plan by the Minister to double UK exports to £1 trillion by 2020.
With such enterprising targets for export, the AESSEAL group is a strong model to emulate: a full 90% of the AESSEAL Group’s sales came from outside of its domestic market in 2011, and AESSEAL was recently presented with the 2011 International Trade Company of the Year Award in a ceremony at the House of Lords. Other high profile recent awards include the company’s 12th Queen’s Award, and the IMechE Manufacturing Excellence awards as both the Overall Winner and Customer Service winner.
Long term targeting of the strategically important oil and gas sector also paid dividends for the company, subsequently contributing ~25% of the group’s sales growth, or up 40% year on year.
The AESSEAL Group’s founder and Managing Director, Chris J. Rea, OBE commented: “Whilst the UK economy hovered on the edge of recession for much of 2011, at AESSEAL we have managed to further strengthen our global sales. This is through continued investment in our customer value proposition. We have made significant product technology and customer service infrastructure investments over the last decade, and I believe we are seeing the benefits.
I also believe that more businesses need to operate a culture of empowerment – particularly within international markets. People need to take ownership of the results, supported by competent management and solid processes from the central organisation. I think too many international businesses either exercise too much or too little control. At AESSEAL we place a huge amount of importance on empowerment, but with high standards and robust processes.”
Ken Beaty, Partner at 3i, a minority investor in AES since 1996, added “It is encouraging to see an example of a UK manufacturing business bucking the trend to succeed internationally in today’s challenged economy. This is a result of an outstanding management team, a leading market position and continued focus on quality and service which is reflected in AES’s consistent 20% CAGR growth.”
AESSEAL® is one of the world’s leading specialists in the design and manufacture of mechanical seals and support systems. The AESSEAL promise to customers is simple: they aim to give such exceptional service that they need never seek another source of supply.
AESSEAL customer service and quality has seen the company show strong growth year on year since it was established in 1979. Today, AESSEAL employs a global network of sales engineers and technical support specialists.
AESSEAL has won several accolades in recognition of the company’s success during 2011: Its 12th Queens Award to date – Queens Award for Enterprise - International Trade, The Institute of Mechanical Engineers Award for Manufacturing Excellence and Customer Focus and lastly the International Trade Company of the Year Award.
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