Annual Report 2022
Engineering
our difference

Our Purpose is to create sustainable value for all our stakeholders
as we engineer a more efficient, safer and sustainable world.
Engineering
our difference
In 2022, we made a difference to
our customers, each other and
the world around us.
Accelerating our Purpose to
engineer a more efficient, safer
and sustainable world we grew
stronger in the face of geopolitical
and economic adversity, our
colleagues inspired each other
to do the right thing by living our
Values and we celebrated our
own differences and diversity.
Our customers
See pages 12-15
Our environment
See pages 16-17
Our colleagues
See pages 52-55
It was a year when we gave back
even more to our communities
and reduced our impact on the
environment, advancing our
journey to meet our One Planet:
Engineering with Purpose
sustainability goals.
Across the Group, we combined
our capabilities, developing
new‑to‑world solutions to
decarbonise industrial processes
to meet our customers’ changing
needs, working closely with
our suppliers to support our
customers’ sustainability
and efficiency aims, with an
unwavering focus on safety.
Our story of 2022 shows how,
through our commitment to
all our stakeholders and to
creating long‑term sustainable
shareholder value, we
engineered OUR difference.

In this report
Strategic Report
Who we are 2
The industries we serve 4
Financial summary 6
Chair’s Statement 8
Engineering our difference case studies:
– for customers 12
– for the environment 16
– for suppliers 18
Making our difference:
– Purpose and culture 20
– Strategy and business model 22
– Creating value for all our stakeholders 24
– Delivering sustainable value to shareholders
through economic cycles 26
Chief Executive’s Review 28
Key performance indicators 34
Ten-year financial summary 36
Financial Review 38
Sustainability Report 46
Engineering our difference case studies:
– for colleagues 52
– for communities 68
Operating Review
– Steam Specialties 78
– Electric Thermal Solutions 83
– Watson-Marlow 88
Risk Management 92
Governance Report
Our Governance 100
Board leadership and Company Purpose 102
– Chair’s introduction 102
– Board of Directors 104
– Our Group Executive Committee 106
– The Board at a glance 107
– Board activities 108
– Leading with Purpose 109
– Engagement with stakeholders
and Board decision making 111
– Colleague Engagement Committee Report 114
Engineering our difference case study:
– for shareholders 118
Division of responsibilities 120
– Governance framework 121
Board composition, succession and evaluation 122
– Nomination Committee Report 124
Audit, risk and internal control 128
– Audit Committee Report 128
– Risk Management Committee Report 139
Remuneration 143
– Remuneration Committee Report 143
– Remuneration at a glance 2022 148
– Annual Report on Remuneration 149
– Remuneration Policy 2023 160
Regulatory disclosures 169
Statement of Directors’ Responsibilities 173
Financial Statements
Independent Auditor’s Report 175
Consolidated Statement of Financial Position 184
Consolidated Income Statement 185
Consolidated Statement of
Comprehensive Income 186
Consolidated Statement of Changes in Equity 186
Consolidated Statement of Cash Flows 188
Notes to the Consolidated Financial Statements 189
Company Statement of Financial Position 232
Company Statement of Changes in Equity 233
Notes to the Company Financial Statements 234
Corporate Information
Our Global Operations 242
Officers and Advisers 247
“ At Spirax-Sarco Engineering we are committed
tomaking our difference for all our stakeholders
through living our Purpose.”
Nicholas Anderson
Group Chief Executive
Our communities
See pages 68-71
Our shareholders
See pages 118-119
Our suppliers
See pages 18-19
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
1

Who we are
Spirax-Sarco
Engineeringplc is
a multi-national
industrial
engineering Group
with expertise in
the control and
management of
steam, electric
thermal solutions,
peristaltic pumping
and associated fluid
path technologies.
Our technologies play an
essential role in critical
industrial processes
across multiple industries
as diverse as Food &
Beverage, Pharmaceutical
& Biotechnology, Power
Generation and Healthcare.
With customers in 165
countries, we provide the
engineered solutions
that sit behind the
production of many items
used in daily life.
Our Purpose, supported
by our culture and Values,
unites us, guides our
decisions and inspires
us everywhere that
we operate.
Core product lines
1,700+
People
10,400+
Sales and service engineers
2 ,100+
Operating units**
146
Countries with a resident
directsales presence
67
Direct buying customers
‡
110,000
** Operating units are business units that invoice locally
‡ Actively purchasing in the last 24 months
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Spirax-Sarco Engineering plc Annual Report 20222

Electric Thermal
Solutions
Steam
Specialties
Watson-Marlow
Core product expertise
Industrial and
commercial steam
systems, including
condensate
management,
controls and thermal
energy management
products and solutions.
The difference we make
Steam is relatively easy to control
and is capable of transferring large
energy loads in the form of heat.
It is used across a broad range
of industries, in all geographies
and a wide range of applications
including: heating, curing, cooking,
drying, cleaning, sterilising, space
heating, humidifying, vacuum
packing and producing hot water
on demand. The generation of
steam can also be decarbonised
and we’re leading the way by
combining technologies with
our Electric Thermal Solutions
Business. We’ve developed a
range of new-to-world, sustainable
first-fit and retrofit heating solutions,
as well as thermal energy storage
applications for more sustainable
steam on demand.
See pages 78-82
Core product expertise
Electrical process
heating and
temperature
management
solutions, including
industrial heaters
and systems, heat
tracing and a range
of component
technologies.
The difference we make
Electrical heating solutions are
a complementary medium to
steam and there are synergies
in terms of the broad industrial
and geographical application.
Our electrical process heating
and temperature management
solutions provide more efficient
processes through improved
thermal energy management and
control systems. They are easy
to incorporate, install, maintain
and control and can have zero
emissions at point of use, making
them a sustainable choice.
Our solutions are particularly
utilised in applications that require
rapid ‘on-off’ control, higher
temperatures and concentrated
power loads as well as in an
increasing range of sustainable
applications where decarbonisation
of industrial processes is a
key driver.
See pages 83-87
Core product expertise
Peristaltic and
niche pumps and
associated fluid
path technologies,
including pumps,
tubing, specialty
filling systems and
products for single
use applications.
The difference we make
Our pump and fluid path
technologies provide sustainable
value for customers across
process and life sciences
industries. Our solutions provide
engineering excellence across
single-use, system integration,
and OEM applications, and we
are committed to advanced
design and manufacturing
techniques, delivering sustainable
manufacturing capabilities to
customers. We provide total
process confidence and security
in accurate metering, dosing,
transfer and filling. With a low cost
of ownership, reliability and ease
of maintenance, our technologies
combine to provide a cost-effective
end-to-end solution. Through our
expertise we transform customers’
production processes to be more
efficient, safer and sustainable.
See pages 88-91
Thermal Energy Management
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3

The industries we serve
Pharmaceutical
&Biotechnology
25%
of Group revenue
Our peristaltic pumps, valves and single-use
components enable precise flow control
and fluid isolation. Clean steam reduces the
risk of product and process contamination.
Electrical heating is used in a wide range of
process heating applications.
Food & Beverage
19%
of Group revenue
Steam is used for blanching, cooking, baking,
brewing, distilling, packaging, cleaning and
sterilising. Electric heating elements are used
in commercial food equipment. Pumps are
used to meter and transfer ingredients,
deliver food to process lines and handle
process waste.
Oil & Gas
5%
of Group revenue
Electrical heating products reduce fluid
viscosity, deliver freeze protection and help
separate natural gas, crude oil and water
during extraction. Our steam products
enable optimum steam system performance
and reduce energy use duringoil and
gasproduction.
OEM Machinery
12%
of Group revenue
Original Equipment Manufacturers (OEMs)
are companies that build and supply
machines for use in industry. Our activities
with OEMs vary from simple product supply
to advising on machine performance
improvements and process plant design.
Chemicals
5%
of Group revenue
Steam and electricity are widely used as an
energy source in chemical production and
product processing, while our pumps are
used to safely and accurately transfer and
dose critical chemical components.
Power Generation
4%
of Group revenue
Electrical heating technologies are widely
used to optimise power generation.
Steam turbines transfer chemical energy in
fuel into electrical energy and steam is used
to distribute and reuse waste heat formed
during the power generation process.
We apply our products, solutions and expertise across a
diverserange of industrial sectors, helping our customers
to increase their efficiency, safety and sustainability.
13% of Group revenues to ‘other’ industries including, Pulp & Paper, Aerospace & Defence and Textiles.
Strategic Report
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Healthcare
4%
of Group revenue
Steam is used in hospitals and clinics
for space heating, hot water production,
humidification and sterilisation. Pumps
and associated equipment are used
in the manufacture of products for the
Healthcareindustry.
Mining & Precious
Metal Processing
3%
of Group revenue
Peristaltic pumps reduce water, energy
and chemical use and increase productivity
while moving and processing abrasive ores
and slurries. Electrical heating is used for
temperature maintenance and space
heating for workers.
Water & Wastewater
3%
of Group revenue
Peristaltic pumps are used to dose chemicals
during water treatment processes and
to transfer viscous and abrasive slurries.
Electrical heating solutions provide freeze
protection, temperature maintenance and
space heating in water treatment plants.
Semiconductor
2%
of Group revenue
Electrical products are used in water
manufacturing and printing production
processes to ensure thermal uniformity which
is critical during chip manufacturing process;
clean and pure steam generators supply the
humidification system to ensure the air is not
too dry or wet.
Buildings
3%
of Group revenue
Steam is used to provide space heating,
humidification and hot water in public and
private buildings, while our electrical products
are used for hot water and heat generation,
snow-melting, gutter and roof de-icing and
frost-heave prevention.
Transport
2%
of Group revenue
Electrical heating components provide freeze
protection and defrost for engines, rotating
equipment, mechanical systems and fluid
delivery. PTFE lined hoses are used for
braking, cooling, transmission and steering
systems. Our steam heat exchange and
recovery solutions are used on cruise ships.
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Spirax-Sarco Engineering plc Annual Report 2022
5

Financial summary
for the year ended 31st December 2022
Strong performance in 2022; anticipate good growth in 2023
• Revenues up 20% or 14% organically; driven by volume growth and price increases to protect margins
• Statutory operating profit down 1% due to revenue investments, ETS restructure and acquisition costs
• Adjusted operating profit of £380.2 million up 12% or 7% organically
• Adjusted operating profit margin of 23.6%, down 170 bps due to revenue investments
• Steam Specialties organic sales up 12%; Cotopaxi acquisition enhances Digital growth capabilities
• Electric Thermal Solutions organic sales up 14%; strategic acquisitions of Vulcanic and Durex Industries
• Watson-Marlow organic sales up 16%; Biopharm** normalising, Process Industries up strongly
• Net debt^ increased to 1.5x EBITDA* on a pro-forma basis, following ETS acquisitions
• Adjusted cash conversion lower at 57% due to record capital investment and inventory rebuilding
• Total dividend up by 12% to 152.0 pence; maintaining 55-year CAGR track record at 11%
2022 highlights
Statutory 2022 2021 Reported
Revenue
†
£1,610.6m £1,344.5m +20%
Operating profit £318.8m £320.9m -1%
Operating profit margin 19.8% 23.9% -410 bps
Profit before taxation £308.1m £314.5m -2%
Basic earnings per share 305.1p 318.3p -4%
Dividend per share 152.0p 136.0p +12%
Adjusted* 2022 2021 Reported Organic*
Revenue
†
£1,610.6m £1,344.5m +20% +14%
Adjusted operating profit £380.2m £340.3m +12% +7%
Adjusted operating profit margin 23.6% 25.3% -170 bps -160 bps
Adjusted profit before taxation £370.6m £333.9m +11%
Adjusted earnings per share 377.2p 338.9p +11%
Adjusted cash conversion 57% 82%
†
The term ‘sales’ is used interchangeably with ‘revenue’ when describing the financial performance of the business.
* Organic measures are at constant currency and exclude contributions from acquisitions and disposals (with our Russian operating companies treated as disposals from
the date at which the Group suspended all trading with and within Russia).
^ Net debt includes total borrowings, cash and bank overdrafts but excludes lease liabilities, as set out in Note 24 to the Financial Statements.
** Biopharm refers to sales made to the Pharmaceutical & Biotechnology sector
See Note 2 to the Financial Statements for an explanation of alternative performance measures.
Segmental reporting
Our segmental reporting is consistent with how we present management information to the Board. A detailed segmental breakdown is provided in
Note 3 of the Consolidated Financial Statements on pages 200 to 202. A performance review by operating segment is set out on pages 74 to91.
2022
Revenue
Change
2022 Adjusted
operating
profit*
Change
2022 Statutory
operating
profit
Change
Reported Organic Reported Organic Reported
Steam Specialties £866.0m +15% +12% £206.1m +9% +8% £196.2m +5%
Electric Thermal Solutions £256.1m +41% +14% £39.9m +66% +23% £7.3m -34%
Watson-Marlow £488.5m +20% +16% £160.0m +7% +3% £154.4m +6%
Corporate expenses (£25.8m) (£39.1m)
Total £1,610.6m +20% +14% £380.2m +12% +7% £318.8m -1%
*All adjusted profit measures exclude certain items, which totalled a charge of £61.4 million (2021: charge of £19.4 million), as set out in Note 2 to the Financial Statements.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 20226

* All adjusted profit measures exclude certain items, which totalled a charge of £61.4 million (2021: charge of £19.4 million), as set out in Note 2 to the Financial Statements.
The Group’s three operating segments, as defined by IFRS 8, are Steam Specialties, Electric Thermal Solutions and Watson-Marlow.
Electric Thermal Solutions
Watson-Marlow
Steam Specialties
Revenue by segment %
54%
56%
16%
14%
30%
30%
2021
2022
Statutory operating profit by segment %
55%
2%
43%
2021
54%
3%
43%
2022
Electric Thermal Solutions
Watson-Marlow
Steam Specialties
Before corporate expenses of £39.1 million.
(2021: £22.4 million)
Adjusted operating profit by segment* %
51%
10%
39%
52%
7%
41%
2021
2022
Electric Thermal Solutions
Watson-Marlow
Steam Specialties
Before corporate expenses of £25.8 million.
(2021: £22.4 million)
Revenue £m
£1,610.6m
KPI
+14
+17
-3
+6
+7
Organic
change %
1,610.6
1,344.5
1,19 3. 4
1,242.4
1,153.3
2
022
2
021
20
20
2
019
2
018
Statutory operating profit £m
£318.8m
19.8
23.9
20.9
19.7
25.9
Margin %
318.8
320.9
24 9.0
245.0
29 9 .1
2
022
2
021
20
20
2
019
2
018
Statutory earnings
per share
p
305.1p
305.1
318.3
235.5
226.2
3 0 3 .1
2
022
2
021
20
20
2
019
2
018
Adjusted operating profit* £m
£
380.2m
KPI
23.6
25.3
22.7
22.8
23.0
Margin %
380.2
340.3
270.4
282.7
264.9
2
022
2
021
20
20
2
019
2
018
Adjusted earnings
per share*
p
377.2p
KPI
377.2
338.9
256.6
265.7
250.0
2
022
2
021
20
20
2
019
2
018
Health and Safety
Over three-day lost time injury rate
per 100,000 hours worked
KPI
0.07
0.03
0.16
0.19
0.24
2
022
2
021
20
20
2
019
2
018
0.07
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Spirax-Sarco Engineering plc Annual Report 2022
7

Chair’s Statement
Leading with Purpose.
The Board also considered the impact we
have on stakeholders when taking more
difficult decisions, such as the closure of our
loss-making manufacturing facility in Soissons
(France) and the Group’s withdrawal
from Russia.
Our commitment to
inclusion, equity and diversity
Our Board is diverse ethnically, culturally
and in terms of gender, bringing value to our
Group, because of our Board members’ rich
diversity of perspectives and experiences,
enabling them to better understand and
consider the needs of all our stakeholders.
At the end of December 2022, the Board
met the 40% female representation target
and with three members of the Board coming
from a minority ethnic background, we
exceeded the Parker Review target of at least
Introduction
In a volatile year for the world’s
economies, the effects of the deteriorating
macroeconomic situation were felt across
our global societies, impacting our Group’s
stakeholders in many different ways. In these
more challenging times, the Board has
remained focused on ensuring the decisions
we make create value for all our stakeholders
and is pleased with the Group’s strong and
resilient performance.
During 2022, the Board engaged effectively
and continued to reflect stakeholder views
in our decision making. This was evidenced
when making investment decisions such
as increasing our manufacturing capacity,
improving our sustainability performance,
accelerating our Digital Strategy and the
introduction of our Group Inclusion Plan.
“ We are pleased with the progress
made, across different dimensions,
which has created significant value
for all our stakeholders in ways that
are meaningful to them.”
Jamie Pike
Chair
Strategic Report
8 Spirax-Sarco Engineering plc Annual Report 2022

our Group, we approved a set of refreshed
Diversity goals at our December meeting.
The goals are published on page 50 of
the Sustainability Report and reaffirm our
commitment to having a female Chair, Senior
Independent Director, Chief Executive or
Chief Financial Officer by the end of 2025, in
line with the recommendations of the FTSE
Women Leaders Review (formerly Hampton-
Alexander).
We are fully supportive of the Group’s
continued activity to champion these
important societal changes. In 2022, Nimesh
Patel, Chief Financial Officer, became a
Co-Chair of the FTSE Women Leaders
Review and Nicholas Anderson, Group Chief
Executive, is now an Ambassador for the
25x25 campaign, which is seeking to achieve
25 female CEOs in the FTSE100 by 2025.
We became signatories to the UN Women’s
Empowerment Principles and the UN LGBTI
Standards of Conduct for Business, building
on previous commitments, including as
signatories to the Change the Race Ratio
campaign which we began supporting
in 2021.
Although not yet required to do so, we
have voluntarily reported on all diversity
and inclusion data which complies with the
Financial Reporting Conduct’s new disclosure
rules on this topic in respect of Board
composition. These disclosures are published
on page 107 of the Governance Report.
one individual. The Board composition was
stable during 2022 and our focus for the year
was on Board consolidation and succession
planning for senior leadership.
Given the increasing importance placed on
sustainability by all stakeholders, the Board
supported elevating the representation of
this area to the Group Executive Committee
(GEC) level, with Sarah Peers, Group Director
of Sustainability, becoming a member of the
GEC effective 1st October 2022.
The Board was pleased to approve and
oversee the implementation of the Group’s
Inclusion Plan in 2022, noting the impact it is
already having across the Group. In 2022, we
continued increasing the number of women in
senior roles across the Group and improving
gender balance in our senior leadership team
(GEC plus their direct reports) which reached
34% female representation by October
2022. Although usual attrition and employee
changes in the fourth quarter reduced this to
32% at the year-end, we anticipate female
representation in our senior leadership will
return to 34% by April 2023 and we remain
committed to reaching at least 40% female
representation across our senior leadership.
We are also pleased that our global graduate
programme again achieved its goal of 50%
female intake for the year.
To further strengthen our focus on inclusion
and equity leading to greater diversity in
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
9

In addition to delivering a very strong financial
performance, we are pleased with the
progress made by Executive Management
in advancing the Group’s strategic agenda
across different dimensions, creating
significant value for all our stakeholders in
ways that are meaningful to them.
In addition to three acquisitions designed
to create sustainable, long-term value for
shareholders, the Group also closed
its loss-making Chromalox facility in
Soissons (France) and fully exited Russia.
Investments in additional supply capacity,
factory modernisation, IT systems and Digital
are helping our Businesses do even better
what they already do well. Our collaborative
and proactive approach has created mutual
benefit across our global supplier networks
during these more challenging times.
Board highlights
The Board met nine times in 2022.
This included two ad hoc meetings to
address the acquisitions of Vulcanic and
Durex Industries. The Board was actively and
directly involved in progressing the Group’s
One Planet: Engineering with Purpose
Sustainability Strategy. Other highlights in
the year included visits to three operating
companies in the UK and USA. The Board
also reviewed and approved strategy
updates for Digital and Health & Safety.
Eight colleague engagement focus groups
were held and the Board undertook a full
organisational and succession review down
to the level of GEC-3.
The Board has overseen a year of significant
investment to support the Group’s
sustainable growth over the long term.
Engineering our difference for all our stakeholders
Our colleagues
• Read about the impact of our Group Inclusion Plan in the
Sustainability Report on page 50 and how our Inclusion
Commitments are making a positive difference to our
colleagues’ lives on pages 52 and 55.
• We have published our Diversity goals in the Sustainability
Report on page 50.
Our customers
• Read about how we are helping our customers to meet their
efficiency, safety and sustainability goals in our customer case studies
on pages 12 to 15.
• Learn about how we are supporting our customers to decarbonise
their critical industrial processes through our innovative range of
decarbonisation solutions in the Operating Review on pages 78 to 91.
Our environment
• We are supporting our customers to meet
their sustainability goals. Find out how
our products and solutions sold in 2022
reduced our customers’ water and energy
use as well as their CO
2
emissions,
on page 65.
• Learn about our road map to net zero and
our progress so far in the Sustainability
Report on pages 56 to 58.
Our shareholders
• Read about how we are creating long-term
value for all our shareholders on pages 111
to 113 of the Governance Report.
• Learn about how our Watson-Marlow
manufacturing facility in Devens,
Massachusetts (USA), is supporting
our sustainable growth over the long
term on pages 118 and 119.
Our communities
• Read about how we are supporting our communities around the
world through our Giving today for a better tomorrow community
engagement programme, in the Sustainability Report on page 67.
• Our recently established Group Education Fund is improving access
to education and removing barriers and inequality. Read more on
page 68.
Our suppliers
• Read about how we are building mutually beneficial,
long-term partnerships with our suppliers around the
world in our case study on pages 18 and 19.
• Learn about how our three Businesses are optimising
supply chain effectiveness in our Operating Review on
pages 78, 83 and 88.
Engineering
our difference for
our stakeholders
The launch of new-to-world decarbonisation
solutions, created through a cross-Business
collaboration between Steam Specialties and
Electric Thermal Solutions (ETS), will support
our customers to achieve their sustainability
goals and protect our environment.
The Group launched its Inclusion Plan
and global commitments to ensure all
10,400 colleagues across the globe can
thrive by feeling included and supported.
The outstanding efforts of our teams working
in support of our community engagement
framework Giving today for a better
tomorrow, continue making a positive
difference to the local communities in
which they operate.
Chair’s Statement continued
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202210

Section 172 Statement
In accordance with the Companies
Act 2006 (the Act) (as amended by the
Companies (Miscellaneous Reporting)
Regulations 2018), the Directors have
prepared a statement describing how
they have had regard to the matters set
out in section 172(1) of the Act, when
performing their duty to promote the
success of the Company, under section
172. The statement can be found on
page 111 of the Governance Report.
Dividend per share p
152.0
p
20
22
2021
2020
2019
2 018
152.0
136.0
118. 0
110. 0
100.0
Signed by:
Jamie Pike
Chair
on behalf of the Board of Directors
8th March 2023
Board changes
On 31st January 2023, we reported that, for
personal reasons, Olivia Qiu stepped down
as a Non-Executive Director. On behalf of
our shareholders the Board acknowledges
with gratitude Olivia’s significant contribution
since her appointment. We have initiated the
process to appoint another Non-Executive
Director with the skills and experience
required to support the implementation of our
strategies and our commitments to inclusion
and diversity.
Board effectiveness
In 2022, we conducted a Board effectiveness
review with our external advisers Egon
Zehnder, which enabled us to evaluate
progress on the recommendations made
in the 2021 review. The conclusions were
positive and showed an improvement across
all the key dimensions. The review highlighted
the need for the Board to allow more time
for keeping up with industry trends and
competitor activity to better evaluate potential
future risks and opportunities.
Dividends
The Directors are proposing the payment of
a final dividend of 109.5 pence per share,
an increase of 12% (2021: 97.5 pence).
Subject to approval of the final dividend by
shareholders at the Annual General Meeting
on Wednesday 10th May 2023, the total
Ordinary dividend for the year will be 152.0
pence per share, an increase of 12% over the
136.0 pence per share for the prior year.
Strategic Report
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11

Spirax-Sarco Engineering plc Annual Report 2022
Engineering our difference for customers
Innovative solutions
for our customers…
Strategic Report
12

110,000
Direct buying customers
around the world.
…which meet their safety,
efficiency and sustainability
needs, today and tomorrow.
Serving a diverse range of industries
globally, we provide the engineered
solutions that sit behind the
production of items that people
around the world rely on every day.
In sectors ranging from Food
& Beverage, Pharmaceutical &
Biotechnology to Healthcare, Power
Generation and Semiconductors,
our products play an essential
role in our customers’ critical
industrial processes, including
solutions to help them decarbonise
those processes to meet their
sustainability goals.
Whether through the control and
management of steam, electric
thermal or fluid technology
solutions, as well as a new range
of decarbonisation solutions, we
are supporting the efficiency,
safety and sustainability of our
customers’ operations in line with
our Group Purpose.
Our customer closeness and ability
to self-generate growth has become
even stronger through harnessing
the power of digital, as we develop
digital insights and strengthen
our ability to provide a total
customer solution.
Read on to find out how we
are engineering our difference
across our Group and delivering
differentiated value for
our customers.
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13

Engineering our difference for customers continued
Through our innovative Medium Voltage technology and
suite of sustainability solutions, our Group is leading
the way in helping our customers to decarbonise their
critical industrial processes.
The concept of converting heating systems to electric
enables the in-situ replacement of fossil-fuel-fired
burners in boilers and other heating systems, with
minimal disruption to operations.
Chromalox, part of ETS, has been working with a major
energy company in the USA to help reduce carbon
emissions from their exploration and production facilities.
Gas-fired Heater Treaters are separator vessels used
extensively in the customer’s production operations.
They are heated up to support the process of separating
water from the oil or gas before it passes into the
pipeline for processing and are essential to the efficient
operation of oil and gas facilities.
Recognising the importance of minimising expensive
asset downtime, Chromalox worked with our
customer to design a retrofit solution to replace the
burner assembly inside each Heater Treater with
custom-designed flanged electric immersion heaters.
The retrofit solution is conducted at site and the
refurbished electric Heater Treaters have zero
emissions*. The solution also contributed to energy
efficiency, as heat loss from the flue stack was
eliminated, along with the open flame.
Gas-fired Heater Treaters are used extensively
throughout the global energy industry and Chromalox
is already working with other customers in the sector
to help decarbonise their oil and gas operations.
Electric Thermal Solutions
Reducing CO
2
emissions in oil
and gas production.
1,500
tonnes ofCO
2
eliminated by conversion
to electric heating per year.
Steam Specialties
>4,000
tonnes equivalent steam-saving
potentialperyear.
Cotopaxi and Spirax Sarco worked together with Kraft
Heinz, to design and install our connected energy and
sustainability platform, STRATA, at its Shanghai facility.
The digital insights generated by the system, which
examined how Kraft Heinz was managing its use of
water, air, gas, energy and steam (WAGES), combined
with Spirax Sarco’s efficiency and sustainability
solutions, quickly delivered value.
Through the installation of 23 utility meters the WAGES
data was collected and sent to STRATA every minute,
generating real time analysis. A number of issues were
identified, including significant steam leakage detected
during a factory ‘shutdown’ subsequently addressed by
the Spirax Sarco team.
Through monitoring the water meters and using the
insights generated, the team also identified evaporation
and heat loss to the atmosphere from the process
cooling towers. To provide a more sustainable and
efficient solution, we have designed a new heat recovery
system, including an industrial heat pump, to capture the
heat that would otherwise have been lost and re-use it
within the factory’s production processes.
The way in which Cotopaxi technology and Spirax Sarco
know-how have come together is helping Kraft Heinz
achieve its Environmental Stewardship Goals, through
greater efficiency in steam use, as well as reductions
in carbon emissions.
Digital insights and pre-emptive
action improve sustainability.
*when supplied with renewable electricity
Strategic Report
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97.5%
reduction rate in phosphorus load with
the help of Qdos CWT pump.
Technology that is good for
theplanet.
Authorities around the world are tightening
environmental regulations governing chemical usage
and disposal in wastewater treatment, because we only
have one planet.
Watson-Marlow’s Qdos Conveying Wave Technology
(CWT) pump, launched in 2021, is already helping
customers to achieve better environmental performance.
With all the benefits of peristaltic action, a Qdos
CWT pump incorporates a flexible element which is
compressed against a track, reducing material stresses
and providing significantly longer service life in many
chemical metering applications. As with all Qdos
pumps, the sealed CWT pump head minimises operator
exposure to chemicals and can be safely changed in
less than a minute.
At Fürstenhagen wastewater treatment plant in Germany,
our customer was able to meet the strict environmental
discharge limits by accurate and reliable ferric chloride
dosing delivered by the Qdos CWT.
Controlling phosphorus discharge from municipal and
industrial wastewater treatment plants is a key factor
in preventing eutrophication, which can lead to algae
blooms in lakes and reservoirs. These blooms can make
the water dangerous if consumed and blocks sunlight,
which depletes oxygen levels leading to the death of fish
and aquatic plants.
Due to the overall reliability and functionality of the Qdos
CWT pumphead, the Fürstenhagen plant has achieved a
97.5% reduction rate in phosphorus load over the year.
The Qdos CWT is efficient and reliable and it saves on
chemical usage too, making it good for business as well
as for our planet.
Watson-Marlow
“ The Qdos CWT has
been in operation
for more than 15,500
hours and dosed
a total of almost
186,000 litres of
precipitating agent
and hasn’t needed
any maintenance.”
Marco Quehl
Wastewater Operations Manager
Fürstenhagen WWTP
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15

Engineering our difference
By creating a more
sustainable future we are…
Engineering our difference for the environment
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Spirax-Sarco Engineering plc Annual Report 202216

We are supporting our customers
on their sustainability journey by
helping them to make savings in
energy, water and emissions through
our deep knowledge, solutions
focus, innovative technology and
evolving product range.
Our exciting new range of
TargetZero solutions, created
through a collaboration between
Steam Specialties and ETS, came to
market in the second half of 2022.
Through these solutions, we are
uniquely positioned to help make
our customers’ businesses more
sustainable by decarbonising the
generation of heat for their critical
industrial processes, including the
raising of steam. You can read more
about TargetZero and how we are
helping our customers to operate
sustainably in our Operating Review
on page 80.
…powering ahead towards net zero.
…helping customers to meet their sustainability goals.
In 2022, 57% of our Group electricity
came from verified renewable
energy sources.
In addition to switching to green
energy contracts, we are self-
generating renewable electricity
at our facilities. We have installed
2.4GWh at our Electric Thermal
Solutions sites in Nuevo Laredo
(Mexico), Normandy (France),
Heidelberg (Germany) and at our
new Watson-Marlow site in Devens,
Massachusetts (USA). This is
equivalent to the average annual
energy consumption of 110 people
in the UK.
57%
of our Group electricity came
from verified renewable energy
sources in 2022.
17.7 million
tonnes
of greenhouse gas emissions
saved annually from 20 product
categories sold in 2022.
We are working to reduce our own
energy and water use, greenhouse
gas emissions and waste production
at our facilities around the world as
we engineer our difference for our
planet. Our roadmap to net zero on
page 56 of the Sustainability Report
outlines the steps we are taking to
eliminate scope 1 and2 emissions
from our operations by2030.
We are focused on moving to
renewable sources or green energy
contracts for our electricity supply
across the Group, with many of our
largest energy-consuming sites
having transferred to renewable
orgreen electricity sources.
17
Strategic Report
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Creating mutual value…
Strategic Report
18
Engineering our difference for suppliers
18 Spirax-Sarco Engineering plc Annual Report 2022

…by meeting the challenges together.
In February 2022, the Russian
invasion of Ukraine put significant,
additional stress on our already
challenged global supply chains.
In identifying the increased risks,
our teams responded with agility
and care to help suppliers meet the
challenges they faced, while also
securing our own supply needs.
An example of this in action was
when the cost of nickel spiked more
than 250% in just 24 hours after the
start of the war, leading the London
Metal Exchange to temporarily
suspend nickel trading.
Metal castings are a key component
in our steam products and we rely
on the foundry industry across the
world to produce stainless steel
components for the castings of
which nickel is a constituent.
With 10%** of the world’s nickel
supply originating from Russia,
the war created huge uncertainty
for this industry and prompted the
Institute of Indian Foundrymen to
encourage its foundry members
to protect themselves through
significant price increases.
Recognising the potential serious
impact, our teams stepped in with
a different solution, engaging 20
key foundry suppliers in a win-win
agreement. By flexing our pricing
contracts and shortening payment
terms we helped the foundry
members maintain their cash
flow liquidity and stabilise
their businesses.
Working together, our approach
protected our valued partnership
and we secured essential supply
on behalf of our customers.
In 2022, our global supply chains faced
some of their toughest challenges.
>2,500+
key direct suppliers in 2022*.
*The total for key direct suppliers in 2022 excluding Cotopaxi, Vulcanic and Durex Industries.
**www.reuters.com 6 September 2022.
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Spirax-Sarco Engineering plc Annual Report 2022
19

O
u
r
I
m
p
a
c
t
O
u
r
c
o
m
m
u
n
i
t
i
e
s
O
u
r
s
u
p
p
l
i
e
r
s
O
u
r
s
h
a
r
e
h
o
l
d
e
r
s
O
u
r
c
u
s
t
o
m
e
r
s
O
u
r
c
o
l
l
e
a
g
u
e
s
O
u
r
e
n
v
i
r
o
n
m
e
n
t
Purpose
Business
Model
Culture
Strategy
Group
Making our difference
Our ONE Group approach
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202220

Our Culture
Achieving our Purpose depends on our culture,
what we do in our workplaces and how we operate.
Our culture is shaped by our shared Values. They guide our decisions and
behaviours wherever we work in the world.
As part of this culture based on Values,
we promise our colleagues challenging
work with real impact and the chance
for development every day. That’s best
achieved in supportive teams with strong
relationships. It’s those types of teams and
relationships that enable our colleagues to
better understand and help each other,
to learn and to grow.
Inclusion is present in all of this.
It runs through every one of our Values.
It’s central to the promises we make to
our colleagues. It’s critical to achieving
our Purpose.
That’s why we created Everyone is
Included. It’s our Group Inclusion Plan
through which we are committed to
empowering an inclusive and equitable
working culture where all our colleagues
can be themselves and achieve their
full potential.
Find out more on pages 50, 52 to 55.
Our Purpose
To create sustainable
value for all our
stakeholders as we
engineer a more
efficient, safer and
sustainable world.
In living our Purpose,
our Group is united
by a strong culture,
a common strategic
framework, and a
consistent business
model which enables us
to create outcomes with
lasting impact for all our
stakeholders across a
breadth of geographies
and diverse end
market sectors.
Engineering
our difference
All the Businesses in our Group
provide products and solutions which
are essential to the efficient operation
of the critical industrial processes
responsible for essential products
used in everyday life. In this way, our
customers’ needs drive all that we do
and to meet their needs effectively,
we leverage our culture, strategic
framework and business model to
inform the way we work.
Read more about what we do on
page 23.
Safety Excellence
Collaboration Respect
Customer Focus Integrity
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21

Making our difference continued
Customer closeness
Our direct sales business model creates a unique understanding
of our customers’ needs. We build deep, long-term relationships
as we help our customers solve their difficult productivity, control
and energy efficiency problems and improve their operational
performance, safety and sustainability.
Applied engineering
It is not our products alone that provide value to our customers,
but also the application of our extensive knowledge of systems
design, operations and maintenance. Our customers increasingly
rely on our expertise to deliver unique engineering solutions to
achieve enhanced and sustainable operating efficiencies.
Wide product range
The breadth of our product offering is unmatched by our
competitors and our one-stop-shop approach simplifies the
procurement process for our customers who are increasingly
seeking partnerships with competent full-service suppliers.
We are committed to research and development (R&D)
to further widen our range of products and pre-fabricated
engineered packages.
Regional manufacturing
Local availability of a wide range of products, which meet
applicable regional design codes, is critical to our business
model and enhances top-line revenue growth. We have
strategically located our major manufacturing plants across the
world in Europe, North America, Latin America and Asia and are
continuing to invest in new and upgraded manufacturing facilities
across our Group.
Our Strategy
Our Strategy is designed to help us
do better what we already do well.
Our Business strategies, which are
refreshed from time to time, drive our
Group’s organic performance.
Steam Specialties Customer first
2
Electric Thermal Solutions Engineering Premium Solutions
Watson-Marlow Strategy25
You can read about progress in the Business strategies on pages
78 to 91 of the Operating Review.
Our Corporate Strategy drives inorganic
revenue growth and during 2022 this
was evidenced through the successful
acquisitions of Cotopaxi, Vulcanic and
Durex Industries, see page 31.
Our Sustainability Strategy, One
Planet: Engineering with Purpose,
drives our Environmental, Social and
Governance performance.
You can see the overall progress we are making in our Businesses
across our six strategic themes on pages 32 and 33.
You can read about the progress of our six strategic initiatives in
the Sustainability report on pages 46 to 73.
To understand more, read about our strategy in action and the
performance of our Businesses on pages 78 to 91.
Our Business Model
Customer focus
At the heart of our value creation
is our deep engagement with and
understanding of our customers and
their processes.
This closeness enables us to meet our customers’ needs as
we combine our specialist knowledge and locally available,
industry-leading products and services to deliver value-adding
engineered solutions.
Wide
Product
Range
Applied
Engineering
Customer
Closeness
Regional
Manu-
facturing
Customer
Needs
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What we do
Our core activities are those things
we do that enable us to meet the
needs of our customers and
achieve our Company Purpose.
Innovate and design
Through innovative R&D and
collaboration across our Group,
we develop and enhance our
already broad range of products,
pre-fabricated packages and site
services, ensuring that we meet
customers’ changing needs.
1,700+
core product lines
Manufacture
We manufacture industrial and
commercial steam system products,
electrical process heating and
temperature management products
and peristaltic and niche pumps and
associated fluid path technologies.
40
manufacturing sites
Sell
With a resident direct sales
presence in 67 countries and
non-resident direct sales or
distributors in a further 98
countries, we serve customers
in 165 countries worldwide.
67
countries with
direct sales presence
Monitor and measure
We offer a comprehensive range of
site audits, maintenance services
and digital monitoring solutions,
to keep our customers’ systems
operating efficiently.
45%
revenue from
maintenance activities
Apply and solve
We combine our specialist
knowledge and digital capabilities
with our industry-leading products
and services to deliver value-adding
engineered solutions to customers,
who increasingly rely on our
service, solutions and expertise.
2 ,100+
sales and service engineers
Educate
We help our customers to identify
in-house engineering knowledge
skill gaps and offer a wide range
oftraining courses, delivered in our
62 training centres worldwide, to
help plug those knowledge gaps.
62
training centres
Our routes to market
Our direct sales approach is
instrumental in delivering on our
Purpose and creating value-adding
opportunities for self-generated growth.
Sales companies
We have over 100 sales companies, mostly holding local
inventories, which are supplied by our manufacturing companies.
Our direct sales approach plays an important role in all routes to
market – whether direct or indirect – as our engineers engage
with end users to highlight the benefits of our products, solutions
and services. End users can then purchase from us directly,
specify our products in OEM equipment, request that
contractors specify our products, or purchase from a distributor.
End users of our products and services
Industrial and commercial steam, electrical process heating and
peristaltic and niche pump users, across a wide range of markets,
purchasing from usdirectly, specifying our products, orbuying
from distributors.
Direct sales channels
Contractors
and
consultants
Original
Equipment
Manufacturers
End
users
27%
Indirect
sales
channel
22%
9%
22%
42%
78%
Distributors
and
resellers
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23

Making our difference continued
We operate in a way that aims to deliver long-term sustainable
value for our six stakeholder groups. We engineer our difference by
managing our stakeholder relationships in a way that reflects our
Values. Our aim is to create a positive impact in everything that we
do by effectively managing financial, human and natural resources,
as well as understanding our associated risks and opportunities and
implementing our strategy for growth.
Creating value for all our stakeholders
Our suppliers
We build mutually beneficial,
long-term partnerships.
Our colleagues
We focus on what matters
to colleagues wherever in
the world they work.
In February 2022, we launched our global
Inclusion Plan, Everyone is Included,
and our ten Group Inclusion Commitments
which aim to make a positive difference
to the lives of colleagues globally. You can
read about the Commitments and the
impact they are having on pages 50 and
52 to 55.
The Group Inclusion Commitments have
become our minimum global standards on
important matters such as parental leave,
caregiving and support for colleagues
experiencing pregnancy loss, domestic
violence or abuse. The Commitments are
designed to help all our colleagues feel
safe, supported and able to be themselves
at work.
During the year, we also recognised the
impact of the cost-of-living crisis on our
colleagues and brought forward our global
pay review, setting increments country-
by-country, designed to materially replace
eroded purchasing power from higher
inflation. As an example, colleagues in the
UK received a 7.1% pay increase at the start
of 2023, except for some Executive leaders
who received a reduced increment.
Our customers
We support our customers’
mission critical industrial
processes and
sustainability goals.
Our long track record of helping customers
maintain the efficiency, safety and
sustainability of their mission critical industrial
processes, through our products, direct
sales model and solutions focus, became
even more important in 2022 amidst
swiftly rising energy prices and demand for
decarbonisation solutions. The increasing
commitments to net zero targets globally will
As we progress towards our ambition of
becoming a leader in industrial sustainability,
we recognise the importance of achieving
sustainable supply chains. That’s why we
work closely with our suppliers, providing
education and awareness to help them on
their sustainability journeys and to build
mutually beneficial, long-term partnerships.
In 2022, we refreshed our Supplier
Sustainability Code to reflect the way in which
we are evolving in line with our One Planet:
10,400+
colleagues have access
to support from our Group
Inclusion Plan Commitments.
have a profound effect on industrial activity
over the coming decades and is an additional
source of growth for our Group for at least
the next 30 years. To continue to meet the
needs of our customers, we have invested
significantly in the development of sustainable
products and solutions that help customers
meet their own sustainability goals without
changing their operational processes.
In 2022, we launched new-to-world
TargetZero decarbonisation solutions,
created through an internal collaboration
between Steam Specialties and Electric
Thermal Solutions (ETS). You can read more
about the benefits of the three TargetZero
solutions, branded ‘ElectroFit’, ‘Steam Battery’
and ‘SteamVolt’, on pages 80 and 85 of the
Operating Review.
£20m
invested in Research & Development
across the Group in 2022.
Engineering with Purpose Sustainability
Strategy and set out the minimum standards
we expect. The new Code for direct suppliers
was translated into 17 languages and was
provided to suppliers via our procurement
colleagues working at our manufacturing sites
in each area of our Group. Suppliers who
already have access to our Supply Chain
Sustainability Portal, that we began rolling out
to suppliers in 2022, are able to sign the Code
in the Portal and provide evidence of the ways
in which they are meeting our requirements.
Other suppliers will continue to sign the Code
outside of the Portal. Once fully deployed the
Portal will form the foundation of our supplier
sustainability practices and will contain all our
strategic suppliers.
500+
suppliers had signed our Supplier
Sustainability Code by the end of 2022.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202224

22,000+
volunteering hours recorded by
colleagues in 2022.
Our communities
We help build stronger
communities.
In the 67 countries where we operate
globally, we aim to make life better for the
people in our communities. In support of
our community engagement programme
Giving today for a better tomorrow,
our colleagues can use their volunteering
Our environment
We are on target to achieve
net zero scope 1 and 2
emissions by 2030.
We have made very strong progress reducing
our operating carbon footprint since setting
our baseline emissions for 2019. While our
business has experienced significant organic
growth over the period, the development
and implementation of: net zero roadmaps
since the launch of our Sustainability Strategy
in 2021 has helped to reduce emissions on
an intensity basis by nearly 50% since 2019
versus sales volume growth. This reduction
was facilitated by the emission reduction
measures that we implemented in 2022,
including the decommissioning of our natural
gas-powered Combined Heat & Power
(CHP) plant at our manufacturing facility in
Cheltenham, (UK) and transitioning 57%
of our consumed electricity to renewable
sources. In total these measures delivered an
absolute reduction in our scope 1 and scope
2 emissions of 41% since 2019 to 27,175t CO
2
in 2022.
Our shareholders
We invest in oursustainable,
future growth.
To support the Group’s sustainable
growth over the long-term, we invested in
three important acquisitions to accelerate
the implementation of our Digital
Strategy and expand our ETS Business.
The acquisition of Cotopaxi, a digitally
enabled global energy consulting and
optimisation company, is enabling Steam
Specialties to digitally enhance its customer
bonding through Cotopaxi’s proprietary
STRATA platform.
To grow our ETS Business, Vulcanic
and Durex Industries became part of our
Group in 2022 and have rebalanced the
geographic footprint of ETS between the
USA and Europe.
As the lead brands within ETS for electric
process heating, Chromalox and Vulcanic
will support the effective deployment of
our industry-leading decarbonisation
solutions alongside Steam Specialties.
Thermocoax and Durex Industries are
the lead brands for ultra-critical heating
solutions for industrial equipment, being
well positioned to capitalise on the growing
demand for increasingly stringent thermal
energy requirements in high-technology
equipment within market sectors with high
barriers to entry.
The acquisitions of Vulcanic and Durex
Industries added over 1,100 colleagues
and have significantly grown ETS which
now accounts for 22% of Group revenues
on a pro-forma basis (14% in 2021).
Steam Specialties and Watson-Marlow’s
share of Group revenues fell to 50% and
28% respectively.
We take care of all forms
of life on our planet.
Through our One Planet: Engineering with
Purpose Sustainability Strategy we have
an unprecedented opportunity to engage
our colleagues and our communities to
better understand and protect biodiversity.
To minimise our impact on the planet and to
create a biodiversity net gain, we committed
to offset equivalent to five times our global
operational footprint by 2025. Through our
partnership with the World Land Trust, which
began in 2021, we funded the protection
of 567 acres of vulnerable wildlife habitat in
2022. In our own operations, during 2022,
we completed 78 biodiversity initiatives at our
sites around the world. Examples include our
teams at Spirax Sarco Spain establishing a
long-term collaboration project with Collserola
National Park to help restore a water habitat
in this drought-prone area. This partnership
involves financial sponsorship of conservation
as well as colleagues volunteering their time
in the Park. Other projects undertaken by our
teams include the installation of beehives in
Italy, a roof garden in China, a wildlife pond in
the UK, as well as mangrove protection and
tree planting in Indonesia and Argentina.
41%
reduction in Group CO
2
emissions in
2022 compared to 2019.
78
biodiversity projects across the Group
completed by our teams in 2022.
£540m
invested in acquisitions during
2022 to support long-term
sustainablegrowth.
leave to make a difference in their local
community. In 2022, this amounted to
22,000+ hours of company time used by
colleagues for volunteering, a record level
for the Group since we established our
Group Volunteering Policy in 2019, which
entitled all colleagues to three days of paid
volunteering leave annually. Following the
COVID-19 pandemic and increasing global
food prices, it was predicted that 860 million*
people would be living in extreme poverty by
the end of 2022. That’s why our Group focus
for the 2022 International Day of Charity on
5th September was on reducing poverty.
Colleagues across the Group recognised
the day by volunteering at foodbanks,
cooking at homeless shelters, raising money
through sponsored events and donating care
packages of everyday essentials to people in
need in their local communities.
* United Nations Department of Economic and
Social Affairs Sustainable Development
www.sdgs.un.org/goals/goal1
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25

Making our difference continued
Delivering sustainable value to shareholders through economic cycles
85%
*
of Group revenue is
generated from annual
maintenance and operational (Opex)
budgets, ratherthan from capital
(Capex)budgets.
Why is this important?
Capex budgets are more likely to be
cut during periods of slower growth
or recession. Therefore, the high
proportion of revenue deriving from
Opex budgets gives us resilience
during economic downturns.
Additionally, through our direct sales
approach, we are able to self-generate
business by providing bespoke
engineered solutions, typically with
better margins.
Maintenance and repair sales that
maintain existing systems, supported
by the end users’ Opex budgets,
withatypical invoice value of around
£1.4k
Small project sales that improve
existing systems, supported by the
end users’ Opex budgets, with a typical
invoice value of £10k-£50k
Large project sales that build new
systems, supported by the end users’
Capex budgets, withatypical invoice
value of over>£100k
With the majority of
our revenues coming
from our customers’
maintenance activities
and small
improvement
projects…
40%
*
of revenue is derived
from self-generated
opportunities. This reflects our overall
strategic objective to deliver growth
that outperforms our markets.
We achieve this by staying close to our
customers – through our direct sales
approach – understanding their system
requirements and providing them with
innovative products and solutions to
solve their process challenges.
Why is this important?
By focusing on self-generated growth
we identify problems and design
solutions that deliver significant
operational benefits for customers.
Typically, these bespoke, engineered
projects have higher margins and
relatively short sign-off timeframes as
they are funded by maintenance and
operational budgets at plant level.
As we deliver engineered solutions,
we self-generate growth, reinforce our
customers’ trust in our engineering
expertise and forge sustainable
business relationships.
Further reading
Our direct sales approach is our greatest
competitive advantage and is covered in
more detail in our business model.
See pages 22 to 23
…and over a third
of sales coming
from self-generated
opportunities…
60+%
*
of Group revenue
is derived from
defensive, lesscyclical end markets,
including: Food & Beverage,
Pharmaceutical & Biotechnology,
Healthcare and Power Generation.
Why is this important?
Not only do we derive revenue from
a diverse range of industry sectors,
we also have an excellent balance
between higher-growth end markets
and those that are more defensive
and resilient.
* Based on internal estimates. Where there
is little visibility of end user industry sector
(primarily in sales via distributors), sales
have been allocated across industries on
a pro-rata basis. In 2022 these ‘unknown’
sales accounted for 17% of total revenue.
OEM sales to identifiable industries have
been allocated to those industries. Sales to
OEM customers accounted for 27% of
Group revenue in 2022.
…our revenue is
balanced across
multiple less-
cyclical industries…
25%
19%
12%
5%
5%
4%
4%
3%
13%
3%
2%
2%
3%
OEM Machinery
Chemicals
Power Generation
Healthcare
Buildings
Mining & Precious Metal Processing
Water & Wastewater
Other
Pharmaceutical & Biotechnology
Food & Beverage
Oil & Gas
Semiconductor
Transport
Our understanding of customers and markets, allows us to
see where and how our revenues are generated and where
best to invest for future returns.
45%
40
%
15%
C
a
p
e
x
b
u
d
g
e
t
s
O
p
e
x
b
u
d
g
e
t
s
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202226

14%
*
is our share of addressable
market, which is valued at
£12.5bn at the end of 2022.
Our markets have significant growth
potential due to a number of positive long-
term market drivers (see the list below) at
a macroeconomic and sector level.
Long-term market
growth drivers
Population growth
Increased consumption and demand
in all our major industry sectors.
Economic development
in emerging markets
New markets and increased consumption.
Ageing population
Increased demand for healthcare
and pharmaceutical products.
National and international
climate change mitigation
strategies
Requirements for companies to manage
energy more efficiently, increasing demand
for energy management products
and services.
Increase in global energy
consumption
Increased investment in renewable
and non-renewable energy and
power generation industries, with
increased demand for energy
management solutions.
Industrial production
Our markets reflect changes in industrial
production growth rates but our sales
have consistently outperformed them
as we have expanded our addressable
markets, extended our geographic
penetration and grown our market share.
* Based on internal estimates. The increase
in market size in 2022 reflects underlying
changes in market segment sizes, expansion
of the addressable market as a result of
product development and the impact of
exchange movements. **market share on a pro-forma basis
Our competitive landscape
As the global market leader in steam systems
and peristaltic pumping and a significant
player in the electric thermal solutions market,
we have a strong competitive position in
relatively fragmented markets.
Our competitors generally fall into two
categories: system specialists that supply a
wide range of products and services, and
product specialists that compete on a small
part of our product range. Most system
specialists are relatively small, privately
owned, regional players, while product
specialists lack the whole system expertise
and application knowledge offered by our
direct sales force. Our broad product range,
global presence, applications knowledge and
direct sales business model give us a strong
competitive advantage in our markets.
…and our long-term market drivers remain positive.
Why is this important?
Our long-term growth prospects are
promising. Although we are the market
leaders in steam specialties as well as
pumps and fluid path technologies,
we have a relatively small market share
of these large addressable markets**,
at 17% and 14% for Watson-Marlow
respectively and at just 10% for Electric
Thermal Solutions’ share of the electric
thermal solutions market, we have good
opportunities for growth. We can grow by
targeting self-generated sales, extending
our geographical reach and increasing
the size of our addressable market
through innovative product development.
In addition, our addressable markets
and sectors continue to demonstrate
headroom for long-term growth.
Steam Specialties market
Steam Specialties market share
Electric Thermal Solutions market
Electric Thermal Solutions market share**
Niche pumps and associated equipment market
Watson-Marlow market share
Total addressable
market size
£12.5bn
£5.2bn
£3.4bn
10%
14%
17%
£3.9bn
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
27

Chief Executive’s Review
Outperforming our markets
in a challenging year
A war in Europe, global supply chain
disruptions, COVID-19-related economic
slowdown in China, rising energy prices and
heightened inflationary pressures turned 2022
into a very challenging year, contributing to
a significant weakening in global Industrial
Production Growth (IP). I am, therefore,
extremely proud of the way in which
our teams successfully navigated these
challenges to deliver strong financial results,
as well as advancing the implementation of
our strategies to benefit all our stakeholders.
We entered 2022 fully prepared for a
softening in IP after the very strong 7.7%
expansion of 2021. However, Russia’s attack
on Ukraine resulted in tragic consequences
for the people of that country, with the
Engineering our difference –
for a stronger, more balanced and
more sustainable Group that is well
positioned for the future.
economic shock reverberating immediately
around the globe. The combined impact
of further global supply chain disruptions,
as well as significantly higher energy costs,
raised inflation to levels the world has not
seen in 40 years and progressively weakened
the global economic outlook throughout the
year. For the full year 2022, IP at 2.7% was
materially lower than the 4.4% forecasted
in February 2022 ahead of our 2021 Full
Year Results.
Against this backdrop, all three Businesses
outperformed their markets to deliver
strong double-digit organic sales growth.
This follows our Group’s resilient performance
during the COVID-19 pandemic in 2020,
when we outperformed the IP decline, as well
as our subsequent double-digit growth in
2021 when the world began recovering from
the effects of the pandemic.
“ We worked hard and in
challenging circumstances to
engineer our difference for all
our stakeholders in 2022.”
Nicholas Anderson
Group Chief Executive
Strategic Report
28 Spirax-Sarco Engineering plc Annual Report 2022

Self-generating growth
Our long track record of helping customers
meet their efficiency, safety and sustainability
goals, through our direct sales model
and solutions focus, became even more
critical in 2022 amidst swiftly rising energy
prices, as well as the increasing demand
from customers seeking to decarbonise
their industrial processes in line with net
zero commitments.
Our direct sales business model, which
always involved ‘walking our customers’ sites’
and now includes ‘walking our customers’
data’, through the evolution of our digital
capabilities, is highly effective at uncovering
opportunities to improve the efficiency and
effectiveness of our customers’processes.
These self-generated solutions are becoming
a larger part of our sales mix and remain
attractive even during challenging economic
times, as they are typically paid for from
customers’ operating budgets and have a
short payback period. Approximately 85% of
Group sales continue to be funded from our
customers’ operational budgets.
The increasing commitments to net zero
targets will have a profound effect on
industrial activity over the coming decades
and is an additional source of growth for
our Group over at least the next 30 years.
To address the opportunities arising from the
decarbonisation of industrial processes, we
have invested significantly in the development
of sustainable products and solutions that
help customers meet their own sustainability
goals. In 2022, we launched new-to-world
TargetZero decarbonisation solutions,
created through an internal collaboration
between Steam Specialties and Electric
Thermal Solutions (ETS). You can read more
about the benefits of the three TargetZero
solutions, branded ElectroFit, Steam
Battery and SteamVolt, on pages 80 and
81 of the Operating Review.
The scale of the decarbonisation opportunity
is unprecedented, as direct burning of
fossil fuels is the most prevalent manner of
transferring thermal energy into industrial
processes and only 5% of industrial process
heating is currently generated by electricity.
There are, however, several factors that will
influence the adoption rate of decarbonisation
solutions. Most notably, the rates of progress
towards net zero in different countries, the
infrastructure requirements and the capacity
to deliver that infrastructure quickly, as well
as the relatively higher costs of electricity
compared to hydrocarbon fuels. It is still too
early in the cycle to predict the precise rate
of adoption, which is why we anticipate this
opportunity will play out globally for at least
the next 30 years.
Delivering value to all
ourstakeholders
Our strategy seeks to achieve organic
revenue growth that consistently outperforms
our markets. In the Operating Review
section, you can read more about how each
of our three Businesses are advancing the
implementation of their strategy in line with
our six strategic themes.
The Group adjusted operating profit margin of
23.6% in 2022, is comparable to the highest
margins achieved in our Company’s history,
excluding the exceptional 25.3% adjusted
operating profit margin achieved in 2021.
The difference, in line with our guidance
last year, is due to the full-year impact of
the 2021 revenue investments, in addition
to investments made in 2022 to support
sustainable, future growth.
In what has been another incredibly busy
year, we continued placing the health, safety
and wellbeing of our colleagues at the centre
of everything we do. This included expanding
the role of the Group Health & Safety
Director and launching a new Group Safety
Framework. Disappointingly, our Lost Time
Accident (LTA) rates (per 100,000 work hours)
rose slightly to 0.12 in 2022, compared to the
all-time low rate of 0.10 in 2021. However,
these rates are materially lower than in prior
years (0.23 in 2020 and 0.26 in 2019), which
suggests the lower 2021 rate may have
been a positive anomaly vis-a-vis the Group’s
general trend.
I’m grateful for the commitment, expertise
and efforts of our teams across the world.
Our colleagues, supported by our Company
Purpose, strong culture and Values, robust
business model and strategy, have once
again demonstrated the resilience of our
Group that remains well positioned to
continue growing and adapting to economic
cycles. In 2022, this resilience helped us
deliver a strong financial performance, while
creating benefits for all stakeholders through
our sustainability and inclusion initiatives.
“ I’m grateful for the commitment,
expertise and efforts of our teams
across the world.”
Nicholas Anderson
Group Chief Executive
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
29

Chief Executive’s Review continued
To better serve our customers, we expanded
our manufacturing capacity and increased
our regional supply chain capabilities.
Our capital investments in 2022 included a
significant proportion of our US$106 million
investment in a 14,000m
2
state-of-the-art,
sustainable, multi-brand manufacturing
facility for Watson-Marlow in Devens,
Massachusetts (USA). In 13 months the
project went from ‘breaking ground’ to ‘first
customer shipment’ in December 2022.
This facility, which will shorten supply chains
and provide enhanced support for customers
across the Americas, is scheduled to ramp-
up during 2023.
A new facility for Watson-Marlow’s BioPure
brand was also completed in 2022 to support
increased demand from customers in the
Biotechnology & Pharmaceutical sector. The
£37 million facility located in Portsmouth (UK),
shipped its first customer deliveries at the end
of the Q1 2022 and has enabled BioPure to
double its previous output.
We are planning a US$58 million investment
in ETS to materially expand the existing
manufacturing facility at Ogden, Utah (USA).
The new 9,600m
2
extension will expand
the current footprint by almost 60% and is
scheduled to complete by the end of 2024.
Around the Group, we also invested
significantly in equipment modernisation and
process automation to support and expand
our manufacturing capacity.
Environment
Since refreshing our sustainability
goals in June 2021, including our
commitment to achieve net zero emissions
in scopes 1 and 2 by 2030, we made good
progress in line with our targets. Through our
One Planet: Engineering with Purpose
Sustainability Strategy, we continued to build
on our responsible business foundations
and have successfully embedded across
the Group our six sustainability initiatives.
These focus on net zero greenhouse gas
(GHG) emissions, biodiversity net gain,
improved environmental performance
of our operations, sustainable products,
supply chain sustainability and community
engagements, with good progress made in
every area.
We are executing on our net zero roadmap
for 2030. By the end of 2022, we reduced
our GHG emissions by 41%, compared to
our 2019 baseline. We also introduced a new
electric vehicle leasing portal in the UK, as the
first step towards a global transition to electric
vehicles across the Group. Other highlights
of our sustainability progress include the
introduction of self-generation of renewable
energy at four of our manufacturing sites
and that 57% of our electricity use now
comes from renewable sources, largely
through green energy contracts. To protect
biodiversity, we partnered with the World
Land Trust for a second consecutive year to
offset by 1x our global operating footprint, as
well as our colleagues implementing a further
78 biodiversity projects across our Group
operating companies in 2022.
During 2022, we saved our customers
17.7 million tonnes of CO
2
, 235 million
GJ of energy and 88.4 million m
3
of water
through a select range of product categories
sold, as well as launching our new-to-world
TargetZero decarbonisation solutions.
You can read more about our commitment
to sustainability, as well as the progress
we are making, on pages 46 to 73 of the
Sustainability Report.
Communities
Through our community engagement
programme Giving today for a better
tomorrow, our teams have gone above
and beyond in our local communities, using
their paid volunteering leave to deliver more
than 22,000 volunteering hours while our
Group-wide charitable giving (cash and
in-kind) exceeded £900,000. In addition,
we supported 51 community projects
nominated by colleagues across the Group,
through donations of over £1 million by our
new Group Education Fund. The Fund,
which aims to provide equitable access to
education, is particularly focused on helping
women and girls achieve their potential and
encouraging pathways to careers in science
and engineering through a variety of grass
roots initiatives.
I am delighted with the progress made on all
fronts during 2022, as we worked hard and
in challenging circumstances to engineer our
difference for all our stakeholders.
Colleagues
We continued to invest in the
development and wellbeing of our colleagues
to help them feel supported and included.
We believe that diverse teams bring diversity
of thought and experience, helping us
become a better and higher performing
business. Combined with an inclusive and
equitable working culture, this fuels our
continued growth, creating opportunities
for everyone.
In February 2022, our Group Inclusion Plan,
Everyone is Included became effective.
This gives all colleagues, everywhere, the
opportunity to benefit from our ten Group
Inclusion Commitments. The impact of
Everyone is Included has been far reaching
and made a tangible difference to the lives of
many colleagues who tell us they feel more
welcomed, included and proud of our Group.
In September 2022, we recognised
the impact of the cost-of-living crisis on
colleagues worldwide and brought forward
our annual pay review from March to January
2023. We set above-market pay increases
country-by-country at levels designed to
materially mitigate the purchasing power
eroded by inflation, which for the UK meant a
pay increase of 7.1% for the wider employee
base, which excluded senior executive
leaders who received a reduced pay
increase. Following its success in 2022, we
also awarded another paid Wellbeing Day in
2023 to all colleagues globally.
In December 2022, the Board approved a
refreshed set of Diversity goals. Our focus on
inclusion remains a priority and these Diversity
goals will help accelerate our progress in
support of sustainable growth.
Customers
To keep delivering for our customers,
we strengthened our direct business model
by investing in the expansion and training of
our direct sales teams, in digital technology
solutions and introduced multiple new
products, including innovative new-to-world
decarbonisation solutions.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202230

The acquisitions also support a more
effective deployment of the ETS strategy,
Engineering Premium Solutions.
The introduction of dual brand strategies,
which has proven to be highly successful
for the Steam Specialties Business with
Spirax Sarco and Gestra, aligns each brand
with their chosen strategic market sectors
for growth.
As the lead brands within ETS for electric
process heating, Chromalox and Vulcanic
will support the effective deployment of
our industry-leading decarbonisation
solutions alongside Steam Specialties.
Thermocoax and Durex Industries are the
lead brands for ultra-critical heating solutions
for industrial equipment, being well positioned
to capitalise on the growing demand
for increasingly stringent thermal energy
requirements in high-technology equipment
within market sectors with high barriers
to entry.
The acquisitions of Vulcanic and Durex
Industries added over 1,100 colleagues.
The integration of both companies mirrors
the successful integration processes
deployed on previous acquisitions and
builds upon lessons learnt. Integration began
immediately following completion and
we are very encouraged by the positive
engagement by new colleagues, as well as
constructive collaborations already unfolding.
These acquisitions have significantly
grown ETS which now accounts for 22%
of Group revenues on a pro-forma basis.
Steam Specialties and Watson-Marlow’s
share of Group revenues accordingly reduced
to 50% and 28% respectively.
More details on Cotopaxi are provided on
page 80 of the Operating Review and on
pages 14, 31 and 33. We have set out more
details about Vulcanic and Durex Industries
on page 31 and 85.
The role of digital technologies for our Group
is to enhance our existing business model
across the four main adaptive processes of
customer targeting, operational effectiveness,
innovation and people management.
During 2022 we completed the development
of our Digital Strategy, as well as its
implementation framework. We also
recruited an experienced Digital leader who
joined in early March 2023 to accelerate the
implementation of our Digital Strategy across
the Group.
We also invested in new technologies,
systems and controls to improve efficiencies,
communications and collaboration, as well as
strengthen our resilience. This includes ERP,
BI and CRM systems, product configurators,
a new colleague engagement platform, smart
manufacturing capabilities and enhanced
internal controls capabilities. We also
strengthened cyber defences and operational
IT, as well as laying the foundations for the IT
integration of Vulcanic and Durex Industries.
All of these initiatives contributed to
a stronger, more balanced and more
sustainable Group that delivered differentiated
financial returns to shareholders in 2022 and
is well positioned for the future.
Signed by:
Nicholas Anderson
Group Chief Executive
on behalf of the Board of Directors
8th March 2023
Suppliers
During the year, we relaunched
our Supplier Sustainability Code
in 17 languages and started to roll out
a new Supplier Sustainability Portal to
support our collaborative journey towards
a more sustainable supply chain. Double-
digit inflation in certain raw materials led
to challenges for our suppliers too, as
some companies struggled to manage
the impacts of such sharp price increases.
Recognising this, we supported our suppliers
through these challenging and uncertain
times, de-risking their businesses by flexing
our pricing agreements while maintaining our
supply of raw materials and components.
Shareholders
We invested close to £540 million in
three important acquisitions to accelerate the
implementation of our Digital Strategy and
expand our ETS Business.
The acquisition of Cotopaxi, a digitally-
enabled global energy consulting and
optimisation company, is enabling Steam
Specialties to digitally enhance its customer
bonding through the provision of physical
and digital connections to customers’
infrastructure and equipment, using
Cotopaxi’s proprietary STRATA platform.
STRATA generates critical insights that
are used to better understand industrial
customers’ management and use of Water,
Air, Gas, Energy and Steam (WAGES).
We are also installing Cotopaxi’s solutions
across our Group manufacturing sites to
improve our own WAGES efficiency, in line
with our sustainability targets.
To support the growth of ETS, Vulcanic and
Durex Industries became part of our Group
on 29th September and 30th November,
respectively. Vulcanic is a European leader
in industrial process heating solutions and
Durex Industries, based in the USA, is a
specialist in custom electric thermal solutions
for ultra-critical applications of industrial
equipment. Vulcanic and Durex Industries
have rebalanced the geographic footprint of
ETS between the USA and Europe, adding
an additional 11 manufacturing sites.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
31

Chief Executive’s Review continued
We have made strong progress against our six strategic themes during the year.
Steam Specialties Electric Thermal Solutions Watson-Marlow
Business Strategy Customer first
2
Engineering Premium Solutions Strategy25
Increase
direct sales
effectiveness
through market
sector focus.
The dual brand strategy between
Spirax Sarco and Gestra aligns
market sectors that offer the best
opportunities with the strong
brand in that sector, ensuring the
Business is well-positioned to grow
sales above IP. In 2022, Gestra
grew sales to the Chemicals sector
by 40% compared to 2021, while
Spirax Sarco generated growth of
7% in the Healthcare sector over
the same period.
Since reshaping its strategy, ETS
continues to focus on strategic
sectors that together represent
over 50% of its addressable
market opportunities. In 2022,
the Business realised higher
growth in these targeted sectors
and increased its proportion of
direct sales.
Watson-Marlow increased its
direct sales workforce and
continued embedding its sector
driven approach to understand
customers’ processes and propose
solutions. This included working
with lithium battery customers to
accurately dose, meter and transfer
the liquids required for automotive
battery production and enabling
water treatment sector customers
to reduce chemical use and
improve sustainability.
Develop the
knowledge and
skills of our
expert sales and
service teams.
Steam Specialties continue to
invest in its direct sales force and
self-generated sales capability
through Sales Excellence training
delivered through the Steam
Specialties Academy, which
has been expanded to include
modules on evolving digital
capabilities following the acquisition
of Cotopaxi.
ETS has invested further in its
self-generated sales capability by
continuing to develop the skills
and knowledge of its direct sales
engineers through the recently
established ETS Academy.
Watson-Marlow invested in more
than 40,000 hours of learning
and development, including a
global training programme for
direct sales engineers as part of its
evolution towards providing a total
solutions approach.
Broaden our
global presence.
Steam Specialties has direct
sales capabilities in 66 countries.
In 2022, the Business increased
its sales presence in places where
it has been under-represented,
including parts of Africa and the
Middle East.
The acquisitions of Vulcanic and
Durex Industries in 2022 have
created an improved geographical
balance of the ETS Business
globally and will support organic
growth by leveraging customer
bases, products and technologies.
In North America, construction was
completed at Watson-Marlow’s
first multi-brand manufacturing
facility. First customer deliveries
were shipped, as planned from the
state-of-the-art, highly-sustainable
facility, in 13 months from breaking
ground. Manufacturing will ramp-up
throughout 2023.
Leverage our
R&D investments.
We continued to invest in new
product development across
Steam Specialties and released
new products in 2022, including,
TargetZero decarbonisation
solutions, developed in
collaboration with ETS, to support
the decarbonisation of critical
industrial processes, including the
raising of steam.
ETS is evolving its electrification
solutions for decarbonisation
and sustainability which remain
important growth drivers as it
continues to build a significant
pipeline of opportunities. In addition
to developing TargetZero with
Steam Specialties, ETS is also
collaborating with Watson-Marlow
on a new product for its Aflex
Hose brand.
Watson-Marlow launched multiple
new products during the year,
including an expansion of digital
capability across its core pump
range with a communication
protocol used to collect data and
control equipment over Ethernet
systems. BioPure branded
hose assemblies, which can be
completely customer-specified,
were also launched during the year.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202232

Strategy in Action
Translating our data
into savings.
The acquisition of digitally enabled energy
consulting and optimisation specialist
Cotopaxi is helping our Steam Specialties
Business analyse how we are using
water, air, gas, energy and steam at our
own manufacturing sites. Cotopaxi’s
proprietary system, STRATA, has already
been installed at two of Steam Specialties’
11 manufacturing sites, with the rest due for
completion in the first half of 2023.
STRATA’s web-based energy management
software works alongside our telemetry
systems to continuously monitor and
analyse performance data.
The data is generated in real time and
has so far provided invaluable insights.
For example, at our manufacturing facility
in Cheltenham (UK), STRATA highlighted
there was inefficient consumption of power
from machinery during a site shutdown. In a
similar plant shutdown at our Blythewood
manufacturing facility in the USA, the
data identified an opportunity to optimise
the consumption rate of a compressed
air system.
In both cases our teams were able to
act upon the real-time data insights
generated by STRATA to make
operational improvements and efficiencies,
demonstrating the system’s capability to
identify ways in which 15-20% savings can
be achieved from a site’s typical energy and
utilities consumption.
STRATA Advanced Digital
IIoT Enterprise Application
Steam Specialties Electric Thermal Solutions Watson-Marlow
Business Strategy Customer first
2
Engineering Premium Solutions Strategy25
Optimise our
supply chain
effectiveness.
A Global Supply Chain (GSC)
organisation, responsible for all 11
Steam Specialties’ manufacturing
sites around the world, was
created in 2021. In 2022,
GSC has gone on to further
improve the efficiency of supply
operations through enabling the
adoption of consistent supply
chain methodologies and flexing
operations to better meet demand.
During the year, ETS continued
to invest in further operational
improvements, as well as investing
in additional capacity at its Ogden,
Utah (USA) manufacturing facility.
The Business also closed the loss
making plant in Soissons (France)
during the year.
Production began at the new
BioPure Facility in Portsmouth
(UK), which enabled the brand
to double its previous output for
in-demand single-use products
for the Pharmaceutical &
Biotechnology sectors.
Operate
sustainably
and help improve
our customers’
sustainability.
Steam Specialties worked closely
with our customers to understand
their sustainability goals and
provide solutions to reduce
their energy requirements and
decarbonise steam generation.
We also continued our journey to
meet the Group’s ambitious target
of achieving net zero in scope 1
and 2 greenhouse gas emissions
by 2030.
In addition to launching net zero
roadmaps at its manufacturing
facilities and rolling out an
environmental compliance
calendar, ETS also made huge
progress in supporting its
customers’ sustainability goals.
In addition to the TargetZero
solutions launched with
Steam Specialties, ETS is also
decarbonising other industrial
heating applications, as you can
read about on page 85.
Watson-Marlow identified that 50%
of annual oil consumption used as
lubricant in the braiding process by
its Aflex Hose brand, and ending
up as a waste by-product, could
be filtered, recycled and re-used
in the site’s braiding machines.
This large reduction in volume of
waste oil will support the Business
to achieve its goal of 10% waste
reduction by 2025, as well as
reducing costs.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
33

Key performance indicators
Our key performance indicators are used to measure
the successful implementation of our strategy.
1. Organic revenue growth
†
%
2022
2
021
2
020
2
019
2
018
14
17
-3
7
6
Definition
Organic revenue growth measures the change in revenue in the
current year compared with the prior year from continuing Group
operations. The effects of currency movements, acquisitions and
disposals have been removed.
Progress in 2022
Organic sales increased by 12% in Steam Specialties, 14% in
Electric Thermal Solutions and 16% in Watson-Marlow. Read about
the progress we have made in 2022 in our three Businesses in the
Operating Review on pages 74 to 91.
Link to remuneration
Revenue growth is a key driver of profit generation and a central
element in the annual planning process. Bonus targets are driven off
annual plans and therefore revenue growth drives a key measure of
variable remuneration.
Link to Principal Risk
1 2 3 4 5 6 87
2. Adjusted operating profit
*
£m
2022
2
021
2
020
2
019
2
018
380.2
340.3
270.4
264.9
282.7
Definition
Adjusted operating profit is the profit earned from our business
operations before interest, taxes, the share of profit of associate
companies and certain other items.
Progress in 2022
Increased by 12%. The reported figure reflects a 7% organic increase,
a 4% increase due to exchange and a 1% increase from acquisitions
and disposals. Read about the progress we have made in 2022 in our
three Businesses in the Operating Review on pages 74 to 91.
Link to remuneration
Executive Directors’ variable remuneration is based on two
financial components: adjusted operating profit and cash
generation. Adjusted operating profit margin is a key driver of both
bonus measures.
Link to Principal Risk
1 2 3 4 5 6 87
3. Adjusted operating profit margin
*
%
2022
2
021
2
020
2
019
2
018
23.6
25.3
22.7
23.0
22.8
Definition
Adjusted operating profit margin is defined as adjusted operating profit
expressed as a percentage of revenue.
Progress in 2022
Decreased by 170 bps to 23.6%. On an organic basis the adjusted
operating profit margin decreased by 160 bps. Read about the
progress we have made in 2022 in our three Businesses in the
Operating Review on pages 74 to 91.
Link to remuneration
Executive Directors’ variable remuneration is measured on two main
indicators: profit and cash generation. Adjusted operating profit margin
is a key driver of both.
Link to Principal Risk
1 2 3 4 5 6 87
4. Adjusted earnings per share (EPS)
*
p
2022
2
021
2
020
2
019
2
018
377.2
338.9
256.6
250.0
265.7
Definition
Earnings per share is a measure of the profit performance of the
Group, taking into account the equity structure. EPS is defined as the
adjusted after-tax profit attributable to equity shareholders divided by
the weighted average number of shares in issue.
Progress in 2022
Increased by 11% to 377.2 pence in line with the increase in adjusted
operating profit. Read about the progress we have made in 2022 in
our three Businesses in the Operating Review on pages 74 to 91.
Link to remuneration
EPS measured over three-year periods is one of the three components
of the Performance Share Plan.
Link to Principal Risk
1 2 3 4 5 6 87
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202234

† Organic growth is at constant currency and excludes contributions from
acquisitions and disposals, see Note 2 to the Financial Statements.
* Based on adjusted operating profit. Adjusted operating profit excludes certain
items as set out and explained in the Financial Review and in Note 2 to the
Financial Statements.
6. Health and Safety over three-day lost time
injury rate per 100,000 hours worked
2022
2
021
2
020
2
019
2
018
0.07
0.03
0.16
0.24
0.19
Definition
The number of workplace injuries that resulted in over three days of
absence per 100,000 hours worked. The workplace is any location
in which an employee is present as a requirement of employment.
Employees include all permanent and temporary staff and contractors.
All injuries that occur in workplaces, regardless of cause, are included,
as are road traffic accidents.
Progress in 2022
Our over three day lost time injury rate increased during 2022, rising
from 0.03 per 100,000 hours in 2021 to 0.07 per 100,000 hours in
2022 due to 2021 being an anomalously low year.
Link to remuneration
The safety of our colleagues is central to the sustainability of our
business and has an impact on the financial success and profitability of
the Group. Improving the health, safety and sustainability of our Group
is one of the personal strategic objectives of each Executive Director,
creating a direct link with remuneration.
Link to Principal Risk
1 2 3 4 5 6 87
5. Cash generation* £m
2022
2
021
2
020
2
019
2
018
214.9
277.7
275.8
242.9
238.1
Definition
Cash generation is adjusted operating profit after adding back
depreciation and amortisation, less cash payments to pension
schemes in excess of the charge to operating profit, equity settled
share plans, net capital expenditure excluding acquired intangibles,
working capital changes and repayment of principal under
lease liabilities.
Progress in 2022
Cash generation decreased by 23%, driven by planned record
capital expenditure and investment in inventory as global supply chain
constraints eased. Read about the progress we have made in 2022 in
our three Businesses in the Operating Review on pages 74 to 91.
Link to remuneration
Cash generation is one of two financial measures on which Executive
Directors’ variable remuneration is based.
Link to Principal Risk
1 2 3 4 5 6 87
7. Group greenhouse gas emissions
(scope 1 and 2) tonnes CO
2
e (market-based)
2022
2
021
2
020
2
019
2
018
27,174
38,699
40,031
44,313
46,233
Definition
Scope 1 greenhouse gas (GHG) emissions arise directly from
company-owned or -controlled sources, such as company vehicles
or fuel combustion. Scope 2 GHG emissions are indirect emissions,
primarily from the generation of purchased electricity. Market-based
emissions take into account contractual and supplier-specific GHG
emissions factors.
Progress in 2022
GHG (scope 1 and 2) decreased by 30% compared to 2021 and
by 41% against our 2019 baseline due to the commencement of
decarbonisation initiatives, an increase in operational efficiency and
transition to renewable electricity supply.
Link to remuneration
GHG emission reductions over three-year periods accounts for 20% of
the Performance Share Plan opportunity.
Link to Principal Risk
1 2 3 4 5 6 87
Principal Risks
1 Economic and political instability
2 Significant exchange rate movement
3 Cybersecurity
4 Loss of manufacturing output at any Group factory
5 Failure to realise acquisition objectives
6 Loss of critical supplier
7 Breach of legal and regulatory requirements (including ABC laws)
8 Inability to identify and respond to changes in customer needs
See our Principal Risks on pages 95-99 of our
Risk Management report
Link to Principal Risk key:
No linkDirect link Indirect link
More information about remuneration.
see pages 143-168
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
35

Ten-year financial summary
2013
£m
2014
£m
2015
£m
2016
£m
2017
£m
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
Revenue 689.4 678.3 667.2 757.4 998.7 1,153.3 1,242.4 1,193.4 1,344.5 1,610.6
Operating profit 147.0 148.1 142.8 174.1 198.9 299.1 245.0 249.0 320.9 318.8
Adjusted operating profit* 151.6 153.0 152.4 180.6 235.5 264.9 282.7 270.4 340.3 380.2
Adjusted operating profit margin* 22.0% 22.5% 22.8% 23.8% 23.6% 23.0% 22.8% 22.7% 25.3% 23.6%
Profit before taxation 145.7 144.8 139.7 171.4 192.5 288.8 236.8 240.1 314.5 308.1
Adjusted profit before taxation* 151.1 151.1 151.1 177.9 229.1 254.6 274.5 261.5 333.9 370.6
Profit after taxation 102.3 100.6 96.7 121.3 157.9 223.4 167.0 173.9 234.9 225.0
Adjusted cash from operations 143.0 131.5 146.2 185.0 203.8 242.9 238.1 275.8 277.7 214.9
Cash conversion 94.3% 85.9% 95.9% 102.4% 86.5% 91.7% 84.2% 102.0% 82.0% 56.5%
Capital expenditure to sales
††
4.3% 5.0% 5.0% 5.7% 3.8% 3.8% 5.0% 4.2% 4.8% 7.3%
Basic earnings per share 133.4p 132.8p 129.9p 165.0p 214.4p 303.1p 226.2p 235.5p 318.3p 305.1p
Adjusted earnings per share* 138.8p 140.4p 142.6p 171.5p 220.5p 250.0p 265.7p 256.6p 338.9p 377.2p
Dividends in respect of the year 44.5 139.9 50.6 55.8 64.4 73.6 81.1 87.0 100.2 112.0
Dividends in respect of the year
(pershare) 59.0p 64.5p 69.0p 76.0p 87.5p 100.0p 110.0p 118.0p 136.0p 152.0p
Special dividend (per share) – 120.0p – – – – – – – –
Net assets 403.5 441.9 398.3 524.4 609.5 766.9 826.3 852.3** 1,010.0 1,169.8
Return on capital employed
†
41.8% 41.4% 41.1% 44.8% 49.8% 51.6% 52.5% 48.9%** 59.3% 53.3%
Return on invested capital
†
27.6% 27.4% 27.1% 28.7% 22.6% 19.3% 19.0% 17.8%** 22.9% 19.0%
* All adjusted profit measures exclude certain items as set out and explained in the Financial Review and in Note 2 to the Financial Statements.
** 2020 has been restated following the IFRS Interpretations Committee agenda decision on configuration and customisation costs in cloud computing arrangements
(Software as a Service (SaaS)), seeNote 1 to the Financial Statements for further details.
†
The results for 2019 to 2022 exclude the impacts of IFRS 16, which was adopted in 2019.
††
Capital expenditure excludes IFRS 16 Lease repayments.
Our financial performance demonstrates a strong
trajectory ofgrowth and shareholder value creation.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202236

10
20
30
40
50
%
60
2015 2016 2017 2018 2019 2020 2021 202220142013
ROCE ROIC
Return on capital employed and return on invested capital %
2022 2013
p/share
2014 2015 2016 2017 2018 2020 2021 2019
0
80
160
240
320
400
DPS EPS Special dividend
Dividends and adjusted earnings per share p
2013
Profit margin %
Revenue £m
2014
2015
2016 2017 2018 2020 2021 2022 2019
1,600
1,800
2,000
Sales Adjusted operating profit margin
600
800
1000
1200
1400
0
200
400
26
28
30
16
18
20
22
24
10
12
14
Revenue and adjusted operating profit margin £m / %
* All adjusted profit measures exclude certain items as set out and explained in the Financial Review and in Note 2 to the Financial Statements.
** 2020 has been restated following the IFRS Interpretations Committee agenda decision on configuration and customisation costs in cloud computing arrangements
(Software as a Service (SaaS)).
†
The results for 2019 to 2022 exclude the impacts of IFRS 16, which was adopted in 2019.
††
Capital expenditure excludes lease repayments.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
37

Financial Review
The Group reports under
International Financial
Reporting Standards
(IFRS) and references
‘adjusted’ and ‘organic’
alternative performance
measures where the Board
believes that they help
to effectively monitor the
performance of the Group
and support readers of the
Financial Statements in
drawing comparisons with
past performance.
Certain alternative performance measures
are also relevant in calculating a meaningful
element of Executive Directors’ variable
remuneration and our debt covenants.
Alternative performance measures referenced
in the text below are further explained in
Note 2 to the Financial Statements. The term
‘adjusted’ is not defined under IFRS and may
Strong financial performance
achieved against a weakening
macroeconomic backdrop in 2022.
therefore not be comparable with similarly
titled measures reported by other companies.
Alternative performance measures are not
considered to be a substitute for, or superior
to, IFRS measures.
As a multi-national Group of companies,
we trade in a large number of currencies
and occasionally acquire or dispose of
companies. Therefore, we also refer to
‘organic’ alternative performance measures,
which strip out the effects of the movement of
currency exchange rates and of acquisitions
and disposals not included in the prior year.
The Board believes that these measures
allow readers of the Financial Statements
to gain a further understanding of how the
Group has performed.
Summary of performance
in2022
Sales
Group sales increased by 20% to
£1,610.6 million (2021: £1,344.5 million),
up 14% organically. Currency movements
and acquisitions (net of the disposal of our
Russian operations) both had a positive effect
on sales of 4% and 2%, respectively.
“ In a challenging year, all three Businesses
delivered strong double-digit organic sales
growth and an operating profit margin which is
comparable to the highest margins achieved in
our history before the exceptional performance
of 2021.”
Nimesh Patel
Chief Financial Officer
Strategic Report
38 Spirax-Sarco Engineering plc Annual Report 2022

We completed the acquisitions of Vulcanic
and Durex Industries towards the end of the
year with both companies delivering strong
double-digit sales growth in 2022, driven
by the same decarbonisation trend and
Semiconductor sector growth benefiting
Chromalox and Thermocoax. Including the
acquisitions of Vulcanic and Durex Industries
on a twelve-month pro-forma basis, ETS
sales would be £382.9 million.
Watson-Marlow sales of £488.5 million
(30% of Group revenue) grew 20% or
16% organically supported by our strong
order book. Sales to the Pharmaceutical &
Biotechnology sector grew close to 15%
organically, while sales to Process Industries
sectors grew 19%, significantly ahead
of global IP. In the second half of 2022,
as expected, COVID-19 vaccine-related
demand began to normalise as effects of the
pandemic moderated and our customers
began to work through their existing
stocks, repurposing COVID-19 vaccine
production to meet the continued strong
underlying demand for cell and gene therapy
medications. As a result, Watson-Marlow saw
a reduction in overall demand in 2022 and
Pharmaceutical & Biotechnology customers
also rescheduled some deliveries from our
order book into 2023.
During the fourth quarter of 2022, steps were
taken to appropriately right-size capacity and
overhead support costs in Watson-Marlow,
which included factory labour reductions.
Further actions are underway in early 2023,
ensuring Watson-Marlow is able to both meet
customers’ needs and protect our adjusted
operating profit margin.
Adjusted operating profit
Group adjusted operating profit of
£380.2 million (2021: £340.3 million) grew
12%, or 7% organically, the difference being
due to 4% favourable currency movements
and a net 1% contribution from acquisitions
less the impact of the disposal of our
Russian operations. Adjusted operating
profit in Steam Specialties, ETS and
Watson-Marlow grew organically by 8%,
23% and 3% respectively.
Adjusted operating profit margin
Group adjusted operating profit margin in
2022 was 23.6%, down 170 bps from the
exceptional 25.3% of 2021. Organically the
margin was down 160 bps, driven by the
full year impact of revenue investments
made during 2021 and the additional
revenue investments of 2022 to support
future growth, partially offset by the
benefits of operational gearing from higher
sales. To note, the 2021 Group adjusted
operating profit margin of 25.3% would
have been approximately 200 bps lower,
had we incurred the full-year cost of revenue
investments made during that year.
Steam Specialties adjusted operating margin
of 23.8% was down 120 bps or 90 bps
organically. Our lower margin, compared to
the exceptionally high level of 2021, reflects
the full year impact of prior year revenue
investments, partially offset by the benefits
of operational gearing from higher sales.
During 2022, we continued investing in
support of future revenue growth, with an
expansion in sales-related headcount and
new product development, as well as digital
and sustainability initiatives.
ETS adjusted operating profit margin was
15.6%, up 240 bps or 100 bps on an organic
basis, with the difference due to the positive
impact from the acquisitions of Vulcanic and
Durex Industries, which have a combined
margin similar to the overall Group margin.
Strong sales growth, supported by increased
volumes, resulted in operational gearing
benefits with positive effects on organic
margin progression.
Organic sales growth was significantly
ahead of global IP of 2.7% across all three
Businesses as we successfully navigated
global supply chain disruptions and a
weakening macroeconomic environment
to deliver a strong increase in volumes.
Our proactive price management practices
also allowed us to offset significant inflation in
raw material costs, protecting our adjusted
operating profit margin.
Steam Specialties sales of £866.0 million
(54% of Group revenue) grew 15% in
2022 or 12% organically. This very strong
performance, significantly ahead of IP,
was delivered despite the challenging
macroeconomicenvironment.Demand
growthexceeded sales growth across all
Divisions, with a higher proportion of larger
orders compared to 2021, as customers’
capital expenditure continued to recover from
pandemic-driven reductions.
Electric Thermal Solutions (ETS) sales of
£256.1 million (16% of Group revenue) grew
41% or 14% on an organic basis, with the
difference due to currency movements and
acquisitions that had a positive effect of
7% and 18%, respectively. Strong organic
growth in both Thermocoax (driven by
the Semiconductor and Aerospace &
Defence sectors) and Chromalox (led by
decarbonisation solutions) was achieved
despite continuing disruptions in the global
supply chain, although these constraints
began to ease in the second half of 2022.
Chromalox’s manufacturing facility in Ogden,
Utah (USA) remained capacity constrained
as it transitions to focus on more complex
and bespoke industrial heating solutions,
supporting the decarbonisation of buildings
and industrial processes. During the year,
we continued investing in further operational
improvements as well as increasing capacity
in Ogden. These factors, together with strong
demand growth, resulted in ETS carrying a
record order book into 2023, underpinning
sales in the year ahead.
2021 Exchange Organic
Acquisitions
& disposals* 2022 Organic Reported
Revenue £1,344.5m £52.5m £191.6m £22.0m £1,610.6m +14% +20%
Adjusted operating profit £340.3m £13.0m £23.5m £3.4m £380.2m +7% +12%
Adjusted operating profit margin 25.3% 23.6% -160 bps -170 bps
Statutory operating profit £320.9m £318.8m -1%
Statutory operating margin 23.9% 19.8% -410 bps
* Results include the impact of (i) the acquisition of Cotopaxi, Durex Industries and Vulcanic and (ii) the treatment of our Russian operating companies as disposals from the
date at which the Group suspended all trading with and within Russia.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
39

Financial Review continued
provides some mitigation through our regional
manufacturing presence, diverse spread of
geographic locations and through the natural
hedge of having a high proportion of our
overhead costs in the local currencies of our
operating companies.
Currency movements positively impacted
adjusted operating profit by close to 4%
with a translational benefit of £12.2 million
and an additional transactional benefit of
£0.8 million. The translation benefit reflects
the impact of the weakening of sterling
during 2022 against the currencies in which
the Group generated its adjusted operating
profit. The main transactional exposure flow
affecting the Group is the export of products
from our factories in the UK, invoiced in
sterling, less the import of goods from
overseas Group factories and third parties
priced predominately in euros and US dollars.
The net exposure to transactional currency
movements is approximately £150 million.
Statutory operating profit
andmargin
Statutory operating profit was down 1%
to £318.8 million (2021: £320.9 million)
and the statutory operating profit margin of
19.8% was down 410 bps (2021: 23.9%).
Statutory operating profit and statutory
operating profit margin are impacted by the
same drivers as explained in the adjusted
operating profit sections above, as well as the
reconciling items detailed below:
• A charge of £23.7 million
(2021: £21.4 million) for the amortisation of
acquisition-related intangible assets
• Accelerated depreciation and other
associated one-off costs of £4.2 million
relating to the Group Head Office building
in Cheltenham (UK), which is being
comprehensively re-developed
• A restructuring charge of £15.5 million,
primarily relating to Chromalox’s
manufacturing operation in Soissons
(France)
• A loss on disposal of £7.1 million relating to
the Group’s Russian operating companies,
including associated disposal costs
• A charge of £9.1 million for costs related to
the acquisitions of Cotopaxi, Vulcanic and
Durex Industries
• A charge of £1.8 million from the reversal of
fair value adjustments to inventory on the
acquisition of Vulcanic
Net financing expense
During the fourth quarter of 2022, the Group
raised new euro and US dollar denominated
debt, which in aggregate amounted to
£509 million. The weighted average interest
rate on these new debt facilities is 4.8%.
As a result, net bank interest increased to
£8.4 million (2021: £4.0 million).
Net costs under IAS 19 in respect of Group
defined benefit pension schemes decreased
to £0.8 million (2021: £1.3 million) and lease
interest charges for the year increased to
£1.5 million (2021: £1.1 million).
As a result, adjusted net financing expenses
increased to £9.6 million (2021: £6.4 million)
and on a statutory basis net financing
expenses increased to £10.7 million
(2021: £6.4 million), with the difference
being the costs of arranging the acquisition
debt financing.
Net financing expenses are expected to
increase in 2023 as a result of the full-year
effect of the acquisition-related debt.
Profit before tax
Adjusted profit before tax was up 11%
to £370.6 million (2021: £333.9 million).
Statutory profit before tax was down 2%
to £308.1 million (2021: £314.5 million).
The reconciling items between adjusted
profit before tax and statutory profit before
tax are shown above and in Note 2 to the
Financial Statements.
Taxation
The Group tax rate reflects the blended
average of rates in tax jurisdictions around
the world in which the Group trades and
generates profit. The Group adjusted effective
tax rate decreased by 10 bps to 25.0%
(2021: 25.1%) and on a statutory basis
the Group effective tax rate was 27.0%
(2021: 25.3%).
The Group adjusted effective tax rate is
lower than our forecast for 2022 by close
to 100 bps due to initiatives that delivered
both one-off benefits and structural changes,
reducing the rate in 2022 and on an ongoing
basis. For 2023, we currently anticipate that,
based on a forecast mix of profits, including
the effect of the Vulcanic and Durex Industries
acquisitions, the Group adjusted effective
tax rate will be marginally higher than the
2022 rate.
On 8th June 2022, the European Union (EU)
General Court published its decision on the
appeals for annulment made against the
European Commission’s (EC) 2019 decision
that certain aspects of the UK’s Controlled
Foreign Company regime constituted State
Aid, finding in favour of the EC. The UK
Government has appealed the decision
of the EU General Court.
During 2022, both Chromalox and
Thermocoax shipped a high proportion
of orders from their existing order book
that were booked in 2021 or earlier, when
future inflation expectations were lower.
These orders did not benefit from price
increases in 2022 and their margin was
adversely impacted by higher raw material
cost inflation, as well as higher freight costs.
In 2023, we anticipate margin improvements
as we increase the shipment of orders taken
in 2022 and 2023.
Thermocoax, which has a higher proportion
of sales to OEMs on medium-term contracts
and was impacted by one-off costs
associated with the ramp-up of our new
manufacturing facility in Normandy (France),
experienced a contraction in 2022 adjusted
operating profit margin. Chromalox adjusted
operating profit margin increased in 2022,
with overhead reductions from the closure of
the Soissons (France) facility having a positive
effect in the fourth quarter. The full year
impact of this plant closure will contribute to
further margin progression in 2023.
Including the acquisitions of Vulcanic and
Durex Industries on a twelve-month pro-
forma basis, ETS adjusted operating profit
margin would have exceeded 18.0%.
Watson-Marlow’s 32.8% adjusted operating
profit margin was down 390 bps against the
exceptional margin of 2021 and 400 bps
down on an organic basis. However, Watson-
Marlow’s adjusted operating profit margin in
2022 was still 100 bps higher than its 2019
pre-pandemic margin. The lower adjusted
operating profit margin was driven by the full
year impact of 2021 revenue investments,
which had an impact of over 200bps, as
well as costs associated with the transition
of BioPure to a new facility in Portsmouth
(UK) and the ramp-up of our new facility
in Devens, Massachusetts (USA), which
together had an impact of over 150 bps.
Currency movements
The Group’s Income Statement and
Statement of Financial Position are exposed
to movements in a wide range of different
currencies. This stems from our direct sales
business model, with a large number of
local operating companies. These currency
exposures and risks are managed through
a rigorously applied Treasury Policy, typically
using centrally managed and approved
simple forward contracts to mitigate
exposures to forecast future cash flows
and avoiding the use of complex derivative
transactions. The largest exposures are to
the euro, US dollar, Chinese renminbi and
Korean won. While currency effects can
be significant, the structure of the Group
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202240

Whilst the EU General Court ruling was in
favour of the EC, our assessment is that
there are grounds for successful appeal. As a
result, we have continued to recognise a
receivable of £4.9 million in the Consolidated
Statement of Financial Position. This relates
to the full amount paid to HM Revenue &
Customs for Charging Notices received
in 2021. The Group has not received a
Charging Notice for either the benefit
received prior to 2017, which is estimated
to be £2.8 million, or the benefit received
during 2019 of £1.0 million. No provisions
have currently been recognised relating to
these amounts and therefore they remain a
contingent liability at 31st December 2022.
Further details are included in Note 5 to the
Financial Statements.
Earnings per share
Adjusted basic earnings per share increased
by 11% to 377.2 pence (2021: 338.9 pence),
consistent with the increase in adjusted
operating profit. Statutory basic earnings
per share were 305.1 pence (2021: 318.3
pence). The statutory fully diluted earnings
per share were not materially different to the
statutory basic earnings per share per share
in either year.
Dividends
The Group has a progressive dividend
policy under which dividend payments
follow underlying earnings per share growth
while maintaining prudent levels of dividend
cover. The aim is to provide sustainable,
affordable dividend growth, building on our
55-year record of dividend progress, with
a compound annual increase of 11% over
that period and over the last ten years.
The Board is proposing a final dividend of
109.5 pence per share for 2022 (2021: 97.5
pence) payable on 19th May 2023 to
shareholders on the register at 21st April
2023. Together with the interim dividend of
42.5 pence per share (2021: 38.5 pence), the
total Ordinary dividend for the year is 152.0
pence per share, an increase of 12% on the
Ordinary dividend of 136.0 pence per share
in 2021.
The total amount paid in dividends during
the year was £103.6 million, 14% above the
£91.0 million paid in 2021.
Capital employed
Capital employed increased by £233.3 million
to £892.5 million, including £68.6 million
from acquisitions. On an organic basis,
excluding the impact of currency movements,
acquisitions and disposals, capital employed
increased by £136.9 million. Tangible fixed
assets (PPE and right-of-use-assets)
increased by £111.4 million to £451.7 million,
principally as a result of acquisitions and
expenditure on new manufacturing capacity
for Watson-Marlow.
The capital intensity of our business is
low with capital expenditure typically
amounting to between 4% and 6% of sales.
Record capital expenditure of £117.5 million
in 2022 was equivalent to 7% of sales,
delivering new manufacturing capacity for
Watson-Marlow, including the BioPure
facility in Portsmouth (UK) and new facility
in Devens, Massachusetts (USA), as well
as other significant projects to advance our
One Planet: Engineering with Purpose
Sustainability Strategy and development
of our digital capabilities. Excluding our
investment in new construction projects,
capital expenditure, as a percentage of
sales, would have been at the low end of our
typical range.
Capital employed
2022
£m
2021
£m
Property, plant and equipment 384.5 277.4
Right-of-use assets 67.2 62.9
Software & Development costs 44.5 38.9
Inventories 290.0 201.3
Trade receivables 341.1 272.3
Prepayments and other current assets 100.6 61.7
Trade, other payables, current provisions and current tax payable (335.4) (255.3)
Capital employed 892.5 659.2
Acquired intangibles including goodwill 1,159.1 628.0
Investment in Associate – –
Post-retirement benefits (52.1) (44.7)
Net deferred tax (59.1) (35.7)
Non-current provisions and long-term payables (15.0) (6.2)
Lease liabilities (65.2) (60.1)
Net debt (690.4) (130.5)
Net assets 1,169.8 1,010.0
Adjusted operating profit 380.2 340.3
Adjusted operating profit (excluding acquisitions, disposals and leases) 369.9 339.2
Average capital employed 775.9 621.5
Average capital employed (excluding acquisitions, disposals and leases) 677.5 571.9
Return on capital employed 49.0% 54.7%
Return on capital employed (excluding acquisitions, disposals and leases) 54.6% 59.3%
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
41

Financial Review continued
Cash flow
2022
£m
2021
£m
Adjusted operating profit 380.2 340.3
Depreciation and amortisation 36.0 35.7
Depreciation of leased assets 13.4 11.4
Cash payments to pension schemes more than the charge to adjusted operating profit (5.3) (5.6)
Equity settled share plans 8.9 9.2
Working capital changes (91.9) (39.5)
Repayments of principal under lease liabilities (12.9) (11.7)
Capital expenditure (including software and development) (117.5) (64.1)
Capital disposals 4.0 2.0
Adjusted cash from operations 214.9 277.7
Net interest (8.8) (5.1)
Income taxes paid (90.0) (78.1)
Free cash flow 116.1 194.5
Net dividends paid (103.6) (91.0)
Purchase of employee benefit trust shares/Proceeds from issue of shares (19.0) (24.6)
(Acquisitions)/Disposals of subsidiaries (538.3) –
Restructuring costs (3.2) –
Cash flow for the year (548.0) 78.9
Exchange movements (11.9) 19.4
Opening net debt (130.5) (228.8)
Net debt at 31st December (690.4) (130.5)
Lease liability (65.2) (60.1)
Net debt and lease liability at 31st December (755.6) (190.6)
We are expecting capital expenditure in 2023
to be similar, as a percentage of sales, to
2022 and above the top end of our historical
range. In 2023, we will begin the expansion
of our ETS manufacturing facility in Ogden,
Utah (USA), to meet customer demand for
our decarbonisation solutions. We anticipate
capital investment in 2024 will remain above
historical levels while we complete new
construction projects.
Total working capital increased by
£91.9 million and the ratio of working
capital to sales was 24.6% (2021: 21.3%
on a constant currency basis), including the
impact of acquisitions. Adjusting for the full
year effect of acquisitions and disposals on
a twelve-month pro-forma basis, the ratio
of working capital to sales was 22.8%.
The increase in working capital was driven by
a recovery in the level of inventory as global
supply chain constraints eased, alongside
a net cash outflow across trade receivables
and trade payables, largely due to business
growth. Going forward, we anticipate
maintaining a similar percentage of working
capital to sales.
Return on capital employed
(ROCE)
ROCE reduced by 570 bps to 49.0%
(2021: 54.7%, 2020: 48.9%). Excluding the
impacts of acquisitions, disposals and leases,
ROCE decreased by 470 bps to 54.6%
(2021: 59.3%, 2020: 48.9%), driven by
an increase in both capital investment and
working capital that more than offset growth
in adjusted operating profit. ROCE is defined
in Note 2 to the Financial Statements.
Return on invested capital (ROIC)
ROIC decreased by 370 bps to 18.3%
(2021: 22.0%, 2020: 17.8%), primarily as
a result of the acquisitions of Vulcanic and
Durex Industries. Excluding the impacts
of acquisitions, disposals and leases,
ROIC decreased by 90 bps to 22.0%
(2021: 22.9%, 2020: 17.8%). ROIC is defined
in Note 2 to the Financial Statements.
Post-retirement benefits
The net post-retirement benefit liability
under IAS 19 increased to £52.1 million
(2021: £44.7 million). Assets decreased by
39% to £341.6 million (2021: £560.7 million),
primarily due to the impact of interest rate
increases on fixed income investments.
Liabilities decreased by 35% to £393.7 million
(2021: £605.4 million), largely due to an
increase in AA corporate bond rates used to
discount future cash flows.
The main UK schemes, which constitute
83% of assets, were closed to new members
in 2001 and closed to future accrual in 2020.
These schemes continue to be managed
under a de-risking strategy whereby asset
and liability values are closely monitored by
our asset manager with appropriate asset
allocation decisions taken as the funding
level improves.
Cash flow and treasury
A reconciliation between adjusted cash
from operations and statutory operating
cash flow can be found in Note 2 to the
Financial Statements.
As expected, adjusted cash from
operations was lower than previous years,
decreasing by £62.8 million to £214.9 million
(2021: £277.7 million) with 57% cash
conversion (2021: 82%), due to planned
record capital expenditure of £117.5 million
(2021: £64.1 million) and an increase
in total working capital of £91.9 million
(2021: £39.5 million). Excluding our
investment in new construction projects
and the rebuilding of inventory, 2022 cash
conversion would have been higher than
the prior year and in line with the Group’s
historical performance.
Tax paid in the year increased by
£11.9 million to £90.0 million as a result of
the increase in profit before tax in 2022.
Free cash flow for the year was £116.1 million
(2021: £194.5 million).
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202242

increased during the year as a result of the
acquisitions of Vulcanic and Durex Industries,
prior to considering one-off returns of capital
to shareholders.
The fundamentals of our
financial resilience
The strong operational and financial
performance of the Group during 2022
continues to reflect the resilience of our
business model. Alongside completing
the acquisitions of Vulcanic and Durex
Industries, we have continued to focus
on organic opportunities with significant
investments made in new manufacturing
capacity, sustainability initiatives and building
additional digital capability. The Group’s
longstanding track record of increasing
returns to shareholders has continued with
a proposed year-on-year increase of 12% in
ordinary dividends.
Our products and solutions support critical
industrial processes across a broad range
of industries and geographical markets,
which links our business performance to
movements in global IP. As in previous
years, our business model supported our
outperformance against global IP due to our
ability to self-generate sales (accounting for
40% of sales) and a significant base business
in maintenance and repair sales (accounting
for 45% of sales). These sales are funded
from our customers’ operating budgets.
The remaining 15% of sales are related
to large projects, funded from customers’
capital expenditure budgets, which are
more heavily influenced by economic cycles.
Over 60% of our sales are to defensive,
less cyclical sectors and no single customer
accounts for more than 1.5% of Group sales.
Resilience over the short, medium and
long term
Our business model and the investments
we have continued to make in our business,
combined with our strong cash generation,
position us well to adapt to economic cycles.
Our Going Concern and Viability analysis
gives us confidence in the robust nature
of our business and our capital structure,
even when analysed under a number of
downside scenarios.
We have undertaken scenario-based
modelling of our key risks, the results of
which underpin our confidence in our short
and medium-term resilience. The continued
implementation of our strategy supports our
longer-term resilience and we continue to
closely monitor and respond to the changing
external economic, environmental and social
factors that will impact our Businesses in
the future.
Going Concern statement
The Group’s principal objective when
managing liquidity is to safeguard the Group’s
ability to continue as a going concern for
at least 12 months from the date of signing
the 2022 Annual Report. The Group retains
sufficient resources to remain in compliance
with all the required terms and conditions
within its borrowing facilities with material
headroom and no material uncertainties
have been identified. The Group continues
to conduct ongoing risk assessments
on its business operations and liquidity.
Consideration has also been given to reverse
stress tests, which seek to identify factors
that might cause the Group to require
additional liquidity and form a view as to the
probability of these occurring.
Our financial position remains robust, with the
next maturity of our committed debt facilities
being €225 million of Private Placement notes
which mature in September 2023 and which
are included within the cashflow forecast
that underpins our scenario modelling.
The Group’s debt facilities contain a leverage
ratio (net debt/EBITDA) covenant with a
limit of up to 3.5x. Certain debt facilities
also contain an interest cover (EBITDA/net
finance expense) covenant of a minimum
of 3.0x. The Group closely monitors its
financial position to ensure that it remains
within the terms of these debt covenants.
At 31st December 2022 the Group’s reported
leverage ratio was 1.7x (31st December
2021: 0.4x), the year-on-year increase
resulting from the debt-financed acquisitions
of Vulcanic and Durex Industries. It should be
noted that including a full year of EBITDA for
acquired businesses results in a pro-forma
leverage ratio of 1.5x. Interest cover on a pro-
forma basis was 62x at 31st December 2022
(31st December 2021: 93x).
Reverse ‘stress testing’ was also performed
to assess what level of business under-
performance would be required for a breach
of the financial covenants to occur, the results
of which evidenced that no reasonably
possible change in future forecast cash
flows would cause a breach of the Group’s
covenants. In addition, the reverse stress
tests undertaken did not require us to take
into account any mitigating actions which
the Group would implement in the event of a
severe and extended revenue and profitability
decline. Such actions would serve to further
increase covenant headroom.
Having assessed the relevant business
risks as discussed in our Principal Risks on
pages 95 to 99 and considered the liquidity
and covenant headroom available under
several alternative scenarios as set out in
Dividend payments, including payments
to minorities, were £103.6 million
(2021: £91.0 million), and reflect the final
dividend for 2021, as well as the interim
dividend for 2022. Share purchases net of
new shares issued for the Group’s various
employee share schemes resulted in a cash
outflow of £19.0 million (2021: £24.6 million).
Acquisitions (net of disposals) during the
year amounted to £538.3 million (2021: £nil),
primarily driven by the purchase consideration
for Vulcanic and Durex Industries.
Restructuring spend during the year was
£3.2 million due to the closure of Chromalox’s
manufacturing operations in Soissons
(France).
Financing and liquidity
Net debt at the end of the year was
£690.4 million (2021: £130.5 million),
including debt raised to finance the
acquisitions of Vulcanic and Durex Industries,
with a net debt to EBITDA ratio of 1.7 times
(2021: 0.35 times). On a pro-forma basis,
including a full-year of EBITDA for companies
acquired during the year, the net debt to
EBITDA ratio is 1.5 times. At the end of the
year total committed and undrawn debt
facilities amounted to £285.3 million alongside
a net cash balance of £243.8 million.
The average tenor of our debt is over four
years with the next contractual repayment
maturity in September 2023. Since the end of
the year the Group has successfully exercised
the first of two options to extend the maturity
of our £400 million revolving credit facility by
an additional year to April 2028.
Capital structure
The Board keeps the capital requirements of
the Group under regular review, maintaining
a strong financial position to protect the
business against risks that could impact
trading while providing flexibility to invest for
future growth. The Group earns a high return
on capital, which is reflected in strong cash
generation over time. Our capital allocation
policy remains unchanged. Our first priority
is to maximise organic investment in the
business to drive future growth. Next, we
prioritise investing in acquisitions that can
expand our addressable market through
increasing our geographic reach, deepening
our market penetration, or broadening
our product range. Acquisition targets are
required to exhibit a strong strategic fit whilst
meeting strict commercial, economic and
return on investment criteria. When cash
resources significantly exceed expected
future requirements, we would look to return
capital to shareholders, as evidenced by
special dividends declared in respect of 2010,
2012 and 2014. In the near term, we will
look to reduce our financial leverage, which
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
43

Financial Review continued
Scenarios modelled Links to Principal Risks
Scenario 1: Revenue Fall
We considered a combination of forward-looking scenarios in which sales were adversely impacted in all years of the assessment
period. The reductions reflected the combined impact of economic political instability on global Industrial Production output, material
currency exchange rate fluctuations and a loss of manufacturing output at a significant Group manufacturing site.
We assumed a reduction of 17% in sales and no mitigating actions were taken by the Group. Despite these impacts the Group
continued to trade profitably and always remained comfortably within the financial covenants in the external financing facilities.
Risk 1: Economic and
political instability
Risk 2: Significant exchange
rate movement
Risk 4: Loss of manufacturing
output at any Group factory
Risk 6: Loss of critical supplier
Risk 8: Inability to identify or
respond to changes in
customer needs
Scenario 2: Exceptional Charge
We considered the impact of a potential large, one-off expense as could be required in the case of a legal or regulatory fine or a
compensation payment. An expense equivalent to 10% of the 2022 adjusted group operating profit was assumed alongside a
negative impact of 10% on revenue resulting from the associated reputational damage.
Despite these impacts the Group continued to trade profitably and always remained comfortably within the financial covenants in the
external financing facilities.
Risk 7: Breach of legal and
regulatory requirements
(including ABC laws)
Scenario 3: Cyber Attack
We considered the occurrence of a cyber-attack that succeeds in severely impacting Group systems. We assumed an immediate
disruption to trading followed by a fall in sales in subsequent years resulting from the associated negative reputational impact, the
combined effect being a loss of 5% of sales in each year over the period. A significant initial cost was also included to rectify the
immediate impact of the attack followed by increased investment in all subsequent years to strengthen our cyber-security.
Despite these impacts the Group continued to trade profitably and always remained comfortably within the financial covenants in the
external financing facilities.
Risk 3: Cybersecurity
Scenario 4: Acquisition Failure
We considered a scenario whereby a large acquisition has failed to achieve the acquisition business case. We assumed a 20%
shortfall in sales in the acquired business and disposal for a lower cash consideration than the original consideration.
Despite these impacts the Group continued to trade profitably and remained comfortably within the financial covenants contained
within the external financing facilities at all times.
Risk 5: Failure to realise
acquisition objectives
the viability assessment below, the Directors
consider it appropriate to continue to adopt
the going concern basis in preparing the
financial statements.
Assessment of Viability
In accordance with provision 31 of the UK
Corporate Governance Code 2018, the
Board has assessed the viability of the
Group, taking into account the Group’s
current financial position, business strategy,
the Board’s risk appetite and the potential
impacts of the Group’s Principal Risks.
We set out the eight Principal Risks we have
identified on page 95.
The Board has adopted a five-year viability
assessment, which it believes to be
appropriate as this timeframe is covered by
the Group’s forecasts; takes into account
the nature of the Group’s Principal Risks,
a number of which are external and have
the potential to impact over short time
periods; and is aligned with the maturity of
the Group’s principal committed bank credit
facility. While the Board has no reason to
believe that the Group will not be viable over
a longer period, given the inherent uncertainty
involved, the Board believes that a five-year
period provides an appropriate degree of
confidence whilst covering a sufficiently
longer-term perspective.
In making their assessment, the Board
completed a robust assessment, supported
by detailed modelling, of the Principal Risks
facing the Group, including those that
would threaten its business model, future
performance, solvency, or liquidity. In addition
to completing an impact assessment of the
Principal Risks, the Board considered the
probability of the occurrence of the Principal
Risks, the Group’s ability to control them
and the effectiveness of mitigating actions
available. In every modelled scenario the
Group is able to demonstrate that it continues
to remain viable. The scenarios modelled to
support this process were as follows:
A further scenario was modelled to ascertain what level of revenue or adjusted operating profit margin reduction would be required to cause a
breach of the Group’s debt covenants. The reductions in revenue and adjusted operating profit margin were significantly higher than those shown
in the above scenarios. While linked to the Group’s Principal Risks, the scenarios detailed above are hypothetical and designed to test the ability
of the Group to withstand such severe outcomes. In practice, the Group has an established series of risk control measures in place that are
designed to both prevent and mitigate the impact of any such occurrences from taking place. The results of the stress testing undertaken showed
that the Group would be able to absorb the impact of the scenarios considered should they occur within the assessment time period. In all the
scenarios considered, the Group was not required to implement any mitigating actions in relation to reductions in forecast expenditure in order to
remain within its debt covenants.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202244

Viability statement
Based on the outcomes of the scenarios and
considering the Group’s financial position,
strategic plans and Principal Risks, the
Directors have a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they fall
due over the period of their assessment.
The Directors’ statement regarding the
adoption of the going concern basis for the
preparation of the financial statements can be
found on pages 43 and 44.
Long-term resilience
The Group has a long track record, over 130
years, of consistently adapting to changing
macroeconomic, environmental and social
factors supported by our business model.
While our strategy and business model
lessen any material impact from our Principal
Risk factors, we nevertheless continuously
review our markets, listen to our customers
and adapt our solutions, while working
responsibly and in line with our Values to build
long-term sustainability.
We have a highly resilient business and
strategy that will remain relevant across
different climate-related scenarios.
We recognise the need to anticipate and
mitigate the impact of climate-related change.
In 2021 we launched our One Planet:
Engineering with Purpose Sustainability
Strategy covered in more detail on page 46
of the Sustainability Report. Although not
classed as a Principal Risk for our Group, the
TCFD disclosures on pages 59 to 61 detail
the anticipated impact of climate-change on
the Group’s longer-term resilience.
The increasing commitments to net zero
targets will have a profound effect on
industrial activity over the coming decades
and is an additional source of growth for
our Group over at least the next 30 years.
To address the opportunities arising from the
decarbonisation of industrial processes, we
have invested significantly in the development
of sustainable products and solutions that
help customers meet their own sustainability
goals. In 2022, we launched new-to-world
TargetZero decarbonisation solutions,
created through an internal collaboration
between Steam Specialties and Electric
Thermal Solutions (ETS). You can read more
about the benefits of the three TargetZero
solutions, branded ElectroFit, Steam
Battery and SteamVolt, on page 80 of the
Operating Review.
Group Outlook
Forecasts for 2023 IP have trended steadily
downwards since February 2022 and are
now at 0.7%, reflecting the likelihood of
recession in developed markets and low
growth in emerging markets. Against this
uncertain macroeconomic backdrop, our
resilient business model, ability to self-
generate sales and significant proportion
of demand from maintenance and repairs,
underpins our confidence in another year of
progress for the Group.
If exchange rates at the end of February
were to prevail for the remainder of the
year, there would be a tailwind impact
of between approximately 1% and 2%
on sales and adjusted operating profit.
Movements in exchange rates are often
volatile and unpredictable so the actual
impact could be significantly different.
Therefore, our guidance excludes any impact
from currency movements.
The full year effect of the acquisitions of
Vulcanic and Durex Industries on a twelve-
month pro-forma basis, net of the disposal
of our Russian operations, would have
expanded Group revenues by almost 8% to
£1,734 million in 2022.
During the second half of 2022, COVID-19
related demand from Watson-Marlow’s
Pharmaceutical & Biotechnology customers
began to normalise and, in the first two
months of 2023, we have continued to
see a level of demand consistent with the
fourth quarter of 2022, which still ended with
untypically strong order book levels. In the
first half of 2023, we expect these customers
to continue utilising their existing stocks and
reschedule deliveries from our order book.
However, with strong underlying demand
for cell and gene therapy applications in the
Pharmaceutical & Biotechnology sector, as
well as Process Industry applications, we
anticipate significantly higher demand in the
second half of 2023 as excess customer
stocks are depleted, although defining the
precise timing and scale of any recovery
remains difficult. Therefore, excluding any
impact from currency movements for the full-
year 2023, we anticipate Watson-Marlow’s
overall sales for 2023, to be slightly below
2022, as lower sales to the Pharmaceutical &
Biotechnology sector will be largely offset by
strong growth of its Process Industry sectors.
The Steam Specialties and ETS Businesses
also opened 2023 supported by record
order books, so we anticipate mid-to-high
single-digit growth over 2022 pro-forma
sales, driven by volume growth above IP and
proactive price management practices that
offset inflation of wages, energy and materials
to protect margins.
Assuming no material deterioration in
forecasted IP and excluding any impacts
from currency movements, we anticipate
mid-single-digit growth over 2022 Group
pro-forma sales, together with a small
progression to the Group’s adjusted
operating profit margin. As Watson-Marlow’s
sales will be strongly weighted to the second
half of the year, we anticipate the Group’s
sales phasing in 2023 will also be more
weighted to the second half than the typical
48% : 52% phasing of previous years.
Based on increased operational gearing in the
second half, as well as the full benefit in the
second half of first half cost saving initiatives
in Watson-Marlow to right-size capacity and
overhead support costs, we anticipate the
Group’s adjusted operating profit phasing in
2023 will be more weighted to the second
half than the 44% : 56% phasing of 2020.
Cash conversion of 57% in 2022 was
impacted by a rebuilding of inventory as
global supply chain disruptions eased, as
well as a step-up in capital investment as
we expanded our manufacturing capacity
to support future growth. In 2023, we
anticipate cash conversion will improve to
above 70% with capital investment remaining
at approximately 7% of sales driven by
project completions and the expansion of
Chromalox’s manufacturing facility in Ogden,
Utah (USA).
Therefore, we look forward to delivering
another year of overall double-digit sales
growth, together with a small progression in
the Group’s adjusted operating profit margin
and improved cash conversion.
Nimesh Patel
Chief Financial Officer
8th March 2023
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
45

Sustainability Report
One Planet:
Engineering with Purpose
Our One Planet Strategy is our mechanism to create sustainable
value for all our stakeholders, as we engineer a more efficient,
safer and sustainable world.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202246

“ In our first full
year of strategy
implementation
we have made
good progress
in a number
ofareas.”
Sarah Peers
Group Director of Sustainability
One Planet: Engineering with Purpose
is our commitment to sustainability, as
well as our roadmap to building a more
sustainable future. 2022 saw the first full
year of our strategy implementation and we
made important progress in our sustainable
business operations, including:
• Became a participant of the UN
Global Compact
• Launched Everyone is Included
• Reduced GHG emissions (scope 1 and
2 market-based) by 30% vs 2021
• Reduced Group energy consumption by
4% vs 2021
• Electricity consumed from certified
renewable sources increased to 57%
• Delivered at least one biodiversity initiative
by 47% of our operating companies since
the strategy launch in 2021
• Reduced waste to landfill to 10% from
12% in 2021
• Doubled volunteering hours to over22,000
Across all initiatives we have put the
foundations in place to achieve or make
strong progress against our 2025 targets,
with planning, roadmaps and new systems
implemented in order to measure our
progress and facilitate the changes required.
In October 2022, we were accepted as a
participant of the UN Global Compact. This is
our commitment to align our operations
and strategies with ten universally accepted
principles in the areas of human rights, labour,
environment and anti-corruption and to
take action in support of business-relevant
issues embodied in the UN Sustainable
Development Goals (SDGs).
Our strategy
One Planet: Engineering with Purpose
is implemented by each of our three
Businesses, with central oversight from the
Group Executive Committee. In 2022, Sarah
Peers, Group Director of Sustainability, joined
the Group Executive Committee and the Risk
Management Committee, demonstrating
our commitment to placing sustainability at
the heart of our Company decision-making,
strategy and risk management processes.
For more information please see page 125.
The strategy is delivered through six strategic
initiatives, which are:
zero
1. Net zero carbon
Achieve net zero greenhouse
gas emissions
2. Biodiversity net gain
Deliver biodiversity net gain
3. Environment improvements
Implement environmental
improvements in our operations
4. Sustainable products
Grow sales of products with
quantified sustainability benefits
5. Supply chain sustainability
Embed sustainability criteria in
supply chain management
6. Community wellbeing
Support the wellbeing of people in
our communities
Additionally, the Sustainability Strategy is
supported by two strategic projects that are
critical to our ability to deliver the strategy and
assess progress:
1. Knowledge
Develop our colleagues’
sustainability knowledge
2. Data
Improve the availability and quality
of sustainability data
This framework gives us a way to manage
and measure sustainability progress
consistently across our diverse Group.
The initiatives and projects encourage
investment in sustainable technology both
within our own operations and for our
customers, with a strong focus on the
ways in which our products and solutions
can help our customers to meet their own
sustainability targets.
By prioritising the environment and people in
our plans for sustainable business growth, we
can work with stakeholders to leave a better
world for tomorrow, because we only have
one planet.
Watch our one planet video:
www.spiraxsarcoengineering.com
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
47

Sustainability Report continued
Responsible business foundations
We are an organisation which places Health
and Safety (H&S) at the centre of everything
we do. H&S continues to be an important
priority for the Group Chief Executive, Board
of Directors, and Executive management
teams. H&S is a standing agenda item at
every Board meeting and Group Executive
Committee meeting. We continue to have
robust H&S management systems across
the Group and at the time of publishing,
51 of our Group Companies are certified
to ISO 45001 or equivalent. We have also
continued to cautiously review our approach
to the management of COVID-19, steadily
evolving our minimum standards in line with
international consensus, whilst ensuring local
decision-making is fully supported.
As part of our commitment to continually
improve, we expanded the role of the Group
Health and Safety Director in March 2022.
This role builds on the significant progress
made to date, by championing an evolution in
our global approach.
Progress
Our new safety management platform
(EcoOnline) has now been deployed globally
and is primarily used to report, manage
and investigate H&S events. We continue
to evolve this tool to support our continual
improvement in H&S management across
the Group, such as Behavioural Based Safety
observations (BBS) and colleague concerns.
We have continued to focus on BBS training,
with phases 1, 2 and 3 now fully deployed
within Steam Specialties and Watson-Marlow,
with over 6,000 colleagues trained globally.
In Electric Thermal Solutions (ETS), phase
1 was implemented across the Business in
2022, and this phase will be extended to
Vulcanic and Durex Industries in 2023.
In this reporting period there were five
more lost time accidents (LTA) than the
previous year (increased from 15 to 20),
which represents an increase to our Group
LTA frequency rate* to 0.12 (0.10 in 2021).
A one to three-day absence was recorded
for 40% LTAs (67% in 2021). The remaining
60% resulted in three days or more off work
(33% in 2021). However, in the last two
months of 2022 there were no LTA reports.
Our all-accident frequency rate* increased
to 2.43 from 2.22 which we consider to be
a reflection of improvement to our reporting
culture. Overall, whilst there was no general
correlative trend between each incident, a
higher level of hand and arm incidents was
evident in 2022 and preventing these became
an enhanced focus throughout the year.
Whilst it is disappointing that our LTA rate
increased, these figures continue to represent
a low rate, with 1.1 LTAs occurring every
1 million hours worked. The relative increase
in 2022 may also have been due to 2021
being an anomalous year when compared
to the general trend of previous years.
When compared to 2020, 2022 figures
represent a 48% drop in LTAs and a 7.2%
decrease for the all-accident frequency rate.
The frequency rate of both near miss
incidents (27.38*) and safety concerns
(271.06*) continued to increase when
compared to the previous year, 16.5% and
11% respectively. This was in line with our
expectations and is a further demonstration
of our reporting maturation throughout the
Group, reflecting the impact of our BBS
programmes where we have an active H&S
culture that addresses risks before they
become accidents. In 2022, we again saw no
work-related fatalities among our colleagues
or contractors.
Inter-business learning and sharing of
best-practice has been at the heart of our
approach throughout the year, with our global
monthly H&S forum being well attended
across the Group. This regular cadence and
engagement has been invaluable as we have
matured and advanced our approach to
team collaboration.
A reassessment of the H&S strategy resulted
in the introduction of a new Group H&S
framework, fully supported by our Group
Executive Committee. The framework
provides a more holistic, consolidated and
tiered approach to validate, enhance and
continually improve H&S excellence over the
next five years. This approach is bespoke to
our Group and will be achieved by focusing
on broader goals covering our culture, risk-
control and further enabling our colleagues to
prioritise H&S. Our starting point, foundation
level, will build on the solid progress we have
already achieved.
To further support this Group-wide
initiative and to continue our investment
in technological solutions, we have also
identified a global compliance solution
to support a risk-based approach for
demonstrating a consistent legal compliance
baseline across our larger locations.
Health and Safety
*per 100,000 hours worked
Focus for 2023
• Implement our Group-wide H&S
excellence framework
• Onboard new global
compliance tool
• Relaunch our customised approach
to BBS across the Group
27.38
23.5
20.65
15.4
9.79
2
022
2
021
20
20
2
019
2
018
Near misses per 100,000 hours worked
271.06
24 4 .14
185.94
118.6 2
98.03
2
022
2
021
20
20
2
019
2
018
Health and Safety concerns raised
per 100,000 hours worked
0.07
0.03
0.16
0.19
0.24
2
022
2
021
20
20
2
019
2
018
Over three-day lost time injury rate per
100,000 hours worked
0.05
0.07
0.07
0.07
0.11
2
022
2
021
20
20
2
019
2
018
One to three-day lost time injury rate per
100,000 hours worked
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202248

People and wellbeing
The wellbeing and safety of our colleagues
has always been of primary importance
and is reflected in our Company Values of
Safety, Respect, Integrity, Customer Focus,
Excellence and Collaboration. These are the
guiding principles used across the Group to
steer our conduct, underpin decision-making
and define our culture. Our HR policies and
systems support us in protecting the rights
of our colleagues and ensuring their fair and
equitable treatment.
We believe that diverse teams bring diversity
of thought and experience, helping us to
become a better and higher performing
business. Combined with an inclusive and
equitable working culture where all of our
colleagues can be themselves and achieve
their potential, this fuels our continued
growth, creating more opportunities for our
colleagues and all of our stakeholders.
Progress
Following the completion of our biennial
Engagement Survey in 2021, a number
of actions were implemented in 2022 to
increase engagement across the Group.
We developed a Purpose Guide to help
teams connect their personal purpose with
the Group Purpose, which will be further
supported with facilitated workshops in
2023. We increased Employee Engagement
Committee involvement with colleagues
in a series of focus groups across the
Group. We also developed an Employee
Value Proposition managers’ guide and
launched a new leadership development
programme based on the principles of the
Followership framework.
In 2022, we launched our first Development
Everyday festival, giving our colleagues
access to a wealth of resources and webinars
to support their growth and development
journeys. This two-week festival focused on
a range of topics which covered life inside
and outside of work, with a theme of ‘Make
the best of ME!’. Over 1,600 colleagues
engaged actively with this event, with the
most popular sessions being about financial
wellbeing and career strategies that really
work. Feedback from our colleagues was
very positive, with sessions being described
as ‘insightful and interesting’ with ‘a lot of
useful information’.
As part of our Group Inclusion Commitment
on menopause and positive menstrual health,
we introduced free, eco-friendly menstrual
health care products across our Steam
Specialties sites and Group headquarters
in the UK this year, through a project led
by one of our graduates. Working with the
company TOTM to provide these products
for our colleagues is a significant step
towards normalising menstrual health, whilst
supporting the wellbeing and dignity of
colleagues and visitors to our sites and being
kinder to the planet. You can read about this
case study on page 54.
In July 2022, we launched our inaugural
Group-wide Values-based colleague
recognition programme called the Spirit
Awards. The Awards shine a light on
the way our colleagues ‘elevate their
everyday’ activities to create value for all our
stakeholders by embracing our Values. As a
new and underpinning element of a stronger
recognition culture throughout the Group, we
were delighted to receive 633 applications
from colleagues in our first year. It was a
difficult task, but our team of category judges
shortlisted 32 applications which were then
presented to our Group Executive Committee
(GEC) in a second round of judging.
The GEC then selected 20 applications to
become ‘finalists’. In early 2023, around 40
colleagues from across our Group travelled
to the UK to meet with leaders and discuss
their achievements, as part of the Group’s
biennial leadership conference. During a
special Awards Ceremony, the winners were
announced. You can find out more about
our winners and their stories on our Group
website and more about our Values on page
21 of the Strategic Report.
In 2022, we signed the Leadership Pledge
of the Global Business Collaboration for
Better Workplace Mental Health as part of
our commitment to an ongoing focus on
colleague wellbeing. Supporting this, we
launched our Wellbeing Day, an extra day of
paid leave to enable every colleague across
our Group to spend an extra day doing what
they love.
Wellbeing continued as a theme in colleague
engagement throughout 2022. This included
menopause awareness webinars to raise
awareness of symptoms and support, and a
World Mental Health Day resource pack for
our colleagues. To mark International Men’s
Day, we partnered with Prostate Cancer UK,
running global webinars on understanding
prostate cancer risk. We additionally marked
International Day of Persons with Disabilities
and Black History Month.
Our commitment to health
and safety extends to
the mental health of our
colleagues and promoting
the importance of self-care.
In 2022, our colleagues around the
world were able to spend a Wellbeing
Day doing more of the things they love.
The extra day of paid leave has helped
colleagues support their wellbeing in
different ways.
Bridie Easton from Watson-Marlow
chose to spend this day completing a
long bike ride. On a bright and soggy
autumn day in the UK, she enjoyed
being outside in the local countryside,
taking in the scenery and the fresh air
and feeling energised and happy.
Focus for 2023
• Undertake biennial colleague
engagement survey
• Encourage all colleagues to use their
Wellbeing Day in 2023
• Embed mental health in updated
Group Health and Safety Policy
• Launch 2023 Spirit Awards
• Ongoing focus on colleague support
through global webinars and
local initiatives
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
49

Sustainability Report continued
Responsible business foundations continued
Inclusion and diversity
Gender – Board of Directors*
2022
60%
40%
60%
40%
2021
Male
Female
Male – 6 (2021: 6)
Female – 4 (2021: 4)
Gender – Senior Managers*
Male
Female
68%
32%
Male – 40 (2021: 33)
Female – 19 (2021: 16)
67%
33%
2021
2022
Gender – Total Workforce*
Male
Female
74%
26%
Male – 7,724 (2021: 6,548)
Female – 2,692 (2021: 2,123)
76%
24%
2021
2022
*At 31st December 2022
**Definition of senior managers aligned with FTSE Women Leaders Review
By operating in accordance with our
Company Values and Group Policies we
establish and maintain a culture of ethical
behaviour throughout our global operations.
Across the Spirax-Sarco Engineering Group,
we’re committed to creating a truly inclusive
and equitable working culture where all of our
colleagues can be themselves and achieve
their full potential.
This emphasis on inclusion is central to our
culture and runs through every one of our
Values. An inclusive, equitable and wellbeing-
focussed culture makes us stronger as
individuals, as teams and as a Group.
Progress
In February 2022, we launched our first
global Inclusion Plan, Everyone is Included
and ten Group Inclusion Commitments as a
tangible way to make a positive difference to
the lives of our colleagues around the world.
The commitments can be found on page 53.
In Q1 of 2022, the FTSE Women Leaders
Review report ranked us 38th in the
FTSE100 for gender diversity in Board
and senior leadership roles. We met the
Review’s target of 40% women on the
Board. During 2022, our senior leadership**
(Group Executive Committee and their direct
reports) reached 34% female representation
by October. Normal employment changes
reduced this to 32% at the year-end.
We anticipate female representation in our
senior leadership will return to 34% by April
2023 and we remain committed to reaching
at least 40% female representation across
our senior leadership. In Q1, the Parker
Review was also published. We continued to
meet the Review’s goal of having at least one
ethnically diverse Director on our Board.
Diversity goals
To build on our progress so far, we developed
new diversity goals in Q4 of 2022, with the
ambition of achieving the following by the end
of 2025:
• Minimum 40% female participation in each
of our Board, GEC and GEC direct reports
• Having a female Chair, Senior Independent
Director, CEO or CFO
• Double the number of women in
commercial leadership roles
• A 30% female workforce globally
• Increased ethnic diversity of our Board
and GEC
• Double the ethnic diversity of our GEC
direct reports community
For our global graduate programme, we
will continue to aim for 50% female intake
annually, as well as to grow participation from
under-represented ethnic groups in the UK
and USA.
Our Chief Financial Officer, Nimesh Patel,
was appointed Co-Chair of the FTSE
Women Leaders’ Review in 2022, which
seeks to increase the representation of
women in senior leadership roles in the
FTSE 350. In November, our Group Chief
Executive, Nicholas Anderson, became a
Lead Ambassador for the 25x25 campaign
which aims to achieve 25 female CEOs in the
FTSE100 by 2025.
In January 2022, we signed the UN Women’s
Empowerment Principles and the UN LGBTI
Standards of Conduct for Business as
part of our Group Inclusion Commitments.
We also joined the Women’s Engineering
Society (WES) and Women in Science and
Engineering (WISE) to help further advance
our gender equity journey.
This year we placed our first major focus
on celebrating LGBTQ+ Pride, providing
sponsorship and attendance at Cornwall
Pride, as well as hosting webinars for our
colleagues, running an LGBTQ+ session
at our global Steam Specialties leadership
conference and displaying pride flags and
benches at various UK sites.
In Q2, we began building a learning series
of guides and ready-made Safety Moments,
which are available for all our colleagues to
access internally. So far, the series includes
content on personal pronouns, recognising
and managing loneliness, happiness at work
and responding to micro-aggressions at
work. We will continue to add to this library
of resources.
Focus for 2023
• Embed Diversity goals across
the Group
• Embed Everyone is Included
within Vulcanic and Durex Industries
• Establish race equity focus groups
and action plan
• Launch new colleague engagement
platform and app
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202250

Ethical business
By operating in accordance with our
Company Values and Group Policies we
establish and maintain a culture of ethical
behaviour throughout our global operations.
Progress
All colleagues with an email address are
required to complete our Group Essentials
training programme when joining the
Company and annually thereafter. In 2022,
we began the process of migrating our
Group Essentials modules to a new authoring
environment, which will facilitate easier and
quicker maintenance going forwards, as well
as giving each course a design refresh to
ensure that they remain current and engaging
for our colleagues.
Our Group Essentials training covers topics
including Anti-Bribery and Corruption (ABC),
Corporate Criminal Offences (CCO), Health
and Safety (H&S) and Sustainability. We are
currently developing a version of each
Group Essentials module for our desk-free
colleagues working in our manufacturing
sites. These versions are being written
specifically with a desk-free audience in
mind and will be available as both digital and
paper-based training options.
In May 2022, we launched a new Leadership
for Sustainability course for our leaders,
to help them to understand their role as a
leader in delivering our sustainability goals.
This optional training explains why we need
an evolution of our leadership to address a
wider range of considerations and what this
looks like in practice. At the end of the year it
had been completed by 211 of our leaders.
Following the acquisitions of Cotopaxi,
Vulcanic and Durex Industries, we introduced
the Group Essentials training to these new
colleagues, as well as continuing the process
started in 2021 to roll out the programme
to factory-based colleagues. By the end of
the year, 6,351 colleagues had completed
ABC training and 5,934 completed CCO
training. Introduction to Sustainability has now
been launched in all Group languages and
by the end of 2022 had been completed by
5,497 colleagues.
Whistle-blowing
Any colleague with a concern about
potentially unethical behaviour is able to raise
it confidentially through a local, independent
third-party whistle-blowing hotline, hosted by
Safecall. In 2022, 26 calls were raised globally
via this hotline, 10 of which involved one
single case.
All calls were investigated by senior
management and action taken if necessary,
with summaries of calls and related actions
reviewed by the Audit Committee.
Governance
In 2022, Sarah Peers, Group Director of
Sustainability, joined the Group Executive
Committee and the Risk Management
Committee, demonstrating our commitment
to placing sustainability decision-making
at the heart of Company strategy and risk
management processes.
The One Planet: Engineering with
Purpose Sustainability Strategy has central
strategic oversight and is sponsorship by
the Group Executive Committee (GEC)
with day-to-day oversight by the Group
Sustainability Management Committee
(GSMC), comprising the Group Director
of Sustainability, the business Heads of
Sustainability, Strategic Initiative and Strategic
Project leads and other relevant individuals.
Implementation is supported at a Group
level through the six strategic initiatives and
two strategic projects, which each have an
Executive sponsor, an initiative lead and a
cross-business working group. The GSMC
meets regularly to discuss the initiatives and
support each other where required and in
turn informs the GEC on their progress.
The Group Chief Executive is the overall
Executive sponsor for the strategy.
Responsibility for implementing the
strategy sits at a Business level, with the
strategy embedded into the core business
strategies of Steam Specialties, Electric
Thermal Solutions and Watson-Marlow.
Each Business and operating company
is responsible for implementing the One
Planet Strategy through their own Business
strategy; ensuring that all colleagues have
the opportunity to get involved; meeting
and, where possible, exceeding minimum
expectations; delivering timely and accurate
data and collaborating to share learning
across the Group.
The Board receives regular updates
throughout the year. The One Planet Steering
Committee, comprising the GEC, meets
quarterly to receive detailed progress updates
from each strategic initiative and project lead,
in addition to receiving shorter sustainability
updates at most GEC meetings.
This combination of Board and Executive
Committee oversight ensures that the One
Planet Strategy is a key focus area for
the Group.
Focus for 2023
• Migrate to new authoring
environment and design refresh of
Group Essential Training modules
• Launch Group Essentials training to
desk-free colleagues
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
51

Engineering our difference for colleagues
Providing a progressive, supportive
and inclusive culture…
Spirax-Sarco Engineering plc Annual Report 202252
Strategic Report

…for colleagues to thrive
at work and beyond.
Ensuring the best start for
new families by giving every
colleague who becomes a
parent a minimum of 16 weeks
paid parental leave.
Helping every colleague who
is acaregiverto support their
loved ones or take time for
self-care.
Supporting every colleague
who experiences pregnancy
loss of any kind.
Standing up for colleagues
who experiencedomestic
violence or abuse.
Becoming an increasingly
gender-balanced, ethnically
diverse, disability confident
and faith-aware employer.
Being a safe place for
all lesbian, gay,bi,trans
and queer or questioning
(LGBTQ+) people, wherever
we operate.
Creating menopause-
friendly workplaces.
Proactively promoting better
wellbeing, balance and
mental health.
Enabling our hybrid
workforce to be at their best
wherever and whenever they
areworking.
Empowering our colleagues
to grow their knowledge,
skills and confidence as
active advocates of inclusion
and wellbeing.
Our inclusion commitments
Strategic Report
We are passionate about creating a
truly inclusive and equitable working
culture where everyone can be
themselves and achieve their full
potential. This means supportive
teams and strong relationships
where everyone’s contribution is
valued and where we all look out
for each other. To support this, we
launched our Group-wide Inclusion
Plan, Everyone is Included in
February 2022. Our plan includes
ten Group Inclusion Commitments.
The impact of Everyone is Included
has been far reaching and made a
tangible difference to the lives of
many colleagues, enabling them to
bond with their new babies, or step
away from work to support loved
ones in times of need with paid
caregiver leave. Through hybrid
working, colleagues are better able
to balance all aspects of life, while
our Wellbeing Day has introduced
an extra day of paid leave to focus
on any aspect of personal wellness.
Since launching Everyone is
Included, colleagues tell us they
feel more welcomed, included and
proud of our Group.
53Spirax-Sarco Engineering plc Annual Report 2022

Engineering our difference continued
A progressive, supportive and inclusive culture
Strategic Report
Our commitment to creating inclusive and equitable
workplaces includes supporting menopause and
positive menstrual health at work. Áine Loughran joined
our Group through our Global Graduate Development
Programme. Her third rotation was at Watson-
Marlow’s Cornwall facility in the (UK) and while working
there she noted the free provision of eco-friendly,
menstrual products at work. When Áine had carried
out her first two rotations with the Steam Specialties
Business in Cheltenham (UK) Áine noted that products
were not available. She was inspired by the Group
Inclusion Commitments and set out to self-initiate a
project to make these products available to everyone
working across the three sites that comprise the
Cheltenham campus.
Áine engaged with the providers TOTM to arrange for the
products to be available in every location. Áine’s initiative
was so inspiring she was shortlisted as a Finalist in the
Group’s inaugural Spirit Awards programme, which
celebrates colleagues living our Values to elevate the
everyday things that we do. The judges recognised her
efforts as signifying a positive step towards normalising
menstrual health challenges at work, as well as helping
the planet.
Inspiring allyship for
positive menstrual health.
Every colleague who becomes a parent receives a
minimum of 16 weeks’ paid parental leave, wherever
they are, whomever they are and however they become
a parent. Will Stacey works for Spirax Sarco in the UK.
Our parental leave policy meant that as a new father,
he was able to make the most of those important early
weeks, developing a strong bond with his baby son
George. With time to learn about the baby’s feeding and
sleeping patterns he was better able to share the care
with his wife Lauren.
Ensuring the best start
for every family.
Engineering our difference continued
A progressive, supportive and inclusive culture
“ I was extremely grateful to be able to
spend precious time bonding with my
son during his first weeks and to
supportmy wife.”
Will Stacey
Divisional Sales Manager at Spirax Sarco,
UK, part of our Steam Specialties Business
“ It’s about ensuring positive wellbeing for
colleagues and supporting menstrual
healthdignity at work.”
Áine Loughran
Commercial Manager, Global Business Development,
Watson-Marlow, UK
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202254
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202254

Wellbeing
matters.
A helping hand, when
it’s needed most.
We’re committed to doing all we can through a positive
approach to mental health to promote wellbeing and
self-care.
A team from our Watson-Marlow Business in Japan,
decided to spend their wellbeing day together and
hiked up Mount Takao, which is almost 600m high
at the summit. The mountain owes it popularity to its
ease of access from several cities including Tokyo, its
funicular railway, Buddhist temple and abundance of
nature trails. Our colleagues set a goal to reach the
summit of the mountain creating a sense of wellbeing by
focusing on their collective achievement, while enjoying
being outdoors, surrounded by nature. The team has
inspired other colleagues in Japan to come forward
with more suggestions of activities they can do together
to promote wellbeing, including a golf driving contest
and a walk around the town while stopping at local
sightseeing spots.
We’re helping every colleague who is a caregiver, to
support their loved ones or take time out for self-care
with a minimum of 15 days of paid caregiver leave
every year. This leave is often a lifeline for colleagues
when their loved ones are facing significant challenges.
Knowing they can step away from work with the full
support of their line manager, to focus on the people
who need them, is a positive contributor to our
colleagues’ physical and mental wellbeing
at a stressful time.
When Chantalee’s mother lost her life partner, her health
deteriorated. She had a major surgical procedure and
needed Chantalee’s help and care during her recovery.
“ Connecting with nature and achieving
ourgoals brings spiritual fulfilment.”
Watanabe Hirotoshi
Engineering Manager, Watson-Marlow, Japan
“ Mom’s recovery was prolonged and
caregiver leave was a saving grace!
Iwas able to be there for my mom
whenshe needed me most.”
Chantalee Hiles
HR Manager, Spirax Sarco,
South Africa
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
55

2022 Progress since baseline year 2030 Reduction to net zero
Baseline (2019) Emissions from
company-owned
vehicles
Renewable
self-generation and green
electricity contracts
Transition away
from fossil fuels
Other Required carbon
offsetting
Since the launch of One Planet:
Engineering with Purpose in June 2021
we have been working towards our targets
of achieving net zero emissions for scopes 1
and 2 by 2030 and for scope 3 by 2050. It’s
one thing to promise the earth, but when it
comes to climate change commitments, it’s
essential to deliver them credibly too. This is
why we committed to the Science Based
Targets Initiative (SBTi) in 2021 and in 2022
formally submitted these targets to the SBTi
for approval.
In preparation for submitting our targets to
SBTi to be independently assessed and
approved, we quantified our scope 3 value
chain emissions, in conjunction with a third-
party consultant. In 2023, we will focus on
improving scope 3 data quality and begin to
target reductions in downstream air-freighting
and emissions associated with the purchase
of raw materials.
Our new sustainable solutions in our
TargetZero range will help us and our
customers in decarbonising industrial
processes and thus reduce scope 1
emissions. It is innovative technology like this,
which builds upon our history of delivering
solutions, that leads to significant efficiency
improvements for our customers. It reaffirms
steam’s role as a critical source of thermal
energy for the future, and it underlines our
drive to pioneer steam technology.
Key strategic targets
• Net zero scope 1 and 2 GHG emissions
by 2030, with an interim target of a 50%
reduction (compared to 2019) by 2025
• 20% reduction* in Group energy use from
plant, equipment and building assets
(compared to 2019) by 2025
* Target updated in 2022 based on analysis of available
energy reduction opportunities across our Group
Progress
As a key part of our net zero roadmap,
in 2022 we have secured green energy
contracts at many Group sites, meaning
that over the course of the year green
energy accounted for 57% of our electricity
consumption. In order to guarantee the
credibility of renewable contracts, they
are being independently verified on a
quarterly basis to ensure they meet our
strict requirements.
In our green energy strategy we are moving
up the green energy hierarchy, focusing
on-self generation where practical to do so.
Investing in adding to the installed base of
renewable energy where possible is essential
for security of energy supply and greening of
the grid in the countries where we operate.
During 2022, we installed new solar arrays
at our manufacturing sites at Heidelberg
(Germany), Normandy (France), Nuevo
Laredo (Mexico) and our new Watson-
Marlow site in Devens (USA). As part of the
net zero roadmaps developed by all of our
manufacturing sites, we will be investing
further in photovoltaic panels in 2023.
In August, we launched a new electric
vehicle leasing portal in the UK, the first step
in our transition to electric vehicles globally.
Following the success of this rollout in the
UK, we will move in 2023 to the next phase
of the electric vehicle transition, focussing
on Europe, China and South Korea. At the
same time, we developed and rolled-out a
Low Carbon Travel Policy and Guidelines to
reinforce our commitment to electric vehicles
and to guide our colleagues in their decisions
when travelling for business and guiding
them on how this can be done in a more
sustainable way.
Greenhouse gas (GHG)
emissionsperformance
The carbon footprint was verified by TÜV
NORD CERT GmbH in accordance with
DIN EN ISO 14064-3:2020 regarding its
correctness and completeness for Spirax-
Sarco Engineering plc, providing limited
assurance as follows:
“Acting as an independent Certification
Body TÜV NORD CERT GmbH has verified
the carbon footprint, scope 1 and scope 2
(market-based) of the organisation for the
reporting period 01.01.2022 – 31.12.2022
(inclusive) to be 27,175 tonnes CO
2
e.
On the basis of the verification, there is no
evidence that the greenhouse gas statement
is not materially correct and is not a fair
Net zero carbon
zero
Illustrative Net Zero Roadmap
Sustainability Report continued
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202256

representation of greenhouse data and
information. Furthermore, no facts have
become known that lead to the assumption
that the greenhouse gas statement has not
been prepared in accordance with the ISO
14064-1 and the GHG Protocol standard.
TÜV NORD CERT GmbH, February 2023.”
In 2022, on a market-basis, absolute Group
CO
2
e emissions fell 30% to 27,175 tonnes,
compared to 2021 and were 41% lower than
2019. At 19.4 tonnes per million pounds of
sales volume to third parties, on an intensity
basis, our Group emissions fell by 34%
compared with the prior year and were 49%
lower than 2019. This has been facilitated
by the switch to green energy contracts at
key sites and also by the switch off of the
Combined Heat and Power plant (CHP) at
our manufacturing site in Cheltenham (UK),
which led to a scope 1 emission reduction of
around 2,000 tonnes CO
2
e.
On a market basis, the UK accounted for
21% of our GHG emissions in 2022, with
5,763 tonnes being generated in total and an
intensity of 16.2 tonnes per million pounds
of inflation adjusted UK sales at constant
currency. These emissions are comprised
of 5,697 tonnes of scope 1 and 66 tonnes
of scope 2 calculated using market-based
emission factors. Our emissions in the UK
decreased by 47% compared to 2021 due
to the reasons outlined above for the Group
as a whole.
Scope 3 emissions
In 2022, we increased our capability in-house
by employing a scope 3 carbon specialist
and, together with a third-party consultant,
we have been able to quantify our scope 3
value chain emissions at 27,300,000 tonnes
CO
2
e in 2021, which has become our scope
3 baseline year. This calculation relies heavily
on estimations and assumptions due to the
nature of scope 3 emissions and may be
revised in the future as more accurate data
becomes available. For more information
about the assumptions made during this
calculation see our Methodology Statement
on page 58.
Our calculations found that the majority
(over 98%) of our scope 3 emissions occur
during the in-use phase of our sold products,
with most of these coming from the Electric
Thermal Solutions (ETS) Business, from
products that are directly powered by
electricity. As renewable energy production
increases globally our scope 3 emissions
will decline. The greening of global electricity
generation will therefore be critical for us to
reach our 2050 scope 3 net zero target.
In December, we submitted our net zero
targets to the SBTi and are awaiting approval
of these targets.
Emission reduction initiatives
We completed a wide range of emission
reduction initiatives across the Group in
2022. For example, our Spirax Sarco site
in Blythewood (USA), relies on a natural
gas boiler system to supply steam to the
manufacturing floor for its operations.
Historically, the boiler system has operated at
full capacity during both work and non-work
hours, resulting in unnecessary natural gas
and water usage.
By ensuring that the boiler remains idle during
non-work hours, including weekends, we are
able to save an estimated 460 tonnes CO
2
e
and 1,500 m
3
of water per year.
Energy performance
In 2022, total Group energy use decreased
by 4% against 2021 to 156,697MWh, and
decreased by 10% on an intensity basis
to 111.9MWh per million pounds of sales
volume to third-parties (2021: 123.8). A large
decrease in absolute energy for the Group
is due to the switch off of the CHP at our
Cheltenham manufacturing site. This has
led to a decrease in stationary fuel use and
an increase in electricity at that site, but
increased efficiency has meant a significant
reduction in Group energy due to this
one site.
Energy use in the UK accounted for
33% of the Group’s total usage in 2022,
at 51,568MWh and decreased by 6%
compared with 2021. On an intensity basis,
UK energy use decreased 8% year-on-year,
39,893
38,319
2
022
2
021
20
20
36,60718,633 17,974
21,781 18 ,112
20,18 2
24,018
18,136
20,004
Scope 1 Scope 2
44,022
2019
Group GHG emissions (scope 1 and 2)
tonnes CO
2
e (location-based)
38,699
40,031
2
022
2
021
20
20
27,17518,633 8,542
21,781 16,918
20,18 2 19,849
24,018 22,215
Scope 1 Scope 2
46,233
2019
Group GHG emissions (scope 1 and 2)
tonnes CO
2
e (market-based)
10,7 91
11,338
2
022
2
021
20
20
5,7635,697 66
7,8 55 2,937
7,4 38 3,900
7,9 69 3,915
Scope 1 Scope 2
11,884
2019
UK GHG emissions (scope 1 and 2 )
tonnes CO
2
e (market-based)
19.4
29.3
3 4 .1
2
022
2
021
20
20
37. 9
2019
Group GHG intensity tonnes CO
2
e per
£m of sales volume to third-parties
(market-based)
16.2
31.1
39.5
2
022
2
021
20
20
39.4
2019
UK GHG intensity tonnes CO
2
e per £m of
inflation adjusted sales at constant currency
(market-based)*
Group GHG emissions (partial scope 3)
tonnes CO
2
e (well-to-tank and transmission
and distribution)
9,893
2021: 10,927
* From UK operations including inter-company sales, to reflect the fact that we manufacture in the UK for sale
overseas into global markets.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
57

to 145.3MWh per million pounds of inflation-
adjusted UK sales at constant currency,
including inter-company sales.
Energy management
An example of an energy management
project undertaken in 2022 is at our Steam
Specialties site in China. We have replaced
all sodium street lights on the site with
solar-powered LED alternatives, with an
investment of nearly £20,000. This has led to
a saving of more than 90% of energy used
for this lighting, an estimated saving of over
50,000kWh annually. Activities in 2022 built
on those reported in 2021 in the USA and
the UK.
Following the acquisition of Cotopaxi, a global
energy consulting and optimisation specialist
in 2022, we commenced a project in Q4
2022 to install digital metering and monitoring
across all of our Group manufacturing sites.
Once complete, this will provide sites and the
Group real-time data on electricity, gas and
water consumption so that we can better
understand where process efficiency can
be improved and also more quickly react to
potential anomalies.
Net zero carbon continued
zero
156,697
163,474
149,811
169, 407
2
022
2
021
20
20
2019
111.9
123.8
12 7.7
139.0
2
022
2
021
20
20
2019
Group energy consumption MWh
51,568
54,996
48,695
2
022
2
021
20
20
50,617
2019
UK energy consumption MWh
Group energy intensity MWh per £m of
sales volume to third-parties
145.3
158.7
169.5
16 7. 9
2022
2
021
20
20
2019
UK energy intensity MWh per £m of inflation
adjusted sales at constant currency*
* From UK operations including inter-company sales, to reflect the fact that we manufacture in the UK for sale
overseas into global markets
Methodology statement
We employ an ‘operational control’
definition to outline our carbon footprint
boundary. Included within that boundary
are manufacturing facilities, administrative
and sales offices where we have authority
to implement our operating policies. For all
entities we have measured and reported on
our relevant scope 1, scope 2 and partial
scope 3 emissions for 2022.
We have used the GHG Protocol Corporate
Accounting and Reporting Standard and
emission factors from the UK Government’s
GHG Conversion Factors for Company
Reporting 2019, 2020, 2021 and 2022 data
from the International Energy Agency 2019,
2020, 2021 and 2022, ISO 140064-1, and
regionally specific Environmental Reporting
Guidelines to calculate our total CO
2
e
emissions figures on a location-basis.
To report under the market-based method we
have used the GHG Protocol data hierarchy,
striving for the highest precision possible.
For sites with green energy contracts, we
have obtained emissions factors for the
relevant tariff and/or supplier in the first
instance, using the residual mix where
supplier-specific emissions factors (SSEFs)
are not available. For sites without green
energy contracts, we follow the data hierarchy
and apply location-based factors only where
SSEFs or residual mix are not available.
When entering new green contracts, we
apply SSEFs (where available) from the start
of the year and do not restate prior years with
SSEFs. No certified green energy contracts
are included in our market-based figures for
2019 or 2020.
For more information please see our
methodology statement on our website:
www.spiraxsarcoengineering.com/
sustainability/one-planet
Focus for 2023
• Cheltenham (UK) manufacturing
facility decarbonisation project to
complete by end of 2023
• Investment in solar projects as per
financial plan
• Energy reduction initiatives and
process improvements planned
• Metering rollout as part of
Cotopaxi partnership
Alignment with
UN SDGs
42%
25%
32%
Natural gas
Business travel in owned fleet
Electricity
Group energy source (scope 1 and 2)
2022 percentage
Other
1%
Sustainability Report continued
16%
5%
78%
Wind
Hydroelectric
Green Mix
Renewable electricity source
2022 percentage
Solar self-generation
1%
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202258

Task Force on Climate-related Financial Disclosures (TCFD)
In accordance with Listing Rule 9.8.6R(8) we confirm that the following table contains disclosures consistent with the Task Force
on Climate-related Financial Disclosures’ recommendations and recommended disclosures. Our approach is fully aligned with
seven of the 11 TCFD recommendations and partially aligned with four, which are:
Strategy b) describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning; and
c) describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios.
Although we completed high-level, qualitative scenario analysis in 2021 for the Group, as well as a deeper dive assessment of physical climate-related risks to our
Steam Specialties manufacturing sites in 2021 and 2022, we have identified scenario analysis as an area for further development. During 2023 we will undertake a
quantitative climate risk assessment (under different warming scenarios) for both physical and transitional risks. After completion of this work we will have a quantified
understanding of potential financial impacts on the Group, as well as by sector and geography.
Metrics and targets a) disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and
risk-management process; and b) disclose scope 1, scope 2, and, if appropriate, scope 3 greenhouse gas (GHG) emissions, and the related risks.
We have reviewed the suggested cross-industry metrics and disclosed GHG emissions (scope 1 and 2) and link to remuneration. The remaining metrics are either
not available or are deemed business-sensitive with the exception of internal carbon prices. Given the strong engagement with, and investments in, net zero initiatives
across the Group, an internal carbon price is not needed. Throughout 2022, we used a third-party carbon accounting specialist to help us establish our scope
3 emissions for a baseline year of 2021. The work was completed in December and full scope 3 emissions for 2021 are reported on page 57. Scope 3 is highly
complex and requires significant levels of estimations where data are not available. As we are still developing our data collection processes for scope 3, reliant on
external support, it was not possible to calculate full scope 3 emissions for 2022 ahead of the reporting deadline. We have disclosed a partial scope 3 figure
(category 3, B and C) for 2022, which can be found on page 57.
We will review our disclosures against the recommendations of TCFD on an annual basis, with the intention of further increasing alignment with these
recommendations in 2023, following completion of quantitative scenario analysis, with full alignment anticipated by 2024.
Governance
Describe the
Board’s oversight of
climate-related risks
and opportunities
The Board is directly responsible for climate-change risk matters and is responsible for the overall stewardship of strategic risk
management and internal control. The Audit Committee is also directly involved in the detailed review of risks, and reports back to
the Board on its findings. During 2022 the Audit Committee received two risk management updates from the Risk Management
Committee’s Chair, and also reviewed the Principal Risks, as well as climate change’s position on the Group Risk Register.
Our One Planet: Engineering with Purpose Sustainability Strategy is an important mechanism by which we seek to mitigate
climate-related risks and maximise climate-related opportunities. The Board received five updates from the Group Director of
Sustainability during 2022. This included updates on progress against metrics and targets and enabled the Board to be directly
involved in climate-change matters.
Supporting customers on their decarbonisation journey is an important element of both our Steam Specialties and Electric Thermal
Solutions business strategies. The Board also provides strategic oversight of these business strategies, ensuring that we are mitigating
any market-based risks that could arise as a result of climate change.
Where sustainability, including carbon reduction investments, is part of a large CapEx proposal, these investments are directly approved
by the Board.
Describe management’s
role in assessing and
managing climate related
risks and opportunities
The Risk Management Committee has responsibility for managing climate-related risks. Maurizio Preziosa, Managing Director, Steam
Specialties and Andy Robson, Group General Counsel and Company Secretary had specific delegated responsibility for overseeing
climate-related risks and mitigation activities in the first half of 2022. In May 2022, Sarah Peers, Group Director of Sustainability was
invited to join the Risk Management Committee and assumed this delegated responsibility. In October, she also joined the Group
Executive Committee to help to ensure that climate-related risks and opportunities are appropriately considered in management’s
day-to-day operational practices.
Under new responsibility within the Risk Management Committee and with the Group’s additional focus on Sustainability, the risk
was comprehensively reviewed and the Group Risk Register updated in 2022, resulting in the risk being further elevated in the Risk
Register following similar rises in the previous two years. The Group Risk Register adopted the language of TCFD, recognising that
climate change is not a singular risk, but a combination of physical and transitional risks that will emerge differently under different
warming scenarios.
The updated risk was extensively discussed at Risk Management Committee meetings, to ensure Committee alignment and
agreement on the definition and scope as well as the likelihood, impact, velocity and also the Group’s appetite for the risk.
During 2022, the Risk Management Committee reviewed the Group’s exposure to risk using a top-down approach, where the
Committee sought views of Group companies on risks that the Committee considered may affect their businesses and to ensure
that new or emerging risks were not missed. Following this process, the Committee reviewed and confirmed the robustness of the
countermeasures that Group companies have in place to mitigate the risks contained in the Group Risk Register.
During 2022, management of the Group’s climate change mitigation activities was overseen by the Board, the Group Executive
Committee and the Group Sustainability Management Committee (GSMC) utilising the management structure outlined on page 51.
The GSMC comprises the Group Director of Sustainability, the business Heads of Sustainability, Strategic Initiative and Strategic Project
leads and other relevant individuals. Governance structures for risk management can be found on page 94.
Management oversight of climate-related risks and opportunities is embedded within the One Planet: Engineering with Purpose
Sustainability Strategy and within our core business strategies. Through those strategies, the Group Executive Committee and Business
Executive Committees consider climate-related risks, opportunities, strategic implementation and progress against targets.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
59

Strategy
Describe the climate-
related risks and
opportunities the
organisation has
identified over the short,
medium and long-term
Acute physical risks
• Acute physical risks are event-driven and could arise in the short term (1-5 years) but could also materialise in the medium- (5-10
years) and long-term (10+ years)*. All businesses and many of the Group’s operating locations are exposed to a degree of risk
from extreme weather events, with no one geographical region at a materially higher risk than others within the Group’s operations.
The risk is believed to be low across most sites, based on the likelihood and impact of these risks. Examples of such risks at our
sites include river flood and flash flood.
• The velocity of extreme weather events is high, but the likelihood is deemed to be relatively low. Under higher warming scenarios, the
likelihood of an acute physical risk occurring may increase for some of our sites. The post-mitigation impacts are also deemed to be
relatively low.
• Some suppliers could be at risk from an extreme weather event, which has the potential to disrupt our supply chain.
• Acute physical risks are managed through our Principal Risks 4 (Loss of manufacturing output at any Group factory) and 6 (Loss
of a critical supplier). To mitigate risk, annual risk assessments are conducted by our insurance partner and we have appropriate
insurance cover. Business continuity planning and capacity planning is in place to ensure we have spare capacity at alternative sites
and stock is held locally in sales companies. For key commodities, where possible, we seek to maintain dual sourcing to negate the
risk from the loss of a critical supplier. For more information about the management of these Principal Risks, see pages 97 to 98.
Chronic physical risk
• Chronic risks arise from longer-term changes in climate pattern. A very small number of our sites have been identified as having a
potential risk from coastal flooding in the long term.
• Chronic physical risks are currently managed in a similar way to acute physical risks.
Market transition risks/opportunities
• Increasing availability of green energy could enable electric heating solutions to replace fossil-fuel derived steam generation where
carbon emission concerns override cost differences in the medium- to long-term (5 years+). This will provide opportunities across
all geographical regions and most customer sectors for our Electric Thermal Solutions and Steam Specialties Businesses as these
businesses combine to electrify the generation of steam.
• As market-leaders in the provision of thermal energy solutions, mitigating this risk and maximising the opportunity is deeply
embedded in the core business strategies of both our Steam Specialties and Electric Thermal Solutions Businesses. This risk is
mitigated through Principal Risk 8 (Inability to identify and respond to changes in customer needs). Mitigation includes regular voice
of customer research and Research & Development / New Product Innovation, to lead the way in providing innovative solutions to
customers. For more information about the management of this Principal Risk, see page 99.
Technology transition risks/opportunities
• New low carbon technologies and energy mix for steam generation could impact the purchasing decisions of steam users who
have previously raised steam using fossil-fuel fired boilers. However, this is largely deemed an opportunity for the Group as we are
developing first-to-world technologies and innovative decarbonisation solutions.
• This risk is mitigated through Principal Risk 8 (Inability to identify and respond to changes in customer needs) and offering
increasingly innovative decarbonisation and sustainable solutions to our customer, such as the new TargetZero range of products
including SteamBattery, Electrofit and SteamVolt, which were released in 2022. More information can be found on page 80.
Reputation transition risks
• Risk of reputational loss of Spirax-Sarco Engineering as a top performing, environmentally sustainable business due to association
with fossil-fuel reliant systems over the medium- to long-term (5 years+).
• This very low risk is mitigated by our strong reputation, innovative product developments, introduction of our Natural Technology
marketing strategy that correctly positions steam as a sustainable technology and our own leading net zero commitments and
progress against them.
Policy and legal transition risks
• Potential financial risk from carbon taxation, the low-carbon vehicle transition and low-carbon building efficiency requirements, over
the medium- to long-term (5 years+)
• This risk is mitigated through our One Planet Strategy, which includes net zero targets, energy reduction commitments, major
decarbonisation projects and conversion to an electric vehicle fleet.
Describe the impact of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy and
financial planning
Growing awareness of climate change and customer sustainability targets will continue to provide an impetus for business growth
as we provide products, services and solutions that increase efficiency and reduce customers’ energy use and carbon emissions.
To mitigate the risks outlined above, our One Planet Sustainability Strategy informs our business strategies and provides focus to
advance the development of products and services that help our customers to achieve their carbon reduction targets, with a focus
on voice of customer and understanding customer needs. This, in turn, helps us to manage reputational risk by ensuring we’re driving
down our own emissions, in line with our commitments to the Science-Based Targets initiative (SBTi) and the UN Global Compact.
Each of our three businesses incorporates sustainability in their business strategies, Customer first
2
, Engineering Premium Solutions
and Strategy25. This has resulted in the TargetZero synergy projects between Steam Specialties and Electric Thermal Solutions.
As part of our financial planning process, we have an annual financial plan for sustainability. When considering sustainability
investments, we prioritise initiatives that deliver the best value of £/t CO
2
e saved. In 2022, we developed and commenced
implementation of net zero roadmaps across our manufacturing sites.
In December 2022, we formally submitted our net zero targets for scopes 1 and 2 by 2030 and scope 3 by 2050 to the SBTi for
approval. More information about our net zero roadmap can be found on page 56.
Task Force on Climate-related Financial Disclosures (TCFD)
continued
* 1-5 years aligns with the Group’s assessment of Going Concern and Viability, as well as strategic planning. 5-10 years aligns with our 2030 net zero commitments.
10+ allows for a longer-term view and the emergence of different warming scenarios.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202260

Describe the resilience
of the organisation’s
strategy, taking into
consideration different
climate-related scenarios,
including a 2°C or
lower scenario
With customers in almost all industries worldwide and across 165 countries, steam remains the world’s most efficient heat transfer
medium for a wide range of applications, with multiple onsite uses from the production of foods, beverages and medicines, to the
generation of power. Our steam solutions are complemented by our Electric Thermal Solutions product and service offering. We thus
have a highly resilient business that will remain relevant across different climate-related scenarios.
High-level Group-wide scenario analysis was completed in 2021, including a 2°C or lower scenario and a 4°C scenario, and a
third-party climate risk resilience assessment was completed for Steam Specialties manufacturing sites in 2021. Building on that risk
assessment, during 2022 two Spirax Sarco manufacturing sites underwent a more detailed physical risk assessment on-site.
During 2022, we undertook a tender process to identify a third-party to support quantitative climate risk analysis (under different
warming scenarios) for both physical and transitional risks. This will enable us to determine which risks and opportunities could have a
material financial impact on the organisation. A partner was selected and a schedule of work agreed, to be undertaken in 2023.
As part of our annual viability assessment, we undertake scenario risk modelling focussing on stress testing the Income Statement and
Cashflow projections to determine the resulting impact on the Group’s debt covenants and liquidity headroom, to ascertain the potential
revenue or adjusted operating profit impacts that could arise from a single, or combination of, the Group’s Principal Risks. The key risks
associated with climate change are likely to manifest through three of our Principal Risks (Risks 4, 6 and 8). Modelling completed as
part of our viability assessment suggests that our Principal Risks do not pose a significant threat to the viability of our Group, therefore
management believes that this also applies to climate risk. For more information see pages 133 and 142
Risk management
Describe the
organisation’s processes
for identifying and
assessing climate-
related risks.
The Risk Management Committee holds annual top-down or bottom-up reviews, that provide information and evaluations that
the Committee uses alongside our risk impact, likelihood, appetite and velocity ratings to create an effective system for assessing
materiality, monitoring, planning and developing our Group-wide approach and culture regarding risk.
The Risk Management Committee performs a scoring exercise each year against all our documented risks, assessing impact,
likelihood, control, velocity and appetite for each risk. Each member of the Committee scores each risk and the scores are reviewed,
discussed and assessed compared to the other risks. This process is used to assign the Principal Risks and position of each risk on
the Register. Existing and emerging regulatory requirements related to climate change are considered as part of this review.
Risk velocity was deliberated and approved as a further measure in our Group’s risk management framework in 2022. Risk velocity
ratings were assigned and validated for all Principal Risks, as set out on pages 95 to 99, and other risks on the Risk Register, including
climate change.
Describe the
organisation’s processes
for managing climate-
related risks.
Climate change-related risks are currently deemed to be low for the Group (based on assessment of likelihood, velocity, impact and
control) and climate change is not identified as a Principal Risk on the Group’s Risk Register. However, a number of the key risks
associated with climate change, such as physical risks – notably the impact of a climate-related event on our direct operations,
specifically the loss of a manufacturing site, or on a critical supplier – and transition risks – such as failure to meet changing market
needs, are already managed through other Principal Risks on the Group Risk Register. Thus, we believe that our risk management
processes are adequate and appropriate for the level of risk as applicable to our Group.
For more information about how we manage risk, see the Risk Management Committee report on pages 139 to 142.
Describe how processes
for identifying, assessing,
and managing climate-
related risks are
integrated into the
organisation’s overall
risk management
In 2022, a top-down risk review was undertaken, the Committee received high quality input from its Group operating companies and
determined that they have sufficiently robust measures in place to effectively mitigate the Group’s Principal Risks (and the associated
climate-related risks). The top-down risk review informed the annual review, validation and update of the Group Risk Register. For more
information please see page 93.
Climate change is a risk factor that influences other risks, so control of climate risk is embedded in and managed through other
Principal Risks, particularly Risk 4 (Loss of manufacturing output at any Group facility), Risk 6 (Loss of a critical supplier) and Risk 8
(Inability to identify and respond to changes in customer needs).
Climate change has risen in position in the Risk Register over the last few years to position 9 following similar rises in the previous two
years. It is considered a serious, emerging risk though not currently one of the Group’s Principal Risks.
Metrics and targets
Disclose the metrics used
by the organisation to
assess climate-related
risks and opportunities in
line with its strategy and
risk management process
See the following pages for absolute and intensity metrics related to:
• Greenhouse gas emissions – 57
• Energy use – 58
• Waste and water – 63 to 64
• Customer environmental benefits – 65
In 2022, Group greenhouse gas emissions (scope 1 and 2) were established as a Group Key Performance Indicator (KPI) to measure
successful progress against our strategy. See page 35 for more information on our KPIs.
In addition, internally we monitor a number of opportunity metrics, for example the customer decarbonisation opportunities’ pipeline in
the Electric Thermal Solutions Business and metrics related to the launch of our TargetZero products.
Disclose Scope 1, Scope
2, and, if appropriate,
Scope 3 greenhouse gas
(GHG) emissions, and the
related risks
Scope 1, Scope 2 and Scope 3 disclosures can be found on pages 56 to 57.
During 2022, we used a third-party to help us quantify a full scope 3 baseline figure for 2021. This figure was calculated using
acceptable scope 3 methodologies, but is heavily reliant on estimates and may be changed in the future as data availability and
accuracy improves.
For more information about the methodology we use to calculate our scopes 1, 2 and 3 emissions and customer savings metrics,
seepage 58 and a more detailed methodology statement on our website: www.spiraxsarcoengineering.com/sustainability/one-planet.
Describe the targets used
by the organisation to
manage climate-related
risks and opportunities
and performance
against targets
See the following pages for targets related to:
• Net zero carbon and energy use – 56
• Biodiversity net gain – 62
• Environmental improvements in our own operations – 63
• Sustainable products – 65
• Sustainable supply chain – 66
Reflecting the central importance of the Group-wide One Planet Sustainability Strategy to all of our forward-looking plans, the measures
for the 2022 Performance Share Plan (PSP) changed to include a sustainability measure accounting for 20% of the PSP opportunity,
dependent on reduction of greenhouse gas emissions (scope 1 and 2) over three-year periods. For more detail see page 147.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
61

Sustainability Report continued
The global decline of biodiversity is something
which will affect all of us. Biodiversity is
essential to support all life on our planet,
which depends on a network of complex
interactions between plants, animals and
micro-organisms to properly function.
When we developed One Planet, we
recognised that we have a responsibility to
address this decline and use the strategy as
an opportunity to engage our colleagues and
our communities in this important objective.
Key strategic targets
• Deliver a biodiversity offset equivalent to
five times our global operational footprint
by 2025
• Deliver biodiversity net gain* of +10% for all
new manufacturing sites and facilities
• Deliver at least one biodiversity initiative per
operating company, on site or in the local
community by 2025
Progress
In 2022, we continued our partnership
with the World Land Trust that we began in
2021. We completed our second phase of
investment, funding the protection of an extra
567 acres of land on the Somuncurá plateau
in Argentinian Patagonia, equivalent to our
operating footprint including the footprint of
our new acquisitions, Cotopaxi, Vulcanic and
Durex Industries.
We also increased our focus on our
own operations, with the launch of our
new in-house Biodiversity Portal, which
enables us to track biodiversity initiatives
implemented by our operating companies.
By the end of the year, 97 initiatives had
been completed on our sites, with 47% of
operating companies delivering at least one
biodiversity improvement on site or in the
local community since the strategy launch
in 2021.
During 2022 we partnered with a third-party
ecologist to assess progress against our 10%
biodiversity net gain target for our two new
sites BioPure (UK) and Thermocoax (France).
A wide range of biodiversity enhancement
initiatives have been implemented at these
sites, however, we haven’t yet reached
our 10% net gain target, so work will
Biodiversity net gain
Alignment with
UN SDGs
Biodiversity initiative
At Watson-Marlow in Ireland, we
are supporting the planting of native
forests in the southwest of the country.
In partnership with Veon Ltd and also
partially funded by the Department of
Agriculture, this project will create a
long-term biodiverse habitat replacing
ash woodlands that succumbed to
ash dieback. The native trees, such as
oak, birch, rowan and alder will create
biodiverse habitats for native Irish
species such as red squirrels, stoats and
endangered bird species. The first phase
of the project will plant 15,000 trees
and 2,500 tonnes of CO
2
are predicted
to be sequestered by the forest over
its lifetime.
continue in 2023 to ensure the delivery
of 10% biodiversity net gain before 2025.
We recognise that biodiversity impact doesn’t
only apply to our direct operations, so in
2022 we completed high-level hot spot
analysis of biodiversity impacts in our supply
chain and intend to build on this information
in 2023 to increase our understanding of
supply chain impacts and to inform future
strategic planning.
Focus for 2023
• Make progress against our
10% biodiversity net gain
target for recently completed
and new or ongoing major site
development projects
• Embed biodiversity questions into
our assessment of suppliers via the
Supplier Sustainability Portal
• Continue to strengthen our
partnership with the World
Land Trust
* Quantification of net gain will be focused on large
development projects, where locally-specific net gain
methodologies will be applied, similar in approach to
the UK’s DEFRA methodology
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202262

Environmental improvements
The way we manage resources in our own
operations is one of the most direct ways
through which we can lessen our impact
on the environment. By ensuring that we
are operating efficiently we can preserve
resources, reduce our carbon footprint and
minimise pollution of the natural world.
Our focus on water efficiency, waste
reduction and elimination of solvent-based
paints ensures that we are controlling how
we use resources and dispose of waste
responsibly to protect the environments
where we live and work.
Key strategic targets
• Reduce water consumption by 15%
(compared to 2019)
• Achieve zero waste to landfill
• Reduce waste generated by our sites by
10% (compared to 2019)
• Eliminate solvent-based paint (unless
mandated by customer requirements and
with Executive Committee approval)
• All manufacturing sites certified to ISO
14001 standard or equivalent
Progress
In 2022, we focused on accurately assessing
current performance and identifying future
actions to enable us to meet our 2025
targets. Waste and water actions plans have
been rolled out across our sites globally, with
113 of 131 operating companies, excluding
2022 acquisitions, having initiated reduction
plans in 2022. To effectively reduce water
use, we must first be able to accurately
monitor where it’s being used. We have
improved monitoring, with five smart water
meters installed in 2022 in sites where we
previously had no access to data.
Of our 30 manufacturing sites, excluding
recent acquisitions in Cotopaxi, Vulcanic and
Durex Industries, 21 are currently certified
to ISO 14001. In 2022, we developed
implementation plans for those locations still
requiring certification and are confident in our
ability to gain this at these sites by the end
of 2025. None of the 11 new manufacturing
sites acquired at the end of 2022 currently
have ISO 14001. Achieving certification at
these sites will also become a priority from
2023 onwards, but may not be completed
by 2025.
Water
The water usage was verified by TÜV NORD
CERT GmbH in accordance with International
Standard on Assurance Engagements 3000
– ‘Assurance engagements other than Audits
or Review of Historical Financial Information’
(ISAE 3000), regarding its correctness
and completeness for Spirax-Sarco
Engineering plc.
“Acting as an independent Certification
Body TÜV NORD CERT GmbH has verified
the water usage of the organisation, for the
reporting period 01.01.2022 – 31.12.2022
(inclusive) to be 203,796,350 litres.
Based on the reasonable assurance
procedures we have performed and the
evidence we have obtained, the selected
water consumption for the year ended 31st
December 2022, is materially correct and a
fair representation of the Selected Information
for the reporting period.
TÜV NORD CERT GmbH, February 2023.”
In 2022, disappointingly, we saw a material
increase in water consumption compared to
2021 of 21% to 203,796m
3
. Five principal
causes have been attributed to the increase
in water use in 2022: business growth;
signification water leaks at a small number
of sites; the setting up of new manufacturing
sites (BioPure, UK and Thermocoax, France)
which required additional water use for
cleaning and other start-up processes; the
construction of our new global headquarters
in Cheltenham, which required the use of
water to damp down dust during demolition;
and increased occupancy at our office
buildings due to the post-COVID-19 return to
the workplace. The largest increase occurred
at our Cheltenham (UK) manufacturing
site where we saw an increase of 30% in
2022 compared to 2021, due largely to an
underground mains water leak.
This has reaffirmed our need for access to
accurate, real-time usage data. We have
committed to an investment working with
Cotopaxi to install digital metering and
monitoring at all of our Group manufacturing
sites by the end of 2023.
Against our 2019 baseline, absolute water
use increased by 12%. On an intensity basis,
water use increased by 14% compared with
2021, with an overall reduction in intensity of
3% compared to our 2019 baseline.
Waste
Our global operations generated 6,513
tonnes of waste in 2022, which is an
increase of 4% from the previous year. On an
intensity basis, we saw a 2% decrease in
waste generated at 4.7 tonnes per million
pounds of sales volumes to third-parties.
While initiatives to reduce waste production
are being implemented, these take some
time to show a positive effect in the volumes
produced and currently waste increase as a
result of production growth is outpacing these
initiatives to reduce waste. Waste reduction
will continue to be a focus in 2023. We have
continued to increase the proportion of waste
that is diverted from landfill globally, with 90%
of our waste recovered, recycled or used to
generate electricity in 2022 (2021: 88%).
We initiated a review of our global waste
collection providers which has been
completed in the UK. Over time, we aim to
ensure that our waste vendors are better able
to provide accurate and timely data.
Solvent-based paint
Working with an external consultant, we
have developed an internal tracking method
to measure progress and VOC emissions
associated with the painting process.
From this project we have been able to
determine that 24 of our sites are currently
using some solvent-based paint.
We have established a cross-business
working group to share best practice and
progress, and disseminate information about
paints across the Group. During 2022, the
group focussed on identifying aqueous-
based paints available as an alternative.
Each business has formed a dedicated team
to manage transition at their locations.
Pilot transition projects in Watson-Marlow
Bredel (Netherlands) and Spirax Sarco’s
Cheltenham (UK) site have helped us
to understand the steps needed to
transition to aqueous-based paint options.
Representatives from these sites are part of
our central working group.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
63

Environmental improvements continued
Focus for 2023
• Roll out digital posters for waste
and water reduction activities to
be displayed at our manufacturing
facilities to raise awareness
• Roll out automated water meters at
all manufacturing sites in partnership
with Cotopaxi
• Focus on internal education and
awareness of colleagues on actions
and initiatives to drive engagement
Alignment with
UN SDGs
Water reduction initiative
At our Chromolox site in Ogden,
Utah (USA), we have taken actions
to improve the efficiency of our hydro
testing processes. This test involves
filling a pressure vessel with water and
pressurising it to check for leaks, which
is water intensive.
Improvements implemented in this
process have helped to contribute to
a 7% reduction in water use at this
site compared to 2021. We are now
hoping to repeat this success across
other manufacturing sites.
4.7
4.7
5.0
2
022
2
021
20
20
4.9
2019
Waste intensity tonnes of waste per £m of
sales volume to third-parties
10
12
17
2022
2
021
20
20
22
2019
Waste to landfill %
6,513
6 ,248
5,831
2
022
2
021
20
20
6,014
2019
Total waste generation tonnes
145.6
12 7. 8
13 9.1
2
022
2
021
20
20
149.9
2019
Water intensity m
3
of water per £m of sales
volume to third-parties
203,796
168,742
18 2,746
163,280
2
022
2
021
20
20
2019
Total water use m
3
Sustainability Report continued
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202264

Customer environment benefits
Annual estimated customer CO
2
, energy and water savings from
a select range of 20 product categories sold in 2022
17.7m
tonnes of CO
2
per year
235m
GJ per year
of energy
88.4m
m
3
per year
ofwater
To put these savings into context, that is the equivalentof:
804m
mature trees
absorbingCO
2
3.00m
people’s annual
averageenergy
consumption
(UK)
35,000
Olympic-sized
swimming
pools of water
Sustainable products
Alignment with
UN SDGs
To keep global temperature-rise to a level
of 1.5°C or below, businesses must work
together to lower carbon emissions in their
own operations and wider value chain.
The most important way we engineer
our difference for our customers and the
environment is through the products and
solutions we provide that help our customers
to increase the efficiency of their operations.
Sustainability for our customers has always
been central to our Company Purpose, as we
work to engineer a more efficient, safer and
sustainable world.
Many of the products and services we
offer help our customers to manage their
sustainability impacts and lower their energy
and carbon use. However, as recognised in
our scope 3 quantification project, as many of
our Electric Thermal Solutions (ETS) Business
products consume energy, use-phase
emissions related to these products is the
highest contributor to our scope 3 emissions.
These emissions are derived from electricity
use and will decrease over time as electricity
grids become more green globally as the
world transitions towards renewables.
We will continue to innovate in our product
design and increase sales of products
that have the greatest quantifiable
sustainability benefits.
Key strategic targets
• Quantify the whole life cycle carbon
footprint and sustainability benefits of
selected existing and new products
• Grow sales of products with quantifiable
sustainability benefits to customers
• Eliminate all virgin, non-recyclable
or non-biodegradable packaging by
2025 at the latest, unless specified by
customer requirement
Progress
Within the Steam Specialties Business,
we are particularly focussed on improving
efficiency and reducing energy use for
our customers. We have been reporting
quantified sustainability benefits from a
small range of product categories in Steam
Specialties for a number of years, using a
methodology established in a partnership
with Ricardo Energy & Environment. In 2022,
we expanded this methodology to include
boiler-level controls and heat exchangers
and, for the first time, added products from
Watson-Marlow and ETS. In Watson-Marlow,
wehave developed the methodology to
quantify the benefits for Certa Pumps and
in ETS for our new TargetZero products
SteamVolt, ElectroFit and SteamBattery.
While sales of these new product ranges,
and therefore measured impacts for
our customers, are currently small they
offer a significant potential for customer
environmental benefits as they become
more established.
While these innovative new products will
help decarbonise steam generation, energy
efficiency and improvements to customer
operating efficiency have been at the core of
our offering to customers for over a century
and will continue to be so. Our ability to walk
our customers’ plants, identify efficiency
opportunities and provide products or
engineered solutions to improve operating
efficiency and hence sustainability, remains at
the core of what we do.
In 2022, we built on the screening exercise
completed in 2021 to develop a life cycle
assessment (LCA) model with a third-party
specialist for our Steam Specialties and
ETS Businesses, with initial LCAs being
conducted in these businesses. In our
Watson-Marlow business we recruited an
LCA specialist and purchased LCA software
to complete these analyses in house.
In 2022, two LCAs were completed in
Watson-Marlow and we expect this number
to increase in 2023.
As part of our new product development
(NPD), we have trialled a Group-wide eco-
design template and started to tailor this for
the NPD processes in the three Businesses,
using existing frameworks and best practice
to share learnings across the Group. We have
also established a Group-wide working
group for sustainable packaging, with
representatives from each Business, utilising
expertise from our 2021 pilot project in our
Cheltenham (UK) manufacturing site.
Focus for 2023
• Continued expansion of our
customer environmental
benefits model
• Further embed LCA methodology
with two LCAs targeted in
each business
• Continue to embed eco-design
methodology into product design
and development processes,
utilising LCA results
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
65

Sustainability Report continued
Sustainable supply chain
In our supply chains, we have a responsibility
to develop and educate our suppliers on
sustainability and to build mutually-beneficial,
long-term partnerships. As we continue
to progress in our ambition of becoming
a leader in industrial sustainability, we
aim to work with our suppliers to further
raise standards.
We require our suppliers to meet these
standards including committing to operate in
accordance with law, conduct business in a
way that is fair and adheres to human rights
principles and encourage them to take steps
to mitigate their environmental impact.
Key strategic target
• 80% of strategic and high-risk suppliers
assessed and meeting or exceeding
updated sustainability standards by 2025
Progress
In June 2022, we launched our new third-
party Supply Chain Sustainability Portal
(Portal), with an initial phase one rollout to 512
suppliers. The Portal will form the foundation
of our supplier sustainability monitoring
processes and, once fully deployed, will
contain our high-risk and strategic suppliers
and allow us to monitor their compliance with
our Supplier Sustainability Code (Code) and
our sustainability standards more broadly.
The Portal allows us to have greater
transparency and evidence for sustainability
standard compliance and a closer working
relationship with these suppliers. It also
affords us improved understanding of risk,
improved visibility across the business and
provides a basis to have focussed continuous
improvement actions with our suppliers.
We will use the Portal to identify areas where
the supply chain is performing well and also
highlight opportunities for development.
While still in an early phase of deployment, we
have already seen responses from 20% of
suppliers in the Portal on ESG topics.
The Portal allows for indirect monitoring of a
wider number of our suppliers (currently over
1,200) and alerts us to potential breaches
which we can then investigate. In 2022,
issues of relevance that were identified
included H&S concerns and environmental
incidents. None of the potential breaches
were deemed to be of material concern,
but they have been identified as a risk with
those suppliers and we will look for repeat
incidences which could demonstrate a
pattern of poor standards and trigger
further action.
This year we have updated and relaunched
our Code, to reflect a further increase in
expected standards. The new Code for direct
suppliers was translated into 17 languages
and communicated to procurement
colleagues working at our manufacturing
sites in each business. Suppliers using our
Portal will be able to sign the Code in the
Portal and provide evidence of the ways in
which they are meeting our requirements.
Suppliers outside of the Portal will be tracked
through an in-house app which has been
developed to improve oversight and reporting
and to allow us to track Code signatures.
Due to the introduction of these new
systems, the number of suppliers that have
signed our Code utilising the new processes
was 30% at the end of the year (96% in
2021) as we work to transition our suppliers
to this new way of working.
Our Portal also allows our colleagues and
suppliers to access a library of training
courses. This third-party content is
available free-of-charge on a wide range of
sustainability topics for suppliers to upskill
their teams and use the knowledge to help
improve their sustainability performance.
Occasionally, it is necessary that we cease
working with suppliers if they are unwilling to
sign the Code, or if their standards fall short
of those required and they are unwilling or
unable to improve. In 2022, we exited seven
suppliers under these conditions.
Focus for 2023
• Incorporate the next phase
of suppliers into our Supplier
Sustainability Portal rollout
• Work with suppliers to improve
response rates and begin to
assess results
• Develop biodiversity, community
engagement, diversity and inclusion
modules for the Portal
Alignment with
UN SDGs
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202266

Supporting our communities
As a Group, we have committed to increasing
the wellbeing of people in our communities,
while addressing global sustainability
challenges such as poverty, hunger, access
to education, inequality, climate change and
biodiversity loss.
In the 67 countries in which we operate
globally, we want to make life better
for the people in our communities.
Through charitable donations and colleague
volunteering we are able to share our
resources and expertise to meet local needs,
improve access to education and support
longer-term economic wellbeing so that
our communities will be stronger and more
resilient now and in the future.
Key strategic targets
• Deliver 150,000+ hours (cumulative) of
colleague volunteering globally by 2025
• £2 million of cash or in-kind donations
(cumulative) made by our Group
Companies by 2025
• Establish a Group Education Fund and
donate at least £5 million by 2030
Progress
Group Education Fund
Having established the Spirax-Sarco
Engineering Group Education Fund in late
2021 and funded it with a £1 million donation,
in 2022 we began accepting applications and
making donations. Operating companies are
able to identify local education needs and
apply to the Group Education Fund for grants
to support projects addressing these needs.
The applications are reviewed by the Group
Education Fund’s trustees and the grants and
projects are then administered locally by our
operating companies.
In this first year of donations, we successfully
funded 51 projects from 43 operating
companies totalling over £1 million.
Examples of the projects include supporting
activities and programmes for disadvantaged
Focus for 2023
• Further increase volunteering hours
and colleague participation
• Donate an additional £1 million
through the Group Education
Fund and continue to support
additional projects
• Track impacts of Group Education
Fund projects supported in 2022
Alignment with
UN SDGs
Ukraine
As a response to the conflict, Ukraine
was a point of focus for charitable
giving in 2022. After an initial donation
of £100,000 from the Group Charitable
Fund, we launched a colleague
matched-giving appeal. As well
as making direct cash donations,
colleagues engaged in local collections
for essential supplies and donated
time to sort, pack and distribute these
supplies. The total value of cash and
in-kind donations raised locally by
colleagues amounted to over £90,000
which we then matched, making
the full amount donated through the
matched giving appeal £183,815
and a total donation to the people of
Ukraine of £283,815.
young people from favelas in Brazil, providing
funding for a five-month training course for
neurodiverse students to prepare them to
enter the labour market in Italy, and funding
interior contents and finishing for a new
school for children from rural farming families
in the Philippines. Read about how we
engineered our difference in our communities
in our case studies on pages 68 to 71.
Group charitable donations
Including the donations to the Ukraine Appeal
during 2022, the Group Charitable Fund
donated £572,000 to charitable causes,
an increase of 66% from 2021. Some of
these donations include: £13,000 to the
Kaleidoscope Trust to advance rights for
LGBTQ+ people across the Commonwealth;
£10,000 to Young Enterprise to equip
young people with skills, knowledge and
confidence to succeed in the world of work;
and £15,000 to Cheltenham Open Door in
the UK to provide food, shelter and essential
services to people living in poverty and
experiencing homelessness.
Operating company charitable
donations and volunteering
In 2022, we developed and launched a new
internal reporting platform to more accurately
capture and record volunteering activities
and cash and in-kind donations from our
operating companies.
Colleague volunteering hours doubled in
2022 compared to 2021, totalling 22,000+
hours of company time spent volunteering.
Our operating companies donated £349,600
to charitable causes, in cash or in-kind (non-
cash) donations during 2022.
572.0
3 4 5 .1
265.8
280.3
263.0
2
022
2
021
20
20
2
019
2
018
Group Charitable Fund donations
£’000
22,140
11, 0 57
3,154
5,311
4,856
2
022
2
021
20
20
2
019
2
018
Volunteering hours
349.6
335.6
19 7.7
188.5
225.8
2
022
2
021
20
20
2
019
2
018
Operating Company cash/in-kind
donations £’000
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
67

6868
We give our support…
Spirax-Sarco Engineering plc Annual Report 2022
Strategic Report
Engineering our difference in local communities

•
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
69
…where it is needed the most.
Giving Today for a
BetterTomorrow
Around the world, there are people
living in poverty, people who
are hungry, who lack access to
education or suffer from inequality.
People and nature are being
impacted by climate change and
biodiversity loss.
Our Group is united behind
our Giving Today for a Better
Tomorrow community engagement
programme. Whether through the
work of our colleagues using their
paid volunteering days, locally
funded community initiatives or
by nominating projects to benefit
from our Group Education Fund,
we are addressing local needs
today, so that our communities
will be stronger and more
resilient tomorrow.
During 2022, our efforts helped
underprivileged and disadvantaged
young people, older people and
people living with a disability.
We helped the people of Ukraine
through cash and in-kind donations
and we initiated projects to improve
biodiversity and the environment.
51
projects were successfully
nominated by our colleagues
with over £1 million donated
from our Group Education
Fund in 2022.
Group Education Fund
Our Group Education Fund was
established at the end of 2021
to improve access to education,
tackle poverty through education,
remove barriers and inequality, and
improve diversity in engineering. In
its first year the Fund donated over
£1million to 51 projects identified
by colleagues and managed by our
local operating companies around
the world. Read on to find out about
some of the projects that have
benefited so far.

Our Group Education Fund:
Engineering our difference in local communities continued
Many children in East Africa must walk long distances
to school and when they arrive they are often tired
and hungry.
To tackle this challenge and to help children get the best
out of their time at school, our team in Spirax Sarco East
Africa applied to the Group Education Fund and received
over £7,000 per year for three years to help local children
in Nairobi living in extreme poverty. The funding created
‘the porridge programme’ which means 110 children will
benefit from a hot breakfast every day for the next three
years. For some children this will be the only meal they
have in a day.
Serves up a hot meal
before lessons.
Our team from Spirax Sarco Egypt successfully secured
a £50,000 donation from the Group Education Fund
to build a new community school in Fayoum, helping
improve access to education for children living in
rural areas.
Working in partnership with the Man Ahyah organisation
the donation will improve access to education for local
children that drop out of school due to difficulties of
getting to school because of the distance they have
to travel.
Brings schools closer
to communities.
“ I feel proud to work for an organisation
that provides me with the opportunity
to give back to my community and
local environment. It keeps me motivated
and warms my heart.”
Rana Mohamed
Operation Leader for Spirax Sarco, Egypt
“ Through our programme we want to restore
hope and dignity.”
James Mburu
General Manager, Spirax Sarco, Kenya
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202270

Inspires the next generation. Removes barriers to education.
Our Watson-Marlow Business is partnering with
TECwomen, an organisation working to ignite a passion
for Technology, Engineering and Creativity in girls and
women, to deliver an annual programme of education
events in Cornwall, UK. Events have included school
workshops and the successful launch of a DigitalUPLIFT
training course for a cohort of 35 women, helping them
to access career opportunities in Science, Technology,
Engineering and Maths (STEM).
After the ‘Take Up Space’ event that involved game
design, coding, and stop-motion animation, 53% of
attendees said they were now more interested in a
career in space or engineering.
Practical support for schools and colleges can make
a real difference to the quality of education that
pupils receive.
Recognising this, our Thermocoax team in France
applied to our Group Education Fund for a grant to
support an exchange project at the National Graduate
School of Engineering of Caen and Research Center
(ENSICAEN). Complementing what was already being
done by the college to improve access to education,
the project connected high school students from rural
communities with students attending ENSICAEN.
The grant funded the purchase of portable scientific kits
and equipment used to help the engineering students
demonstrate their science-related projects to the high
school pupils. Through the project students living
outside the city are given an opportunity to learn more
about science, with the aim of encouraging them to
embark on a career in engineering.
“ The programme will help inspire more girls
and women in Cornwall (UK), to embark
on careers in technology and engineering,
by improving access to education in
these fields.”
Lauren Gill
Global PR Manager, Watson-Marlow, UK
“ We wanted to give students living far from
the cities more opportunities to embark on
a career in engineering.”
Nadine Lauret
Marketing & Digital
Communication Manager,
Thermocoax, France
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
71

This Annual Report and in particular the Sustainability Report, contains the information required to comply with the Companies, Partnerships and
Groups (and Non-Financial Reporting) Regulations 2016, as contained in sections 414CA and 414CB of the Companies Act 2006. The table
below provides key references to information that, in conjunction with the Sustainability Report, comprises the Non-Financial Information
Statement for 2022.*
Reporting requirement Group Policies that guide our approach Information and risk management, with page references
Environmental matters • Group Environmental, Health, Safety,
Energy and Sustainability Policy
• Group Management Code
• Supplier Sustainability Code
Sustainability Report, pages 46 to 47 and 56 to 66
Principal Risks, pages 95 to 99
Our business model, pages 22 to 23
Section 172 Statement, pages 11 and 111 to 113
Company Purpose, inside front cover and page 102
Employees • Group Diversity and Inclusion Policy
• Group Management Code
• Group Human Rights Policy
• Group Environmental, Health, Safety,
Energy and Sustainability Policy
Sustainability Report, pages 48 to 56
Our business model, pages 22 to 23
Colleague Engagement Committee Report,
pages 114 to 117
Section 172 Statement, pages 11 and 111 to 113
Company Purpose, inside front cover and page 102
Social matters • Group Human Rights Policy
• Group Charitable Donations Policy
• Group Employee Volunteering Policy
• Supplier Sustainability Code
Sustainability Report, page 67 to 71
Our business model, pages 22 to 23
Section 172 Statement, pages 11 and 111 to 113
Company Purpose, inside front cover and page 102
Respect for
human rights
• Group Human Rights Policy
• Modern Slavery Statement
• Supplier Sustainability Code
Sustainability Report, page 66
Principal Risks, page 99
Risk Management Committee Report, page 140
Anti-corruption and
anti-bribery matters
• Group Anti-Bribery and Corruption Policy
• Group Gifts, Entertainment and Hospitality Policy
• Group Competition Law Compliance Policy
• Group Whistle-Blowing Policy
• Supplier Sustainability Code
Sustainability Report, page 51
Principal Risks, page 99
Risk Management Committee Report, page 140
Description of the business model Our business model, pages 22 to 23
Description of the Principal Risks in relation to the above matters, including
business relationships, products and services likely to affect those areas ofrisk,
and how the Company manages the risks
Risk management, pages 95 to 99
Risk Management Committee Report, pages 139 to 142
TCFD disclosures, pages 59 to 61
Non-financial key performance indicators Sustainability Report, pages 48, 50, 56 to 58 and
62 to 67
Key performance indicators, page 35
* The policies listed above can be found on our website: www.spiraxsarcoengineering.com/our-approach/corporate-governance/governance-documents. Compliance with
our policies is monitored through the implementation of our Sustainability Strategy, through our internal audit function and, locally, by our General Managers.
Non-financial information statement 2022
Spirax-Sarco Engineering plc has been
independently assessed according to the
FTSE4Good criteria, and has satisfied the
requirements to become a constituent of the
FTSE4Good Index Series.
MSCI ESG Research provides MSCI ESG Ratings
on global public and a few private companies
on a scale of AAA (leader) to CCC (laggard),
according to exposure to industry-specific ESG
risks and the ability to manage those risks relative
to peers.
The use by Spirax-Sarco Engineering plc of any MSCI ESG Research LLC or its affiliates (MSCI) data, and the use of MSCI logos, trademarks, service marks or index names
herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Spirax-Sarco Engineering plc by MSCI. MSCI services and data are the property of
MSCI or its information providers and are provided “as-is” and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
We have disclosed, to the fullest extent possible, against the requirements of the Industrial Machinery & Goods Standard of the Sustainability Accounting Standards Board
(SASB), in respect of 2022, which can be found on our website www.spiraxsarcoengineering.com/investors/results-reports-and-presentations/year/2022.
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202272

Our Policies
Group Governance Policies
Group Management Code – This Code sets out the Group’s policy on the operation of its Businesses and the procedures, controls and
senior manager certification that provide the means to achieve compliance with the Code throughout the Group and to achieve continuous
improvement in the Group’s performance.
Anti-Bribery and Corruption Policy – It is Group policy to conduct its business free of any bribery or corruption. The Group will not enter into
contractual relationships with third parties that are known to engage in corrupt practices and will not engage in the giving or receiving of bribes or
favours that create a conflict of interest. Anti-bribery and corruption training forms part of our Group Essentials Training and must be completed
by all new employees and annually thereafter.
Group Whistle-blowing Policy – We are committed to conducting our business with honesty and integrity and we expect all employees
to maintain high standards in accordance with our Group Management Code and our Core Values. A culture of openness and accountability
is essential to prevent any situations occurring and to address them when they do occur. This policy aims to encourage employees to report
suspected wrongdoing as soon as possible, in the knowledge that their concerns will be taken seriously and investigated as appropriate and
that their confidentiality will be respected.
Competition Law Compliance Policy – It is Group policy to conduct business in accordance with the competition laws of all the countries
in which we operate. This policy outlines standards of conduct and integrity we expect from all colleagues and the potential consequences of
breaching competition laws.
Gifts, Hospitality and Entertainment Policy – This policy sets out the Group’s position on the giving and receiving of gifts, hospitality and
entertainment, and our colleagues’ responsibilities under this policy.
Charitable Donations Policy – This policy sets out the principles to be adopted in relation to charitable donations, both cash and in-kind, and
applies to all charitable donations and community engagement activities across the Group.
Environment Policies
Environmental, Health, Safety, Energy and Sustainability Policy – We expect our colleagues to achieve Environmental, Health, Safety
& Energy (EHS&E) excellence through engagement, empowerment and fostering good behaviours, while targeting zero accidents, zero
environmental incidents and improved energy performance.
Supplier Sustainability Code – The Code represents the minimum standards that we ask our suppliers and their sub-tier suppliers to adhere
to when conducting business with Spirax-Sarco Engineering plc. It covers expectations relating to human rights, health and safety, quality
management, environmental sustainability and ethics.
Colleague and Human Rights Policies
Employee Volunteering Policy – All Group colleagues are entitled to up to three days of volunteering leave per year. This policy is intended to
help and support colleagues wishing to volunteer and provides a framework for good practice.
Human Rights Policy – Human rights can be defined as basic rights that allow individuals the freedom to lead a dignified life, free from fear or
want and free to express independent beliefs. The objective of this policy is to minimise risks to Spirax-Sarco Engineering plc from a breach of
international human rights standards by the Company or by association with business partners and suppliers. It aims to protect the business
by providing a framework of fundamental principles of human rights by which Spirax-Sarco Engineering plc will be guided in the conduct of
its business.
Diversity and Inclusion Policy – Spirax-Sarco Engineering plc recognises its talented and diverse workforce as a key competitive advantage.
We encourage equality, diversity and inclusion in the workplace because it is the right thing to do, it is in line with our Company values and
makes good business sense. This policy’s purpose is to formalise our commitment to: provide equality, fairness and respect for all in our
employment practices, regardless of an individual’s background; operate in accordance with the Equality Act 2010; and oppose and avoid all
forms of unlawful discrimination.
Modern Slavery Statement – Our organisation is committed to maintaining effective policies and procedures to ensure that no individual within
our organisation or supply chain is at risk of exploitation. This statement details our multi-faceted approach to raise awareness of modern slavery
and human trafficking and the concrete actions taken to prevent and identify potential instances.
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73

Operating Review
All three Businesses provide essential services to critical industrial
processes and ultra-critical industrial equipment. In 2022, our teams
stepped up once again to meet our customers’ needs against a
challenging macroeconomic backdrop.
Strategic Report
74 Spirax-Sarco Engineering plc Annual Report 2022

Operating Review
At a glance
Electric Thermal
Solutions
Chromalox, Vulcanic,
Thermocoax and
Durex Industries
Revenue
16%
£256.1m
Reported
+41%
Organic
+14%
Statutory operating profit £m
£7.3m
Adjusted operating profit £m
£39.9m
Statutory operating margin %
2.9%
Adjusted operating margin %
15.6%
No. of operating units at year end
36
Key Industries
Steam Specialties
Spirax Sarco and Gestra
54%
Revenue
£866.0m
Reported
+15%
Organic
+12%
Statutory operating profit £m
£196.2m
Adjusted operating profit £m
£206.1m
Statutory operating margin %
22.7%
Adjusted operating margin %
23.8%
No. of operating units at year end
61
Key Industries
Watson-Marlow
Watson-Marlow
Revenue
30%
£488.5m
Reported
+20%
Organic
+16%
Statutory operating profit £m
£154.4m
Adjusted operating profit £m
£160.0m
Statutory operating margin %
31.6%
Adjusted operating margin %
32.8%
No. of operating units at year end
49
Key Industries
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Operating Review continued
Market environment
Global industrial
production growth
1
(IP) was 2.7% in 2022,
compared to 7.7% in
2021. All regions recorded
positive IP, although
growth was below the
level achieved in 2021
when the global economy
bounced back strongly
from the COVID-19
pandemic-related
impacts of 2020.
IP was strongest in the first half of 2022 at
2.8%, despite a demanding comparator in
2021. IP slowed in the second half although
at 2.6% industrial production remained
higher than the second half of 2021. In the
final quarter of 2022, sequential IP growth
over the third quarter moved into negative
territory, contracting 0.5%. For the full year
2022, IP of 2.7% was materially lower than
the forecasted 4.4% at the time of our 2021
Full Year results in March 2022. Russia’s
invasion of Ukraine on 24th February 2022
and the consequential impact on global
supply chains and energy prices, as well as
other inflationary pressures, dampened the
global economic outlook that weakened
progressively throughout 2022.
In Asia Pacific, IP was 3.1%, significantly
lower when compared to the strong
8.3% expansion in 2021, reflecting the
reintroduction of lockdowns in China,
1 Source for industrial production data:
Oxford Economics, 23rd February 2023
North America
+3.9%
IP in 2022
compared with +4.9% in 2021.
Latin America
+1.3%
IP in 2022
compared with +6.2% in 2021.
<-10%
<-5% to -10%
≤0% to -5%
>0% to 5%
>5% to 10%
>10% to 15%
>15%
not applicable
Strategic Report
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particularly in Shanghai. In the Americas, IP
was 3.9% in North America but only 1.3%
in Latin America, with Brazil registering a
minor IP contraction over 2021. In EMEA, IP
contracted 3.6% in the UK with Germany,
France and Italy broadly flat.
In March 2022, we suspended all
Group trading with or within Russia and
commenced the process of exiting our
Spirax Sarco and Watson-Marlow operations
in Russia. This process concluded in July,
with the disposal of our Russian operating
companies. The impact on our 2022 results
was small as Russia accounted for close to
1% of Group revenues in 2021.
In our largest sectors, Pharmaceutical &
Biotechnology and Food & Beverage, which
accounted for 41% of Group pro-forma sales
in 2022, IP was 0.9% and 1.8% respectively.
In the OEM sector (12% of Group pro-forma
sales in 2022) IP was 5.8% and in the Oil &
Gas sector that accounted for 5% of 2022
Group pro-forma sales, IP was 1.7%.
During the last year, forecasts
1
for 2023 IP
have trended downwards, from 4.0% in
February 2022 to 0.7% in February 2023,
reflecting ongoing geopolitical tensions,
rising interest rates to combat high levels
of inflation and the potential for recession
in some countries.
Europe
+1.7%
IP in 2022
compared with +8.3% in 2021.
China
+3.8%
IP in 2022
compared with 8.7% in 2021.
Asia Pacific
+3.1%
IP in 2022
compared with +8.3% in 2021.
Europe, Middle
East and Africa
+2.5%
IP in 2022
compared with +6.8% in 2021.
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77

Operating Review continued
Steam Specialties
Progress in 2022
Steam Specialties comprises our two world-
leading product brands of Spirax Sarco and
Gestra and operates across three geographic
Divisions: Europe, Middle East and Africa
(EMEA), Asia Pacific and the Americas.
The OEM sector represented 19% of Steam
Specialties total sales, while Food & Beverage
and Healthcare accounted for 29% and 3%
respectively.
Steam Specialties sales of £866.0 million
grew 15% in 2022 or 12% organically.
This very strong performance combined
strong volume growth ahead of IP, despite
the challenging macroeconomic environment,
with proactive price management practices
that offset significant raw material, energy
and wage cost inflation to protect margins.
The strong volume growth delivered benefits
from operational gearing, supporting
revenue investments to drive future organic
sales growth.
Demand growth exceeded sales growth
across all Divisions, expanding order books,
with a higher proportion of larger orders
compared to 2021, as customers’ capital
expenditure continued to recover from
pandemic-driven reductions.
EMEA generated 11% organic sales growth.
In the UK, Germany, France and Italy, the four
largest markets in EMEA which collectively
represent over 60% of regional sales, IP
progressively weakened during the year and
turned negative in the final quarter. There was
a strong recovery in demand from the marine
sector in Italy, as the outlook for worldwide
travel improved due to the relaxation of
COVID-19 restrictions that enabled cruise
ships to start operating again.
Asia Pacific achieved 10% organic sales
growth despite lower IP and the challenges
in China caused by COVID-19 related
lockdowns, particularly in Shanghai.
The region benefited from a recovery
in large orders funded from customers’
capital budgets, which account for a higher
proportion of sales than in the rest of the
world. China, our largest market in the region
representing over 50% of sales, achieved 8%
organic sales growth compared to 3.8% IP.
In Korea, our second largest market in Asia
Pacific, organic sales increased by 11%,
significantly above IP of 1.6%.
In the Americas, sales grew 20% organically
against a mixed backdrop for IP. In the USA,
the largest market in the region, representing
around 50% of the Americas, sales
were up 11% compared to IP of 3.9%.
This outperformance against IP reflects good
progress in implementing our strategy to drive
higher growth from direct sales, compared
to growth through distributors, as well as
our focus on the Healthcare and Chemical
sectors which grew strongly.
In Latin America, which accounts for over
40% of the Americas’ sales, there was strong
volume growth in the largest markets of
Argentina and Brazil, driven mainly by the
Food & Beverage sector, Chemicals and
Oil & Gas sectors, as well as good price
management practices to offset higher
inflationary pressures and protect margin.
Steam Specialties adjusted operating profit
grew 9% to £206.1 million, up 8% organically.
The adjusted operating profit margin was
23.8%, down 120 bps or 90 bps organically.
Statutory operating profit of £196.2 million
was up 5% from £186.8 million in 2021.
Our lower adjusted operating profit margin,
compared to the exceptionally high level of
2021, reflects the full year impact of prior year
revenue investments, partially offset by the
benefits of operational gearing from higher
sales. Had we incurred the full-year cost of
these revenue investments in 2021, Steam
Specialties 25.0% adjusted operating profit
margin would be reduced by close to 200
bps. During 2022, we continued investing
further to support future revenue growth, with
an expansion of sales-related headcount and
new product development, as well as digital
and sustainability initiatives.
Gestra’s adjusted operating profit margins
increased for the full year and exceeded the
20% threshold achieved in 2021, the highest
since we acquired the company in 2017.
2021 Exchange Organic
Acquisitions
& disposals* 2022 Organic Reported
Revenue £754.9m £19.1m £95.6m (£3.6m) £866.0m +12% +15%
Adjusted operating profit £188.7m £3.5m £15.7m (£1.8m) £206.1m +8% +9%
Adjusted operating profit margin 25.0% 23.8% -90 bps -120 bps
Statutory operating profit £186.8m £196.2m +5%
Statutory operating margin 24.7% 22.7% -200 bps
* Includes the impact of (i) the acquisition of Cotopaxi and (ii) the treatment of Spirax Sarco Russia as a disposal from the date at which the Group suspended all trading with
and within Russia.
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Revenue £m
£866.0m
2021: £754.9m
Group revenue %
54%
2021: 56%
Adjusted operating profit £m
£206.1m
2021: £188.7m
2022
2
021
2
020
2
019
2018
866.0
754.9
6 9 4 .1
733 .5
755.4
2022
2
021
2
020
2
019
2
018
206.1
188.7
154.3
170.1
177.9
Reported
+15%
Organic
+12%
Reported
+9%
Organic
+8%
Adjusted operating margin %
23.8%
2021: 25.0%
Steam Specialties at a glance
(at year end)
61
operating units*
66
countries with a resident
direct sales presence
5,264
colleagues
*Operating units are business units that invoice locally.
Statutory operating profit £m
£196.2m
2021: £186.8m
2022
2
021
2
020
2
019
2018
196.2
186.8
15 7. 8
222.5
172.6
Reported
-120bps
Organic
-90bps
Reported
+5%
Key markets
“2022 was a very strong year for all
Divisions, despite ongoing global
supply chain disruptions, reflecting
the progress made in delivering our
strategy in support of our Purpose.”
Maurizio Preziosa
Managing Director, Steam Specialties
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79

Operating Review continued
Steam Specialties continued
Business strategy update
In 2021, Steam Specialties
launched its refreshed
business strategy, Customer
first
2
(Cf
2
) and 2022
represented the first full year
of its implementation.
The refreshed strategy builds on the original
Customer first strategy that has been in place
since 2014 and focuses on mega trends
such as customer insight, sustainability,
innovation, digital and inclusivity.
Increase direct sales
effectiveness through
market sector focus
Following the acquisition of Gestra in 2017,
Steam Specialties adopted a sector-driven
dual brand strategy. Aligning market sectors
that offer the best opportunities with the
brand that is traditionally strongest in that
sector, ensures that we are well-placed to
grow sales at above IP rates. For example,
Gestra delivered 40% sales growth in the
Chemicals sector as a result of its strong
presence, while Spirax Sarco generated
growth of 7% in the Healthcare sector, as
hospitals sought to catch-up on deferred
maintenance expenditure.
In January 2022, Steam Specialties
completed the acquisition of Cotopaxi, a
digitally enabled global energy consulting and
optimisation specialist, to further accelerate
the implementation of our Digital Strategy.
Cotopaxi’s proprietary software platform,
STRATA, generates critical insights that
are used to better understand industrial
customers’ management and use of Water,
Air, Gas, Energy and Steam (WAGES).
Cotopaxi’s digital solutions experience in
steam installations has enhanced our ability to
connect to customers’ systems and analyse
their data, generating further opportunities
and solutions that support system uptime,
reduce waste and increase efficiency.
Develop the knowledge and
skills of our expert sales
and service teams
We continued to implement Customer
Value Propositions (CVPs) to support our
customers’ changing requirements and
needs. During 2022, our teams tailored a
CVP to support lithium mining projects in
Argentina for the automotive battery sector.
We continued to invest in our direct sales
force and self-generated sales capability
through our Sales Excellence training
that is delivered by our Steam Academy.
Following the acquisition of Cotopaxi,
training now includes modules on our
digital capabilities and the value that can be
generated for our customers.
Broaden our
global presence
Steam Specialties has direct sales capabilities
in 66 countries and we continue establishing
a stronger sales presence in parts of the
world that have previously been under-
represented. In 2022, this included parts of
Africa and the Middle East with a substantial
step-up in the recruitment of direct sales
engineers across those regions.
Leverage our research
and development (R&D)
investments
We continued to invest in new product
development across Steam Specialties
and released multiple new products
during 2022, to support the efficient
use and control of steam, including the
‘TargetZero’ decarbonisation solutions (for
more information see below). Due to our
relentless focus on innovation, in 2022
Steam Specialties exceeded their long-held
Product Vitality (PV) target which compares
the revenue from new products, services or
solutions introduced in the previous five years
to total revenue.
Optimise supply chain
effectiveness
In 2021, we created a Global Supply Chain
organisation responsible for all Steam
Specialties manufacturing sites around the
world, to further improve the efficiency of
our operations. This global organisation
enables the adoption of consistent supply
chain methodologies and accelerates the
sharing of best practices across the 11
Steam Specialties manufacturing sites,
while accelerating investments in plant
modernisation. In common with most
businesses, Steam Specialties experienced
considerable disruption to its supply
chain over the past two years with an
adverse impact on customer service levels.
During 2022, we successfully mitigated
materials shortages by expanding our
supplier base while also increasing our
sales volume.
Operate sustainably
and help improve our
customers’ sustainability
We work closely with our customers to
understand their sustainability goals and
provide solutions to optimise their energy and
water usage, as well as decarbonise steam
generation. The Group developed a suite
of innovative TargetZero decarbonisation
solutions through the Thermal Synergy
Solutions project, a collaboration between
Steam Specialties and ETS designed to
decarbonise customers’ industrial processes,
including the raising of steam. ‘ElectroFit’,
replaces industrial boilers’ fossil fuel-fired
heating elements with an in-situ conversion
to electric heating elements, eliminating the
boiler’s scope 1 greenhouse gas (GHG)
emissions while minimising plant disruptions
and retaining the existing boiler infrastructure.
‘Steam Battery’ is an energy storage system
using steam, which retains the thermal
energy until required and decouples the
electric energy generation from the thermal
energy use. ‘SteamVolt’ uses the patented
Chromalox Medium Voltage (MV) technology
to provide electric heating solutions at
industrial scale to decarbonise the raising of
steam, as well as other industrial processes.
These solutions were successfully tested on
customer sites and we started accepting
orders in the second half of 2022.
Alongside our drive to help customers
meet their sustainability goals, we are also
taking steps to meet the Group’s ambitious
target of achieving net zero scope 1 and
scope 2 GHG emissions by 2030. In 2022
Steam Specialties initiated a £5.9 million
investment programme to decarbonise our
UK manufacturing facility in Cheltenham
(UK), through the installation of all three
TargetZero solutions for the electrification of
our on-site gas-fired boilers. Upon completion
by the end of 2023, this project will eliminate
the site’s scope 1 emissions and our
purchased electricity requirements (scope
2 emissions) will be satisfied by green
energy contracts.
During the first half of 2023 we will
also implement Cotopaxi’s STRATA
platform across the 11 Steam Specialties
manufacturing locations, enabling us to
monitor our efficiency and sustainability
performance in real time, using the insights
to make changes that eliminate waste and
reduce consumption.
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During the year, our colleagues were involved
with more than 50 biodiversity projects across
the Business. With projects including, the
installation of beehives in Italy, a roof garden
in China, a wildlife pond in the UK, as well
as mangrove protection and tree planting in
Indonesia and Argentina.
Focus for 2023
We anticipate a more challenging
macroeconomic environment in 2023 for
both our customers and ourselves.
We will continue to support our customers
with solutions that improve the safety and
efficiency of their industrial processes, thereby
reducing their operating costs. With our
TargetZero solutions, we will also support
their journeys towards zero GHG emissions
while completing the decarbonisation of our
UK manufacturing facility.
In key regions such as the USA, Middle East
and Africa, we are focused on expanding
our direct sales presence and our direct
engagement with customers. We will also
leverage our investments in digital capabilities,
supported by Cotopaxi, to further enhance
our understanding of customers’ operations
and how to best support them.
Steam Specialties Outlook
IP forecasts for 2023 have trended steadily
downwards since February 2022 and are
now at 0.7%, reflecting the likelihood of
industrial recessions in developed markets
and lower growth in emerging markets.
Against this weak macroeconomic backdrop,
our resilient business model, ability to self-
generate sales, significant proportion of
maintenance and repair sales and strong
order books underpin our confidence in the
growth outlook for Steam Specialties.
Excluding any impact from currency
movements, we currently anticipate mid-to-
high single-digit growth, over 2022 pro-forma
sales, driven by volume growth above IP and
proactive price management practices that
offset inflation of wages, energy and materials
to protect margins.
We also anticipate a more typical drop-
through from the increased sales to adjusted
operating profit of close to 35%, leading to
further improvement in our adjusted operating
profit margin.
Steam Battery is part of our TargetZero decarbonisation solutions.
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81

7.5 MW
of steam converted
into a90°C flow of hot
water that isdistributed
totheFaenzacommunity.
Steam Specialties
Providing solutions
that help improve our
customers’ sustainability.
Spirax Sarco has worked with its
customer, Enomondo, to provide
a heating system for the industrial
district of Faenza (Italy), powered
exclusively by organic waste.
Enomondo burns biomass waste,
including grape skins from local
wine growers in its thermal power
station which has a steam generator.
The resulting steam, which is
produced at high pressure, is used
to power an electrical generating
turbine and also to provide steam
used in the district heating system
designed and built by Spirax Sarco.
The solution converts low
pressure steam to hot water with
subcooling technology to give
maximumefficiency.
In the process up to 7.5 MW of
steam is converted into a 90°C flow
of hot water that is distributed to
the Faenza district community.
This includes the Alpha Tauri
Formula1 team, where the
installation of the latest generation
of meters gives complete control
and monitoring to ensure optimum
efficiency contributing to the
customer’s sustainabilitygoals
aswell as our own.
Operating Review continued
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Electric Thermal Solutions
Acquisitions
During the last four months of 2022, the
Group’s Electric Thermal Solutions Business
(ETS) completed the acquisitions of Vulcanic
and Durex Industries, strengthening coverage
of attractive end-market sectors and
geographies to broaden the platform for
strong organic growth of the Business.
Vulcanic
On 29th September, we completed
the acquisition of Vulcanic, a European
leader of industrial heating solutions that
is headquartered in Paris (France) with
ten manufacturing facilities worldwide.
Chromalox generates close to three-quarters
of its sales in the Americas, whereas Vulcanic
generates around 80% of its sales in EMEA.
Vulcanic complements Chromalox through
its strong position in the Food & Beverage
and OEM sectors, while serving different
markets than Chromalox within the Oil & Gas
and Chemicals sectors. Vulcanic comprises
several product brands that are each
individually strong in their respective sectors.
We have appointed an experienced leader
for Vulcanic from within our Group and the
integration is progressing well.
We are implementing a dual brand strategy
for Chromalox and Vulcanic, modelling
the highly successful approach in Steam
Specialties that aligns the Spirax Sarco
and Gestra brands with specific strategic
growth sectors. As the lead brands within
ETS for electric process heating, including
the decarbonisation of industrial processes,
Chromalox and Vulcanic will support
the effective deployment of our industry
leading decarbonisation solutions alongside
Steam Specialties.
Durex Industries
On 30th November, we completed the
acquisition of Durex Industries, a US-based
specialist in custom precision thermal
solutions with embedded electric heating,
cooling and sensing technologies for
ultra-critical applications within complex
industrial equipment, with headquarters
and manufacturing facilities in Cary, Illinois
(USA). OEMs accounted for almost 90% of
sales with approximately 60% of sales to the
Semiconductor sector.
Durex Industries is a highly complementary
brand to Thermocoax, with minimal customer
overlap and over 80% of its sales in North
America, whereas over 60% of Thermocoax’s
sales are in EMEA. As the lead brands within
ETS for ultra-critical thermal solutions for
industrial equipment, Thermocoax and Durex
Industries are well positioned to capitalise
on the growing demand for increasingly
stringent thermal heating requirements in high
technology equipment and will accelerate the
development of ETS’ critical OEM business.
We have retained the existing strong
management of Durex Industries and they are
working collaboratively across ETS to identify
opportunities that accelerate the growth of
each brand.
Market overview
Following the acquisitions of Vulcanic and
Durex Industries, the Americas and EMEA will
represent 56% and 32% of sales respectively
on a pro-forma basis.
ETS has a different balance of end markets
when compared to the rest of the Group with
18% of sales to the Semiconductor sector
and 12% to the Power Generation sector on
a pro-forma basis.
Our customers’ focus on the decarbonisation
of their critical industrial processes, in line
with their own sustainability and net zero
goals, continues to drive strong demand for
both Chromalox and Vulcanic products and
solutions. The rate of adoption over time
of our decarbonisation solutions remains
difficult to predict due to varying rates
of progress towards net zero in different
countries, capacity to deliver the necessary
infrastructure quickly, as well as the relatively
higher cost of electricity compared to
gas. Therefore, we anticipate this market
opportunity will unfold globally over at least
the next 30 years.
During 2022, Semiconductor demand grew
strongly with the proportion of ETS sales to
the sector increasing. We anticipate demand
will be lower in 2023 due to consumer
spending on electronics being impacted
by a weaker macroeconomic environment,
as well as a slowdown in the expansion of
Semiconductor manufacturing capacity.
Through Thermocoax and Durex Industries,
ETS supplies complex solutions for precise
thermal control, incorporated by OEMs
into Wafer Fabrication Equipment (WFE) for
more advanced Semiconductor products
utilised in higher-end applications. We expect
that these niche positions will partially
mitigate the impact of an overall reduction in
Semiconductor demand. Additionally, there
is an opportunity for our solutions to replace
incumbent suppliers in the WFE aftermarket,
further mitigating cyclicality in the new-
build market.
2021 Exchange Organic
Acquisitions
& disposals* 2022 Organic Reported
Revenue £181.3m £13.2m £27.4m £34.2m £256.1m +14% +41%
Adjusted operating profit £24.0m £1.9m £5.9m £8.1m £39.9m +23% +66%
Adjusted operating profit margin 13.2% 15.6% +100 bps +240 bps
Statutory operating profit £11.1m £7.3m -34%
Statutory operating margin 6.1% 2.9% -320 bps
*Includes the impact of the acquisition of Durex Industries and Vulcanic.
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83

Operating Review continued
Electric Thermal Solutions continued
Revenue £m
£256.1m
2021: £181.3m
Group revenue %
16%
2021: 14%
Adjusted operating profit £m
£39.9m
2021: £24.0m
2022
2
021
2
020
2
019
2018
256.1
181. 3
178.0
154.6
186.1
2022
2
021
2
020
2
019
2
018
39.9
24.0
24.6
22.8
24.7
Reported
+41%
Organic
+14%
Reported
+66%
Organic
+23%
Adjusted operating margin %
15.6%
2021: 13.2%
Electric Thermal Solutions at a glance
(at year end)
36
operating units*
20
countries with a resident
direct sales presence
2,698
colleagues
*Operating units are business units that invoice locally.
Statutory operating profit £m
£7.3m
2021: £11.1m
2022
2
021
2
020
2
019
2018
7.3
11.1
4.8
12.1
7. 9
Reported
+240bps
Organic
+100bps
Reported
-34%
Key markets
“ETS is now a much bigger, more
geographically balanced Business,
well positioned to capitalise on the
significant growth opportunities
we see, especially from
decarbonisation.”
Armando Pazos
President, Electric Thermal Solutions
Strategic Report
84
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Progress in 2022
ETS sales grew 41% to £256.1 million or
14% on an organic basis, with the difference
due to acquisitions and currency tailwinds.
During 2022, ETS benefitted from strong
overall demand growth, significantly ahead
of IP and above the growth in sales.
Growth in Thermocoax was driven by the
Semiconductor sector, with increasing
end user demand for sophisticated digital
equipment and from the Aerospace &
Defence sector, due to demand for sensing
and heating technologies in satellites
supporting mobile telecommunications
networks. Chromalox experienced increasing
demand for decarbonisation solutions.
Vulcanic and Durex Industries delivered
strong double-digit growth in sales driven
by the same decarbonisation trend and
Semiconductor sector growth benefiting
Chromalox and Thermocoax. Including the
acquisitions of Vulcanic and Durex Industries
on a twelve-month pro-forma basis, ETS
sales would be £382.9 million in 2022.
Manufacturing continued being impacted
by disruptions in the global supply chain,
although these constraints are beginning to
ease. Shipments from our manufacturing
facility in Ogden, Utah (USA) remained
capacity constrained during 2022 as it
transitions to focus primarily on bespoke
industrial heating solutions, increasingly
utilising our patented Medium Voltage
(MV) technology for the decarbonisation
of buildings and industrial processes.
Throughout the year we continued investing
to increase capacity in Ogden, as well as
making further operational improvements to
support manufacturing of more complex and
bespoke solutions. The capacity constraints
were compounded by strong demand
growth and resulted in ETS carrying a record
order book into 2023, underpinning strong
sales growth in the year ahead.
Sales from Chromalox EMEA contracted
year-on-year following the announcement,
in May 2022, of our plans to close the loss-
making manufacturing plant in Soissons
(France). This facility was successfully
decommissioned in September, three months
ahead of schedule, with minimal disruptions.
The costs associated with the closure
(£14.5 million) are included as an adjusting
item in the Consolidated Income Statement
as disclosed in Note 2 to the Financial
Statements. The acquisition of Vulcanic
restores the capability to manufacture in
Europe some of the products previously
sourced from the Soissons facility.
ETS adjusted operating profit grew 66%
to £39.9 million and was up 23% on an
organic basis, the difference being due
to acquisitions and currency movements.
Statutory operating profit of £7.3 million
was down 34% from £11.1 million in 2021,
driven by the restructuring of Chromalox’s
manufacturing operation in Soissons (France).
ETS adjusted operating profit margin of
15.6% was up 240 bps and 100 bps
organically, with the difference due to the
fourth quarter contributions from the Vulcanic
and Durex Industries acquisitions that had
a combined operating margin similar to the
overall Group margin.
During 2022, both Chromalox and
Thermocoax shipped a high proportion of
orders from their existing order book that
were booked in 2021 or earlier. These orders
did not benefit from the 2022 price increases
so the margins achieved were adversely
impacted by high materials cost inflation and
higher freight costs. Nickel-based alloys,
electrical components, petrochemical and
resin products, all experienced double-digit
cost inflation.
Price increases were applied to new orders
taken in 2022 to protect operating margins
from this higher cost inflation, with further
price increases being applied to new orders
received in 2023. Although we still have
some orders to be delivered that were
taken in 2021, we anticipate some margin
progression in 2023 as we increase the
shipment of orders taken in 2022 and 2023.
Thermocoax experienced an adjusted
operating profit margin decline in 2022, due
to our higher proportion of sales on medium-
term contracts and an adverse impact of
one-off costs associated with the ramp-up of
our new manufacturing facility in Normandy
(France). Chromalox adjusted operating profit
margin increased strongly in 2022, driven by
operational gearing from sales volume growth
above IP and improved price management
practices to offset cost inflation on new
orders that was partially offset by the lower
margins of some older orders shipped in
2022, as well as a small benefit of overhead
reductions in the fourth quarter from the
closure of the Soissons (France) facility.
Including the acquisitions of Vulcanic and
Durex Industries on a twelve-month pro-
forma basis, ETS adjusted operating margin
would be above 18.0%.
Business strategy update
ETS implemented a strategy
refresh during 2020, resulting
in the launch of their
‘Engineering Premium
Solutions’ (EPS) strategy.
An important component of this strategy is
the drive towards ‘Total Customer Solutions’
moving from being mostly product centric to
becoming more focused on selling solutions
to higher-growth sectors in which we are well
positioned. We also continued strengthening
our business development function and
increasing our focus on new product
innovation, with demonstrable technological
advantages and quantified sustainability
benefits. We made good progress in
advancing our strategic agenda in line with
the Group’s six strategic themes:
Increase direct sales
effectiveness through
market sector focus
Since reshaping our strategy to prioritise
focus on strategic sectors that represent
over 50% of our addressable market, we
have realised higher growth in these targeted
sectors and increased our proportion of
direct sales.
We have also continued identifying
opportunities for ETS to leverage its position
as part of our Group by adopting best
practice from other parts of the organisation.
In 2022, this led to the launch of a revised
‘go to market’ strategy in EMEA and Asia
Pacific, following its successful roll out in
the Americas, which optimises the number
of accounts assigned to individual direct
sales engineers.
We have continued to invest in our self-
generated sales capability by developing
the skills and knowledge of our direct sales
engineers through the ETS Academy.
Building on the success of the Steam
Specialties’ Academy, the ETS Academy was
completed in the third quarter of 2022 and
utilises virtual and visual assets to provide
a rich and immersive experience for our
direct sales teams and end-user customers.
Additionally, our sales teams have been
undertaking Sales Excellence training to
develop or refresh skillsets in consultative
value-based selling.
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Chromalox has launched several Customer
Value Propositions (CVPs) focused on its
decarbonisation and net zero solutions during
the year, which required specific training,
marketing materials and decarbonisation
calculators for the Engineered Chemicals,
Sustainable Energy and Oil & Gas sectors.
Broaden our
global presence
The acquisitions of Vulcanic and Durex
Industries provide an improved geographical
balance of the ETS Business globally and
will support organic growth by leveraging
customer bases, products and technologies.
Over the coming years we will implement
our integration plans that also accelerate the
adoption of our market sector driven dual
brand strategy on a global scale.
Leverage our research
and development (R&D)
investments
ETS is evolving its electrification solutions
for decarbonisation and sustainability, which
remain important growth drivers as we build a
significant pipeline of opportunities.
By combining our core capabilities with
Steam Specialties, we have been able
to develop synergies within our thermal
energy management portfolio that enabled
the ‘Thermal Solutions Synergy’ team to
design new industry-leading products that
deliver significant sustainability benefits for
customers. The new-to-world TargetZero
solutions are covered in more detail in
the Steam Specialties Operating Review
on pages 80 and 81. ETS has also been
collaborating with Watson-Marlow to release
a new product for its Aflex Hose product
brand in 2023.
In addition to the TargetZero
decarbonisation solutions developed
with Steam Specialties, ETS developed
and launched multiple new products to
market in 2022 from both the Chromalox
and Thermocoax Divisions. The new
Chromalox products include a portable air
heater designed for safely heating server
rooms and a safe water heater, certified
to heat potable water. In addition to range
extensions, Thermocoax also launched
two new-to-world products to support the
fabrication of 3 nm semiconductor chips, as
well as radiation-hardened heating cables for
aerospace applications.
Optimise supply chain
effectiveness
During 2022, we continued investing in
further operational improvements, as well
as increasing manufacturing capacity in
Ogden, Utah (USA). In order to ensure
sufficient capacity to satisfy the anticipated
long-term demand for Chromalox’s
Medium Voltage technologies that also
support decarbonisation, we are planning
a US$58 million investment to materially
expand the Ogden facility. The new 9,600m
2
extension will expand the current footprint by
almost 60% by the end of 2024 and includes
geothermal heating, as well as solar panels
for on-site renewable energy supply.
In Normandy (France), Thermocoax’s four
separate sites came together in a new
purpose-built, state-of-the-art manufacturing
facility. Production ramped-up during the first
half of 2022 as the teams adjusted to working
in a single facility and secured all the process
qualifications needed for the critical industrial
applications that support the Semiconductor,
Aerospace and Defence sectors. The plant is
fully aligned to our One Planet: Engineering
with Purpose Sustainability Strategy,
with the implementation of solar panels to
self-generate electricity, as well as waste
reduction and on-site biodiversity projects.
Operate sustainably
and help improve our
customers’ sustainability
During the year ETS continued to implement
our One Planet: Engineering with
Purpose Sustainability Strategy, which
included the installation of 1.2 GWh of
renewable energy supply at three of our
sites in Nuevo Laredo (Mexico), Heidelberg
(Germany) and Normandy (France).
We completed net zero roadmaps at
all manufacturing sites and rolled out
environmental compliance calendars
to ensure business continuity at key
locations including Ogden and LaVergne,
Tennessee(USA).
Focus for 2023
During 2023, we will focus on implementing
the integration plans for Vulcanic and Durex
Industries, as well as accelerating growth
opportunities through collaboration with
Chromalox and Thermocoax. We will align
the ‘go to market’ dual brand strategy for
Chromalox and Vulcanic in Europe during the
first half of the year.
Product developments will focus on the
next generation of Medium Voltage (MV)
technology and Heat Trace systems,
supporting decarbonisation and temperature
management of commercial infrastructure.
ETS is engaged with multiple partners,
including universities, cities and agencies,
working to decarbonise their district heating
systems. We will also focus on leveraging
Vulcanic’s presence in Europe to increase the
penetration of our Heat Trace systems, which
is currently lower than in North America.
Operationally, our focus will be on increasing
manufacturing output from our site at
Ogden, as well as implementing our plant
modernisation and sustainability initiatives.
We will also progress the expansion of our
Ogden facility.
ETS outlook
The full year effect of the Vulcanic and Durex
Industries acquisitions, on a twelve-month
pro-forma basis, would result in ETS sales
in 2022 of £382.9 million with an adjusted
operating profit margin above 18.0%.
We opened 2023 with record order books,
which underpins our confidence of achieving
another year of good sales volume growth
above IP, particularly as we continue to
expand our manufacturing capacity to
increase shipments. Strong customer
demand for decarbonisation solutions will
remain a driver of ETS sales growth, although
Semiconductor demand that grew strongly
in 2022 and accounted for 18% of ETS sales
on a pro-forma basis, is likely to be lower
in 2023. As Vulcanic and Durex Industries
were acquired in late 2022, these Divisions
of ETS have not yet managed to fully embed
our Group’s proactive price management
practices so their sales growth rates in 2023
will benefit less from pricing. Consequently,
excluding any impact from currency
movements in 2023, we anticipate mid-to-
high single-digit growth, over 2022 ETS pro-
forma sales, albeit slightly lower growth than
at Steam Specialties.
Operational gearing from increased sales,
continued proactive price management
practices that offset cost inflation, a higher
proportion of order book shipments that
benefit from improved pricing and the full
year benefit of lower overheads resulting
from the closure of the Soissons facility in
France, are expected to drive further adjusted
operating profit margin improvements for
the Chromalox and Thermocoax Divisions of
ETS. We anticipate the adjusted operating
profit margin of the Vulcanic and Durex
Industries Divisions will decline in 2023,
compared to their full year pro-forma margins
achieved in 2022, as they derive less benefits
from the 2023 price increases and we step
up the revenue investments planned for their
integration. Consequently, we anticipate ETS
adjusted operating profit margin in 2023 will
be slightly below 18.0%.
Operating Review continued
Electric Thermal Solutions continued
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5 MW
discharge capability.
Within ETS, Vulcanic works
alongside Chromalox to provide
industrial heating solutions,
including the decarbonisation of
critical industrial processes, each
focused on different applications
and markets.
Just as Chromalox and Steam
Specialties have developed a new-
to-world, SteamBattery solution,
from our Group (see page 80),
Vulcanic provides the electric
immersion heater and power control
systems that powers ‘Heatcube’,
at Nordjyllandsværket AS (NJV)
inDenmark.
‘Heatcube’ is a thermal storage
solution using molten salt for
higher temperature applications
and was developed by Norway’s
Kyoto Group to preserve and
discharge thermal energy into
process heating applications
whileeliminatingemissions.*
Vulcanic’s technical expertise and
long-standing experience with
molten salt applications optimises
heater performance and maximises
the operating life of the energy
charging system. This enables the
system to efficiently cycle thousands
of times over the course of its 20-
30 year expected life, with around
90%efficiency.
Electric Thermal Solutions
How Vulcanic and molten
salt are helping reduce
greenhouse gas emissions.
Through the creation of ETS within
Spirax-Sarco Engineering, the
Group continues to support our
customers on their sustainability
journeys, which is good news for
industry and for our planet.
* when connected to green electricity sources.
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Operating Review continued
2021 Exchange Organic
Acquisitions
& disposals* 2022 Organic Reported
Revenue £408.3m £20.2m £68.6m (£8.6m) £488.5m +16% +20%
Adjusted operating profit £150.0m £7.6m £5.3m (£2.9m) £160.0m +3% +7%
Adjusted operating profit margin 36.7% 32.8% -400 bps -390 bps
Statutory operating profit £145.4m £154.4m +6%
Statutory operating margin 35.6% 31.6% -400 bps
*Includes the impact of the treatment of Watson-Marlow Russia as a disposal from the date at which the Group suspended all trading with and within Russia.
Watson-Marlow
Market overview
Watson-Marlow sales to the Pharmaceutical
& Biotechnology sector, which now accounts
for around 60% of sales, have historically
grown at close to 20% per annum.
This was driven by advances in cell and gene
therapies, as well as a move towards single-
use manufacturing processes.
In 2020 and 2021, the sector experienced
exceptional growth driven by its role in
developing and producing COVID-19
vaccines, with Watson-Marlow sales growing
22% and 43% respectively. During the period
between the fourth quarter of 2020 and the
second quarter of 2022, our Pharmaceutical
& Biotechnology customers experienced
exceptionally strong demand for vaccines
as the industry estimated that at least two
doses would be required for a significant
proportion of the global population in order
to defeat the pandemic, which potentially
could be followed by boosters or new
vaccines to combat new variants of the virus.
As such, capacity additions accelerated and
production ramped-up, leading to increased
demand for equipment and consumables.
This exceptional demand exceeded
Watson-Marlow’s manufacturing capacity,
notwithstanding our multiple capacity
expansion initiatives, leading to an increase in
the order book, which remained well above
pre-pandemic levels at the end of 2022.
COVID-19 vaccine global adoption rates
turned out to be much lower than the
World Health Organisation (WHO) and most
governments anticipated, especially in many
developing economies. Nevertheless, the
severity of the virus and its symptoms have
subsided due to the effectiveness of the
vaccines, despite lower-than-anticipated
doses being administered. With lower
forecasted demand and excess vaccine
inventory, production has slowed.
In the second half of 2022, as expected,
Watson-Marlow’s COVID-19 related demand
began normalising, with many customers
postponing new orders and rescheduling
delivery dates of orders already placed. As a
result, Watson-Marlow’s full year sales to
the Pharmaceutical & Biotechnology sector
grew close to 15% in 2022 and untypically
over 50% of sales occurred in the first half
of the year.
Demand growth in Process Industries was
significantly above IP, supported by sector
specific programmes to accelerate demand,
such as in Food & Beverage and Water
& Wastewater sectors, as well as new
product introductions.
Following the rapid growth in COVID-19
related demand in 2021 and the first half of
2022, Watson-Marlow expanded capacity
at its existing manufacturing facilities with
additional shifts and new equipment, which
also helped mitigate the impact of global
supply chain disruptions. As demand started
normalising in the second half of 2022,
steps were taken to appropriately right-size
capacity and overhead support costs, which
included factory labour reductions in the
fourth quarter of 2022. Further actions are
underway in early 2023, ensuring we are
able to both meet our customers’ needs and
protect our adjusted operating profit margin.
Progress in 2022
Watson-Marlow sales grew 20% to
£488.5 million, or 16% up on an organic
basis. Sales to the Pharmaceutical &
Biotechnology sector grew close to 15%
organically and sales to Process Industries
sectors grew 19%, significantly ahead of
global IP. This level of growth reflects both
strong volume increases and our proactive
price management practices that offset
inflationary cost pressures to protect margin.
Watson-Marlow’s adjusted operating profit
grew 7% to a record £160.0 million, driven
by strong sales growth and partially offset
by revenue investments to support future
growth. Organically, adjusted operating profit
grew 3%, the difference being the impact of
currency and the disposal of our high margin
Russian operation.
Watson-Marlow’s adjusted operating profit
margin of 32.8% declined 390 bps from the
exceptional margin of 2021. Despite declining
400 bps on an organic basis, the margin
remains 100 bps above the 2019 pre-
pandemic margin. Statutory operating profit
grew 6% from £145.4 million in 2021 to
£154.4 million in 2022.
The reduction in adjusted operating profit
margin was driven by the full year impact of
2021 revenue investments, which had an
impact of over 200 bps, as well as costs
associated with the transition of BioPure
to a new facility in Portsmouth (UK) and
the ramp-up of our new facility in Devens,
Massachusetts (USA), which together had
an impact of over 150 bps.
Business strategy update
Strategy25 is Watson-Marlow’s
five-year organic growth
strategy, building momentum
to drive sustainable growth that
outperforms our markets and
create value for all stakeholders.
We made good progress in advancing our
strategy agenda in line with the Group’s six
strategic themes:
Increase direct sales
effectiveness through market
sector focus
During 2022, Watson-Marlow increased
its direct sales workforce and continued
embedding our sector driven approach to
understand customers’ processes,
opportunities for improvement and proposing
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Revenue £m
£488.5m
2021: £408.3m
Group revenue %
30%
2021: 30%
Adjusted operating profit £m
£160.0m
2021: £150.0m
2022
2
021
2
020
2
019
2018
488.5
408.3
321.3
265.2
300.9
2022
2
021
2
020
2
019
2
018
160.0
150.0
10 7. 3
84.8
95.8
Reported
+20%
Organic
+16%
Reported
+7%
Organic
+3%
Adjusted operating margin %
32.8%
2021: 36.7%
Watson-Marlow at a glance
(at year end)
49
operating units*
42
countries with a resident
direct sales presence
2,337
colleagues
*Operating units are business units that invoice locally.
Statutory operating profit £m
£154.4m
2021: £145.4m
2022
2
021
2
020
2
019
2018
154.4
145.4
102.2
7 7. 5
82.7
Reported
-390bps
Organic
-400bps
Reported
+6%
Key markets
“The launch of our global
Innovation Centre in 2022,
isjustone example of how
we areinvesting in our
Business todrive long-term
sustainablegrowth.”
Andrew Mines
Managing Director, Watson-Marlow
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Operating Review continued
Watson-Marlow continued
solutions. For example, we have been
working with lithium-ion battery customers
to use our Bredel APEX pumps and hose
solutions to accurately dose, meter and
transfer the liquids required for automotive
battery production. We are also supporting
our customers in the Water treatment sector
with high accuracy chemical dosing solutions
that have facilitated reduced chemical usage,
helping them to achieve their sustainability
and cost goals.
In 2022, we invested in over 40,000 hours
of training, learning and development for
colleagues across all areas of Watson-
Marlow. This included the development and
deployment of a global training programme
for our direct sales engineers to enhance
consultative selling skills as we evolve
towards our total solutions approach.
Broaden our
global presence
During the fourth quarter of 2022 we
completed the construction and first
phase of production fit-out at our new
state-of-the-art manufacturing facility in
Devens, Massachusetts (USA), with the first
customer deliveries shipped before the end
of the year, as planned. This milestone was
achieved in 13 months of breaking ground
at the factory, demonstrating strong project
management and governance, as well as
cross-continental collaboration of our teams,
set against significant supply chain and
inflationary challenges.
Leverage our research
and development (R&D)
investments
During 2022, we opened our first dedicated
Innovation Centre to support the Business
globally. From its location close to our factory
in Falmouth (UK), this state-of-the-art facility
will support all new product developments
and is the hub for evolving our Digital Strategy
across all products, services, manufacturing
processes and core enterprise systems.
These ongoing investments are critical to
support the quality and consistency of our
operations and ensure we continue to deliver
value to all our stakeholders.
We launched multiple new products during
the year, including an expansion of our digital
capability across the core pump range, with
a communication protocol used to collect
data and control equipment over Ethernet
systems. We also launched BioPure-branded
hose assemblies, which enable customers to
specify a completely customisable solution
based on their technical specifications, as
well as fully integrated Flexmag single-use
pressure sensing systems to extend our fluid
path solutions.
Optimise supply chain
effectiveness
During 2022, we made significant progress in
expanding Watson-Marlow’s manufacturing
capacity. The new BioPure facility in
Portsmouth (UK) commenced production in
March 2022 and has enabled a doubling of
capacity, following the successful transition
to this new location. Injection moulding
machines, which were temporarily located
at subcontractor sites to increase capacity,
are also being relocated to the new
BioPure facility.
Due to global supply chain disruptions and
the impact of transitioning to a new facility, we
took the decision to hold more inventory to
ensure continuity of supply, working with our
partners to identify risks and opportunities.
Operate sustainably
and help improve our
customers’ sustainability
Watson-Marlow has established a new
dedicated business sustainability team to
develop a deeper understanding of our
product life cycle sustainability impact,
drive engagement and accelerate progress
on our commitments to the Group’s One
Planet: Engineering with Purpose
Sustainability Strategy.
In 2022, our Aflex Hose facility in Yorkshire
(UK) identified that 50% of their annual oil
consumption could be filtered, recycled
and re-used in the site’s braiding machines.
This large strong reduction in waste oil
volume will support Watson-Marlow to
achieve its goal of 10% waste reduction
by 2025, as well as reducing costs.
We have installed solar panels which
generate 1.2 GWh of renewable energy at
our new manufacturing facility at Devens,
Massachusetts (USA).
Focus for 2023
Our focus for 2023 will include implementing
our Operational Excellence Framework,
an integrated planning process to better
align resources across the demand and
supply processes, with the aim of driving
efficiency improvements across production
and procurement that de-risk our supply
chain and reduce costs. In support of our
One Planet: Engineering with Purpose
Sustainability Strategy, Cotopaxi’s STRATA
platform is being deployed across all
Watson-Marlow’s manufacturing operations
to better monitor our sustainability footprint
and drive reductions in consumption and
waste. The ramp-up of the new Devens site
will continue throughout 2023, supporting
the tightly controlled validation and phased
transfer of product brands to the state-of-the-
art manufacturing facility.
Watson-Marlow outlook
COVID-19 related demand from
Pharmaceutical & Biotechnology customers
began to normalise in the second half of
2022 and in the first two months of 2023
we continued seeing a level of demand
consistent with the fourth quarter of 2022.
In the first half of 2023, we expect that
customers will continue working through their
existing stocks of our products and may still
defer some deliveries from our order book,
while repurposing their production to meet
continued strong underlying demand growth
for cell and gene therapy applications. In the
second half of 2023, we anticipate a return
of customers’ demand growth, although
defining the precise timing and scale of the
recovery remains difficult.
For the full year 2023, we anticipate Watson-
Marlow sales to the Pharmaceutical &
Biotechnology sector will be lower than 2022.
However, this decline will be largely offset
by Process Industries sales growth, driven
by volume growth above IP and continued
proactive price management practices to
offset cost inflation and protect margins.
Therefore, excluding any impact from
currency movements, we anticipate overall
Watson-Marlow sales in 2023 will be slightly
below 2022, with over 55% of full year sales
occurring in the second half of the year.
As Watson-Marlow continues driving
proactive price management practices across
all market sectors, slightly lower sales in 2023
implies mid-to-high single-digit sales volume
decline, with resulting negative operational
gearing. During the fourth quarter of 2022
and first months of 2023, Watson-Marlow
has taken steps to appropriately right-
size manufacturing capacity and reduce
overhead support costs in order to offset the
adverse impact of lower sales volumes on
Watson-Marlow’s adjusted operating profit
margin. As a result, we anticipate the full year
adjusted operating profit margin in 2023 will
remain at a similar level to 2022, with close to
65% of full year operating profit occurring in
the second half of the year.
Charges relating to the right-sizing of
manufacturing capacity and reduction in
overhead support costs are expected
to be excluded from 2023 adjusted
operating profit as defined in Note 2 to
the Financial Statements.
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5,000m
2
Innovation Centre
As Watson-Marlow builds its digital
maturity, through new tools and
investment, we are becoming more
agile and effective in customer
targeting and operational excellence.
In May 2022, we opened our
5,000m
2
global Innovation Centre
in Cornwall (UK). The Cardrew
Innovation Centre is a specialist
facility with more than 60 colleagues
dedicated to New Product
Innovation (NPI) processes for the
Watson-Marlow Business globally.
The facility incorporates test
laboratories, dedicated electronics
and software development
laboratories, as well as development
spaces for user experience, rapid
prototyping, metrology and robotics.
Watson-Marlow
Engineering for the future.
At any one time the team can
have up to 20 different NPI
projects underway to support the
development of new pumps and
fluid path designs. By remaining
focused on evolving our existing
ranges, as well as introducing new
solutions, we continue to meet the
needs of our customers and our
wider stakeholders. The work at
the Cardrew Innovation Centre is
essential to accelerating product
time-to-market, optimising our
development costs and providing
excellence to customers through a
standardised approach. All of this
helps Watson-Marlow maintain its
leading position in the global fluid
technology solutions market.
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91

Risk Management
Risk is an inherent part of our business operations,
core to aligning to our Purpose and we approach it
with the same deliberate, strategic consideration
as other aspects of the business.
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Our approach and
appetite for risk
Risk is an inherent part of our business
operations, core to aligning to our Purpose
and we approach it with the same deliberate,
strategic consideration as other aspects
of the business. The Risk Management
Committee monitors our operational risks,
in particular those identified as Principal
Risks, on an ongoing basis, while the Board
is responsible for the overall stewardship
of strategic risk management and internal
control. The Audit Committee is also involved
in the detailed review of risks and reports
back to the Board on its findings.
We hold annual top-down or bottom-
up reviews that provide information and
evaluations that the Committee uses
alongside the risk appetite and risk velocity
ratings for our Principal Risks to create an
effective system for monitoring, planning and
developing our Group-wide approach and
culture regarding risk.
The General Managers of our operating
companies are involved in the risk
assessment process. The evaluations of the
Committee, including setting the appropriate
levels of risk are then communicated to all
Group operating companies.
This ongoing monitoring and engagement
contribute to the Group’s Risk Register and
the way we manage our risks. As they are
dynamic and fluid, both our Risk Register and
Principal Risks reflect the current conditions
across the Group and guide our ongoing
monitoring and mitigation activities.
Further reading
Our Principal Risks
See pages 95 to 99
“
Our top-down risk review in 2022 underlined an
increased risk of disruption to our supply chain
caused partly by rising inflation. Our Principal
Risks have been realigned in recognition of
these pressures.”
Nicholas Anderson
Group Chief Executive
Key risk
management actions
The following key actions were undertaken
by the Group during 2022 in addition to the
regular monitoring of risks:
• Top-down risk review: the Committee
received high quality input from its Group
operating companies and determined that
they have sufficiently robust measures in
place to effectively mitigate the Group’s
Principal Risks
• Risk Register: the top-down risk review
informed the annual review, validation and
update of the Risk Register
• Risk velocity: Risk velocity was
considered and approved as a further
measure in our Group’s risk management
framework. Risk velocity ratings were
assigned and validated for all Principal
Risks as set out on pages 95 to 99.
• Rising inflation: due to elevated levels
of inflation in a number of countries and
recognising the severity of the impact on
our workforce, we decided to revalidate
our compensation parameters and bring
forward our pay review date in 2023 from
March to January to provide earlier support
to colleagues with inflationary cost of living
and thereby mitigating the risk of attrition
• Enterprise Risk Management:
the findings of the Enterprise Risk
Management review were discussed
and actions approved for implementation
during 2023 to further enhance the Group’s
risk management framework
• Exit from Russia: followed the imposition
of global sanctions on Russia, the Group
took the view that Russia’s ability to trade
with the world would be restricted for many
years to come and therefore to safeguard
the best interests of the Group, we took
the decision to exit Russia together with
the ceasing of all direct and indirect trade
with Russia
• Risk Appetite Statement: the Risk
Management Committee confirmed
the statement, which can be found on
page 142
The Committee’s analysis of the Principal
Risks affecting the Group, before mitigation,
is set out on pages 95 to 99.
Supply chain
Our upstream supply chain has continued
to suffer turbulence during 2022 on account
of scarcity of materials coupled with a revival
in demand which has negatively influenced
the stability of some suppliers. Despite a
weakening of the negative impact of the
COVID-19 pandemic, we have seen a new
source of turbulence in the form of the
Russian invasion of Ukraine which has led to
escalating energy costs and further material
constraints. We have responded with a
refinement in our supplier risk escalation
process with an intent to strengthen the
monitoring of the highest scored risks
throughout 2023, coupled with improved
supplier relationship management, continued
dual sourcing and improving the capability of
our supply teams. Whilst supply disruptions
have been limited in 2022 and the outlook
for 2023 is similar, we expect supplier price
increases, due to even higher levels of
inflation and energy costs.
Risk Register review
Following the annual review of the Risk
Register, Principal Risks and the responses
from the top-down risk review, ‘Loss of
Critical Supplier’ was, following a similar rise
last year, further elevated in priority in the Risk
Register. ‘Inability to Identify and Respond to
Changes in Customer Needs’ and ‘Breach of
legal and regulatory requirements, including
Anti-Bribery and Corruption laws (ABC)’ were
consequently lowered in ranking.
Strategic Report
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93

Risk Management continued
Group operating companies
Group-wide Risk Register
Maintained and reviewed by the Risk Management Committee
Risk assurance
Internal audit (ongoing review of effectiveness
by the Audit Committee and Risk Management Committee)
Risk review (external/internal)
Carried out at regular intervals
Reports to
Top-down review
Bottom-up review
Works with
Risk Management Committee
Oversees risk management processes and procedures and monitors mitigating
actions put in place by the Group. Works with the Audit Committee to monitor
theeffectiveness of internal controls and theaudit process, including ‘deep-dives’ into
specific risks
Audit
Committee
Board
Emerging risks
Following the disposal our Russian operating
companies, we are continuing to monitor
the conflict in Ukraine and its subsequent
impact on our Group, including rising energy
costs, increasing inflationary pressures and
corresponding interest rate rises in an effort
to curb inflation. These risks have been
partially offset by a reduction in COVID-19
related risks.
The Risk Management Committee and the
Board are actively involved in assessing
emerging risks and over-the-horizon risks.
This includes identifying future opportunities
and risks that develop from changes in
materials technology and nano technology.
In 2022, an example of this was manifested
in the Group’s acquisition of the Cotopaxi
business. Cotopaxi has been highly
complementary to our Digital Strategy which
enhances the way we deliver value to our
customers. Their proprietary STRATA system
has identified opportunities for energy savings
for steam end user customers and we are
expecting it to deliver similar efficiencies for
our other two Businesses. It is vital that we
keep our business current and able to use
the latest know-how.
Further reading
Risk Management Committee Report
See pages 139 to 142
Our Viability Statement
See pages 44 to 45
Our Going Concern Statement
See pages 43 to 44
TCFD Disclosures
See pages 59 to 61
Managing risks
The year-on-year trend for each Principal
Risk was assessed and updated and risk
appetite ratings validated for each of the
Principal Risks. Each of the Principal Risks
was also assigned a risk velocity rating.
Further information relating to risk velocity can
be found on page 95.
Climate change risks
Climate change risks are managed and
assessed in the same way as all other risks.
The focus and scrutiny with our stakeholders
including investors, governments,
organisations and consumers on the
potential impact, likelihood and timing of
climate change has increased in the last year.
We believe we have a critical role to play
in leading the decarbonisation of industrial
processes, and our One Planet Strategy sets
out the importance to the Group of capturing
these opportunities. Our acquisition activity
in 2022, which includes the acquisitions of
the Vulcanic and Durex Industries, further
positions us favourably to capture the
opportunities in the transition to a more
sustainable, low carbon world. Although not
a Principal Risk, Climate change has been
elevated to risk 9 in our Risk Register in
2022. Our Group Director of Sustainability
became a member of the Risk Management
Committee in 2022 in recognition of the
increasing importance of this risk. Following a
comprehensive review, our description of
this risk was updated in the Group Risk
Register, aligning with the TCFD framework
and recognising that climate change is
not a singular risk, but a combination of
physical and transitional risks that will emerge
differently under various scenarios. For more
information about the management of
climate-related risks, please see our TCFD
disclosures on pages 59 to 61.
Strategic Report
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Principal Risks
The following pages set out the Group’s
Principal Risks, as validated by the
Committee and describes the links to
strategy, the mitigation measures, the velocity
of each risk and the appetite for each risk.
The Trend column sets out the change in
direction of the risk, if any, since 2021.
Principal Risks are those risks that we
have identified as currently most relevant to
the Group.
Risk appetite ratings defined:
Very low
Following a marginal-risk, marginal-reward approach that represents the safest strategic
route available.
Low
Seeking to integrate sufficient control and mitigation methods in order to accommodate a
low level of risk, though this will also limit reward potential.
Balanced
An approach which brings a high chance for success, considering the risks, along with
reasonable rewards, economic and otherwise.
High
Willing to consider bolder opportunities with higher levels of risk in exchange for increased
businesspayoffs.
Very high
Pursuing high-risk, sometimes unproven options that carry with them the potential for high-
level rewards.
Risk velocity ratings defined:
Velocity Description Timeframe
Very low
Very slow impact, response time adequate to mitigate effects Felt after
12 months
Low
Slow impact, robust response to strategy may mitigate effects Felt within
12 months
Medium
Moderate time to impact, swift and robust response may mitigate effects Felt within
6 months
High
Fast impact, immediate response may mitigate effects Felt within
a month
Very high
Very rapid impact with little or no warning. Limited time to respond and
mitigate effects
Felt within
a week
Increase
f
rom FY2021
Decrease
from FY2021
No
change
Ranking
Likelihood
Control
High LowMedium
High LowMedium
High LowMedium
Impact
Risk velocity
Very high
Very low
1
2
3
5
P
e
o
p
l
e
O
p
e
r
a
t
i
o
n
a
l
4
E
c
o
n
o
m
i
c
8
7
6
Risk likelihood, control and impact
Principal Risks
1 Economic and political instability
2 Significant exchange
rate movement
3 Cybersecurity
4 Loss of manufacturing output
at any Group factory
5 Failure to realise
acquisition objectives
6 Loss of critical supplier
7 Breach of legal and regulatory
requirements (including ABC laws)
8 Inability to identify and respond to
changes in customer needs
Strategic Theme
1 Increase direct sales effectiveness
through market sector focus
2 Develop the knowledge and
skills of our expert sales and
service teams
3 Broaden our global presence
4 Leverage our R&D investments
5 Optimise supply
chain effectiveness
6 Operate sustainably and
help improve our customers’
sustainability
Strategic Report
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95

Risk Management continued
Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor
and explanation of change
Risk
appetite
rating Rationale for rating
1. Economic and political instability
The Group operates
worldwide and maintains
operations in territories
that have historically
experienced economic
or political instability,
including regime
changes. In addition to
the potential impact on
our local operations, this
instability also increases
credit, liquidity and
currency risks.
Very high
High
Medium
Low
Very low
• Strong internal controls, including internal audit and
appropriate insurance
• Operating in line with the Group Treasury Policy,
including currency exchange hedging and cash
pooling arrangements
• Externally-facilitated scenario planning exercises
• Resilient business model, strengthened by regular
strategic business reviews
• Well spread business by geography and sector
• Increased liquidity through more headroom on Group
debt facilities
Executive sponsor: Group Chief Executive
Change: This risk has increased due to escalating
global political uncertainties and a weakening
macroeconomic outlook, partially offset by declining
COVID-19 related risks.
Very high
High
Balanced
Low
Very low
We have the
background and
know-how to
successfully manage
the unique challenges
in economically and
politically volatile
territories. We are
willing to accept these
challenges where
opportunities for
growth exceed the
impact of this risk.
1 2 3 4 5 6
Link to strategic
theme:
2. Significant exchange rate movement
The Group reports
its results and pays
dividends in sterling.
Sales and manufacturing
companies trade in local
currency. With our local
presence in markets
across the globe, the
nature of our business
necessarily results in
exposure to exchange
rate volatility.
Very high
High
Medium
Low
Very low
• Maintain the spread of manufacturing across
currency areas
• Consideration of exchange rate exposures in the
manufacturing strategy
• Forward cover where appropriate and in line with
the Group Treasury Policy on hedging currency
exchange movements
• Focus on reducing manufacturing cost, including
sourcing materials from cheaper markets, and
purchasing in the UK in foreign currency
• Deployment of price management tools
Executive sponsors: Chief Financial Officer
Change: No change
Very high
High
Balanced
Low
Very low
We take a balanced
view of this risk as the
risk arises as a direct
result of our global
presence, but our
geographic spread
means we are not
wholly dependent on
any one currency.
1 2 3 4 5 6
Link to strategic
theme:
Key
Trend
Risk increased
No change to risk
Risk decreased
Link to strategic theme
Direct link
Indirect link
No link
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202296

Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor
and explanation of change
Risk
appetite
rating Rationale for rating
3. Cybersecurity
Cybersecurity risks
include theft of
information, malware,
ransomware and
compliance with evolving
statutory and legislative
requirements. Risks may
manifest through a direct
attack on our business or
through our supply chain.
Very high
High
Medium
Low
Very low
• Global assessment of our IT environment against UK
cyber essentials framework and prioritising actions
for improvement
• Deploying security tools to limit the impact and spread
of ransomware
• System access rights regularly reviewed
• Further strengthening of security for centrally-
managed systems for heightened protection
and consistency
• Mandatory cyber awareness training is delivered to all
staff electronically each year
Executive sponsors: Group IS Director
Change: This risk has increased due to rising
geopolitical tensions and sophisticated, state-backed
cyber attacks.
Very high
High
Balanced
Low
Very low
Concerns of potential
impact on the
business, in addition
to the important
considerations
surrounding
protection of personal
data, reinforce
our commitment
to implement and
maintain robust
security measures
across the Group.
1 2 3 4 5 6
Link to strategic
theme:
4. Loss of manufacturing output at any Group factory
The risk includes
loss of output as
a result of natural
disasters, industrial
action, accidents or
other causes. Loss of
manufacturing output
from our larger plants
risks serious disruption to
Group sales.
Very high
High
Medium
Low
Very low
• New facility for Watson-Marlow Fluid Technology
Solutions in North America
• Expansion of capacity planned for Thermocoax in
France and BioPure in the UK
• Capacity planning and holding stock in
sales companies
• Conducting audits/inspections
• Annual risk assessments and business
continuity planning
• Reviewing and maintaining appropriate insurance cover
• Continuing commitment to employee policies, ensuring
satisfactory benefits and regular communication with
all employees
• Comprehensive manufacturing footprint
project undertaken
• Investment in new sites to open alternative lines
of supply
Executive sponsors: Managing Directors of Steam
Specialties, Electric Thermal Solutions and Watson-
Marlow Fluid Technology Solutions
Change: No change
Very high
High
Balanced
Low
Very low
While we have
mitigated this risk
through a geographic
spread of factories,
calculated replication
of capacity and
management of
stock, we have a
low appetite for
this risk due to the
potential negative
consequences
to the Group and
its customers.
1 2 3 4 5 6
Link to strategic
theme:
Strategic Report
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97

Risk Management continued
Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor
and explanation of change
Risk
appetite
rating Rationale for rating
5. Failure to realise acquisition objectives
The Group mitigates
this risk in various
ways, including through
comprehensive due
diligence, professional
advisers, contractual
protections and
comprehensive
integration planning.
However, there are
some variables that are
difficult to control, such
as adverse economic
conditions, or the loss
of key employees,
which could impact
acquisition objectives.
Very high
High
Medium
Low
Very low
• Regular review of acquisition criteria in line with
strategic plan
• Board approval of integration plans for
major acquisitions
• Scrutiny of targets and implementation plans by
external advisers and internal key players
• Use of retainer/escrow to provide protection against
warranty claims
• Use of insurance as protection against seller breach
and non-disclosure
• Ensuring valuation models show a healthy return
on investment
• Regular monitoring of performance by the Board
against the approved investment case
Executive sponsors: Group Chief Executive
Change: No change
Very high
High
Balanced
Low
Very low
Thorough planning
and proper due
diligence can
mitigate many
of the potentially
risky aspects of
an acquisition.
Implementation plans
must be well-
developed and
carefully pursued
to achieve the
full strategic and
financial benefits.
1 2 3 4 5 6
Link to strategic
theme:
6. Loss of critical supplier
This risk relates to
the loss of a critical
supplier that could
result in manufacturing
constraints and delayed
deliveries to customers.
Very high
High
Medium
Low
Very low
• Improved supplier risk assessments and actions to
create supply chain alternatives
• Supplier selection processes have been improved
with increased importance placed on product
quality, product delivery, financial stability and
supplier sustainability
• Supplier development and supplier management
resources have been strengthened
• As part of our procurement strategy, we are securing
more robust sources of supply
• Dual sourcing strategies for critical suppliers
and critical parts give us greater flexibility in our
supply chain
• Continued with global market assessment exercises
to establish correct price points and mitigate
price increases
Executive sponsors: Business Supply Heads
Change: This risk has increased on account of
continuing supply chain headwinds, affected by zero-
COVID policy in China (which has now ended) and the
Russia/Ukraine crisis, and the impacts will continue into
2023, as global supply chains look to realign to more
secure sources of supply.
Very high
High
Balanced
Low
Very low
Our expenditure
with suppliers is not
heavily concentrated
in any one supplier
or group of suppliers.
Therefore, while
the loss of a critical
supplier would
present logistical
difficulties and would
likely lead to delayed
deliveries, the impact
would be limited in
terms of number
of products and
customers affected.
1 2 3 4 5 6
Link to strategic
theme:
Strategic Report
Spirax-Sarco Engineering plc Annual Report 202298

Principal Risk and
why it is relevant Trend
Risk
velocity
Key mitigation, sponsor
and explanation of change
Risk
appetite
rating Rationale for rating
7. Breach of legal and regulatory requirements (including ABC laws)
We operate globally
and must ensure
compliance with laws
and regulations wherever
we do business. As we
grow into new markets
and territories we
continually review and
update our operating
procedures and ensure
our colleagues are fully
informed and educated
in all applicable legal
requirements, such as
with respect to anti-
bribery and corruption
(ABC) legislation.
Breaching any of these
laws or regulations
could have serious
consequences for
the Group.
Very high
High
Medium
Low
Very low
• Ongoing global monitoring of commercial
arrangements and agreements, with appropriate
professional advice
• Established procedures to maintain accreditations
• Annual Group-wide ABC training improved with a
new programme
• Multi-lingual, multi-national secure whistle-
blowing hotline
• Group Litigation Report and ongoing monitoring
of cases
• Regular updates on Corporate Governance and
Stock Exchange rules
• General Data Protection Regulation compliance plan
in place
• Conducting supplier audits
• Engaging suppliers to commit to compliance with the
principles of the Supplier Sustainability Code
Executive sponsors: Group General Counsel
Change: No change
Very high
High
Balanced
Low
Very low
We abide by the laws,
rules and regulations
of the jurisdictions
in which we operate
and given the serious
consequences for
breaching these laws,
rules and regulations,
we have a very low
appetite for this risk.
1 2 3 4 5 6
Link to strategic
theme:
8. Inability to identify and respond to changes in customer needs
This risk could lead to
a reduction in demand
from a failure to respond
to changes in the
needs of customers or
technology shifts.
Very high
High
Medium
Low
Very low
• Stronger presence of sales engineers, compared with
competitors, in the marketplace
• Acquisition of Durex Industries and the Vulcanic
Group to better position the Group in meeting
customer demand in the transition to more
sustainable industries
• New product ideas generated by market development
managers from close alignment with sales engineers
and customers
• Sales and competitor analyses undertaken to identify
any trends or technology shifts
• Digital strategies for each Business are either
underway or under preparation with longer term
implications on investment, resource levels, new skills
and need to develop external partnerships
• A Group Digital Director leading the Group
Digital Strategy
• Acquisition of Cotopaxi to further accelerate the
Group digital learning curve
Executive sponsors: Managing Director,
Steam Specialties
Change: No change
Very high
High
Balanced
Low
Very low
The Group continues
to focus on its market
awareness, invests
in technical and
sales knowledge
via the Spirax Sarco
Academy and,
through Customer
first sectorisation,
seeks to be more
closely attuned to its
customers. There is a
good level of control
effectiveness, but
a low appetite for
this risk.
1 2 3 4 5 6
Link to strategic
theme:
Strategic Report
Spirax-Sarco Engineering plc Annual Report 2022
99

Welcome to our 2022 Governance Report. In this report you
can see the composition of our Board and our Executive
Committee and find out how our governance framework
for planning, implementation and monitoring of Company
performance ensures we are well placed to respond and
adapt to the changing environment.
Our Governance
Governance
Spirax-Sarco Engineering plc Annual Report 2022100

The ways in which we have aligned governance to strategy to ensure compliance with some
of the key elements of the Code and our leadership on these matters are highlighted below.
Leading effective governance to ensure the successful
management of the Group across its diverse Businesses.
Culture and Values
See pages 21 and 109
Business model
See pages 22 and 23
Stakeholder engagement
See pages 111 to 113
Sustainable thinking
See pages 46 to 71
Resource/
capital allocation
See pages 41 to 44
Workforce practices
See pages 48 to 55
and 114 to 117
Strategy
See pages 22 to 37
Company Purpose
See inside front cover
Effective controls
and framework
See pages 93 to 99
and 128 to 142
Our report outlines the Board’s
key areas of focus in 2022.
Corporate Governance
Statement
The Disclosure Guidance and Transparency
Rules (DTR) require a company to include in
its Directors’ Report a governance statement
containing certain information. However, as
allowed by DTR 7.2.9, we have chosen to set
out the information in this governance section
of the Annual Report. The Group’s risk
management and internal control framework
and the Principal Risks and uncertainties,
described on pages 93 to 99, the Directors’
Report on pages 169 to 172 and the various
Committee Reports on pages 114 to 147
also contained required information and are
incorporated into this statement by reference.
In this section
Our Governance 100
Board leadership and Company Purpose
– Chair’s introduction 102
– Board of Directors 104
– Our Group Executive Committee 106
– The Board at a glance 107
– Board activities 108
– Leading with Purpose 109
– Engagement with stakeholders
and Board decision making 111
– Colleague Engagement Committee Report 114
Engineering our difference case study:
– for shareholders 118
Division of responsibilities 120
– Governance framework 121
Board composition, succession and evaluation 122
– Nomination Committee Report 124
Audit, risk and internal control
– Audit Committee Report 128
– Risk Management Committee Report 139
Remuneration
– Remuneration Committee Report 143
– Remuneration at a glance 2022 148
– Annual Report on Remuneration 149
– Remuneration Policy 2023 160
Regulatory disclosures 169
Statement of Directors’ Responsibilities 173
Governance
Spirax-Sarco Engineering plc Annual Report 2022
101

Our Purpose
Our Purpose, to create sustainable value
for all our stakeholders as we engineer
a more efficient, safer and sustainable
future, helps our Group companies to stay
relevant in a fast-changing world. It drives
our direction and priorities and connects us
with the communities of which we are part.
Our Purpose also provides our colleagues
with the clarity needed to respond quickly
and with agility as part of ONE Group.
Environmental, Social and
Governance (ESG) oversight
I would like to take the opportunity this year
to set out in detail the Board’s direct and
comprehensive oversight of ESG matters,
which are essential to the execution of our
Group Strategies.
ESG and Health and Safety updates are
always the first two operational matters
addressed by the Board at each meeting.
Details of matters discussed at meetings held
in 2022 can be found on pages 108 and 109.
Sustainability reports will include updates
on the One Planet Strategy and Everyone
is Included plan and progress against
sustainability KPIs.
The Board held various meetings with
the Group Director of Sustainability,
Group Sustainability Reporting Manager,
Sustainability Data Manager and the Group’s
Chief Financial Officer (as chair of the net zero
initiative), to:
• discuss the approach to sustainability,
performance and progress
• review the Annual Report ESG disclosure
metrics (assessed by risk)
1
• review and discuss ESG data
governance processes and agreed best
practice improvements
• discuss and supervise the audit and
assurance of ESG data (including
extending the scope to include water use)
• review and supervise the Task Force on
Climate-related Financial Disclosures
(TCFD)
Subsequent to these meetings, updates
and reports were presented to the Audit
Committee for discussion and where
appropriate, recommendations to the Board
for inclusion in the Annual Report & Accounts
on the matters listed above.
During 2022 there were three meetings
of the Colleague Engagement Committee
(CEC) – previously know as the Employee
Engagement Committee. The Committee’s
principal remit is to ensure that the voice of
the workforce is considered in all aspects of
the Board’s thinking and to understand and
support colleague engagement activities
across the Group. The CEC also has a clear
programme and agenda for meeting self-
selected groups across the business, without
management present, in order to understand
better their roles and gain their feedback on
the organisation and their experience working
for the Company.
In 2022, the CEC facilitated two meetings
on behalf of the Remuneration Committee,
in addition to their formal programme of
meetings, to better understand Executive and
colleague pay arrangements as part of the
review of the Company’s Remuneration Policy
which is due for reapproval by shareholders
at the 2023 Annual General Meeting.
Full information of the CEC’s activities in
this regard can be found in the CEC Report
on pages 114 to 117 as well as in the
Remuneration Committee Report on pages
143 to 168.
Section 172 Statement
The long-term success of our business is
dependent on the way we work with all
our stakeholders and continues to require
effective engagement, constructive working
practices and recognition of stakeholder
views in order to create and sustain value
for all.
In respect of Section 172 of the Companies
Act 2006 (as amended by the Companies
(Miscellaneous Reporting) Regulations 2018),
the Directors have prepared a statement
describing how they have had regard to
the matters set out in Section 172, when
performing their duty to promote the success
of the Company see pages 111 to 113.
Board changes
On 31st January 2023, we reported that, for
personal reasons, Olivia Qiu stepped down
as a Non-Executive Director. On behalf of our
shareholders, the Board acknowledges with
gratitude Olivia’s significant contribution since
her appointment. We respect her decision to
step back from some external commitments
at this time and we wish her all the very best
for her future.
In line with the succession planning
undertaken by the Nomination Committee,
we have initiated the process to appoint
another Non-Executive Director with the
skills and experience required to support the
implementation of our strategies in line with
our commitments to inclusion and diversity.
“
ESG has long been at the heart of our Group’s
core activities. The Board is pleased to have been
directly involved with refreshing our One Planet:
Engineering with Purpose Sustainability Strategy
in 2021 and overseeing its implementation in 2022.
We have been more challenging with our ESG goals
and targets and equally our direct involvement
continues to increase given its importance to
shareholders and wider stakeholders.”
Jamie Pike
Chair
Board leadership and Company Purpose
Chair’s introduction
1 2021 Annual Report & Accounts page 129
Governance
Spirax-Sarco Engineering plc Annual Report 2022102

Board composition
As illustrated in the Board biographies on
pages 104 and 105 and the Board at a
glance (as at 31st December 2022) on page
107, we continue to ensure that our Board
is diverse ethnically, culturally and in terms of
gender and we have always been transparent
in our reporting of Board composition.
The Financial Conduct Authority (FCA) has
introduced new listing rules, effective for
accounting periods starting on or after 1st
April 2022, to create more transparency
around this matter. Whilst we already disclose
much of the information already, we have
chosen to include all the required information
voluntarily this year. This can be found in the
Nomination Committee Report on pages 124
to 127.
Board Performance
The Chair confirms that, following a formal
performance evaluation, each Director’s
performance continues to be effective and
each Director demonstrates commitment
to the role. The Senior Independent Director
conducted a review of the performance of the
Chair as required by the Code and the review
concluded that the Chair’s performance
was good.
Outcome of 2022
We consider that our performance was
strong in 2022 whilst we continued to make
the significant investments in our future
growth. More information on the 2022 Group
performance can be found in the Strategic
Report on pages 1 to 99.
Fair, balanced and
understandable
In accordance with the Code, the Directors
confirm that they consider the Annual
Report & Accounts, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Group’s financial position,
performance, business model and strategy.
Statement by the Directors
on compliance with the Code
The Code applied to the Group for the
financial year ended 31st December 2022.
The Board considers that it has complied,
in full, with the provisions of the Code other
than provision 38 (Executive Directors’
pension contributions) where, in line with
the 2020 Remuneration Policy, all Executive
Directors will have moved to the new level
of 10% of base salary by the end of 2022.
With effect from 1st January 2023 we are
now fully compliant with all Code provisions
following the final step change bringing the
incumbent Group Chief Executive’s pension
contributions in line with the wider colleague
maximum contributions (more information on
this can be found in the Remuneration Report
on page 145. We detail our compliance,
on a Code provision-by-provision basis, in
the Corporate Governance section on our
website, www.spiraxsarcoengineering.com.
Proxy advisory firms
The Company engages with a number of
proxy advisory firms ahead of publication
of its Notice of AGM and publication of
their proxy reports in order to, where
possible, align proposed resolutions with
investor expectations.
Annual General Meeting
The 2023 Annual General Meeting (AGM)
is scheduled to take place on Wednesday,
10th May 2023 and an explanation of
the resolutions sought, is set out in the
Circular posted on our website and sent to
shareholders in the format selected by them.
As required by the Code the resolutions
regarding each Director’s appointment or
reappointment will be accompanied by
information on why their contribution is, and
continues to be, important to the Company’s
long-term sustainable success. In 2023 we
will be refreshing our Remuneration Policy
and modifying our Performance Share Plan
following a shareholder consultation.
This year we are pleased to reinstate a
physical AGM meeting and welcome our
shareholders in person. I look forward
to meeting shareholders at the AGM on
Wednesday 10th May 2023.
Jamie Pike
Chair
8th March 2023
Further reading
The Notice of Annual General Meeting
and all governance-related policies
and procedures are available
to view and download:
www.spiraxsarcoengineering.com
Board focus for 2023
• Continue to support the Group
Executive Committee and the three
Businesses with their growth plans
through the implementation of their
medium-term plans.
• Key management presentations
and discussions are planned in
2023 across all of our Businesses,
including Business Digital strategies
and Group Strategic risks
• Further consolidate our position
through both organic and
inorganic growth
• Focus on ESG and climate change
• Board succession planning
Governance
Spirax-Sarco Engineering plc Annual Report 2022
103

Board leadership and Company Purpose continued
Board of Directors
At year end 2022
A EE N A EE N
EE N R
RK RK N
Nimesh Patel BSc
Chief Financial Officer
Appointed to the Board
September 2020
Areas of experience
International business, senior management,
M&A, finance and accounting, industrial,
pensions, tax and treasury
Background
Before joining the Group in 2020, Nimesh
Patel was Chief Financial Officer of the De
Beers Group. Prior to that he was Group
Head of Corporate Finance at Anglo American
plc, leading a team based in London and
Johannesburg. Previously, Nimesh spent 14
years in investment banking at both JP Morgan
and as a Managing Director at UBS.
External appointments
Co-Chair of the FTSE Women Leaders Review
and Trustee of Barts Charity
Jamie Pike MBA, MA, MIMechE
Chair
Appointed to the Board
May 2014
Areas of experience
Engineering, international business, senior
management, M&A, strategy
Background
Jamie Pike joined Burmah Castrol in 1991
and was Chief Executive of Burmah Castrol
Chemicals before leading the Foseco buyout
in 2001 and its subsequent flotation in 2005.
Prior to joining Burmah, he was a partner at Bain
& Company. Jamie was educated at Oxford,
holds an MBA from INSEAD and is a Member of
the Institute of Mechanical Engineers.
External appointments
Non-Executive Director and Chair designate
of XP Power Limited.
Nicholas Anderson BSc Eng., MBA
Group Chief Executive
Appointed to the Board
March 2012. Appointed Chief Operating Officer
in August 2013 and Group Chief Executive in
January 2014
Areas of experience
Engineering, international business, senior
management, M&A, operational, strategy, sales
and marketing, industrial
Background
Before joining the Group in 2011 as Director
EMEA, Nicholas Anderson was Vice-President
of John Crane Asia Pacific (part of Smiths
Group plc), based in Singapore and President
of John Crane Latin America, based in the USA.
Previously, Nicholas held senior positions with
Alcoa Aluminio in Argentina and Brazil, starting
his career with the Foseco Minsep Group plc
in Brazil.
External appointments
Non-Executive Director of BAE Systems plc.
Peter France
Independent Non-Executive Director
Appointed to the Board
March 2018
Areas of experience
Engineering, international, senior management,
M&A, operational, strategy, sales and marketing,
industrial, manufacturing
Background
Peter France was Chief Executive Officer of
Rotork plc from 2008 to 2017. He also gained
wide experience in a number of key roles at
Rotork plc from 1989 to 2008 including acting
as Chief Operating Officer and Director of Rotork
South East Asia based in Singapore.
Peter is a Chartered Director of the Institute
of Directors.
External appointments
Chief Executive Officer of ASCO Group Limited.
Caroline Johnstone BA, CA
Independent Non-Executive Director
Appointed to the Board
March 2019
Areas of experience
International, M&A, finance, people
Background
Caroline Johnstone has 40 years’ experience
working with large global organisations on
mergers and acquisitions, culture change
and cost optimisation. She was a partner in
PricewaterhouseCoopers (PwC) and sat on
the UK Assurance Board as people partner.
Caroline is a member of the Institute of
Chartered Accountants of Scotland.
External appointments
Chair of Synthomer plc, Non-Executive Director
and Audit Committee Chair of Shepherd Group
Ltd, a private company which owns Portakabin
Limited and sits on the Governing Board of the
University of Manchester.
Angela Archon MSc SE, BSc CEng
Independent Non-Executive Director
Appointed to the Board
December 2020
Areas of experience
Engineering, operational, strategy, international,
M&A, manufacturing, senior management
Background
Angela Archon held various senior executive
positions while employed by IBM Corporation
representing them for eight years as Board
Liaison for the National Action Council for
Minorities in Engineering. She is a member
of the Engineering Honour Society and
earned a Professional Engineer’s license.
Until December 2022, she was a non-executive
director of Switch Inc., listed on the New York
Stock Exchange.
External appointments
CommonSpirit Health, Non-Executive Director of
DT Midstream Inc.
Governance
Spirax-Sarco Engineering plc Annual Report 2022104

EE N R
A EE N
A N R
A N R
Richard Gillingwater MA
Independent Non-Executive Director
&Senior Independent Director
Appointed to the Board
March 2021
Areas of experience
International business, investment, finance and
non-executive experience
Background
Until December 2022, Richard Gillingwater
was Chair of Janus Henderson Group plc.
He has also held a range of executive positions
within global investment banks including
Kleinwort Benson, Credit Suisse and Barclays
de Zoete Wedd. Richard holds an MBA from
the International Institute for Management
Development, a BA Law from Oxford University
and is qualified as a solicitor.
External appointments
Senior Independent Director of Whitbread plc
and Governor of the Wellcome Trust.
Andy Robson LLB Law Barrister
Group General Counsel and
Company Secretary
Appointed as Group General Counsel
and Company Secretary
June 2012
Areas of experience
International law, corporate governance,
international business development including
M&A, business restructuring, information
technology, contract negotiation
Background
Before joining the Group in 2012, Andy Robson
was General Counsel and Company Secretary
of RM plc, a role he held for 14 years. Prior to
this, Andy was European General Counsel
with Cendant Corporation headquartered in
Baltimore, USA and worked in the USA for
Blackstone Trust.
Jane Kingston BA
Independent Non-Executive Director
Appointed to the Board
September 2016
Areas of experience
Engineering, international, senior management,
operational, people, remuneration
Background
From 2006 until her retirement in December
2015, Jane Kingston served as Group Human
Resources Director for Compass Group PLC.
Prior to this, she served as Group Human
Resources Director for BPB plc. Jane has
worked in a variety of sectors, including roles
with Blue Circle Industries plc, Enodis plc
and Coats Viyella plc and has significant
international experience.
External appointments
Non-Executive Director and Remuneration
Committee Chair of Inchcape plc.
Olivia Qiu PhD, BSc
Independent Non-Executive Director
Appointed to the Board
December 2020 to January 2023
Areas of experience
Engineering, international, digital
transformation,innovation
Background
Olivia Qiu has held a range of executive positions
with large global organisations including Chief
Executive Officer and Board Director of Alcatel-
Lucent Shanghai Bell. Olivia was previously a
Non-Executive Director of Renault Group and
Saint Gobain.
External appointments
Chief Innovation Officer with Signify
(formerlyPhilips Lighting).
Due to personal reasons, Olivia stepped down
from the Board on 31st January 2023.
Kevin Thompson BSc, FCA
Independent Non-Executive Director
Appointed to the Board
May 2019
Areas of experience
Engineering, international, senior
management,M&A, strategy, finance,
pensions,taxand treasury
Background
Kevin Thompson was Group Finance Director
of Halma plc from 1998 to 2018, having joined
Halma as Group Financial Controller in 1987.
Kevin qualified as a Chartered Accountant with
PricewaterhouseCoopers (PwC) and is a Fellow
of the Institute of Chartered Accountants in
England and Wales.
External appointments
Trustee of the Great Ormond Street Hospital
Children’s Charity.
Key
A
Audit Committee
N
Nomination Committee
EE
Colleague Engagement Committee
R
Remuneration Committee
RK
Risk Management Committee
Denotes Committee Chair
Executive
Non-Executive
Company Secretary
Group Leadership Team
Flag denotes country of citizenship
Further reading
Read about our Board diversity,
composition, succession and evaluation.
See pages 124 to 127.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
105

Board leadership and Company Purpose continued
Our Group Executive Committee
Jim Devine
Group HR Director
Appointed to the Group
ExecutiveCommittee
February 2016
Background
Before joining the Group in 2016,
Jim was Group HR Director at
Chemring plc and prior to that
held a range of senior HR roles at
Centrica plc, Ford Motor Company
and BAE systems.
Andrew Mines
Managing Director, Watson-
Marlow
Appointed to the Group
ExecutiveCommittee
November 2019
Background
Prior to joining the Group, Andrew
held the position of Executive Vice
President, Global Construction
Products of Illinois Tool Works Inc.
(ITW) and was a member of the
Group Executive Leadership Team.
Andrew had a 23-year career
with ITW comprising engineering,
sales, manufacturing and senior
roles in global Automotive and
Construction sectors.
Sarah Peers
Group Director
of Sustainability
Appointed to the Group
ExecutiveCommittee
October 2022
Background
Sarah joined the Group in 2013
as Group Head of Corporate
Communications and was
appointed Group Head of
Sustainability in July 2020
and is now Group Director of
Sustainability. Prior to joining the
Group, Sarah worked as a qualified
teacher. Sarah holds a Doctorate in
Historical Geography (specialising
in early industrial labour history)
from the University of Oxford.
Maurizio Preziosa
Managing Director,
Steam Specialties
Appointed to the Group
ExecutiveCommittee
January 2021
Background
Maurizio joined Spirax-Sarco
Engineering Group in 2011 as
Managing Director of Spirax
Sarco Italy and developed his
career in the Group by assuming
the role of Regional General
Manager Southern Europe, Global
Divisional Director Gestra, up to the
appointment at Group Managing
Director Steam Specialties in 2021.
Prior to joining Spirax-Sarco
Engineering Maurizio worked
in ABB Group with different
sales management and general
management roles.
Nicholas Anderson
Group Chief Executive
See Biography on Board of
Directors page 104.
Nimesh Patel
Chief Financial Officer
See Biography on Board of
Directors page 104.
Andy Robson
Group General Counsel
and Company Secretary
See Biography on Board of
Directors page 105.
Armando R. Pazos
President, Electric
Thermal Solutions
Appointed to the Group
ExecutiveCommittee
December 2021
Background
Armando joined the Group in
March 2020 as the Vice President
of Global Sales and joined the
GEC in December 2021 following
his promotion to President and
Managing Director of the Electric
Thermal Solutions Business.
Prior to this, Armando was at
Ingersoll Rand, an industrial global
manufacturer of tools, pumps, and
air compressors, for 24 years.
Governance
Spirax-Sarco Engineering plc Annual Report 2022106

Composition and skills
Expertise and experience Board makeup
5yrs 10mths
Average length of service
Engineering
Senior
management
M&A
Strategy Operational
Finance
Investment
Innovation
Digital
International
7
7
7
5
2 2
2 2
4
1
1
10
People
Sales &
marketing
Gender diversity
Length of service
NationalityCore expertise
Ethnic diversity
Male Female
46
Asian Indian Black
1117
White
1-3
years
3-5
years
5+
years
34 3
Board and Committee attendance
Jamie Pike 6/7
3
– – 6/7
3
3/3 –
Nicholas Anderson 7/7 – – – – 5/5
Richard Gillingwater 7/7 5/5 5/5 7/7 – –
Nimesh Patel 6/7
2
– – – – 5/5
Jane Kingston 7/7 – 5/5 7/7 3/3 –
Kevin Thompson 7/7 5/5 5/5 7/7 – –
Caroline Johnstone 7/7 5/5 – 7/7 3/3 –
Peter France 7/7 5/5 – 7/7 3/3 –
Angela Archon 7/7 – 5/5 7/7 3/3 –
Olivia Qiu 6/7 4/5 – 6/7 3/3 –
Board
Audit
Remuneration
Nomination
Colleague
Engagement
Risk
1
How the Board spent its time
15%15%
Acquisitions Sustainability
20%
Operations and risk
20%
Strategy
10%
Finance
10%
Governance
10%
People
1 The Risk Committee consists of the Executive Directors, members of the GEC and other key individuals, full details can be found on page 139.
2 Attendance at Management Training Course
3 Absence due to a prior commitment, however fully briefed the delegate chair
6
11
11
British
French
American
British/
Irish
British/
American
The Board at a glance
At year end 2022
Governance
Spirax-Sarco Engineering plc Annual Report 2022
107

Board and Committee
meetings during the year
Ordinarily the Board meets seven times a
year and then on an ad hoc basis as required.
In the year ending 31st December 2022, in
addition to the seven scheduled meetings of
the Board, there were two ad-hoc meetings
to discuss specific topics arising outside of
the formal Board and Committee schedule.
These meetings specifically addressed the
acquisitions of Durex Industries and the
Vulcanic Group of Companies. Attendance at
scheduled Board and Committee meetings is
set out in the table on page 107. Other senior
Executives and Non-Executive Directors
(where they are not formal Committee
members) attended by invitation.
All Directors are expected to attend all
Board meetings and relevant Committee
meetings unless prevented by prior
commitments, illness or a conflict of interest.
Directors unable to attend specific Board or
Committee meetings are sent the relevant
papers and asked to provide comments in
advance of the meeting to the Chair of the
Board or Committee.
In addition, all Board and Committee
members receive the minutes of meetings as
a matter of course.
Board activities
The Board is collectively responsible for
the long-term success of the Company, its
strategy, governance and internal controls
and is accountable for its activities. The Board
ensures good governance practices are
embedded throughout the Group as they
are an integral part of running a successful
business. This specifically includes a focus on
Environmental Social and Governance (ESG)
matters.
To support this, the Board considers reports
on the key activities of the Group and reports
from the Chairs of the Audit, Nomination,
Remuneration and Colleague Engagement
Committees as appropriate at each
scheduled Board meeting. It also receives
information on important forthcoming events,
reports on environmental, sustainability and
health & safety matters ,on strategy, investor
relations and legal affairs.
The Chair, with assistance from the
Group General Counsel and Company
Secretary, is responsible for the governance
arrangements. This includes meeting
agendas, timely information flows and
facilitating dialogue between Executive and
Non-Executive Directors, to encourage an
open and supportive culture.
Board agendas are carefully planned to
ensure focus on the Group’s strategic
priorities and key monitoring activities,
as well as reviews of significant issues.
The Company Secretary is responsible for
maintaining forward agendas for the Board
and its Committees, ensuring that items
are evenly distributed and scheduled at
the appropriate times of the year for timely
consideration. Agenda timings are proactively
managed to enable sufficient time for
consideration of items.
The Board regularly receives papers and
presentations from senior management,
giving the Board the opportunity to meet
colleagues below Board level. This helps
to embed a positive attitude to good
governance in the Company’s culture and
ensures that processes and procedures are
adhered to by demonstrating the Board’s
desire to ensure they have robust information
on which to make sound decisions and carry
out their statutory duties.
As per best practice, our Non-Executive
Directors meet with Deloitte, (external auditor)
and Korn Ferry, (independent remuneration
consultants), separately from our Executive
Directors after every Board meeting.
The Colleague Engagement Committee
meets with groups of colleagues separately
from management. More information about
these meetings can be found on pages 114
to 117.
Annually the Board combines a scheduled
Board meeting with further meetings focusing
on strategic development and to review the
Group’s longer term outlook. At this meeting
members of the Group Executive Committee
present strategy papers for their business
areas including financial, technology, organic
and inorganic growth and stakeholder
engagement. On ESG matters, the Group
Director of Sustainability presents updates on
progress with the implementation of the One
Planet Strategy at every Board meeting and
the Group Head of Safety regularly attends
Board meetings. In addition, the Board has
been actively involved in the setting of goals
and targets relating to ESG matters and their
translation into performance-related metrics.
The Group’s Whistle-blowing Policy and
independently facilitated whistle-blowing
platform enables colleagues to report any
concerns related to unethical or illegal
conduct within the business, anonymously
if preferred. The Board receives reports from
the Group General Counsel if any concerns
have been raised via the policy.
Board leadership and Company Purpose continued
Board activities
Strategy
• Reviewed and assessed medium-
term plans for all three Businesses
• Reviewed Corporate Strategy
• Reviewed One Planet Strategy
• Two-day Strategy presentations
• Acquisitions of Durex Industries and
the Vulcanic group of companies
Audit and risk
• Annual Risk Review
• Reviewed external financing facilities
• Withdrawal from Russia
• Deep-dive on Principal Risk ‘Loss of
manufacturing output’
Performance
• Monthly, quarterly, biannual and
annual trading, as appropriate*
• Company share performance and
shareholder/analyst feedback*
• Business reviews and senior
management presentations
• Aflex, Spirax USA and BioPure
performance and management review
by Board during visits to operations
Culture and People
• Rising Talent presentations
• Group Talent update
• Full organisational and succession
review across all senior management
(to GEC-3)
• Colleague focus groups facilitated by
Colleague Engagement Committee,
which includes a number of NEDs
• Reviewed and approved the 2023
Diversity and inclusion goals
• Board Visits to Aflex Hose, Spirax
USA and BioPure
ESG and Health and Safety
• Health and safety and sustainability
strategy updates*
• Setting goals and targets for
forthcoming year
• Reviewed and supervised the full
year results for sustainability KPIs and
progress against targets
• Received a sustainability
recruitment update
• Received an update and reviewed
the Group’s 2021 TCFD disclosures
• Approved introduction of new Electric
Company Vehicle Scheme
• Aflex Hose, Spirax Sarco USA
and BioPure ESG review during
Board visits
Key Board activities
Governance
Spirax-Sarco Engineering plc Annual Report 2022108

Governance
• Received updates by
Committee Chairs*
• Received updates on all material
legal and Governance matters*
• Compliance programmes update*
• Approval of 2022 Modern
Slavery Statement
• Reviewed Bid Defence
• Refreshed Sanctions Policy
• Refreshed Whistle-blowing policy
and approved colleague-wide
awareness campaign
* Standing items at every scheduled
Board meeting
Leading with Purpose
“ As a more inclusive
Group we aim to
unlock more of
our creativity and
innovation, drive
superior performance
as well as retain and
attract new talent.”
Jamie Pike
Chair
Culture and Values
To achieve our Purpose, we rely on our
widely understood and established business
model and most importantly, a strong and
supportive culture. Our culture comes from
colleagues living our Values (see page 21)
to provide mission-critical solutions for our
customers’ essential industrial processes.
Our Values guide Board decision-making.
We prioritise Safety and through our
engagement with each other and our Group
colleagues we help improve Collaboration
and Respect. We support Excellence
and Customer Focus through an ongoing
programme of investment – our decision-
making is supported by site visits and
management presentations. We promote
and support Integrity through our transparent
approach, as well as ensuring the Group has
appropriate processes and controls which
underpin strong corporate governance.
Key Board activities
continued
The Board monitors and assesses culture using the following mechanisms:
Approach How it links to culture
Colleague Engagement Committee Insight (in form of business and HR leads presenting) from different business areas to
understand what is happening locally as drivers to improve engagement and colleague
experience. This enables discussion and visibility of how values are being lived through
organisation and how aligned local culture is to the current and future strategic objectives.
Colleague survey Gives global insight into colleague engagement and enablement that informs where focus/action
needs to be placed to support the organisation’s culture and the group’s strategic goals.
Committee Focus Groups Monthly touchpoints with groups of colleagues from different business areas globally to listen to
the colleague voice, open dialogue and gain feedback on what it’s like to work at Spirax/build
assurance that the desired culture is being embedded within the organisation. This involves
presenting key themes to the management teams to support any local/group activity that is
required. During each of the operational visits detailed in board activities (Aflex, BioPure and
Spirax Sarco USA) a Colleague Focus Group takes place with feedback to management and
the CEC.
Internal Audit reports Information from the internal audit team on the impact of policies and processes
Inclusion and Diversity Review and supervision of Diversity goals on gender and ethnicity
Other Whistle-blowing cases, grievance as well as ‘speak-up’ data, health and safety data
(includingnear misses), promptness of payments to suppliers, attitudes to regulators,
The Board was pleased to approve and
oversee the implementation of the Group’s
Inclusion Plan in 2022, noting the impact it is
already having across the Group. To further
strengthen our focus on inclusion and equity
leading to greater diversity in our Group, we
approved a set of refreshed Diversity goals at
our December meeting, which can be found
on page 50.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
109

Reinforcing our ‘speak-up’ culture globally
As part of ensuring our workplaces are safe and inclusive, we
educate and support our colleagues to help us eliminate wrongful
conduct. In 2022, this included reinforcing our message of
zero tolerance through our anti-bribery and corruption training.
The training is available in 16 languages and every colleague is
required to complete the training annually, including new colleagues
in Cotopaxi, Vulcanic and Durex Industries.
We also arranged awareness sessions during the year to help
colleagues and particularly our senior managers to strengthen our
resilience against instances of fraud or policy breaches.
To ensure all colleagues feel able to ‘speak up’ if they have
a concern, we launched an awareness campaign to remind
colleagues about how to access and use our whistle-blowing
platform Safecall. The service enables colleagues to report potential
wrongful conduct or illegal activity they are concerned about,
while maintaining their own anonymity. Our multi-language Group
campaign included an international directory of telephone numbers,
posters and digital signage.
The Safecall service launched in 2015. In 2022 the service received
26 calls which have been reviewed by the Audit Committee.
Board leadership and Company Purpose continued
Leading with Purpose continued
Supporting framework
We have a comprehensive Code of Conduct
and supporting policies, including Whistle-
blowing, Anti-Bribery & Corruption, and
Human Rights Policies, which set standards
for ensuring that our business activities are
conducted in a responsible manner for the
benefit of our shareholders, customers,
colleagues and suppliers. Spirax-Sarco
Engineering has zero tolerance to any form of
bribery and corruption, both within our Group
and in any dealings with our customers,
suppliers and other third parties. Our Anti-
Bribery and Corruption Policy and Modern
Slavery Statement can be found on our
website, www.spiraxsarcoengineering.com/
our-approach/corporate-governance.
All colleagues and Board members are
expected to demonstrate and promote high
standards of ethical business conduct and
to know and follow our Code of Conduct
with pride. Our Whistle-Blowing Policy and
Safecall, our secure whistle-blowing facility,
enables colleagues to make reports if they
suspect anything inappropriate or experience
any misconduct or wrongdoing in our
business. The facility, hosted by Safecall,
anindependent provider, enables colleagues
to report concerns via a web portal or
by telephone, anonymously if preferred.
We havea number of Group policies which
are designed to help our colleagues balance
their work and personal lives effectively,
including flexible working.
Further reading
Our Anti-Bribery and Corruption
Policy and Modern Slavery Statement
can be found on our website,
www.spiraxsarcoengineering.com/
our-approach/corporate-governance
Governance
Spirax-Sarco Engineering plc Annual Report 2022110

Section 172
Statement
The long-term success
of our business is
dependent on the
way we work with all
our stakeholders and
continues to require
effective engagement,
constructive working
practices and
recognition of all
stakeholder views in
order to create and
sustain value for all.
This section, from pages 111 to 113 forms
our Section 172 statement. It describes how
the Directors have performed their duty, in
good faith, to promote the success of the
company, for the benefit of our shareholders,
including how they have considered and
engaged with wider stakeholders, and how
they have taken account of the matters set
out in Section 172(1)(a) to (f) of the Companies
Act 2006.
Considering these broad interests is an
important part of the way the Board makes
decisions, but at times the Board has to
balance the competing interests of different
stakeholders and other factors in delivering the
Company’s Strategy. Some examples of key
decisions that the Board has taken and how it
has taken into account the views and needs of
wider stakeholder in making those decisions
are described in the following pages.
Engagement with stakeholders and Board decision making
Section 172(1)
(a) the likely consequences of any
decision in the long-term
Engineering our difference
to create sustainable,
long-term value.
The Board always strives to act in the
long-term interests of its key stakeholders
to achieve our Purpose of creating
sustainable value for all of our stakeholders
by engineering a more efficient, safer and
sustainable world.
Our strategy is designed to help us do better
what we already do. The individual Business
strategies drive the organic growth of the
Group, whilst our corporate strategy drives
inorganic revenue growth. Our sustainability
strategy, One Planet: Engineering with
Purpose, drives our Environmental, Social
and Governance performance.
Relevant disclosures
Making our difference: Our ONE Group
approach pages 20 to 27
Progress against our strategy
pages 32 to 33
b) the interests of our colleagues
Engineering our difference
for our colleagues, whoever
they are and wherever
they work.
During 2022, several Board meetings
have been held at our manufacturing
sites. We have visited Aflex Hose in their
new facility in Huddersfield in the north of
England, Steam Specialties at the USA site
in Charlotte, South Carolina and BioPure
at their new facility, near Portsmouth in
the south of England. This has presented
plenty of opportunity for the whole Board
to connect with colleagues and local
management as they showed us around the
site and shared their initiatives with us.
As part of our commitment to inclusion,
equity and diversity we launched our Group
Inclusion Plan, Everyone is Included.
To ensure a continued focus on inclusion
and equity leading to greater diversity in our
Group, the Board also approved a refreshed
set of Diversity goals in 2022.
Nimesh Patel, Chief Financial Officer became
a Co-Chair of the Women FTSE Leaders
Review and Nicholas Anderson, Group
Chief Executive, is now an Ambassador for
the 25x25 campaign, which is seeking to
achieve 25 female CEOs in the FTSE100
by 2025.
The Board supported the Group
becoming signatories to the UN Women’s
Empowerment Principles and the UN LGBTI
Standards of Conduct for Business, building
on previous commitments, including as
signatories to the Change the Race Ratio
campaign which we began supporting
in 2021.
Relevant disclosures
Engineering our difference for colleagues,
pages 52 to 55
Sustainability Report, pages 46 to 73
Governance
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111

Board leadership and Company Purpose continued
Engagement with stakeholders and Board decision making
Board Decision:
Supporting our colleagues
globally through the
cost-of-living crisis
During 2022, we recognised the impact
of the cost-of-living crisis on colleagues
worldwide. Inflationary pressures globally
meant retrospective pay benchmarking
data was of limited value as it only reflected
pay increase levels made prior to Russia’s
attack on Ukraine and the economic
consequences that followed. In the 2023
planning process the Board decided not
to use the market data and to ensure
colleagues were properly supported in
more challenging times, instead looked
at predicted inflation as the key reference
point for setting base pay increases. As a
result, the Group set increments, country-
by-country, at levels designed to materially
replace the eroded purchasing power
which, for the UK, meant a pay increase
of 7.1% for the majority of UK colleagues.
In line with shareholder guidance, the pay
increase for Executive management
was lower at 5.3%.
The Board were mindful of the impact of
salary increases on the wider group of
stakeholders. The Board considered the
decision to provide cost-of-living salary
increases was appropriate in order to
maintain colleague engagement and
motivation. The adverse impact on other
stakeholders, such as customers and
suppliers, was minimal in comparison to
the positive impact for our colleagues.
Section 172(1)
(c) the need to foster business relationships
with suppliers, customers and others
Engineering our difference
for our customers
and suppliers.
The Board understands the importance
of fostering business relationships with
our suppliers and customers. In 2022 the
Board approved investment in the Group’s
manufacturing capabilities, supply capacity,
factory modernisation and in IT systems and
Digital to support sustainable growth that
meets the needs of our customers today
and tomorrow.
The launch of new-to-world decarbonisation
solutions, created through a cross-Business
collaboration between Steam Specialties
and Electric Thermal Solutions, ensures
we can support our customers to achieve
their sustainability goals and protect the
environment. Our collaborative and proactive
approach has created mutual benefit across
our global supplier networks during these
economically challenging times.
We relaunched our Supplier Sustainability
Code (SS Code) to support our collaborative
journey towards a sustainable supply
chain. We also launched our new third-
party Supply Chain Sustainability Portal
(Portal). The Portal forms the foundation
of our supplier sustainability practices and
will include our strategic suppliers allowing
us to monitor their compliance with our
SS Code and our sustainability standards
more broadly.
Relevant disclosures
Engineering our difference for customers,
pages 12 to 15
Engineering our difference for suppliers,
pages 18 and 19
Sustainability Report, pages 46 to 73
(d) the impact of Spirax-Sarco Engineering’s
operations on the community and the environment
Engineering our difference
for our local communities
and the environment.
Our ‘Giving today for a better tomorrow’
community engagement framework has
made a tremendous difference in our
local communities.
Jamie Pike, Chair, and Caroline Johnstone,
NED, are Independent Trustees on the
Group Education Fund, founded by Spirax-
Sarco Engineering, which meet throughout
the year to review applications and confirm
investment in educational causes.
Launch of the Group Education Fund and
investment of more than £1 million in 51
projects is having a huge beneficial impact
on our local communities.
All Board members participated in training on
sustainability reporting in December 2022.
Given the increasing importance placed
on sustainability by all stakeholders, the
Board considered that the GEC should have
greater representation in this area and Sarah
Peers, Group Director of Sustainability,
became a member of the GEC, effective 1st
October 2022.
For more information on how the Board has
managed Climate change risk please see
pages 140 to 141.
Relevant disclosures
Engineering our difference for the
environment, pages 16 and 17
Sustainability Report, pages 46 to 73
Board ESG oversight, Corporate
Governance statement page 102
(e) the desirability of maintaining a reputation
for high standards of business conduct
Engineering our difference
with integrity.
We have a comprehensive Code of
Conduct and supporting policies, including
Whistleblowing, Anti-Bribery & Corruption,
and Human Rights Policies, which set
standards for ensuring that our business
activities are conducted in a responsible
manner for the benefit of our shareholders,
customers, colleagues and suppliers.
Spirax-Sarco Engineering has zero tolerance
to any form of bribery and corruption, both
within our Group and in any dealings with our
customers, suppliers and other third parties
we may deal with.
All colleagues and Board members are
expected to demonstrate and promote high
standards of ethical business conduct and to
know and follow our Code of Conduct with
pride. We provide a whistleblowing facility,
which is underpinned by our Whistleblowing
Policy, enabling colleagues to make reports
if they suspect anything inappropriate or
experience any serious misconduct or
wrongdoing in our business.
Relevant disclosures
Supporting framework, Corporate
Governance statement page 110
Governance
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Board Decision:
Closure of manufacturing operations in Soissons, France.
Chromalox’s manufacturing plant in
Soissons (France) had been loss-making
since the Company’s acquisition by
Spirax-Sarco Engineering in 2017.
The financial underperformance could
not be sustained, but the final decision to
close Soissons was only taken after the
Board conducted a full review including
a s172 analysis of how their decision-
making would impact our stakeholders,
including colleagues, customers, suppliers
and our shareholders.
The Board concluded that closing
Soissons was in the best interests of the
business while ensuring that appropriate
mitigating actions were undertaken to help
those stakeholders adversely affected by
the decision. The local operating company
entered into extensive consultations with
all affected stakeholders. A care package
for affected colleagues was developed
and included support for mental
health and wellbeing, outplacement
assistance, retirement planning advice
and reskilling for 61 affected colleagues.
Following the decision to close the site,
financial compensation provided was well
above the statutory requirement.
As the facility was loss-making, the
closure resulted in significant cost
savings for ETS. Additional cost benefits
came from relocating the French Sales
Company to lower cost premises and
selling fixed assets, such as land and
buildings, enabling the Group to continue
investing in the long term.
The impact on customers and suppliers
was also considered. As the French
Sales Company focus is on selling
decarbonisation and heat trace products,
which were not produced at Soissons,
the Board concluded that the impact
could be easily mitigated, not least with
the proposed acquisition of Vulcanic,
which was in process at the time
and subsequently added four French
manufacturing facilities to the Group.
The local community will benefit from
a revitalisation programme funded by
amounts paid by Chromalox to the local
authorities, to fund local projects which
reduce the impact of business closures
on the community.
2022 Shareholder
engagement
January
• Berenberg 8th Annual Investor
Relations Forum (virtual)
March
• Full Year Results Announcement and
shareholder roadshows (virtual)
• Berenberg UK Corporate
Conference 2022
May
• Trading Update
June
• Investor Roadshow – EUR
• ETS Investor Seminar
• Investor site visits to Cheltenham
July
• Investor site visits to Cheltenham
August
• Half Year Results Announcement and
shareholder roadshows (virtual)
September
• Investor Roadshow – Europe
• Investor site visits to Cheltenham
October
• Investor Roadshow – USA
November
• Trading Update
• Investor site visits to Cheltenham
• JP Morgan Best of British Conference
• 2023 Remuneration Policy consultation
December
• Goldman Sachs 14th Annual
Industrials Conference
• Investor site visits to Cheltenham
• 2023 Remuneration Policy consultation
Section 172(1)
(f) the need to act fairly as
between our shareholders
Engineering our difference
for our shareholders.
The Board recognises our shareholders and
investors as an important stakeholder group.
Through monthly calls with shareholders
and analysts, and by providing regular
forums for meeting and communicating
with shareholders, their advisers and the
investment community, we ensure that
we understand the views and opinions
of our investors and are kept informed
of any concerns that may arise. We are
also able to give updates on our results
and developments within our Businesses.
We undertook around 160 investor meetings
during the year, the calendar to the right
shows shareholder events attended
throughout the year.
The AGM is an opportunity shareholders
and investors, including retail investors, to
meet with the Directors and put questions
to the Board. The Company proactively
encourages its shareholders to vote, by way
of a poll, at general meetings by providing
electronic proxy voting for those who wish to
vote online, and personalised proxy cards to
those electing to receive them.
Relevant disclosures
Regulatory Disclosures pages 169 to 172
Governance
Spirax-Sarco Engineering plc Annual Report 2022
113

Key activities undertaken
The Committee met three times in 2022,
details of attendance can be found on page
107. Our Group Chief Executive and Group
Chief Financial Officer also attend most
Committee meetings, which enables us to
reflect and discuss colleague engagement
with them. Other members of the Board
and the Group Executive Committee
(GEC) regularly attend the Committee.
The Non-Executive Directors consistently
take the opportunity to meet without
management present.
During the year, the Committee had a full
agenda which included:
• Eight structured discussion and feedback
meetings with colleagues in different areas
of the Group – we had a mix of virtual
and in-person meetings and over 90
colleagues participated
• We invited leaders from across our Group
to attend Committee meetings to discuss
engagement activity and progress in
their areas
• The Committee held all their meetings at
operational sites (see detail in Board visits)
• The Committee members have continued
to have informal ‘coffee talks’ with
colleagues across the Group who are
randomly selected on a quarterly basis
The full Committee terms of reference
can be found on our website,
www.spiraxsarcoengineering.com.
Committee role and
responsibilities
The Colleague Engagement Committee (the
Committee) was created by the Board in
2019, to create a more formal and regular,
two-way, direct dialogue between the Board
and colleagues, providing tangible insights
and ensuring our Colleague’s voices are
heard in the Boardroom. The Committee
Chair reports back to the full Board after each
meeting with key findings and actions arising.
The main duties of the Committee include:
• A programme of engagement activities
to enable the Board (and Non-Executive
Directors in particular) to have regular
dialogue with colleagues
• Overseeing the approach to, the results
and action-plans of each biennial global
colleague engagement survey
• Regular engagement with senior
management across the Group to
understand ongoing and developing
engagement practices
• Supporting the Audit Committee and
the Board in ensuring that procedures
in place for colleagues to raise concerns
in confidence and anonymously are
accessible and publicised
“One overriding reflection from my
interactions with colleagues is how
open everyone is – and how keen
management is to hear feedback;
this enables a focus on continuous
improvement.”
Caroline Johnstone
Chair of Colleague Engagement Committee
Board leadership and Company Purpose continued
Colleague Engagement Committee Report
How the Committee spent its time %
This breakdown reflects topics addressed
during Committee meetings, and does not
include time spent during engagement events.
40% 30%
15%15%
Business updates on colleague engagement
Direct Colleague Engagement follow-up
Committee remit, planning and approach
to engagement
Current Engagement Practices and
Survey results
Members
Our Colleague Engagement
Committee comprises:
Membership
Caroline Johnstone
(Chair)
Angela Archon
Peter France
Jane Kingston
Jamie Pike
Olivia Qiu
1
1 Olivia Qiu stepped down from the Board on
31st January 2023
Governance
Spirax-Sarco Engineering plc Annual Report 2022114

Chair’s review of 2022
Both the direct contact we have had
with colleagues, as well as the openness
of the Businesses in sharing updates
with the Committee, has given us good
insight into the business culture in the
Group. One overriding reflection from my
interactions with colleagues is how open
everyone is – and how keen management
is to hear feedback; this enables a focus on
continuous improvement.
Committee meetings
andoperation
During the year we reviewed and made
slight amendments to our Terms of
Reference which can be found on our
website, www.spiraxsarcoengineering.com.
The Group has also formalised its approach
to colleague engagement, setting clear
targets and clarifying how the Board’s
colleague engagement activities sit alongside
the wider colleague engagement programme,
more information can be found below.
Amanda Janulis, Group Corporate
Counsel, is the secretary to the Committee.
During 2022, the Committee has continued
to work with Amanda, Jim Devine, Group
HR Director and Jenni Forrester, Head of
Colleague Experience. The Committee remit
and agenda continues to develop, thanks to
the input and hard work of Amanda, Jim and
Jenni. Jenni has now taken on a new role in
the Group and has handed over her role in
supporting the Committee – she has added
a great deal to the thinking and success of
colleague engagement across the business
and to the development of the Committee
and I want to recognise and thank her for
this. We look forward to working with her in
her new role.
Colleague engagement
andfeedback
We have continued our programme of
structured meetings with colleagues from
across the Group, which gives us the
opportunity to hear from colleagues.
The Group has more than 10,400 colleagues
and one of the Committee’s challenges in
engaging effectively with a high proportion
of colleagues is the geographical spread
of our 146 operating companies, some of
which are very small. Only ten operating
companies have more than 100 colleagues.
We have therefore, developed a systematic
but pragmatic approach to identifying
our programme of colleague meetings
by referencing:
• Headcount across business operations
and geographies, so we have a mix of
interactions across the three Businesses
of Steam Specialties, Electric Thermal
Solutions and Watson-Marlow across the
three main geographies of Asia Pacific,
the Americas and Europe. We ensure that
our meetings are held with colleagues
representing both large and smaller
operating companies and this year have
had the pleasure of meeting with over
100 colleagues
• We also consider functions and special
interest groups – in 2022, we held
discussions with colleagues in the earlier
years of their career (including graduates,
year-in-industry and apprentices). We also
had deep-dive discussions with colleagues
in central functions including IT, Finance,
HR and Legal
• We consider different strata of the
organisation, holding discussions, for
example with those in middle management
• We refer back to previous colleague
engagement surveys and the engagement
results, comparing against trends and
other business unit KPIs. This may lead us
to visit an operating company which has
less positive engagement results or we
may choose one with higher engagement
results to identify opportunities for sharing
best practice
• We will occasionally revisit a business
area to run a follow-up discussion with
colleagues to test whether actions taken
have had an impact on the colleague
experience locally
Our approach to colleague engagement and feedback
• Colleagues are invited or volunteer
for attendance, with the aim to have
a group who represent all areas of
an operating unit, including sales and
supply businesses, office and shop floor
workers, day and night shifts etc
• At the start of each meeting, we
commit that all comments are
completely confidential and non-
attributable, and that we feedback
only themes to management and to
the Committee
• Following the colleague discussions,
we summarise the themes in a paper
to management and the Colleague
Engagement Committee. I also
have a formal debrief with the local
and regional management, to offer
key insights, enable a discussion
and consideration of potential
resulting action
• At the subsequent Committee meeting,
we discuss the key themes, Committee
members reflect on both the positive
feedback and the areas of concern
and management reflect on any
actions required
• A summary is fed back to the next
full Board meeting and the Board
continues to reflect on colleague views
when making key decisions as a Board
– see the section 172 statement on
pages 111 to 113 for examples of how
the Board considered colleagues in
their decision-making
Governance
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115

Board leadership and Company Purpose continued
Colleague Engagement Committee Report continued
The majority of the time in the discussion
group is spent asking colleagues’ for their
views on a handful of topics. In 2022, our
typical areas included gauging colleagues’
understanding of and engagement in our
Group’s sustainability and inclusion strategies.
We have also continued to explore how well
we live our Values (and Safety in particular),
but we also leave plenty of space to hear
what’s on our colleagues’ minds. In support
of the Board and Audit Committee focus on
ensuring we have adequate whistle-blowing
arrangements, we always check if colleagues
are aware of our Safecall external helpline.
In 2022, we developed the introduction to
the structured meetings, briefly sharing with
colleagues the role and operation of the
Board and where the Colleague Engagement
Committee fits in. These have been well
received, with colleagues taking an interest in
the wider leadership of the Group.
We hear many consistent and positive
messages across the discussions, including:
• Safety is always the first priority and
our strongest Value, followed closely by
Customer Focus. Colleagues feel cared for
by the Company and this has continued
beyond the period of the pandemic with
many specific examples shared with us,
both at a Group and a local level
• Colleagues feel they are treated with
respect and have opportunities to influence
ways of working with their ideas
• Our colleagues are particularly proud of
our investment in and commitment to
sustainability (our One Planet: Engineering
with Purpose Sustainability Strategy) and
inclusion (Everyone is Included)
• There is a great deal of enthusiasm
for potential future growth, colleague
development and our ability to create
further value for customers, through
digital tools
The most consistent challenges for us seem
to relate to leveraging our resources as we
mature and grow as a Group:
• Colleagues would welcome more
information and insight around the Group’s
products, customers and opportunities.
We have a particular challenge to
communicate with colleagues who don’t
operate on company email
• We will continue to focus on our Value
of Collaboration. We need to enable
our colleagues to work together cross-
functionally in a more seamless way, so
they can maximise their personal and
our business effectiveness – this will be
through a mix of technology, processes
and ways of working. We need to reflect
on where it is possible to align processes
and share know-how across our Group
The Committee and management really
value the time taken by our colleagues in
offering their feedback in focus groups and
management always look for opportunities
to take action. Management ensures that,
where appropriate action is taken, we
communicate that back to the specific group
that provided the feedback, some examples
of actions taken in 2022 are shown in the
table opposite.
Other Committee activities in 2022
Business unit discussions – At Committee
meetings in 2022, we invited the leaders
of our three Businesses, operational and
functional, to share their approach to
colleague engagement as well as their
engagement successes and challenges.
Board site visits – During 2022, several
Board meetings have been held at our
manufacturing sites. We have visited Aflex
Hose in their new facility in Huddersfield in
the north of England, Steam Specialties at
the USA site in Charlotte, North Carolina,
and BioPure at their new facility, near
Portsmouth in the south of England. This has
presented plenty of opportunity for the whole
Board to connect with colleagues and local
management as they showed us around
the site and shared their initiatives with us.
In 2023, we hope to be able to visit more of
our colleagues, including a planned trip to
the USA.
Informal engagement – All NEDs
participate in ‘coffee talks’, an informal
scheme where colleagues are randomly
paired with another for a virtual coffee.
This gives NEDs the opportunity to speak to
colleagues at all levels of the Group one to
one, to both understand their role and gain
their feedback on the organisation and their
experience working with us.
January
• ETS, Chromalox, Ogden – a
follow-up focus group with some
colleagues that we met in 2019
and some new colleagues joined
the session
• Steam Specialties, Spirax Sarco,
South Korea – colleagues from
sales and supply joined us, with
assistance from a translator
April
• Early Careers – colleagues on
our Global Graduate Development
Programme, Apprenticeship
Scheme as well as our Year-in-
Industry (YINI) scheme
June
• Steam Specialties, Spirax Sarco,
USA – colleagues from sales and
supply joined a discussion at our
Blythewood manufacturing site in
South Carolina
October
• Steam Specialties, Spirax Sarco
and Gestra, Italy – outwith the
normal Board meeting schedule, I
visited our Italian operating company
and was able to tour the facility,
meeting colleagues and managers.
We conducted two separate focus
groups, with representatives of firstly
the sales teams and, secondly, with
supply colleagues
• Watson-Marlow, BioPure, UK –
on-site discussion with colleagues
from the manufacturing facility
in Portsmouth
December
• Colleague Network Groups –
colleagues who participate in our
colleague resource groups, such
as the Women’s Network, Working
Families forum, LGBTQ+ community
and disability forum joined us for
a discussion
Focus groups held in 2022
Governance
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Feedback received Action taken
One group indicated that they would welcome more information on the
background to the Business unit strategy, that those who were newer to
the Business had not been involved in earlier versions of the strategy and
therefore lacked the base level understanding.
The team took this on board when developing further discussion
sessions on the strategy, taking time to set the context and then
considered the team’s role in the next phase.
Colleagues suggested that the Group could gain more value from
our UK apprenticeship scheme and potentially roll out an apprentice
programme in other parts of the world. We were also asked to consider
how the various streams of early careers, such as graduates, apprentices
and YINIs, could join-up on certain initiatives to share knowledge and
streamline resource.
Management have since undertaken a wider review of our
apprenticeship programme and what opportunities we may have to
leverage something similar globally, which will be a focus for 2023.
Since we have fully embraced hybrid working, one group asked that
laptops became ‘standard’ issue as some still had desktop computers
which made working from anywhere but the office impractical.
Desktop computers have since been replaced with laptops, where
appropriate and going forward, laptops are issued to new starters.
Some of our female colleagues raised the challenges of getting well-
fitting workwear.
This prompted a review of available workwear across our
manufacturing locations.
In one very high growth area of our Business, colleagues were very
positive about the new facilities and investment from the Group but felt
that they had had limited time to understand the Business strategy and
wanted to “see it for themselves”.
The local management team took an action to ‘introduce’ all
colleagues to their new site, with a tour across all areas, to
demonstrate products and their impact on society as well as
innovation opportunities.
One group shared that the additional Wellbeing Day, offered to all
colleagues in 2022, was not showing on their HR system, so they were
unable to request the leave.
The local HR team rectified this immediately.
Participants, particularly in our manufacturing populations, were not
always aware of our whistle-blowing hotline (Safecall) or where they
would find the number should they need it.
In response, management took action to refresh communications via
posters around the workplaces, particularly manufacturing locations.
Looking forward
We look forward to having oversight of and
hearing the results of the 2023 colleague
engagement survey across the Group that
will run during April 2023.
The Committee has planned a number
of colleague meetings across the Group
in 2023, which will include engaging with
some of our Sales Engineer job family and
with teams from our two new acquisitions in
ETS, Vulcanic and Durex Industries, as well
as a meeting with one of largest operating
companies, UK Supply, as a follow-up to our
last meeting with the team there in 2020.
We also want to advance our race equity
journey by better understanding the
lived experience of our Black and African
American colleagues across our USA
operations. To start this, we will be working
with an external partner in the USA to run
some virtual and physical colleague focus
roundtables to assess our race equity culture,
identifying opportunities to improve this and
to grow our leadership diversity. One of our
Committee members, Angela Archon, will
participate in these.
All NEDs will continue to participate in
quarterly ‘coffee talks’ and members
of the Committee will also take part in
an International Women in Engineering
Day event as well as the 2023
Graduate Conference.
I am happy to answer any questions or take
any feedback on our Committee activities,
at our Annual General Meeting in May or at
any time.
Caroline Johnstone
Chair of Colleague
Engagement Committee
8th March 2023
Committee focus for2023
• 2023 Group-wide engagement survey
• Colleague discussion and feedback
meetings including with companies
recently acquired by the Group
• Externally facilitated discussions
with our Black and African American
colleagues across our USA operations
to advance our race equity focus
Governance
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117

Governance
Spirax-Sarco Engineering plc Annual Report 2022118
Investing in sustainable, future growth…
Engineering our difference for shareholders
Sustainable
supply chain*
Regional
manufacturing
Supporting our
communities*
Environmental
improvements*
Customer
support
Biodiversity*
People and
wellbeing
Net-zero
carbon*
Inclusion
and diversity
zero

119
Watson-Marlow’s new state-of-
the-art 14,000m
2
manufacturing
facility in Devens, Massachusetts
(USA) epitomises our approach to
sustainable growth. Construction
of the site is complete with the
final phase of internal fit out to be
completed during 2023.
Regional manufacturing capability
is a key component of our business
model, enabling us to deliver for
customers with shortened supply
chains as well as enhanced
customer support. This multi-brand
facility marks a significant step
forward in Watson-Marlow’s
global supply strategy.
It also represents a ‘blueprint’
for our future manufacturing
investments to be efficient, safe and
sustainable in line with our Group’s
Purpose, by combining wellbeing
features and digital innovations
with environmental and biodiversity
initiatives into the design.
To support colleague wellbeing,
picnic areas and a designated
walking trail outside complement
internal facilities including a
reflection room, fitness centre, café
and gender-neutral facilities.
Sustainability design includes solar
panels, electric vehicle charging,
retention ponds for storm water
US$106 million
invested in our ‘blueprint’ state-of-the-art, sustainable
andinclusive manufacturing facility in the USA.
…to create long-term value.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
management, rainwater harvesting
and upgraded insulation. In addition,
we are optimising our operations
through digital monitoring of
energy usage and manufacturing
operations. Biodiversity initiatives
include native landscaping
and protection for local wildlife
including the threatened species
Blanding’s turtles.
We are very proud of our latest
manufacturing facility which is
fully aligned to our One Planet:
Engineering with Purpose
Sustainability Strategy and Group
Purpose, underpinning our approach
to achieving sustainable growth over
the long term.
*In line with our Sustainability Strategy commitments.

Division of responsibilities
The Board is responsible
for providing leadership to
the Group. The governance
structure of the Group
ensures the Board,
together with the Board
Committees and Group
Executive Committee,
has sufficient controls and
oversight of the business,
with a balanced approach
to risk that is aligned with
Spirax-Sarco Engineering’s
culture. The structure
assists the Board in fulfilling
its responsibilities and is
designed to ensure that
the Board focuses on
strategy, monitoring the
performance of the Group
and governance as well as
risk and control issues.
An overview of the division of responsibilities,
as set out in the Code, is provided in the
diagram opposite and we comply with
all the relevant Principles and Provisions.
The responsibilities of the Chair, Group Chief
Executive, Senior Independent Director,
Board and Committees are set out in writing
and agreed by the Board. A clear division is
made between the leadership of the Board
and Executive leadership.
The Role of the Board
The Board is collectively responsible for
the long-term success of the Company.
The business of the Company is managed by
the Board who may exercise all the powers
of the Company. The Board has a formal
schedule of matters reserved for the Board’s
decision-making which is available on the
Group’s website. Although the Board retains
overall responsibility, it delegates certain
matters to the Board Committees and the
detailed implementation of matters approved
by the Board and the day-to-day operational
aspects of the business to the Group
Executive Committee.
Board Committees
The Board Committees consist of Non-
Executive Directors and each Committee
Chair reports to the Board on matters
discussed at Committee meetings and
highlights any significant issues that require
Board attention. The terms of reference for
each Board Committee are reviewed annually
and are available on the Group Website.
The annual reports by each Board Committee
Chair are given in this Annual Report.
Group General Counsel and
Company Secretary
The Group General Counsel and Company
Secretary, together with the Group Legal
team including the newly appointed Group
Assistant Company Secretary, support the
Chair and the Committee Chairs in making
sure members are equipped for informed
decision-making and that they appropriately
allocate their time to subjects. All Directors
have access to the advice of the Group
General Counsel and Company Secretary
as well as the Group Legal team, who are
responsible for advising the Board on all
governance matters. Both the appointment
and removal of the Group General Counsel
and Company Secretary is a matter for the
whole Board.
Group Executive Committee
There is a clear division of responsibilities
between the leadership of the Board
and our Executive leadership. Our Group
Chief Executive’s roles and responsibilities
include: management of the Group’s short-,
medium- and long-term performance;
stewardship of capital, technical and human
resources; corporate and business strategy;
internal risk management controls and
organisational structure.
Delegation of Authority
An internal Delegated Authority matrix is
operated ensuring that decisions are taken at
the right level within the Group by those best
placed to take them, whilst simultaneously
allowing the business to function efficiently.
The matrix is reviewed annually to
accommodate any adjustments required to
ensure practical compliance.
Governance
Spirax-Sarco Engineering plc Annual Report 2022120

Chair
Designated workforce
engagement NED
Audit
Committee
Nomination Committee
Remuneration
Committee
Risk
Committee
Colleague Engagement
Committee
Senior Independent Director
Non-Executive Directors
Group Chief Executive
Group General Counsel
and Company Secretary
Group Executive Committee
• Responsible for the leadership
and effectiveness of the Board
• Promotes a culture of
openness and debate
• Facilitates constructive
Board relations
• Holds meetings with Non-
Executive Directors, without
Executive Directors present
• Ensures that the Board listens
to the views of shareholders,
the workforce, customers and
other key stakeholders
• Responsible for all
Environmental, Sustainability
and Governance matters
• Responsible for ensuring
that the Board considers all
Strategic Risks
• Chair of the Colleague
Engagement Committee
• Responsible for colleague engagement
• Facilitating two-way dialogue between
the Board and its Committees and the
Workforce, flagging issues and feedback
to the Board
The overall purpose of
this Committee is one of
oversight and monitoring
of the entire financial
reporting and control
process, to ensure the
integrity of the Group’s
Financial Statements
and assurance
over them
The main role of
this Committee is to
recommend changes to
the Board and consider
succession planning for
the future
This Committee
determines the
philosophy, principles
and policy of Executive
Director and senior
manager remuneration
having regard to the
latest legislation,
corporate governance,
best practices and the
FCA Listing Rules
This Committee
oversees the
management and control
of significant operational
risks affecting the
Group. The Committee
ensures that the Group
has risk management
policies and procedures,
including those
covering project
governance, sanctions
and embargoes,
crisis management,
human rights, business
continuity and
business management
The principal remit of this
Committee is to ensure
that the voice of the
workforce is considered
in all aspects of the
Board’s thinking
• Provides a sounding board to
the Chair
• Serves as an intermediary
for the other Directors
and shareholders
• Leads an annual meeting
of Non-Executive
Directors to appraise the
Chair’s performance
• Provide constructive challenge, strategic
guidance and offer specialist advice
• Hold a prime role in appointing and
removing Executive Directors
• Scrutinise and hold to account the
performance of management and
individual Executive Directors against
agreed performance objectives
• Responsible for the day-to-
day running of the Group’s
business and performance
and the implementation
of strategy
• Leads the Group
Executive Committee
• Represents management on
the Board
• Advises the Board on all
governance matters
• Supports the Board to ensure that it has
the policies, processes, information, time
and resources it needs for the Board to
function effectively and efficiently
• Advises the Board on important legal and
regulatory matters
The Board relies on the Group Executive Committee to implement
the strategy and run the business by empowering our colleagues to
do their part in the strategy execution. The emphasis is on growth
and on an entrepreneurial approach with a strong governance
culture. The Board holds this team accountable against targets and
standards and ensures that it has strong and effective leadership in
place to execute the strategic plan
Governance framework
Board of Directors
• Responsible for setting the Group’s
strategy and ensuring strategic objectives
are met
• Direct involvement in all ESG matters.
• Assesses culture and promotes the long-
term success of the Company
• Approves the Company’s financial
statements and performance expectations
• Ensures maintenance of a framework of
prudent and effective controls
• Ensures effective engagement with
shareholders and all our stakeholders,
including the workforce
• Approves matters relating to the
composition of the Board and Committees
Governance
Spirax-Sarco Engineering plc Annual Report 2022
121

Division of responsibilities continued
Board composition, succession and evaluation
We make sure that the
Board is actively involved in
all important Group matters
and it is effective in fulfilling
its role as a balanced Board
During 2022, in compliance with the Code,
the number of Non-Executive Directors
was always more than the number of
Executive Directors (excluding the Chair).
At the time of publication, our Board
comprises two Executives, a Non-Executive
Chair and a further six Non-Executive
Directors. This ensures that no one person
or group of individuals dominates the
Board’s decision-making. All our Non-
Executive Directors, including the Chair, are
considered independent.
Board succession and tenure
The Nomination Committee continuously
reviews succession plans in light of strategy,
business requirements, tenure and diversity.
For more information on succession planning
please see the Nomination Committee
Report on pages 124 to 127. With regard
to the appointment and replacement of
Directors, the Company is governed by
its Articles of Association (Articles), the UK
Corporate Governance Code (the Code),
the Companies Act 2006 (the Act) and
related legislation. The Articles themselves
may be amended by special resolution of
the shareholders. The Articles provide that
Directors may be appointed by an ordinary
resolution of the Company’s members or by a
resolution of the Directors. With the exception
of Olivia Qiu who stepped down as a director
in January 2023 for personal reasons, all the
Directors will retire at the 2023 AGM and
all will stand for re-election as required by
the Code.
The Board’s recommendations concerning
appointment or reappointment are contained
in the Nomination Committee Report on page
126. The Executive Directors have service
contracts that can be terminated on twelve
months’ notice. The appointments of the
Non-Executive Directors can be terminated
on three months’ notice. The Chair’s
appointment can be terminated on six
months’ notice.
Details of the Directors service contracts
can be found in the Directors Remuneration
Report on page 159.
External listed company
appointments
The Board believes that Directors should be
able to accept other appointments where
no significant actual or potential conflicts of
interest arise and provided that the Director
is able to maintain sufficient time available to
discharge their duties effectively. These other
appointments enable Directors to develop
further skills and experience from which
the Company benefits, provided that such
commitments do not impinge on their duties
to the Company.
Existing commitments of Directors are
carefully reviewed prior to appointment
and on an ongoing basis to ensure they
can continue to deal appropriately with the
affairs of the Group. If a Board member
wishes to accept an additional position this
must be reviewed and approved by the
Chair. Significant changes in a Director’s
outside commitments are discussed with
the Chair prior to a Director accepting
further appointments.
At each Board meeting and also on an
annual basis, each Director confirms their
external appointments and commitments to
the Board as part of the conflicts of interest
check. Nicholas Anderson is also a non-
executive director of BAE Systems plc, a
FTSE 100 company, which is acceptable
under the Code.
The number of external appointments held
by our Non-Executive Directors and full-time
Executive Directors, as at 31st December
2022, are provided in the table below, details
can be found in the Directors biographies on
pages 104 and 105. Only external positions
of listed companies or equivalents in other
jurisdictions are counted in accordance with
the provisions of the guidelines published by
Institutional Shareholder Services and other
proxy advisers.
Listed Plc Directorships
No. of other
Non-Executive
roles
No. of other
Executive roles
Independent Non-Executive Directors
Jamie Pike (Chair) 1 –
Angela Archon 1 –
Peter France – 1
Richard Gillingwater 1 –
Caroline Johnstone 1 –
Jane Kingston 1 –
Full-time Executive Directors
Nicholas Anderson 1 –
Governance
Spirax-Sarco Engineering plc Annual Report 2022122

Register of conflicts
The Board formally considers any potential
conflicts between a Director and the
Company. Any situational conflicts must
be notified to the Board for authorisation
as and when they arise, notwithstanding a
Director’s general duty to avoid such conflicts.
Transactional conflicts must be notified to
the Board in person or in writing at the next
meeting, where the Board can decide, in the
absence of the Director concerned, whether
or not to authorise such conflict and how to
manage the conflict if authorised.
Induction, development and
information flows
New Directors receive formal induction
training, including, when possible, site visits
and meetings with the Company’s advisers,
brokers, auditor and where appropriate,
major shareholders. Ongoing training is
encouraged and provided upon request and
as appropriate. This training is customised
for each Director and varies depending upon
their skills, experience and background.
Governance training is undertaken annually
by the Board and the Audit Committee also
arranges ESG, financial and related training
each year.
Directors also receive regular updates on
changes and developments in the business,
legislative and regulatory environments.
The Anti-Bribery and Modern Slavery
Policies were reviewed by the Board during
the period. Each Board pack contains a
copy of the Directors’ statutory duties.
Directors are encouraged to discuss with
the Chair any further training requirements
which they feel are needed. This is included
in the discussions held during the annual
performance evaluation.
Good information flows between the Board
and management are essential for effective
governance. The Board, together with senior
management, ensures:
• the agendas are appropriate for the
business and are forward looking as
well as providing historical and current
results data
• papers are of an appropriate length and
content for the Non-Executive Directors to
be able to understand and review
• sufficient time is given for Directors to read
and review the papers prior to meetings.
Board diversity policy
We believe in a diverse and gender-balanced
workforce. Our Equal Opportunities Policy
ensures the provision of equal opportunities
in all aspects of employment and applies
equally to the Board and the wider employee
workforce. Further information on diversity
and succession planning can be found in the
Nomination Committee Report on pages 124
to 127.
Board Evaluation
The evaluation process
The Code requires a company to evaluate its
performance annually with an independent
external evaluation conducted at least every
three years. In the intervening years the Board
conducts a self-evaluation. In addition to
this, each Non-Executive Director, the Group
Chief Executive and the Chief Financial Officer
met with the Chair individually to discuss
their personal performance. The Directors
provided input to the Senior Independent
Director (SID) on the performance of the
Chair. On the basis of that feedback the
SID reviews the performance of the Chair,
including leadership of the Board and
ensuring effectiveness.
Board Effectiveness
Following the external and independently
facilitated Board evaluation by Egon Zehnder
in 2021, the Nomination Committee
conducted, with the assistance of Egon
Zehnder again, an internal Board evaluation
in 2022. Full details of the evaluation process
and outcomes can be found in Nomination
Committee Report on page 125 and 126.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
123

Composition, succession and evaluation
Nomination Committee Report
Committee role and
responsibilities
The main role of the Nomination Committee
is to optimise Board performance, consider
succession planning for the future and
recommend changes to the Board to
match the skills, knowledge and expertise
of individuals to those needed to support
the strategy and business requirements of
the Company.
The Committee’s responsibilities include:
• Making appropriate recommendations
to the Board for the appointment,
reappointment or replacement of Directors
• Reviewing the structure and composition
of the Board with regard to the overall
balance of skills, knowledge and
experience against current and perceived
future requirements of the Group
• Considering succession planning
arrangements for the Executive Directors
and more generally, senior executives
• Overseeing the annual evaluation of the
Board and individual Directors, taking
into account its composition, diversity
and effectiveness
The full Committee terms of reference
can be found on our website,
www.spiraxsarcoengineering.com
“We have an established strong
and diverse Board. The Group
Executive team has made progress
this year with diversity at senior
executive levels. We have furthered
our strategic plans through our
succession policy.”
Jamie Pike
Chair of Nomination Committee
Key activities undertaken
The Nomination Committee met five times in
2022, details of attendance can be found on
page 107. The Group Chief Executive and
Group Chief Financial Officer were invited to
meetings where appropriate. A summary of
the Committee’s activities throughout the year
is set out below.
February
• Executive succession planning
• Reappointment of Caroline Johnstone
and Kevin Thompson for a further
three-year tenure
June
• Executive succession planning for all
senior levels
• Group Executive Committee (GEC)
leadership development
August
• Reappointment of Jane Kingston for a
further three-year tenure
October
• Group Executive Committee (GEC)
succession planning
• GEC Leadership development
December
• GEC and GEC+1 succession planning
How the Committee spent its time %
This breakdown reflects topics addressed
during Committee meetings, and does not
include time spent during engagement events.
75% 15%
5%
5%
Executive Succession
Board Evaluation
Non-Executive succession
Diversity and Inclusion
Members
Our Nomination Committee comprises:
Membership
Jamie Pike (Chair)
Angela Archon
Peter France
Richard Gillingwater
Caroline Johnstone
Jane Kingston
Olivia Qiu
1
Kevin Thompson
1 Olivia Qiu stepped down from the Board on
31st January 2023
Governance
Spirax-Sarco Engineering plc Annual Report 2022124

Chair’s review of 2022
The Board’s composition was stable during
2022, having strengthened the Board in 2021
to reflect more international experience in
line with evolving societal needs. Our focus
during the year was on Board consolidation
and succession planning for both Executive
and senior leadership.
Board and Group Executive
Committee composition
We spent time looking at the composition
of the Group Executive Committee (GEC).
Given the increasing importance placed
on sustainability by all our stakeholders it
was considered that the GEC should have
greater representation in this respect and so
Sarah Peers, Group Director of Sustainability,
became a member of the GEC effective 1st
October 2022. Sarah joined the Company
in 2013 as Corporate Communications
Manager and took responsibility for improving
many aspects of how the company
communicated with our external stakeholders
including our Annual Report. Sarah has a
PhD in Geography from the University of
Oxford, has always had a deep held interest
in issues relating to the environment and was
instrumental in describing how we could
harness sustainability as an opportunity for
the Group. From recognising the long-
established role of the Steam Specialties
Business in saving customers energy,
through to how the Values of the Group align
with a global shift in the mindset of all our
stakeholders, Sarah has actively worked to
make sustainability a core aspect of how we
run the Group and to making sustainability
integral to how we operate. Therefore, both
the Board and the GEC have unanimously
concluded that Sarah should join the GEC.
Details of the respective skills and experience
of all Board and GEC members are set out
on pages 104 to 106.
Chair of the Board tenure
As reported in 2021, Jamie Pike was
reappointed as Chair of the Company with
effect from 13th May 2021 for a further three
years despite this taking him beyond nine
years since appointed to the Board.
The Committee considered that the
reappointment would be compliant
with Provision 19 of the UK Corporate
Governance Code 2018 (the Code), which
allows for an extension beyond nine years’
service, as although Jamie Pike has been
a Non-Executive Director since 2014, he
was only appointed as Chair four years ago,
in 2018.
The Code also specifies that the Chair should
have considerable leadership, corporate
and commercial skills and experience which
Jamie has. These qualities are important to
the mix of the Board as a whole and assists
with a diverse Board made up of people with
a range of relevant skills and expertise, which
will further the development of the Group.
In order to ensure a smooth and successful
handover it was agreed that it was in the best
interests of the business for Jamie to continue
as Chair for a further three years, effective
13th May 2021, taking his total tenure to ten
years. Further information on the succession
plan for the Chair can be found below.
Succession planning and
attracting talent
Egon Zehnder act as external advisers
to the Nomination Committee, helping
the Committee and the Board to make
sure we are well positioned and have
proper succession in place for all senior-
level appointments across the Group.
This ongoing search for the best people
includes both internal and external
candidates, in line with our Diversity and
Inclusion Policy, to ensure that we attract and
retain the best talent. The Board confirms that
neither it, nor any of its Directors, have any
connection with Egon Zehnder.
We confirm that Jamie will stand down
as Chair in 2024. In accordance with our
Board Succession plans, we will follow a
Code-compliant, rigorous and independent
procedure to determine Jamie’s successor
supported by our external advisers.
The procedure will be led by a Nomination
Sub-Committee made up entirely of
independent Non-Executive Directors and
chaired by the Senior Independent Non-
Executive Director. The current Chair, Jamie
Pike and any candidate who is a current
member of the Board, will be excluded from
the process in accordance with the Code.
The Sub-Committee, working with Egon
Zehnder, will develop a job specification
which candidates will be evaluated against,
and a shortlist drawn up. The appointment
will be approved by the full Board following
interviews with all Directors.
Following the resignation of Olivia Qiu in
January 2023, due to personal reasons,
we have initiated the process to appoint
another Non-Executive Director with the
skills and experience required to support
the implementation of our strategies and
our commitments to inclusion and diversity.
Again, we will follow a Code-compliant,
rigorous and independent procedure in
making this appointment, supported by our
external advisers.
Further information on how appointments
to the Board are made can be found in the
Governance statement on page 122.
Board and Committee evaluation
In 2021, we commissioned an external,
independently facilitated Board effectiveness
review conducted by Egon Zehnder. Our aim
was to capture open and constructive
feedback from Board members which would:
• provide insight into our effectiveness
• point to actions for improving
our performance
• establish a benchmark for measuring
future progress
The review was carried out in accordance
with the guidance in the Code and the
findings were published in last year’s Annual
Report. In 2022, we followed up on the
recommendations of Egon Zehnder and
the Board carried out an internal additional
evaluation of the performance of the Board
and the Board Committees, in accordance
with the provisions of the Code. The Chair
and Egon Zehnder supervised the use
of the same survey from 2021 to each of
the Board members. They were asked to
respond to questions on both a quantitative
and qualitative basis. The review considered
the Board’s strengths by looking at individual
capabilities and contributions, what the
Board does and the way in which the Board
members work together. From comparing
the results between 2021 and 2022, we
were then able to evaluate areas where the
Board has improved, as well as areas that
still require development. The survey was a
comprehensive questionnaire covering all
issues related to the effective running of the
Board and the functioning of the Committees.
The responses were consolidated and
anonymised, with common themes identified
for the Board to determine key actions
and next steps for improving Board and
Committee effectiveness and performance.
We were pleased to see that the conclusions
of the 2022 review were positive, suggesting
an overall improvement from the prior year
across all the key dimensions.
The 2022 review emphasised the
following strengths:
• Strong sense of team identity
and collaboration with high levels
of engagement. Trusted and
respectful relationships
• The Board felt guided by a clearly defined
vision and strategy for the Company
• The Board fulfils its role in keeping
sustainability objectives top of mind for
the Company
Governance
Spirax-Sarco Engineering plc Annual Report 2022
125

Composition, succession and evaluation continued
Nomination Committee Report continued
• The Committees are clearly defined and
serve a distinct purpose
The review helped us to consider the
following areas for improvement and
these will continue to be addressed in the
coming year:
• Sufficient time on keeping abreast of
industry trends, competitor activity and
where future threats may emerge
• An opportunity to allow for more strategic
discussion and debate
Re-election of Directors
The Board has concluded that the
performance of each of the Directors
standing for re-election continues to
be effective and that these Directors
demonstrate commitment to their role,
including commitment of time for the Board
and Committee meetings and any other
duties. With the exception of Olivia Qiu,
who resigned on 31st January 2023, all
Directors will stand for re-election at the 2023
Annual General Meeting and the explanation
of how they contribute to the success of
the Company can be found in the Notice
of AGM.
Inclusion, equity and wellbeing
We believe that the Board’s perspective and
approach is greatly enhanced by gender, age
and cultural diversity and we consider overall
Board balance and diversity when appointing
new Directors. We also undertake reviews
each year of the bench strength of all senior
executives and make sure that diversity is
considered in our succession planning across
senior roles.
Effective for financial periods starting on or
after 1st April 2022, the Financial Conduct
Authority has introduced new disclosure
rules (LR 9.8.6R(9) and LR14.3.33R(1)) in
connection with Diversity and inclusion.
We already disclose much of the information
but we have chosen this year to voluntarily
disclose all the information, as set out in the
rules, in the tables below. The Company
captures gender and diversity data of
colleagues through voluntary disclosure via
the internal HR portal where possible or direct
contact where not. Further information on
diversity and inclusion can be found in our
Sustainability Report on pages 46 to 73.
We have a strong focus on inclusion and
are committed to improving diversity across
our Group. As at 31st December 2022, the
Company has met or exceeded two of the
three diversity and inclusion targets, namely
that it has met the 40% female representation
target on the Board and three of the
Board members are from a minority ethnic
background exceeding the Parker Review
target of at least one individual.
The third target requires that at least one
of the senior Board positions (Chair, CEO,
CFO or SID) is held by a woman, a target
endorsed by the FTSE Women Leader’s
review that would like to see a woman in at
least one of these roles by 2025. As at 31st
December 2022, the Company has not met
this target. The role of SID was previously
held by a woman, Dr Trudy Schoolenberg,
and it is the intention of the Board that one of
these positions will be held by a woman again
by the end of 2024. An explanation as to why
we currently don’t meet this requirement,
our succession plans in respect of this and
the search for a new NED following the
resignation of Olivia Qiu at the end of January
2023 follows.
We would, however, like to highlight that two
of our Board Committees, the Remuneration
and Colleague Engagement Committees, are
chaired by women, namely Jane Kingston
and Caroline Johnstone respectively.
In 2021, following a rigorous recruitment
process during which both male and female
candidates were considered, Richard
Gillingwater was appointed to the position
of SID as it was felt that his expertise and
experience were best suited to the role
and complemented the expertise of the
current Board members. Diversity and
inclusion is always a key consideration in the
recruitment process and is at the forefront
of the Committee’s mind when making
nominations to the Board and will continue to
be going forward, including when considering
succession into senior Board positions.
In addition, Sarah Peers, Group Director
of Sustainability, was appointed to our
Group Executive Committee (GEC).
In 2022, wecontinued increasing the
number of women in senior roles across
the Group and improving gender balance
in our senior leadership team (GEC plus
their direct reports) which reached 34%
female representation by October 2022.
Although usual attrition and employee
changes in the fourth quarter reduced this to
32% at the year-end, we anticipate female
representation in our senior leadership will
return to 34% by April 2023 and we remain
committed to reaching at least 40% female
representation across our senior leadership.
Table 1: Reporting table on sex/gender representation
Number of
Board members
Percentage
ofBoard
Number of
Senior positions
on the Board*
Number in
Executive
Management
Percentage
of executive
management
Men 6 60% 4 7 87.5%
Women 4 40% – 1 12.5%
Not Specified/prefer not to say – – – – –
Table 2: Reporting table on ethnicity representation
Number of
Board members
Percentage
ofBoard
Number of
Senior positions
on the Board*
Number in
Executive
Management
Percentage
of executive
management
White British or other White (including minority-white groups) 7 70.0% 3 7 87.5%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 2 20.0% 1 1 12.5%
Black/African/ Caribbean/Black British 1 10.0% – – –
Other ethnic group, including Arab – – – – –
Not specified/ prefer not to say – – – – –
*CEO, CFO, SID & Chair
Governance
Spirax-Sarco Engineering plc Annual Report 2022126

Our global graduate programme again
achieved its goal of 50% female intake for
the year.
As part of our wider commitment to gender
equity, in 2022, our Group CFO, Nimesh
Patel, was appointed Co-Chair of the FTSE
Women Leaders Review which seeks to
increase the representation of women in
senior leadership roles in the FTSE 350.
Our Group Chief Executive, Nicholas
Anderson, also became an Ambassador for
the 25x25 campaign which is initially seeking
to achieve 25 female CEOs in the FTSE 100
by 2025.
Across our Group, our Women’s Network
continued to connect and support women
on key topics related to careers, personal
development and wellbeing, and we
continued our Women’s Executive Mentoring
programme. In 2022, we signed the United
Nations Women’s Empowerment Principles,
and joined both Women in Science and
Engineering (WISE) and the Women’s
Engineering Society (WES) to further support
and guide our gender journey.
In 2022, we rolled out our new Inclusion
Plan and our Group Inclusion Commitments,
approved by the Board, which is about
creating long-term value for all our
stakeholders by empowering an inclusive
and equitable working culture where all
our colleagues can be themselves and
achieve their full potential. It is built on four
pillars – (i)Inclusive Behaviours, (ii) Inclusive
Leadership, (iii) Inclusive Processes and
(iv) Inclusive Partnerships. It has also been
designed to support the United Nations’
Sustainable Development Goals 3 (Good
Health and Wellbeing), 5 (Gender Equality),
8 (Decent Work and Economic Growth), 10
(Reduced Inequalities) and 16 (Peace, Justice
and Strong Institutions).
Within the Global Inclusion Plan, we have
outlined our Group Inclusion Commitments
to ensure that wherever we work in the
world, we will make our difference for
our colleagues.
You can read more about the Inclusion
Plan, our Commitments and our progress
on pages 50 and 52 to 55. We have put
inclusion, equity and wellbeing at the heart
of the culture we are continuing to build,
including the following initiatives in 2022:
• Unconscious bias online training for all
colleagues in multiple languages, which
was completed by our colleagues
• Succession planning and talent
development activities designed to ensure
we continue to have a strong, diverse
bench strength for the management and
operation of our businesses, including a
female executive mentoring programme
and in-house leadership courses
• Our Global two-year graduate programme
supporting our ability to hire the best
graduates from all over the world who
are often globally mobile and strive for
leadership positions
• Sponsorship and promotion of multiple
science, technology, engineering and
mathematics (STEM) initiatives amongst
schools in the communities in which
we operate
• Ongoing commitment to undertaking
a UK equal pay audit across all our
UK Businesses
• Continuing expansion of our colleague
networks, including our existing Women’s
Network and our new Working Families
Forum, Mental Health First Aiders Network,
Watson-Marlow Disability Forum and
Steam Specialties EMEA LGBTQ+ and
Friends Network
Diversity and Inclusion Policy
Our Board fully complies with the principles
of our new Inclusion Plan and Commitments
and our current Diversity and Inclusion Policy
both of which can be found on the Group’s
website. During 2023, we will be updating
this Policy, to better reflect the progress we
have made and will include a repositioning
of the Policy to align with our Group’s focus
on inclusion, equity and wellbeing. The new
Policy document will reflect all the principles
of our Group Inclusion Plan, including the ten
Inclusion Commitments. It will also include
the refreshed set of Diversity goals for our
leadership, graduate and commercial roles.
More information on these can be found in
the Strategic Report on pages 50 to 55.
We firmly believe that we have furthered
our strategic plans through our Succession
and Inclusion Policies and our Diversity
goals, looking forward a number of years.
We remain committed to developing a strong
and diverse Board and we have made
progress in developing our internal talent at
the executive senior leadership level.
Jamie Pike
Chair of Nomination Committee
Further reading
Our Diversity and Inclusion Policy and
our new Group Inclusion Plan and
Commitments can be found on our website:
www.spiraxsarcoengineering.com
Watch our Everyone is Included video:
www.spiraxsarcoengineering.com
Committee focus
for2023
• Executive succession at all
senior levels
• Implementation of the
Group Inclusion Plan within Vulcanic
and Durex Industries
• Recruitment of new
Non-Executive Director
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Audit, risk and internal control
Audit Committee Report
“As I look back on the past year and
consider the Committee’s achievements
against the targets we set, I am
pleased to be able to report a year
of strong progress on behalf of all
our stakeholders.”
Kevin Thompson
Chair of Audit Committee
Committee role and
responsibilities
The overall purpose of the Audit Committee
is to oversee and monitor the entire financial
reporting and control process, to ensure the
integrity of the Group’s published financial
information and assurance over it.
The Committee’s published Terms of
Reference are formally reviewed annually and
were last amended in October 2022. A full
copy can be found on the Group’s website,
www.spiraxsarcoengineering.com.
Within the Terms of Reference the
Committee’s responsibilities are separated
into six areas:
• Financial Reporting
• Internal Controls
• Whistle-blowing
• Risk Management
• Internal Audit
• External Audit
The Committee meeting agendas are
tailored to ensure all the identified areas are
covered, while also allowing for emerging
topics to be included and permitting time for
sufficient discussion and review. A summary
of the Committee’s activities across
each area during 2022 is detailed on the
following pages.
The Committee is comprised entirely of
Non-Executive Directors with all members
serving throughout 2022. All members of
the Committee have a depth of financial and
commercial experience in various industries,
as well as the industrial engineering sector
in which the Group operates. The expertise
the Committee utilises, together with their
independence, provides robust challenge
to management as well as internal and
external auditors to ensure their duties under
the Terms of Reference are fulfilled. For the
purposes of the UK Corporate Governance
Code 2018 (the Code) the Board is satisfied
that Kevin Thompson (Chair), Richard
Gillingwater and Caroline Johnstone have
recent, extensive and relevant financial
experience and the required competence
in accounting.
A more detailed summary of the
qualifications, skills and experience of each
Committee member can be found on pages
104 and 105.
Meetings in 2022
The Committee held five scheduled meetings
during 2022, noting that December had been
added to the meeting roster (in response
to comments arising during the Committee
self-assessment process). In addition, the
Committee hosted a ‘tender assessment
day’, where three separate meetings were
held as part of the external audit tender
exercise. Different sub-groups of the
Committee have also taken part in a number
of working sessions with management across
2022. This included a meeting to discuss the
Group’s ongoing workstreams relating to the
requirements set out in the Department for
Business, Energy & Industrial Strategy (BEIS)
White Paper: Restoring trust in audit and
corporate governance (BEIS Proposals).
As with prior years, relevant members of the
Group’s senior management attended the
Committee’s annual scheduled meetings,
including the Group Chief Executive, the
Chief Financial Officer, the Head of Internal
Audit and the Director of Group Finance.
Continuing the practice started in 2020, the
Group’s Business Finance Directors were
each invited to attend and present to the
Committee during the year.
During 2022, the Committee received
reports from External and Internal Auditors
on the major findings of their work and the
progress of management follow-up by way
How the Committee spent its time %
This breakdown reflects topics addressed
during Committee meetings, and does not
include time spent during engagement events.
25% 25%
20%
10%
10%
10%
Financial Resilience, Risk Management
and Internal controls
External Audit (including Audit tender)
and Auditor effectiveness
Corporate governance (including BEIS update)
and whistle-blowing
Internal Audit and fraud defences
Results review and reporting
Presentations by divisional Finance Directors
Members
Our Audit Committee comprises:
Membership
Kevin Thompson (Chair)
Peter France
Richard Gillingwater
Caroline Johnstone
Olivia Qiu
1
1 Olivia Qiu stepped down from the Board on
31st January 2023
Governance
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March
• Reviewed the FY2021 Annual
Report including:
– Significant financial reporting
judgements and the application of
accounting policies
– Going Concern basis, Viability
Statement and financial resilience
– Ensuring fair, balanced and
understandable presentation
– Report of the External Auditor
• Reviewed external quality assessment
of Internal Audit
• Reviewed External Auditor
independence and effectiveness
• Received an update on work relating
to the Group’s internal controls
framework project (G3)
• Received an update on whistle-
blowing calls made to the Group’s
Safecall service
• Received an update on the Group’s
sustainability reporting
• Confirmation of External Auditor
reappointment for FY2022
April
• Hosted external audit firm ‘tender
assessment day’
May
• Update on planning for the half-year
review including:
– Approval of scope
– Significant financial
reporting judgements
– Application of accounting policies
• Reviewed the policy on provision of
non-audit services
of management reports. As a safeguard, the
Committee holds separate meetings with
the External and Internal Auditors without
management present to discuss their
respective areas and any issues arising from
their audit work.
Committee members also attended two
training sessions which were delivered by
external providers in order to provide detailed
insight into current areas of Committee
focus, these covered: sustainability
reporting frameworks and their associated
assurance, and the anticipated impacts
on the Committee resulting from the latest
BEIS Proposals.
Key activities undertaken
May (continued)
• Received an update on the Group’s
G3 project and management of
fraud risk
• Received an update from the Group’s
Tax and Treasury Committees
• Received an update on compliance
to the Group’s mandatory
contract practices
• Received presentation from the Steam
Specialties Business Finance Director
August
• Reviewed the Half Year results,
including:
– Impairment indicators
– Key accounting judgement
and estimates
– Going concern
– Results news release
• Reviewed the interim report of the
External Auditor
• Received an update on the BEIS
Proposals (and the Group’s
preparedness for them)
• Completed Committee
self-assessment and
performance evaluation
• Received an update on, and
discussed Group’s response to, the
FRC’s letter on the Group’s 2021
Annual Report and Accounts
October
• External Audit planning for the Full
Year results
• Reviewed schedule and preparations for
the drafting of the 2022 Annual Report
• Carried out annual review of the
Committee’s Terms of Reference
• Reviewed Internal Audit function’s
self-assessment on effectiveness and
external quality assessment update
• Approved the Internal Audit plan
for 2023
• Received initial feedback on October
2022 fraud workshop
• Received an update on defined
benefit pension schemes
• Received presentation from
the Watson-Marlow Business
Finance Director
December (New Annual Meeting)
• Update from External Auditor
• Received update on the G3 project
(including on the Group’s new Internal
Controls function)
• Received update from Chair of the
Group’s Risk Committee
• Received cyber security update from
the Group IT Director
• Reviewed Group Principal Risk – Loss
of manufacturing output
• Received presentation from the
Electric Thermal Solutions Business
Finance Director
Chair’s review of 2022
I am pleased to present the Audit
Committee’s report for the year ended 31st
December 2022. The report is intended to
describe how the Committee discharged
its core responsibilities in overseeing and
monitoring the Group’s financial reporting
and control processes to ensure the integrity
of the published financial information.
I would also like to highlight a number of
important activities which the Committee
have undertaken during the last year in order
to meet the evolving requirements of the
Group’s stakeholders.
During the year the Committee successfully
implemented the agreed actions resulting
from the effectiveness review undertaken
in 2021. These included scheduling an
additional meeting to allow for deeper dives
into specific risk areas and re-introducing
formal, external, training opportunities for
members, something which had reduced
during the pandemic-related restrictions.
A key area of focus for the Committee,
which was covered during one such in-
depth training session and discussion, is the
reporting of the impact of climate change
on the Group’s business and the resulting
implications on our reported financial risks,
key judgements and related disclosures.
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Audit, risk and internal control continued
Audit Committee Report continued
The Committee has been pleased with the
quality and effectiveness of Deloitte’s external
audit. The insight, level of challenge, clear
communication and understanding of the
key drivers of our business have delivered
high-quality audit insight as well as facilitating
a productive relationship and valuable debate
between management, the Committee
and the External Auditor. The usage of data
analytics within the external audit process has
continued to expand in line with our planned
roadmap, enabling further improvements
in the efficiency and scope of the overall
audit process. The Committee is committed
to continuing progress in this area with
the planned upgrades to the Group’s key
business information systems expected to
facilitate wider opportunities for automation.
In 2021, the Financial Reporting Council
(FRC) invited the Committee to participate
in a pilot engagement project around
audit quality indicators. The Committee
was pleased to be included in the pilot
and defined a set of indicators, alongside
Deloitte and management. The results
provided another important mechanism
for us to measure audit effectiveness while
also delivering valuable feedback to help
shape future market practice with the audit
quality indicators being further enhanced and
reported for the 2022 audit.
As detailed in last year’s report, the
Committee took the decision to tender our
external audit during 2022. As Deloitte had
not reached ten years in their current role as
External Auditor, a tender was not required
under Audit Regulations. Nonetheless, we
took the decision to complete the tender
process in advance of expected workstreams
arising from requirements contained within
the BEIS Proposals, in particular, the
proposals for continuing improvements to
internal controls and external assurance,
which we anticipate will impact the future
scope of the external audit process. I am
pleased to report that the tender process
was launched in March and culminated
in the Committee receiving three high-
quality tender proposals in a competitive
process which was run in accordance with
FRC best practice guidelines. At our May
meeting the Committee proposed to the
Board that Deloitte be reappointed as the
Group’s External Auditor. Despite electing
not to propose a change in the external
audit provider, the tender process enabled
the Committee to engage and strengthen
relationships with other audit firms, including
one outside of the ‘Big Four’ of Deloitte, EY,
KPMG and PwC. Through this process we
examined our current audit approach and
identified additional areas of focus for the
future. Further detail on the tender process is
provided on page 138.
Throughout the year, the Committee has
worked closely with management to support
the continuing internal controls journey as
the Group looks to move forward in line with
the anticipated BEIS Proposal requirements.
The work done to date is further increasing
standards and levels of understanding across
the Group, ensuring the project has strong
momentum as we move forward in 2023.
The additional investment made by the
Group to support this journey, including the
establishment of a central Internal Controls
team, together with investments in Group-
wide technology platforms, demonstrates the
ongoing commitment to deliver against the
agreed roadmap.
As part of a review of, and update to,
the existing fraud risk assessment, I
attended an internal fraud risk workshop
alongside a number of senior functional and
operational leaders from around the Group.
The workshop facilitated a wide-ranging
discussion and identified focus areas for the
coming year. This workshop was an excellent
example of the value of the Committee
working alongside key stakeholders
within the business to strengthen risk
management practices.
During the second half of the year, the Group
completed two acquisitions, the first being the
purchase of the Vulcanic Group of companies
(Vulcanic) in September and the second
being the purchase of Durex Industries
Corporation (Durex Industries) in November
2022. Both acquisitions sit within our Electric
Thermal Solutions Business. The Committee
has engaged with management, together
with the Internal and External Audit functions,
to examine the acquisition accounting
alongside understanding the next steps in
the integration of these businesses into the
wider Group.
In addition to the workstreams detailed
above, the Committee has requested
additional items on its meeting agendas in
response to stakeholder requirements and
the constantly evolving internal and external
environments in which the Group operates.
Examples of such issues which we have
responded to during the year include an FRC
Corporate Reporting Review, monitoring the
impact on the Group’s UK defined benefit
pension schemes in light of the bond market
volatility experienced in the autumn and
understanding the impacts of the decision to
dispose of our business operations in Russia.
The Committee also continues to monitor
the Group’s cyber security preparedness
(including receiving updates on the Group’s
further investment into, and improvement
plans for, this function).
As I look back on the past year and consider
the Committee’s achievements against the
targets we set, I am pleased to be able to
report a year of strong progress on behalf
of all our stakeholders. I hope that this
report provides appropriate context and
understanding around the work undertaken,
which together with our plans for 2023,
should give all our stakeholders assurance
that the Committee is delivering against our
stated objectives. We remain committed
to responding to the expectations of all our
stakeholders and, as always, we welcome
any feedback and look forward to continued
engagement during the coming year.
Focus for 2023
• Continuing the Group’s internal
controls improvement project
• Developing the Group’s Audit
& Assurance Policy, including
evaluating the levels of
external assurance over non-
financial reported information,
including sustainability
• Upgrades to Business ERP systems
• Financial reporting and internal
control workstreams involved in
the integration of Vulcanic and
Durex Industries
• Further development of the AQI
review process
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1. Financial Reporting
Committee role: Actions and reviews undertaken during 2022:
Monitor the integrity of the Group’s published
financial information and review and challenge
the significant financial reporting issues and
judgements made in connection with its
preparation and presentation.
• Reviewed all externally published Financial Statements and trading updates, along with the
2021 Annual Report and Accounts, prior to recommendation to the Board. Detailed papers
prepared by management highlighting key issues, judgements and estimates contained
within reported financials
• Detailed analysis of managements verification and internal review processes covering the
factual content of the external reporting releases
• External Auditor reports and progress updates in relation to Interim results review and full year
Group audit
• Detailed analysis of Going Concern and Viability reporting and underlying modelling
assumptions, including assessment of suitability of time period covered and scenario
assumptions against the context of the Group’s identified Principal Risks
• Final draft of 2022 Annual Report & Accounts including fair, balanced and
understandable assessment
• Pension accounting and strategy, including assessment of assumptions used to value the
material schemes
• Assessment of the acquisition integration plans, alongside the associated acquisition
accounting. In-depth acquisition reports were presented to the Committee covering the asset
and liability valuations, together with the key assumptions used in arriving at the valuations,
for both the Vulcanic and Durex Industries acquisitions
• Ongoing assessments of the appropriateness of the Group’s use of Alternative Performance
Measures (APMs)
Financial reporting matters and accounting judgements
The Committee is responsible for assessing whether suitable accounting policies have been adopted and whether management has made
appropriate judgements and estimates when applying these policies. During 2022, the Committee considered and addressed the significant
matters listed below in relation to the Group’s Financial Statements and disclosures. The Committee received regular reports from management
regarding these matters and they were the subject of detailed discussions by the Committee, management and the External Auditor.
The Committee also received detailed external audit reports covering the work undertaken and the conclusions reached in relation to each of
these areas. As a result, the Committee reached the conclusion that they were happy with the proposed accounting treatments and resultant
financial reporting.
Revenue recognition
Issue: How this was addressed:
In view of the profile of revenue and profit
recognition in the final quarter of the year (a
period when, in some Group companies,
a higher proportion of the annual external
revenue is recognised compared to the rest
of the year), the need to focus on any new
significant contracts and revenue cut-off for
certain Businesses was highlighted to ensure the
appropriate recognition of revenue for the year
ended 31st December 2022.
The Committee receives updates from management on new significant contracts and monitors
the adequacy of the control environment for revenue recognition. In particular, the Committee
reviewed adherence to the Group’s policy to recognise revenue when performance obligations
have been fulfilled which, in the majority of cases, is at time of dispatch or delivery to the
customer. After considering the combined evidence, the Committee was able to conclude that
revenue recognition was appropriate during 2022 and at the year end.
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Audit, risk and internal control continued
Audit Committee Report continued
Pensions
Issue: How this was addressed:
The Group operates four main defined benefit
pension schemes (three in the UK and one
in the US). The aggregate assets of the four
schemes totalled £333.2 million as at 31st
December 2022 while the aggregate liabilities
totalled £367.2 million resulting in a net liability of
£34.0 million. All four schemes are now closed
to future accrual.
There are judgements and estimates made
in selecting appropriate assumptions in
valuing the Group’s defined benefit pension
obligations, including discount rates, mortality
and inflation (see note 23 on pages 216 to 220).
These variables can have a material impact in
calculating the quantum of the defined benefit
pension liability.
The Committee considered reports by the Group, including those from independent external
specialists used to prepare pension valuations. Management’s selection of assumptions was
challenged, and key assumptions were examined against observable external benchmarks and
market practices.
The Committee spent time during the second half of the year closely monitoring the funding
position and impact on the pensions schemes and the valuation assumptions which resulted
from the market volatility seen in the UK government debt markets and in liability driven
investment funds.
Based on this review (including reports from the External Auditor) and consideration of the
valuation methods applied, the Committee is comfortable that the key assumptions and
accounting treatment are reasonable and appropriate.
Management override of controls
Issue: How this was addressed:
Internal controls are the safeguards put in place
by the Group to protect its financial resources
against external and potential internal fraud
alongside ensuring the accuracy of reported
financial information. Management is responsible
for ensuring the internal controls are followed
across the Group. As such, intervention by
management in the handling of financial
information, especially in relation to one-off or
judgemental transactions and making decisions
contrary to the internal control policy is a
significant, if unlikely, risk.
The Committee discussed the mitigation of control risks, with a particular focus on the level
of management reviews taking place within the Businesses, with both management and the
Business Finance Directors in their regular Committee presentations. The Committee also
noted the high quality of response by management to any deviations from Group policies.
Regular cycles of internal and external audits by independent parties are in place to review
financial information. The audits are objective reviews on compliance with the Group’s
accounting and internal control policies. The Group continued to invest in its Internal Audit
function during 2022 and has increased the usage of data analytics in audits.
As detailed previously, management has an ongoing internal controls improvement programme
in order to further review and enhance the internal financial control environment and the
Committee receives regular updates on progress. The Committee remains satisfied with the
Group’s monitoring of the effectiveness of the internal control systems and noting that no
significant control deficiencies have been identified through this process, is supportive of the
Group’s continuous improvement journey in this area.
Acquisitions – goodwill valuation
Issue: How this was addressed:
There is a high level of judgement surrounding
the valuation of goodwill and the risk of
impairment in respect of major acquisitions.
As detailed in Note 15 to the Consolidated
Financial Statements on page 211 the largest
goodwill balance as at 31st December
2022 relates to the Electric Thermal
Solutions Business of cash generating units
(£514.9 million).
The Committee received detailed reports from management outlining their valuation of goodwill
for any potential impairments and the basis for key assumptions used within their valuation
models. The Committee focused on the key assumptions and the associated disclosures
around the valuation of goodwill for the Electric Thermal Solutions Business, namely:
• the appropriateness of the Group using a cash flow forecasting period longer than five years
for estimating the value in use of the Electric Thermal Solutions Business
• the forecast operational performance in the business plan, in particular, sales and
earnings before interest and tax (EBIT) growth and EBIT margin forecasts as well as cash
generation assumptions
• the discount rates applied to the cashflows resulting from the business plan, specifically the
determination of the input variables used to calculate the discount rate
• the modelling outcomes when sensitivities were applied to represent reasonably possible
changes to key assumptions
The Committee concluded it was comfortable that key assumptions and associated
disclosures were reasonable and that the resulting value in use exceeded the reported carrying
values which led to no impairment being required, including when sensitivities were applied.
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During 2022, the Group received a request for information from the FRC in relation to the ongoing Corporate Reporting Review monitoring
work which the FRC undertakes, detail of the review scope is provided on page 136. The review highlighted a point in relation to the Group’s
adoption of a cash flow forecasting period longer than five years for estimating the value in use of the Electric Thermal Solutions Business of cash
generating units. The Group explained to the FRC that it considered it appropriate to utilise a time period greater than five years, as it anticipated
growth in the period to 2030 in excess of the long-run growth rate used to estimate a terminal value, as a result of the demand for its products in
customers’ publicised decarbonisation initiatives.
Following the FRC review, the Committee supports the enhancements the Group has made to its disclosure of key assumptions (Note 15 page
211) to provide further detail on:
• the link to decarbonisation commitments within the market in which our Electric Thermal Solutions Business operates and the planned year-on-
year reduction in the forecasting period
• the significance of the judgement made over the forecasting period
• management’s experience of forecasting reliably over periods greater than five years
Acquisitions – intangible assets valuation
Issue: How this was addressed:
There is a high level of judgement surrounding
the valuation of acquired intangible assets in
relation to major acquisitions. The associated
valuation models contain judgements relating
to future business performance and underlying
economic conditions.
As detailed in Note 26 to the Consolidated
Financial Statements on pages 223 and
224 as at 31st December 2022 the Group
recognised intangible assets of £241.8 million
in relation to the acquisitions of Vulcanic and
Durex Industries.
The Committee received detailed reports from management, supported by a third-party
valuation specialist, outlining their proposed valuation methodology together with the basis for
the key assumptions used within the valuation models. The Committee focused on the key
assumptions and the associated impacts on the valuation of intangible assets for Vulcanic and
Durex Industries, namely:
• the forecast operational performance in the valuation model business plans used to value
intangible assets, in particular, revenue growth, EBIT margin forecasts and long-term growth
rate assumptions.
• the discount rates applied to the cash flows resulting from the business plans
• The reasonableness of assumptions when considered in the context of past actual
performance and available third-party evidence, with a particular focus on the inputs which
impact Vulcanic brand valuation
• The proposed useful economic life over which each intangible asset is to be recognised
• the impact on the valuation outcomes when sensitivities were applied to represent
reasonably possible changes to key assumptions
Based on this review (including reports from the External Auditor) and consideration of the
valuation methods and key assumptions applied, the Committee is comfortable that the key
assumptions and the resulting intangible assets recognised are appropriate.
Other significant financial reporting issues
Going Concern, Viability Statement and financial resilience
During 2022 the Committee remained focused on monitoring the Group’s financial resilience and overall liquidity position, especially given the
debt-financed acquisitions of Vulcanic and Durex Industries which completed in the second half of the year. The Committee noted that the Group
operated throughout 2022 comfortably within the leverage ratio covenants contained within its external financing arrangements.
The Group has continued its Viability Statement reporting in line with best practice by (i) including an assessment period of five years, as started
last year, and (ii) providing sufficient detail around the underlying scenario modelling undertaken to ensure an explicit link between how the
scenarios relate to the Group’s identified Principal Risks. The Committee reviewed the 2022 Going Concern and Viability Statements and were
satisfied that these represented accurate assessments of the Company’s position at the date of the Financial Statements. For further detail on the
Going Concern and Viability Statements and for additional information on the financial resilience of the Group, please refer to pages 43 to 45.
Financial disclosures including Alternative Performance Measures (APMs)
In the year, the Committee reviewed a number of accounting treatments and disclosures alongside the treatment of specific adjusting items.
These included:
• the disposal of the Group’s Russian businesses
• the treatment and presentation of costs related to (i) significant restructuring of Group operations, particularly in relation to Electric Thermal
Solutions’ manufacturing operations in France and (ii) the acquisition of the Vulcanic and Durex Industries businesses
• the fair values applied to acquired assets and liabilities of the Vulcanic and Durex Industries businesses, alongside the alignment of these
businesses to the Group’s accounting policies
During 2022 the Group undertook certain transactions which were significant in nature and which management proposed be classified as an
adjusting item to provide all our stakeholders with additional useful information in order to assess the period-on-period trading performance of
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Audit, risk and internal control continued
Audit Committee Report continued
the Group (see Note 2 on page 196). In line with best practice the Committee continued to closely monitor the Group’s policy on such items,
spending considerable time understanding, reviewing and challenging management’s classification. The Committee also took account of the
views of the External Auditor and arrived at the conclusion that they supported the enhanced disclosures made by management and considered
the classifications to be appropriate in each case.
The Committee noted that it would continue to focus on the definitions and usage of APMs given the increased regulatory scrutiny on
such measures.
2. Internal Controls
The Board has overall responsibility for the effectiveness of the Group’s internal controls and risk management frameworks. Oversight of
the Group’s risk management procedures and the operation of controls is undertaken by the Risk Management Committee and the Group
Executive Committee and further detail on these processes can be found on page 139 to 142. The Committee supports the Board and the Risk
Management Committee by monitoring and assessing the effectiveness of the Group’s internal controls processes as follows:
Committee role: Actions and reviews undertaken during 2022:
Review the adequacy and effectiveness of the
Group’s internal financial control environment.
Receive reports from the Risk Management
Committee on operational risks.
Review the Group’s Tax and Treasury polices as
well as debt financing facilities and the approach
to management of foreign exchange risk.
• Review of all external and internal audit reports
• Update on Group-wide training programmes (including mandatory courses on Health &
Safety, Anti-Bribery & Corruption and cyber security)
• Annual reviews of the Group’s Tax and Treasury policies with the Group Head of Tax and
Group Treasurer attending the Committee meeting. Review of the minutes and actions of the
Tax and Treasury Committee meetings that took place during the year
• Review and approval of all new Group external debt financing facilitates entered into during
the year, including the financing arrangements utilised in order to complete the acquisitions of
Vulcanic and Durex Industries
• Review of annual management papers on how the Group monitors the effectiveness of the
Group’s internal control processes
• Detailed reports from the functional leaders with responsibility for managing Cyber
security risk
• Detailed presentations from management, the External Auditor and an external third party on
progress in relation to the BEIS Proposals.
• In-depth presentations from the Group Director of Sustainability and an external third party
covering sustainability reporting requirements and frameworks
• Detailed reviews with the respective internal risk owner for each one of the Group’s identified
Principal Risks
• The Finance Director of each of the Group’s three Businesses presented their internal control
and governance structures to the Committee. These updates included detailed progress
reports by each business around the programmes to upgrade their core Information
Systems. Progress was compared to a series of identified critical success factors
During the year both management and the Committee continued to closely monitor the BEIS Proposals and in particular the response to the
consultation around ‘Restoring trust in audit and corporate governance’ which was published by BEIS in May. Following on from the work
undertaken in 2021, the Group has continued to invest significant time and resources in understanding and preparing the Group for the
anticipated impact of the BEIS Proposals. The Group’s Chief Financial Officer and his Finance Leadership Team have continued the development
and implementation of their Group Governance Guidelines (G3) programme which is designed to deliver a risk-based approach to improving the
overall internal financial controls within the Group. To support the Group’s Businesses to successfully embed the G3 programme, the Group has
established a central Internal Controls team whose role is to partner with the Group’s Businesses in order to deliver a successful implementation.
A sub-group of the Committee continued to work closely with management, as they had in 2021, to support the G3 programme and provide
input to the Group’s internal controls roadmap. The programme will focus on a number of key thematic areas:
(i) the consistency and evidencing of key controls
(ii) documenting and standardising the approach to control operation and
(iii) tightening the general IT controls around core information systems
The G3 programme is supported by a library of training materials and a global online platform to track and monitor progress and milestones
across the Group.
The Group has also continued to focus on analysing our current reporting processes alongside the level of assurance we currently obtain over our
external disclosures. Supported by external advisers, the Group has undertaken a structured risk review of all our external disclosures, together
with a review of best market practice in the FTSE100 peer group, to identify which areas the Group may wish to consider changing the current
level of assurance around in response to increased regulatory scrutiny and changes in market practice. It is anticipated that this work will provide a
framework upon which the Group will base its Audit and Assurance Policy as required under the BEIS proposals.
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3. Whistle-blowing
The Group’s Safecall facility, a confidential colleague whistle-blowing platform, continued to be used across the Group throughout 2022.
The facility is actively advertised at all operating companies and allows any colleague to raise concerns, anonymously if needed, where they feel
activity is being undertaken which conflicts with the Group Management Code or Values. Calls raised are investigated by the Group General
Counsel and/or the Group Head of Internal Audit with the involvement of other senior colleagues as required.
Committee role: Actions and reviews undertaken during 2022:
Review the adequacy and security of the whistle-
blowing arrangements that the Group has in
place for colleagues.
Monitor colleague awareness of the whistle-
blowing policies and procedures.
Ensure appropriate processes are in place for the
proportionate and independent investigation of
any matters raised.
Receive reports of non-compliance with the
Group’s polices around fraud, bribery and
unethical behaviour.
• The Committee reviewed a summary of calls to the Group’s whistle-blowing helpline which
have been received and are being investigated.
• Reviewed the outcome of any identified cases where Group policies have been breached,
together with details of the actions taken by management alongside consideration of any
lessons learned.
As a result of the Committee’s review they were satisfied that all calls received via Safecall were dealt with appropriately by management. A small
number of breaches of the Group policies were identified during 2022. There was no material financial loss in any of these instances and the
Committee was supportive of the lessons learned during the year and the follow-up actions taken by management to support and reinforce
Group policies.
4. Risk Management
Committee role: Actions and reviews undertaken during 2022:
Review the Group’s procedures and controls
relating to:
– Fraud
– Bribery and unethical behaviour
– Money laundering
– Compliance with legal and
regulatory requirements
• Reviewed current approach to fraud risk management and participated in internal cross-
function workshop
• Received reports from management detailing any identified cases of fraud and the resulting
actions being taken
• Received input from the External Auditor and from the internal audit function as to their
observations and findings
• Received updates from the Group Legal team on the training materials used across the
Group to educate colleagues on anti-bribery, money laundering and legal compliance
• Received a detailed update from the Group Legal team leading the mandatory contract
practices standardisation project across the Group
Fraud
The Committee monitors the effectiveness of measures in place to prevent, detect and manage fraud. While it is not possible to completely
eliminate fraud risk from the organisation, the Committee is satisfied that measures currently in place are effective at managing and reducing fraud
risk to an acceptable level.
During the year, the existing fraud risk assessment of the Group was reviewed and updated. In addition, in October 2022, a fraud risk workshop
was held with a cross-function and business line group of senior leaders (including the Committee Chair). In the workshop, current fraud
prevention measures were assessed. Management across the Businesses also held a fraud ‘stand down’ during 2022, where they reminded
colleagues of the key fraud risks and the need for vigilance to ensure frauds are prevented/reported swiftly. Three key actions were agreed for
2023 to continue to improve fraud risk management in the Group: further strengthening third party due diligence processes; supplementing on-
line Anti-Bribery & Corruption training with interactive group sessions; and building enhancements into current data loss prevention controls.
Governance
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135

5. Internal Audit
The Committee is cognisant that the ongoing monitoring and review of the effectiveness of the Group’s Internal Audit function is a key
responsibility which all our stakeholders look to the Committee for. During the year the Committee undertook a number of actions in this area:
Committee role: Actions and reviews undertaken during 2022:
Monitor and review the effectiveness of the
Internal Audit function.
Review, assess and approve the annual internal
audit plan.
Review the Internal Audit reports and monitor the
key issues arising.
• Assessed the independence and effectiveness of the Internal Audit function
• Reviewed the results of the annual self-assessment of the function
• Discussed the findings of the External Quality Assessment of the Internal Audit function and
monitored progress on agreed improvement actions
• Monitored key performance indicators of the function against pre-agreed targets
• Monitored timely completion of internal audits against the 2022 audit plan and approved any
changes to the plan
• Approved the internal audit activity plan and budget for 2023
• Reviewed reports submitted periodically by the Head of Internal Audit of activities
undertaken, key audit findings and remediation actions and status reports on completion of
agreed action plans
• Reviewed and approved the Internal Audit Charter
• Held regular meetings with the Group Head of Internal Audit without management present
Throughout 2022, the Committee monitored the effectiveness of internal audit activity and the results of audits undertaken. This provided valuable
input into the Committee’s view on the effectiveness of the Group’s risk management, control and governance framework.
During 2022, the Internal Audit team performed a total of 35 internal audits, which were all conducted through in-person visits. This ability for the
team to physically visit the locations being audited provided a valuable opportunity to build strong relationships with the local operating companies
and to gather additional insights which are not as easy to identify when auditing on a fully remote basis.
The majority of the operating companies audited were found to have an effective control environment. Where issues were found, remediation
actions were agreed that were tracked to completion and validated before being closed. To the extent that any internal audit action items
become overdue, the Business Finance Directors are engaged to assist with ensuring they are closed as soon as possible. The Committee
was satisfied that throughout 2022 management devoted significant resource to the resolution of action items. The Committee receives regular
reports on closure rates and will continue to monitor outstanding actions. During the year, progress was made in reducing open and overdue high
priority items.
Thematic issues identified during audits are also reported, leading to a number of Group-wide control improvement initiatives being undertaken in
areas such as those relating to third-party customer and supplier contracting, IT and financial controls.
The Committee is satisfied that the internal audit function has sufficient skills and resources to discharge its responsibilities effectively and a robust
training programme is in place for ongoing development of technical and analytics capabilities.
The internal audit function has continued to develop its analytics capabilities, in alignment with the systems roll-outs in progress across the
Group’s Businesses. Activity to date has already led to improvements in the level of assurance the Internal Audit team has been able to provide.
The target is for analytics to be fully embedded across the internal audit process including risk assessment, scoping, fieldwork testing and
assessing the effectiveness of remediation actions implemented.
An external quality assessment of the Internal Audit function was carried out in December 2021 by an external provider, Protiviti. Overall, the
function was considered to be performing strongly with all internal activities undertaken rated as ‘Generally Conforms’ to IIA Standards (the
highest available rating). While there are established good practices, some opportunities were identified for further and ongoing improvement,
such as reintroducing the guest auditor programme and amending elements of the audit methodology, which have been actioned.
FRC review scope
It should be noted that the FRC review was based on the Group’s Annual Report and Accounts and does not benefit from detailed knowledge of the Group’s business or an
understanding of the underlying transactions entered into. It was, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting
framework. The FRC supports continuous improvement in the quality of corporate reporting and recognises that those with more detailed knowledge of the business,
including the Audit Committee and auditors, may have recommendations for future improvement.
The FRC review work undertaken provides no assurance that the Group’s Report and Accounts are correct in all material respects; the FRC’s role is not to verify the
information provided but to consider compliance with reporting requirements.
The FRC’s letters are written on the basis that the FRC (which includes the FRC’s officers, employees and agents) accepts no liability for reliance on them by the Company
or any third party, including but not limited to investors and shareholders.
Audit, risk and internal control continued
Audit Committee Report continued
Governance
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6. External Audit
Committee role: Actions and reviews undertaken during 2022:
Oversee the relationship with the Group’s
External Auditor.
Review the quality and effectiveness of the
external audit, including approval of the scope
of annual audit plan and associated fees, the
underlying audit procedures and approach and
the controls designed to ensure independence
and govern the provision of non-audit services.
Make recommendations to the Board on the
tendering of the external audit, the appointment
process, remuneration and engagement terms of
the External Auditor.
• Deloitte’s reports to the Committee covering their Interim review and Full Year audit outcome
and opinion
• Full external audit tender process undertaken
• Recommendation to reappoint Deloitte at the 2023 AGM
• Review, challenge and approval of Deloitte’s 2022 audit plan and associated fees
• Tracking Deloitte’s progress against audit plan journey, specific areas of focus included data
analytics usage
• Review and approval of proposed external audit quality indicators and subsequent
consideration of performance against these post the FY21 audit
• Approval of Non-Audit Services Policy alongside processes to govern auditor independence
• Regular dialogue with Deloitte through the year, in addition to Committee meeting time
allocated with External Auditor in the absence of management
External audit effectiveness and quality
A key responsibility of the Committee is overseeing the external audit process and assessing the audit quality. During the year the Committee
engaged in a number of specific actions in order to improve the auditor effectiveness review process while ensuring it continues to fulfil its
obligations in this area. These included:
• External evaluation of FRC’s Audit Quality Review (AQR): The Committee reviewed the FRC’s latest AQR report on audit quality as related
to Deloitte. This review was followed up with a findings discussion with Deloitte at a Committee meeting. The Committee was satisfied with the
outcome of this review.
• Identification and introduction of Audit Quality Indicators (AQIs): Following the publication of the FRC’s thematic review on AQIs, the Group
participated in the FRC’s pilot review project on this area. The Committee agreed a set of AQIs against which Deloitte’s external audit would
be measured. The criteria covered various factors including: the experience of the audit team; the use of technology to automate the audit
process; the level of input from technical specialists within Deloitte; and the overall communication process with the Committee. The Committee
found the AQIs helpful in providing a defined structure against which the external audit could be assessed. The Committee, via the Chair,
provided feedback to the FRC, particularly around the fact that they would find published, expected benchmarks for each AQI useful as a
metric against which to compare the Group’s specific results. Going forward, the Committee will maintain the AQI assessment process whilst
looking to develop specific targets and to evolve and expand the criteria in order to maximise the assessment opportunity.
• Audit plan and approach: The Committee discussed Deloitte’s detailed audit plan, proposed approach and the planned scope of the audit
during the year, together with the proposed materiality and the identified significant audit risks. Given the scale of the number of operating
companies within the Group’s Businesses, detailed discussions were held around the entities to be covered within the scope of the audit in
order to arrive at a suitable balance between the level of audit coverage and the rotation of operating companies into external audit scope within
the Group. The scope of the audit was also updated later in the year to cover the acquisitions of Vulcanic and Durex Industries. As part of this
detailed audit plan review, the Committee reviewed and approved the proposed audit fees. In reviewing the audit fees, the Committee received
a detailed breakdown of the proposed fees and was able to satisfy themselves that the agreed amount represented fair value in order to deliver
the quality and scale of audit sought.
• Internal evaluation process: The Committee considers it important to gather feedback from within the Group and specifically from the finance
teams within the operating companies who interact with the various Deloitte teams as part of the audit process. Each local finance team is
asked to provide feedback on the external audit process by scoring a series of review questions and providing rationale for the scores given.
The results are then aggregated and presented to the Committee and Deloitte for discussion with year-on-year movements in the results
tracked and detailed. While the overall results and audit experience was positive, a number of incremental opportunities to further improve the
process have been identified and agreed with the Committee.
• Interaction with the auditor: Throughout the year, the Committee worked closely with Deloitte and was able to gather a good insight into
the overall quality of the audit process and the performance of key individuals within the Deloitte team. Throughout these interactions the
Committee felt that Deloitte delivered a consistently high-quality output and provided an appropriate challenge to management’s assumptions,
key judgements and estimates whilst ensuring their audit process focused on the key risk areas.
Via the combination of the activities described above, the Committee was able to conclude that Deloitte has provided a high-quality audit,
appropriately questioned and challenged management and ensured that the Committee has received appropriate insight and feedback detailing
the process and results. The Committee was also pleased to see (i) an increased use of data analytics by Deloitte within the audit process this
year in order to increase efficiency and (ii) the level of audit work undertaken in order to review and suggest improvements to each of the Group’s
Businesses as they continue on the journey to upgrade their respective ERP systems.
Governance
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137

External audit tender
Whilst not required under EU Audit
Regulations, as it has only been eight years
since Deloitte’s appointment, the Committee
announced in March 2022 that it intended to
invite firms to tender for the external audit of
the Group. The selected firm being proposed
to shareholders for approval at the 2023
AGM, would undertake the 2023 Interim
review and Full Year audit. This decision was
taken in light of the significant schedule of
work to be undertaken over the forthcoming
years (in line with the BEIS Proposals
for continuing improvements to internal
controls and other areas of assurance which
is anticipated to impact future external
audit work).
Before commencing the tender process, the
Group approached its top ten shareholders
to gather their input and viewpoints, ensuring
these could be taken into account during the
tender process. The process was designed in
line with FRC best practice guidelines and all
participating firms were provided with clearly
defined assessment criteria. The Committee’s
assessment criteria was based on audit
quality (including technical competence),
challenge and independence as well as a
review of published reports on the quality
of each firms audits. The Committee invited
several audit firms to tender and were
pleased to include a firm, outside of the ‘Big
Four’ as one of the final three participants in
the proposal process. During the process
all participating firms were provided with
extensive access to the Group, including
a comprehensive online data room, time
with the Managing and Finance Directors
of each of the Group’s three Businesses,
meetings with key Group function leaders,
individual sessions with the Committee Chair
and members as well as a guided tour of
the Group’s largest UK manufacturing site.
The process helped develop our relationship
with a broader range of audit firms, which we
see as valuable in order to expand the choice
of professional partnerships in the future.
Following the receipt of high-quality
proposals and presentations from all three
tender participants, the Committee took
the decision to propose the reappointment
of Deloitte as the Group’s External Auditor.
This recommendation is made by the
Committee based on the audit tender
process and has not been influenced by
any third-party view. The Committee also
confirms that no contractual term of the
kind mentioned in Article 16(6) of the Audit
Regulation had been imposed on the
Group which placed any restriction on the
Committee regarding firms that were able
to participate in the tender process and
Audit, risk and internal control continued
Audit Committee Report continued
ultimately be proposed to shareholders
to undertake the Group external audit.
Given that the Group’s current audit partner
at Deloitte, Andrew Bond, will be no longer be
able to lead the Group external audit in 2024
(as a result of the regulatory requirement to
rotate every five years), the Committee used
the audit tender process as an opportunity
to select a proposed new lead audit partner
from Deloitte for 2024 onwards.
Safeguarding auditor independence
andobjectivity
The Committee recognises that the
independence of the External Auditor is
an essential part of the audit framework
and has adopted a policy for determining
whether it is appropriate to engage the
Group’s auditor for non-audit services.
The Auditor Engagement Policy was
reviewed and updated during the year to
align with the latest FRC Ethical Standards.
A copy of the Auditor Engagement Policy
can be found on the Group’s website,
www.spiraxsarcoengineering.com.
To safeguard independence and objectivity,
the policy sets out that the maximum period
of an audit engagement is to be ten years
(calculated from the date of the first financial
year covered by the audit engagement letter).
Further and in line with the Ethical Standard,
the policy details the non-audit services that
the auditor can undertake and which of
those services are subject to the non-audit
services cap.
On non-audit service caps and approvals,
the policy states that any expenditure with
the Group’s auditor on non-audit fees
should not exceed 70% of the average audit
fees charged in the last three-year period.
Furthermore, (i) where the fees for any
individual engagement in relation to the non-
audit services are in excess of £100,000, pre-
approval is required from the Committee and
(ii) a cumulative annual cap of £300,000 is
set in respect of non-audit services provided
by the auditor, above which all individual
engagements must be pre-approved by the
Committee. In addition to the Group’s Policy,
the auditor performs its own independence
and compliance checks, prior to accepting
any engagement, to ensure that all non-audit
work is compliant with the FRC’s Ethical
Standard in force and that there is no conflict
of interest.
During the year, the Group spent £0.1 million
on non-audit services provided by Deloitte
LLP, which included work undertaken on
the Interim review. These non-audit fees
equate to 7% of the average Group audit
fees charged over the past three years.
Further details can be found in Note 7 on
page 203.
Ensuring a fair, balanced and
understandable Annual Report
The Board is required to provide its opinion
that it considers the Annual Report &
Accounts, as a whole, to be fair, balanced
and understandable and therefore provides
the required information for shareholders to
assess the Group’s position, performance,
business model and strategy.
During 2022, the Committee considered
many components of business performance
to ensure it has a full understanding of
the operations of the Group. Key matters
considered by the Committee include:
• reviewing, understanding and supporting
the key judgements and estimates taken
• risk areas set out in the Risk Management
Committee Report
• ensuring an appropriate balance of
GAAP and non-GAAP financial measures
and disclosures
• receipt of regular strategy reports
from the Group Chief Executive and
operational reports from the Business
Managing Directors
• reviews of the budget and operational plan
alongside the financial performance
• recognising the internal co-ordination and
review of the Group-wide input into the
Annual Report which runs alongside the
formal audit process undertaken by the
External Auditor
Through all the above, alongside its
monitoring of the effectiveness of the
Company’s controls, internal audit and risk
management, the Committee maintains
a good understanding of business
performance, key areas of judgement and
decision-making processes within the Group.
As a result, the Committee advised the Board
that they consider the Group’s Annual Report
to be fair, balanced and understandable.
Kevin Thompson
Chair of Audit Committee
8th March 2023
Further reading
Resilience, Going Concern and viability
statements on pages 43 to 45
Governance
Spirax-Sarco Engineering plc Annual Report 2022138

Members
Our Risk Management
Committee comprises:
Membership Attendance
Nicholas Anderson
(Chair) 5/5
Nimesh Patel 5/5
Jim Devine (GEC) 5/5
Dan Harvey (Head of
Internal Audit 5/5
Andrew Mines (GEC) 5/5
Armando Pazos (GEC) 3/5
Sarah Peers (GEC)* 3/3
Maurizio Preziosa (GEC) 5/5
Andy Robson 5/5
*joined in May 2022
“Risk management is on the frontline
in delivering sustainable value for
all our stakeholders and aligning
toourPurpose.”
Nicholas Anderson
Chair of Risk Management Committee
Audit, risk and internal control
Risk Management Committee Report
How the Committee spent its time %
25%
20%
15%
15%
5%
10% 10%
Risk management and controls
Internal Audit
Results review and reporting
Financial resilience
Presentations by Business unit
Finance Directors
External audit
Corporate governance, training
and whistle blowing
Committee role
and responsibilities
The purpose of the Committee is to oversee
the management and control of significant
risks affecting the Group. The Committee
ensures that the Group has robust risk
management policies and procedures
in place, covering all key areas of risk,
such as project governance, sanctions
and embargoes, crisis management,
human rights, business continuity and
business management.
The Committee’s responsibilities include:
• Using top-down and bottom-up reviews
to understand the risks facing the Group,
including all workforce-related risks
• Determining the Group’s appetite for risk
• Assessing the velocity of each risk
• Monitoring any emerging risks on
the horizon
• Accepting and managing within the
Businesses those risks which our
colleagues have the skills and expertise to
understand and leverage
• Identifying appropriate risk mitigation
techniques and countermeasures
Key activities
The Committee met five times in 2022, details
of attendance at meetings can be found
to the left. A summary of the Committee’s
activities throughout the year is set out below.
January
• Final approval of 2021 Risk Register
and Principal Risks
• Elevation of ‘Loss of critical
supplier’ to Principal Risk 8 and
a corresponding risk appetite
rating approved
• Validation of all other risk
appetite ratings
May
• The concept of risk velocity was
deliberated and approved for
inclusion in the Group’s Risk
Management Process
• The results of the Enterprise
Risk Management Process
were assessed and areas of
improvements were discussed
August
• All operational risks were scored for
risk velocity
• The responses to the top-down
risk review were discussed and
determined to be satisfactory
Governance
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139

Audit, risk and internal control continued
Risk Management Committee Report continued
trade with Russia. The disposal of our
Russian businesses was concluded on 6th
July 2022 and this was coupled with a global
rollout of an updated sanctions policy relating
to Russia. Having traded in Russia for more
than 25 years this was a decision fraught
with emotion, not least for the impact on our
Russian colleagues, who we continued to
support, including through paying salaries
in the second quarter as we prepared the
operations for disposal.
The conflict in Ukraine also triggered a
global energy crisis and spiralling inflation
in a number of countries. Recognising the
severity of the impact on our workforce, we
decided to revalidate our compensation
parameters and bring forward our pay review
date in 2023 from March to January, setting
each country’s pay increment at a level that
is able to meaningfully replace most of the
purchasing power eroded by the inflationary
pressures in 2022.
In addition to completing its biennial top-
down review of risks and the update of the
Group Risk Register, the Committee also
deliberated the findings of the Enterprise
Risk Management Review undertaken
with the support of external consultants
PricewaterhouseCoopers LLP and will
implement key findings during 2023.
Anti-Bribery and Corruption (ABC)
The Group has continued to reinforce the
message of zero tolerance for bribery and
corruption within its Businesses. Our ABC
training, which is hosted by the Steam
Specialties Academy as part of the Group
Essentials training module is available in 16
key languages and around 6,350 colleagues
(including Directors) worldwide have now
taken part in the training.
The Group uses an independent, third-party
whistle-blowing facilty to enable colleagues
to anonymously report any suspected
unethical, illegal or otherwise concerning
conduct. To ensure all colleagues continue to
know how to access the facility, an internal
awareness refresher campaign was launched
in January 2023 in 16 languages and rolled
out across the Group.
In line with our Gifts, Entertainment and
Hospitality Policy, we also maintain an
online gift register, where colleagues are
expected to record gifts, to ensure our
conduct is in keeping with the highest ethical
expectations and always within the law.
This year we reviewed and updated our
Gifts, Entertainment and Hospitality Policy to
ensure it was appropriate for the increasing
size and complexity of our business.
Further updates on whistle-blowing and ABC
can be found in our Sustainability Report on
page 51.
Modern Slavery Statement
The Group’s Modern Slavery Statement
2022 reflects the Group’s Values and
the interplay between those Values and
our commitment to the mission behind
the UK Modern Slavery Act. It explains
how we operate to the highest ethical
standards across our global businesses.
We respect and protect human rights and
will not tolerate modern slavery or human
trafficking in any of our operations, including
through our supply chain. The Statement
can be found on the Group’s website,
at www.spiraxsarcoengineering.com/
sustainability/supply-chain.
Identifying emerging and
PrincipalRisks
We have a robust Risk Management
Process in place through which we identify,
evaluate and manage the Principal Risks
and emerging risks that could impact the
Group’s performance.
During 2022, we reviewed the Group’s
exposure to risk using a top-down approach,
where the Committee sought views of the
Group companies on the risks that the
Committee considered may affect their
businesses to ensure new or emerging risks
are not missed. Following this process, the
Committee reviewed and confirmed the
robustness of the countermeasures that
Group companies have in place to mitigate
the Principal Risks in the Group Risk Register.
In addition, we continued to closely monitor
certain changing emerging risks such as the
rising cost of inflation and took appropriate
mitigating actions through the bringing
forward of our 2023 pay review date and
effective price increases.
Our Principal Risks and the results of the
2022 review are set out in the Strategic
Report on pages 92 to 99.
Climate change risk
Climate change continues to be an emerging
risk that we continue to closely monitor in
light of national and global developments.
Climate Change risk is broken down into two
categories: Physical risks (such as increased
frequency and severity of extreme weather
events), and the impacts of such events and
climatic changes on the Group’s operations
(including supply chains); and transition risks
(arising from political, economic and societal
shifts to a low-carbon economy).
November
• Discussion of results of risk scoring
and changes in year-on-year trend,
principally resulting in ‘Loss of critical
supplier’ being elevated to Principal
Risk 6 and Climate Change being
elevated to risk 9
• Review of, and agreement on,
updates to the Risk Register arising
from the top-down review
December
• Final approval of 2022 Risk Register
and Principal Risks
• Risk appetite and risk velocity ratings
validated for all Principal Risks
Chair’s review of 2022
Summary of key focus areas
A key development of the Committee’s work
this year has been the introduction of risk
velocity in the Group’s risk management
process. Risk velocity is a measure of
the time that would lapse between the
materialising of a risk and the point at
which the Group would feel its impact.
The business and regulatory frameworks
have become increasingly complex and
fast-paced. However, risk is rarely static and
the COVID-19 pandemic has demonstrated
the speed at which a risk can impact
an organisation.
This has necessitated the addition of risk
velocity as another dimension to our risk
assessment framework. For those risks
with high velocity, it is crucial that we ensure
that the appropriate controls are in place in
the event that such a risk does materialise.
This confers a key advantage of enabling us
to plan ahead and put in place pre-emptive
and recovery processes today and ensure
that we can thrive in an environment which
is increasingly volatile. We have rated each
of our Principal Risks for risk velocity with the
same rigour as we measure the likelihood
and impact of a risk.
In February 2022, Russia invaded Ukraine.
This was followed by a unanimous decision
of the major global powers to impose
stringent economic and financial sanctions
on Russia and we likewise suspended all
trading with and within Russia. The Group
took the view that Russia’s ability to trade
with the world would be restricted for many
years to come. We therefore ultimately took
the difficult decision to close our Russian
businesses and cease all direct and indirect
Governance
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Attendance at the World Climate Summit, an
important fringe event of the 27th Conference
of the Parties of the UNFCCC (COP 27)
corroborated our view that the risk will
continue to dominate the global economic
and political agendas in 2023 and we must
continue to recognise the climate risks and
opportunities in arriving at our business
decisions. Our climate risk is managed
holistically by the Committee with regular
updates to the Group Executive Committee
and the Board. The risk was elevated to risk 9
in our Risk Register this year following similar
rises in the last two years.
Recognising the specialist knowledge and
far-reaching implications of this risk, the
Committee also invited our Group Director of
Sustainability to join the Committee this year
which makes us well placed to ensure we
do not have any blind spots in our appraisal
of the risk. We also continue to follow the
framework set by the Task Force on Climate-
related Financial Disclosures (TCFD) to enable
the transition to a low-carbon economy.
Our TCFD disclosures are set out on pages
59 to 61 of the Sustainability Report.
Monitoring effectiveness
(i) Risk management systems
The Committee is responsible for reporting to
the Board the risks facing the Group and the
mitigation measures for those risks. To fulfil
that responsibility, the Committee oversees
the Group’s risk management processes
and procedures, with support from the Audit
Committee, through internal audit, who
monitor Group companies’ compliance with
those processes and procedures.
The Committee is also charged with
the ongoing monitoring of sufficient and
effective mitigation plans for relevant risks
at each Business together with all the
operating companies in each of those three
Businesses. Each operating company
is required to undertake a formal review,
at least once a year, of the risks which
impact, or have the potential to impact, its
business. This takes the form of a top-
down or bottom-up review and includes all
risks related to that company’s workforce.
The reviews are consolidated into Group-
wide risk reports which are maintained and
reviewed by the Committee on a regular
basis. Additionally, the risk management
processes are monitored on an on-going
basis via internal and external audits of
Group companies. Senior managers have
full accountability for risk management within
their businesses. This year also included
an audit of the Group’s Risk Management
Process undertaken through an Enterprise
Risk Management Review.
The Audit Committee also undertakes
‘deep dives’ into the Principal Risk areas.
In 2022 it reviewed Principal Risk 4: Loss of
manufacturing output at any group factory, at
its October meeting.
Underpinning the Group’s control
environment is our culture and the ‘tone at
the top’ of the organisation, which sets the
principles under which all Group business is
conducted. These principles are captured
in the six Values of the Group that have
been communicated to all colleagues.
These principles are also documented and
reinforced through the Group Management
Code and through annual mandatory training
via the online Group Essentials programme.
Colleague engagement surveys are also
undertaken to validate organisational
alignment to our Values and in 2022, a
Values-based awards programme, the Spirit
Awards, was launched, which received 633
applications in its first year.
The Group’s documented policies and
procedures, which are periodically reviewed
and refreshed, set out our clear expectations
of operating companies for the operation of
controls. This includes the Group’s Delegation
of Authorities that has been approved by
the Board and cascaded to our Business
Executive teams and their respective
operating companies.
Reviews over the effectiveness of the controls
environment are performed through an
annual Risk and Control Self-Assessment
process and reviews of operating companies’
activities undertaken by Group functions,
including Internal Audit. Where appropriate,
such as when reviewing specialist functions,
independent reviews are sought from third
parties and various regulatory and certification
audits are also undertaken across the
Group each year. Findings identified from
these processes and reviews give rise to
documented action items, which are tracked
to completion.
Oversight of the financial and operational
performance of our operating companies is
provided at Business and Group levels and
includes detailed quarterly financial reviews,
reviews of monthly management accounts
and weekly flash reporting. Key business
decisions are approved by the Group
Executive Committee, which meets monthly
to review financial performance and receives
reports on activity to manage our Principal
Risks. Senior leaders and the Board visit
Group operations, and regional and business
leaders also present directly to the Board.
Various Business and Functional conferences
are held during the year to engage our
global teams and help communicate
Group expectations.
The governance structure provides three lines
of defence in the Group’s risk management,
as illustrated below.
Internal audits provide independent
testing and verification of compliance with
policies and procedures and monitoring of
follow-up actions where required
Third line of defence
Each Business is responsible for the
identification, control and management
of its own risks
First line of defence
The Risk Management Committee, with
the Audit Committee, ensures that the risk
and compliance framework is effective,
so as to facilitate the monitoring of risk
management with on-going challenge and
review of the risk profile in the business
Second line of defence
(ii) Internal control framework
The Group’s internal controls framework is
structured as follows:
Manage Exceptions
Identify/Prioritise Risks
Set Risk Appetite
Set Operating Principles
Produce and maintain detailed
Policies/Procedures
Validate and test compliance
with Policies
Report on Policy Compliance
Oversight of the Group’s risk management
frameworks and operation of controls is
undertaken by the Risk Management and
Group Executive Committees.
The Risk Management Committee regularly
reviews the Group’s Principal Risks, including
emerging risks and defines appropriate risk
appetite. The Group Executive Committee
is responsible for the operation of controls
to mitigate both the Principal Risks and
other operational risks. The Board is actively
involved in reviewing all risks.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
141

Audit, risk and internal control continued
Risk Management Committee Report continued
Safecall, our established independent
whistle-blowing facility is managed by the
Group General Counsel and is advertised at
all operating sites and was recently reinforced
through a Group-wide awareness campaign.
Safecall helps us ensure that we are always
acting with integrity and working in a way
that is fair and honest and always doing
the right thing. If colleagues are concerned
about serious and wrongful conduct at
work, they can use Safecall to report
concerns confidentially and anonymously
if they become aware of any activity that is
inconsistent with our principles. Concerns are
investigated by the Group General Counsel or
another senior manager as appropriate.
(iii) Internal audit
The Group’s standard policy regarding
internal auditing is that each operating
company is audited at least once
every five years (most more frequently).
Operating companies located in higher
risk territories are audited more frequently,
and businesses acquired by the Group are
subject to internal audit within six months
of acquisition.
The internal audit system is a crucial part of
the risk management process. Internal audits
are conducted by our Internal Audit team led
by our Head of Internal Audit.
Internal audit reports are made to the
Audit Committee and the Board as a
whole. The Audit Committee has ensured
compliance with centrally documented
control procedures on such matters
as capital expenditure, information and
technology security and legal and regulatory
compliance. The Audit Committee conducts
‘deep dives’ into Principal Risks.
Risk Appetite Statement
Risk is an inherent part of business and in
order to achieve our business aims, we must
accept certain risks. We seek to implement
a balanced approach to risk, ensuring
that our resources are protected while still
pursuing opportunities to accelerate and
deliver growth.
The decision to take opportunity-based risks
should, to the greatest extent possible, be
deliberate and calculated.
• We aim to confirm that the level of risk
is commensurate with the strategic and
economic benefits the risk might bring
• We evaluate our ability to control the
risk or mitigate its effects, should that
risk materialise
• We always assess the potential ethical
considerations arising from knowingly
accepting some level of risk
An informed and well-considered process
is crucial to any decision to accept risk.
The Committee has undertaken a thorough
evaluation process to determine an
appropriate Risk Appetite and Risk Velocity
rating for each Principal Risk. These are set
out in detail in the Risk management section
of the Strategic Report which starts on
page 92.
The Group has a very low appetite for risks
that could lead to violations of health, safety
and environmental legislation, breaches of
legal and regulatory requirements and climate
change that might affect its operations.
In contrast, the Group has a high risk appetite
in relation to economic and political instability.
With decades of experience in successfully
managing operations in volatile markets,
we have the control procedures in place to
handle the challenges that come with those
risks and we appreciate that without taking
risks in new, sometimes unstable, territories
we would miss out on valuable opportunities
for growth.
As an organisation we are risk aware, but
not risk averse. We continually monitor
and assess the risks facing the Group
and evaluate our ability to control them
and mitigate their effects. Focusing on our
strategic objectives, we evaluate our Risk
Appetite and decisions to accept risk in a
way that will ensure the on-going financial
health of the Group.
Board and Audit
Committee Oversight
The Board has overall responsibility for
the effectiveness of the Group’s internal
controls and risk management frameworks.
Oversight of the Group’s risk management
procedures and the operation of controls
is undertaken by the Risk Management
Committee and the Group Executive
Committee. Further details on how the Board
and Audit Committee manage this oversight
can be found in the Audit Committee Report
on pages 128 to 138.
Viability Statement
In accordance with provision 31 of the UK
Corporate Governance Code 2018, the
Board has assessed the viability of the
Group, taking into account the Group’s
current financial position, business strategy,
the Board’s risk appetite and the potential
impacts of the Group’s Principal Risks.
We set out the eight Principal Risks we
have identified, along with our mitigation
measures, in our Risk Management section
of the Strategic Report which begins on
page 92. Based on this assessment, the
Board has confirmed that it has a reasonable
expectation that the Company will be able to
continue in operation and meet its liabilities as
they fall due over the five-year period to 31st
December 2027.
Based on this assessment, the Board
has confirmed that it has a reasonable
expectation that the Company will be able to
continue in operation and meet its liabilities as
they fall due over the five-year period to 31st
December 2027.
The Viability Statement is set out in full in our
Financial review on pages 44 to 45.
Nicholas Anderson
Chair of Risk Management Committee
8th March 2023
Further reading
Risk management and Principal Risks
See pages 92 to 99
Focus for2023
• Undertake a bottom-up risk review
and annual review of the Risk Register
• Implement the actions identified
during our Enterprise Risk
Management review process
undertaken in 2022
• Continue to assess and evaluate the
impact of climate change in light of
data collected and the corresponding
risks and benefits to our Group
• Undertake an in-depth business
continuity risk assessment for our
supply companies as part of our
analysis of the mitigation of the risk of
‘Loss of manufacturing output’
• Closely monitor the rising costs of
inflation and supply chain disruption
and their associated impact on
our Businesses
• Accelerate the implementation of our
net zero roadmap and Digital Strategy,
in alignment to achieve our goals
by 2023
Governance
Spirax-Sarco Engineering plc Annual Report 2022142

Committee role and
responsibilities
The main role of the Committee is to
determine Executive remuneration policies,
how they are applied and set targets for
the short and long-term incentive schemes.
It also monitors compliance with the presiding
Remuneration Policy.
The Committee determines the philosophy,
principles and policy of Executive and senior
manager remuneration having regard to the
latest legislation, corporate governance, best
“
Together with management, the
Committee closely reviewed all
aspects of the cost-of-living challenges
developing in almost all of our
markets and were pleased to support
management’s fair and consistent
approach, as we outline below.”
Jane Kingston
Chair of Remuneration Committee
Remuneration
Remuneration Committee Report
Members
Our Remuneration
Committee comprises:
Membership
Jane Kingston (Chair)
Angela Archon
Richard Gillingwater
Kevin Thompson
practice and the Financial Conduct Authority
(FCA) Listing Rules.
The Committee takes account of workforce
remuneration and related policies and the
alignment of incentives and rewards with our
Group culture.
Key activities undertaken
The Remuneration Committee met five times
in 2022, details of attendance can be found
on page 107. A summary of the Committee’s
activities throughout the year is set out below.
How the Committee spent its time %
*excludes consultation meetings
14% 14%
10%
26%
22% 9%
5%
Rem policy and market updates
Bonus achievements and target setting
Board and GEC pay
PSP achievement and target setting
Annual Report
Shareholder consultation*
Gender pay gap & wider workforce pay
February and March
• Review and approval of Committee
Chair’s report
• Annual Report on Remuneration 2021
• Annual bonus – 2021
outcome/2022 targets
• 2022 personal strategic objectives
• PSP – 2019 outcome/2022 targets
(including ESG targets)
• Review of 2021 gender pay gap and
Group Chief Executive pay ratio
• Review of pay and real living wage
rates (UK)
• Shareholder Group Chief Executive
pay consultation review and response
• Approval of increase to the Group
Chief Executive’s 2022 PSP award
and intended 2023 salary increase
August
• Market practice update
• Remuneration Policy review
• PSP plan rules review
• Review of all-employee share plans
October
• Remuneration Policy review
• 2023 Remuneration Policy
shareholder consultation
• 2023 Company-wide salary review
and cost of living challenge
December
• Impact of acquisitions and disposals
on remuneration
• Pay review landscape and cost of
living challenge
• 2023 annual pay review
• PSP plan rules review update
• 2023 Remuneration Policy
shareholder consultation update
• Colleague consultation on Policy and
Reward update
• Proxy and Shareholder Guidelines for
2023 AGM update
• Annual Report on Remuneration
2022 update
Governance
Spirax-Sarco Engineering plc Annual Report 2022
143

Chair review of 2022
I am pleased to present the Directors’ Report
on Remuneration for the year ended 31st
December 2022.
During the year, the Committee considered
the impact of acquisitions and disposals
on remuneration outcomes, focused on
reviewing the Policy and its continuing fit
to strategy and monitored the impact of
economic events on remuneration across the
Group. This included its plan to address the
Group Chief Executive’s salary as outlined to
shareholders in 2021, as well as monitoring
remuneration and employment decisions
taken across the Group. We considered all
decisions on Executive Director and senior
management pay during 2022 in this context.
The Committee worked with management
to address the cost-of-living challenges
facing colleagues working across our
Group companies to ensure this was
appropriately addressed everywhere and
more information on this can be found on
pages 112 and 145. We also assessed the
impact of our remuneration decisions on our
other stakeholders, including shareholders,
employees and the wider communities where
we operate.
Outcomes for the year
underreview
Overall, the Group’s performance in 2022
remained strong. Group organic sales
growth was 14% and Group adjusted
operating profit increased by 12% resulting
in an adjusted operating profit margin of
23.6%. In view of this we determined that
payments to senior managers and Executive
Directors, under both our short-and long-
term incentive plans, were appropriate in this
context. These outcomes are fully detailed
in the pages that follow with the highlights
noted below.
Annual Incentive Plan (AIP)
The Group’s operating profit target (70% of
the opportunity) was set in January 2022 and
has been exceeded (101.9% target), resulting
in 75.14% of the metric maximum achieved.
The Group’s cash generation target (20%
of the opportunity) was not met resulting in
a nil pay-out in respect of this metric. The
key driver behind the shortfall was planned
record capital expenditure and investment in
inventory rebuilding as global supply capacity
restraints eased. Finally, strong progress
has been made against personal strategic
objectives (10% of the opportunity), full
information can be found on pages 150
to 152.
Performance Share Plan (PSP)
January 2020 – December 2022
During the three-year performance period
ending 31st December 2022, earnings per
share grew by 40.3% over the vesting period
resulting in a 100% vesting for this element.
The Group also delivered a total shareholder
return (TSR) of 36.7% over this period (as
determined under our PSP), placing us
above upper quartile in the ranking of our
TSR comparator group and thus qualifying
participants for 100% vesting of this element
of the 2020 PSP.
Consideration of performance outcomes
Our Remuneration Policy is designed to
ensure that a percentage of Executive
Director pay is based on the achievement
of demanding performance targets and
is therefore at risk of not being paid.
Maximum pay-out under the AIP and PSP is
only possible as a result of out-performance
of demanding goals. As described above,
the Committee has made a robust and full
assessment of both financial and non-
financial measures and I am pleased to
confirm that the pay-out under the AIP to
Executive Directors ranges from 59.3%
to 61.8% of maximum, with a 100% of
maximum vesting of the 2020 PSP award.
The Group’s strong performance has
delivered results in line with external
expectations and our challenging internal
goals. The Committee is especially pleased
that progress has been made on the Group’s
key strategic projects for future growth and its
core sustainability strategy. The performance
delivered for the vesting of the 2020 PSP
award is particularly notable given the impact
of the pandemic and inflation on the external
operating environment, with the Group
continuing to operate safely in all of our
markets without taking any state aid.
Recognising that the 2020 PSP targets
were set in the pandemic year, the formulaic
outcome of the results and the share price
at grant have been discussed and assessed
by the Committee with a view to any windfall
gains that might have occurred. The share
price increased approximately 40% from
grant until the end of 2022 (using the average
of Q4 2022 share price) and reflected the
top quartile TSR performance achieved.
The Committee is satisfied that a windfall
has not occurred and so no adjustment
to the outcomes is considered necessary.
The Committee considers this a fair reflection
of business performance throughout
the performance period and in line with
shareholder experience.
The Committee is satisfied that the total
remuneration received by Executive Directors
for 2022 (given as a single figure for each
Director on page 149) appropriately reflects
the Group’s performance over the year and
its progression over the last three years,
as well as being in line with the Policy and
consistent with the approach taken for
other colleagues. It is also satisfied that the
approach to setting remuneration underpins
the effective and proper management of
risk by rewarding fairly for sustainable profit
growth and long-term return for shareholders.
Salary review
The Committee considers salary review
arrangements planned across the Group and
receives an update on broader remuneration
arrangements as context for its decisions at
the more senior levels. As previously reported,
in January 2022 a 2.7% salary increase
was awarded to the Executive Directors.
Throughout autumn 2022 the Committee
engaged with management on the cost-
of-living challenges and explored options
to ensure that for the 2023 salary reviews,
appropriate support is given at different levels
and in different countries across the Group as
described next.
Cost-of-living challenges
As a result, in 2023 we revised our existing
approach to setting country-specific
percentage increases by looking at the
projected Consumer Price Index in each
country as opposed to market benchmark
data. We also brought forward the normal
date of the annual pay review from 1st
March to 1st January 2023 so as to
give an additional benefit for colleagues.
We recognise that inflation does not impact
senior leaders to the same degree, so they
received three quarters of the agreed country
increase. In the UK, this meant that Senior
leaders received a cost-of-living increase circa
2% below the level for all other colleagues
which was 7.1%. The majority of UK and
international colleagues also benefited from
the review being bought forward by two
months (worth an additional 1.2%). The Chief
Financial Officer and senior managers
received a 2023 salary increase of 5.3% and
did not benefit from an earlier review date
which remained at 1st January.
Remuneration continued
Remuneration Committee Report continued
Governance
Spirax-Sarco Engineering plc Annual Report 2022144

Group Chief Executive 2023 Salary
Following a shareholder consultation in 2021,
we informed shareholders in our Annual
Report last year (the benchmarking tables
for which are shown below), that it was
the intention of the Committee to raise the
Group Chief Executive’s salary to £750k with
effect from 1st January 2023, the level we
considered reflected a fully experienced and
proven Group Chief Executive. We received
very positive support (both during the 2021
shareholder consultation and through voting
at the 2022 AGM), full details of the rationale
can be found on pages 135-136 and page
148 of the 2021 Annual Report.
FTSE 31 to 100 industrial,
manufacturing & engineering
Salary
(£’000)
Total target
remuneration
(£’000)
Lower quartile 771 2,126
Median 859 3,132
Upper quartile 954 3,408
Spirax-Sarco Engineering Group
Chief Executive
Salary
(£’000)
LTIP
grant
% of
salary
Total target
remuneration
(£’000)
2021 614 200% 2,020
2022 630 250% 2,189
2023 750 200% 2,428
During 2022, the Committee re-examined
the proposals in light of the cost-of-living
challenges particularly in the UK where our
Group Chief Executive is based and as
described later in this report, we also spoke
to shareholders in order to better understand
their expectations around Executive pay
increases in the current climate. A reminder
of the background which led to this decision
follows, together with a summary of why we
believe this is still the correct course of action.
In 2019, shareholders strongly supported
increases in Executive Directors’ pay to bring
packages to a below median but above
lower quartile level. This was a significant
reset, and we undertook not to increase
the Executive Directors’ salaries (other than
annual inflationary increases) until 1st January
2023 unless there was a significant change in
the scale of the Group.
In terms of the size and complexity of the
Group, since 2019 colleague numbers have
grown from 7,400 to over 10,400. This has
been a result of both organic growth and
through acquisitions. We now have direct
operations in 67 countries. Group revenues
have increased from £1,242m to £1,611m
in 2022.
Since 2019, a number of Executive Directors
have retired and we recruited our Group Chief
Financial Officer which required increased
salary and annual bonus (AIP) opportunity in
order to compete in the market. This exercise
brought into sharp focus that our Group Chief
Executive’s package had drifted materially
below market levels and was creating an
inequitable position that challenges our
Values and creates unacceptable levels
of risk.
Our policy on salaries envisages maintaining
at least a lower quartile level, which we
consider is suitably conservative. However,
the 2022 below lower quartile level salary
(£630,000) would make any future executive
succession planning and attracting high
calibre executives extremely difficult because
it sends entirely the wrong message about
whether we truly value our most senior
executives. The Committee does not believe
in positioning our Directors’ remuneration
at the median level or slavishly following
benchmarking results, however, the
Committee remained very concerned that we
had fallen so far below the wider market for
our Group Chief Executive.
Towards the end of 2022 we re-considered
the realities of our business, relevant markets
for talent and overall compensation and
following advice from our Remuneration
Consultants that the market had not
significantly moved in the last year, we
were confident that the 2022 Group Chief
Executive salary of £630,000 remained below
lower quartile for these companies and our
position on this has not changed.
As a result of consultation in 2021 with our
largest 20 shareholders and proxy agencies
and confirmed in voting at the 2022 AGM
meeting, as well as from the consultation in
late 2022 (details below), we again received
very positive support for these changes.
Shareholders confirmed that our explanation
in consultation letters was clear, compelling
and recognised we had a genuine need
to address the situation in the interests of
fairness and risk management. In 2022,
the Company granted our Group Chief
Executive an LTIP award at the maximum
level permitted under the 2020 Remuneration
Policy (2020 Policy) of 250% of salary.
This was 50% of salary higher than his normal
annual grant and was a one-off, only in 2022,
in order to bridge the gap (caused by timing)
and received the support of shareholders at
the 2022 AGM for which we are grateful.
In determining the figure of £750,000 per
annum, the Committee confirms that it had
already built into the base salary proposal
a cost-of-living increase of 3% for the year
2023. The Committee determined that this
remains appropriate when compared with the
larger increases of 7.1% in the UK for other
colleagues and was implemented on 1st
January 2023. The Group Chief Executive’s
PSP award returns to the normal 200% of
salary for 2023.
Chief Financial Officer 2023 salary
With effect from 1st January 2023, the
salary increase for the CFO was 5.3% (in
line with other senior managers as noted
above). This is below the average increase
awarded in the UK to colleagues from 1st
January 2023 of 7.1%, who also benefited
from their pay review date being brought
forward from 1st March (worth an additional
1.2% as described above). The Committee
considered that this increase was appropriate
in the light of the marketplace, but cognisant
of the greater impact of cost-of-living
increases on colleagues.
Plc Chair 2023 fee
The Committee also reviews the fee for the
Chair and with effect from January 2023 this
was increased by 3%.
Executive pensions
A plan to achieve pension equity across the
Group continued to be accelerated in 2022,
with the Group Chief Executive reducing his
pension allowance from circa 24% of salary
in 2021 to 10% at the start of 2023. In 2023,
his pension allowance is now in line with the
UK new joiner’s maximum rate of 10% of
salary. The CFO was appointed in 2020 with
a 10% pension allowance.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
145

Remuneration Policy review
During the year the Committee began its
triennial review of the Directors’ Remuneration
Policy. The current Policy is due to expire
at the 2023 AGM. The Committee
Chair together with the Chairman of the
Board consulted with the Group’s top 20
shareholders and proxy agencies and the
Committee Chair consulted with internal
colleagues by way of focus groups as
noted below.
It was felt that the overall structure of the
current policy was fit for purpose and no
radical changes are proposed for the new
Policy or remuneration structure. The new
Remuneration Policy can be found in full
on pages 160 to 168, the proposed key
changes are detailed on the left.
Shareholder consultation
During the last quarter of 2022, on behalf
of the Committee, I wrote to our top 20
shareholders and major proxy agencies to
consult on the proposed Policy changes and
also reprise the rationale for the Group Chief
Executive base salary reset as proposed in
2021 and recently reviewed in light of the
current economic environment. Together with
Jamie Pike (Chair of the Board) we met
virtually with six organisations and received
email feedback from a further six representing
circa 38% of our share capital.
Proposed Group Chief Executive base
salary increase in 2023
Feedback we received during consultation
from shareholders and proxies confirmed that
the underlying logic for the proposed increase
to the Group Chief Executive’s base salary
was well explained a year ago and continued
to make sense. Shareholders recognised
that business and personal performance
continued to be strong and were pleased that
the Committee had reassessed the proposal
recently in light of cost-of-living challenges
and were keen to review our overall
approach for the wider workforce as context.
They noted that this proposal had already
included a 3% annual inflationary increase for
2023 compared to the 7.1% that the wider
UK-based workforce would receive. We have
taken their advice to fully disclose all aspects
of the proposal together with our approach
to wider colleague pay which can be found in
this report on page 145.
Remuneration continued
Remuneration Committee Report continued
Key change 2020 Policy Rationale/comment
An increase in annual bonus
maximum opportunity to
200% of base salary
Maximum 150% of base
salary
Included for flexibility for the
next three years and to align
with market comparability.
No intention to utilise this
currently but we will consult
with leading shareholders
beforehand should there be
any desire to implement it in
the future
Bonus (AIP) deferral is
amended to 25% of any
bonus received with a two-
year holding period
No bonus deferral where an
Executive Director has at
least 1.5 times their Share
Ownership Guideline
Bonus award in excess of
80% of the maximum (or
above 60% of maximum, if
Share Ownership Guidelines
have not been met) deferred
into shares for a two-year
holding period
Holding shares to a value of
50% above the Guideline
allows for a fall in the share
price of a third before the
Guideline is no longer met.
Executive Directors have
historically been reluctant to
sell any shares and so have
built up significant holdings
The inclusion of a bonus
threshold payout level of up
to 20%
Silent on value of bonus
threshold payment
This change confirms the
threshold level currently
operating
The inclusion of a PSP
threshold payout level of up
to 18%
Silent on value of PSP
threshold payment
This change confirms the
threshold level currently
operating
Broader definition of when
the Committee can override
formulaic outcomes
Discretion based on
business performance only
Broaden discretion to cover
ability to adjust formulaic
outcomes in relation to
individual performance
and broader shareholder
and employee experience,
in addition to business
performance
Incumbent Executive
Directors’ maximum
pension is in line with the UK
workforce, currently 10% of
salary
Incumbent Executive
Directors’ maximum
pension to be, by 31st
December 2022, the
current blended average
in the market in which
the Executive Director is
based (17% of salary in
the UK), reducing to the
New Executive Director
level (same basis as the
majority of newly appointed
employees in the market in
which the Executive Director
is based) by 2025
This change brings
forward the date by which
all incumbent Executive
Directors’ pensions are
in line with the majority of
the colleagues in the UK,
the market in which they
are based and now fully
aligns with the Corporate
Governance Code
requirements
Governance
Spirax-Sarco Engineering plc Annual Report 2022146

One organisation consulted did express
a preference for phasing this circa 19%
increase. However, in practice it has taken
two years to address the below lower
quartile situation and deliver the salary reset
due to the Committee’s desire to honour its
previous commitment not to increase salaries
above the workforce norm before 2023.
The Committee judged that it would be unfair
to postpone further the reset.
Finally, on this subject our shareholders
requested confirmation that the one-off
enhanced PSP award of 250% for our
Group Chief Executive in 2022 (which was
to compensate for the delay in addressing
salary) would return to the normal level of
200% in 2023. The Committee can confirm
that the Group Chief Executive’s PSP award
in 2023 will be 200% of base salary and the
Chief Financial Officer’s PSP award remains
at 175% of base salary.
Proposed policy changes
Shareholders advised us to provide rationale
on the proposal to increase the policy AIP
maximum from 150% base salary to 200%
of base salary. They were pleased to note our
commitment that neither Executive Director
would benefit from increased potential in
2023 and a further commitment to consult
before any such increases were implemented
in the future. Our rationale is to ensure the
whole package is competitive for a FTSE
100 Company and we hope shareholders
appreciate our track record in fully consulting
should any circumstance develop, which
might require us to use this headroom (as we
demonstrated with the additional PSP grant
in 2022 to the Group Chief Executive).
Those shareholders consulted were
comfortable with the move to standardise
deferral at 25% of bonus (AIP) earned into
shares for two years alongside its removal
if the director owns at least 1.5 x their
shareholding guideline. One noted that this
level of deferral was at the lower end of the
market and another questioned whether the
pay-out level at target would be reviewed
given the increased bonus maximum.
Having considered this point, the Committee
is able to confirm that in the event bonus
levels are increased from the current levels
then we would consult on the appropriate
pay-out at target and level of deferral.
Continuing wider workforce
engagement on remuneration
Whilst developing our new 2023
Remuneration Policy, we held two colleague
focus groups in the last year to gather views
on the current policy and the proposed
changes. Colleagues drawn from different
Businesses, geographies, functions and
jobs came together to hear more about
how our Executives and senior managers
are rewarded to learn more about the role
of the Board and Remuneration Committee.
We discussed the wider framework
for pay and benefits across the Group.
Engagement was high and we gained
valuable insights around views on bonus
objective setting throughout the business
as well as more general comments on the
availability of global employee share schemes
and the cost-of-living challenges currently
faced by many. This feedback helped shape
our approach to the cost of living challenge in
the 2023 reviews.
Annual Incentive Plan (AIP) and
LTIP 2023
The maximum AIP opportunity will remain
unchanged at 150% and 125% of base
salary for the Group Chief Executive and CFO
respectively. The maximum LTIP opportunity
will be 200% of base salary for the Group
Chief Executive (down from a one-off
increase to 250% in 2022) and 175% of base
salary for the CFO. AIP measures, weightings
and ranges are unchanged and will continue
to be operating profit (70%), cash generation
(20%) and personal strategic objectives
(10%). The AIP targets and achievement
will be published retrospectively due to
market sensitivity.
Reflecting the central importance of the
Group-wide One Planet: Engineering
with Purpose Sustainability Strategy to all
of our forward-looking plans, the measures
for the 2022 PSP were changed to include
a sustainability measure accounting for 20%
of the opportunity. The Committee decided
that this would continue for 2023 reflecting
our continued commitment to the One
Planet Strategy.
The EPS performance range for the 2023
PSP grant will be adjusted slightly at the
upper level reducing from IP+8% to IP+7%,
for maximum vesting. Threshold vesting
remains at IP+2 %, continuing to reflect our
margin progression ambition but at a steadier,
incremental rate.
As an established FTSE 100 Company, the
Committee considered it was appropriate
to revise the TSR comparator group from a
subset of the FTSE 350 to a subset of the
FTSE 100 (excluding Mining, Oil & Gas, and
Financial Services) with effect from 2023.
PSP Rules Renewal
We are also taking the opportunity to refresh
and update our PSP rules at the 2023 AGM.
The current rules are close to expiring as they
are nearly ten years old. There are no material
changes being made to the rules, a summary
of which has been included in the Notice
of AGM.
Looking forward
The Committee is committed to ensuring
the remuneration arrangements continue
to support the efforts of the workforce and
the objectives of the strategy, whilst aligning
pay with strong performance. The Group
Executive Committee made a commitment
to its One Planet Strategy we are already
reflecting that in our Executive and senior
manager reward framework which will
continue to develop.
Jane Kingston
Chair of Remuneration Committee
8th March 2023
Committee focus for2023
• Continue to review the cost-of-living
challenges and the resulting impact
on colleagues
• Continue to reflect sustainability,
diversity, inclusion and equity in
reward arrangements
• Facilitate further colleague
engagement on remuneration issues
• Implement the revised 2023
Remuneration Policy
• Implement Group Chief Executive’s
revised pay arrangements
• Adoption of refreshed Performance
Share Plan (PSP) rules
Governance
Spirax-Sarco Engineering plc Annual Report 2022
147

Remuneration continued
Remuneration at a glance 2022
Package for 2023
Group operating profit*
(2022 v 2021)
£370.9m
v £340.3m
EPS Growth*
(2020-22 v 2019-21)
+40.3%
v +35.6%
Group cash generation*
(2022 v 2021)
£206.3m
v £278.5m
Relative TSR
(Percentile TSR achieved)
8th of 47
* adjusted in accordance with
AIP rules
Key Strategic highlights
Our Purpose Group Strategy 2022 bonus metrics 2022 PSP metrics
To create sustainable value
for all our stakeholders
as we engineer a more
efficient, safer and
sustainable world.
To deliver self-generated
growth that outperforms
our markets.
One Planet: Engineering
with Purpose
Sustainability Strategy
Delivery of 2022
operating profit targets
Adjusted EPS
and relative TSR
Delivery of 2022
cash generation
Greenhouse gas intensity emissions 2024 v 2021
Delivery of 2022
personal objectives
Outcomes in 2022
Bonus Group Chief
Executive
CFO
Financial Group operating profit 70% 52.6%
59.3%
achieved
52.6%
61.8%
achieved
Group cash generation 20% 0% 0%
Non-Financial Personal objectives 10% 6.7% 9.2%
Salary The Group Chief Executive’s base salary has increased to £750,000 (includes an assumed 3%
inflation rise) in order to ensure it maintains parity with market levels. The Chief Financial Officer’s
base salary is £529,448 (5.3% inflation rise, which is below the rate of the wider employee base).
See page 145 for
more information
Pension and
Benefits
Both the CEO and CFO rate is 10% of salary in line with the wider workforce maximum.
No change to benefits provided for both the CEO and CFO
See page 145 for
more information
Annual bonus Maximum opportunity is unchanged at 150% of base salary for the CEO and 125% for the CFO
Measures are unchanged, being:
• 70% Operating profit / 20% cash generation / 10% personal objectives
See page 147 for
more information
PSP Maximum opportunity is 200% of base salary for the CEO and 175% of base salary for the CFO
Measures are unchanged, being:
• relative TSR, adjusted EPS and greenhouse gas intensity emissions
See page 147 for
more information
Single total remuneration (£’000) Actual shareholding
1,176390571
1,700562809
Nimesh Patel
Nicholas Anderson
Fixed £’000 Bonus & ESOP £’000
PSP £’000
200%
230.8%
300%
1003.7%
Nimesh Patel
Nick Anderson
2020 policy guideline 2022 % of salary
Governance
Spirax-Sarco Engineering plc Annual Report 2022148

Annual remuneration report
Governance
Details of the Committee membership can be found in the Committee Chair’s report on page 143 and full biographies of the Committee
members can be found on pages 104 and 105. Each Committee member is an independent Non-Executive Director and brings independence
to all aspects of Board remuneration and the application of professional advice to matters relating to remuneration. The General Counsel and
Company Secretary acted as Secretary to the Committee with support from Corporate Divisional Counsel and the Assistant Company Secretary.
The Committee met five times during the year ended 31st December 2022. Details of meeting attendance can be found in the Corporate
Governance statement on page 107.
No conflicts of interest with respect to the work of the Committee have arisen during the period and none of the members of the Committee have
any personal financial interest in the matters discussed, other than as shareholders. The fees of the Non-Executive Directors are determined by
the Board on the joint recommendation of the Chair and the CEO. The fees of the Chair are determined by the Committee.
The Committee is formally constituted and operates on written terms of reference, which are modelled on the Code and are available on our
website www.spiraxsarcoengineering.com.
Advice to the Committee
The Committee takes account of information from both internal and independent sources. During the year it received external advice from Korn
Ferry who was appointed by the Committee in 2019. Korn Ferry advises on all aspects of the Company’s Remuneration Policy and reviews
our remuneration structures against corporate governance best practice. Korn Ferry also provides support to the Company and management
more generally with the monitoring of TSR performance for the LTIP, Executive remuneration levels and structure, non-Board benchmarking and
salary surveys. The Committee confirms that neither it, nor any of its Directors, have any connection with Korn Ferry, which is a member of the
Remuneration Consultants Group and complies with its Code of Conduct, which sets out guidelines to ensure that its advice is independent and
objective. The Committee reviews the performance and independence of its adviser on an annual basis. During the period, Spirax incurred fees
of £108,135 (plus VAT) from Korn Ferry, which included £35,070 of fees in support of the Committee’s annual agenda and £72,595 of ad hoc
project-based work including the Policy review.
The Group’s HR Director provides updates to the Committee, as required, to ensure that the Committee is fully informed about pay and
performance issues throughout the Group. The Committee takes these factors into account when determining the remuneration of the Executive
Directors and senior executives. The CEO also attends at the Committee’s request but does not participate in discussions regarding their own
individual remuneration. The Committee also ran two focus groups during the year, facilitated by the Colleague Engagement Committee, as part
of the review of the Remuneration Policy, see page 147 for more details on these.
Audited information
The information that follows is subject to audit until otherwise indicated.
Single total figure of remuneration (£) N.J. Anderson N.B. Patel
Executive Directors 2021 2022 2021 2022
Salary 614,000 630,500 489,600 502,800
Pension 150,500 150,500 48,960 50,280
Benefits 27,401 28,119 26,894 17,911
Total fixed pay 791,901 809,119 565,454 570,991
Annual bonus 902,580 560,531 612,000 388,413
PSP 1,628,456 1,699,634 1,390,578 1,175,639
ESOP 2,362 1,837 2,362 1,729
Total variable pay 2,533,398 2,262,002 2,004,940 1,565,782
Single total figure 3,325,299 3,071,121 2,570,394 2,136,773
J. Pike J.S. Kingston K.J. Thompson C.A. Johnstone
Chair and Non-Executive Directors 2021 2022 2021 2022 2021 2022 2021 2022
Fees 226,810 300,000 64,330 75,000 64,330 75,000 64,330 75,000
Single totalfigure 226,810 300,000 64,330 75,000 64,330 75,000 64,330 75,000
P. France A. Archon O. Qiu R. Gillingwater
2021 2022 2021 2022 2021 2022 2021 2022
Fees 54,330 60,000 54,330 60,000 54,330 60,000 48,466
1
75,000
Other 21,470 31,292 23,360 8,599
Single totalfigure 54,330 60,000 75,800 91,292 77,690 68,599 48,466 75,000
1 R. Gillingwater was appointed to the Board on 9th March 2021 and as Senior Independent Director (SID) on 1st August 2021. In addition to his pro-rated NED fee of
£44,299, he received £4,167 pro-rated from 1st August 2021 in respect of his duty as SID.
Remuneration continued
Annual Report on Remuneration
Governance
Spirax-Sarco Engineering plc Annual Report 2022
149

Notes to the remuneration table
(a) This is the amount earned in respect of the financial period.
(b) This is the taxable value of benefits paid or payable in respect of the financial period. These benefits typically relate to car allowance and
medical insurance.
(c) This is the total bonus earned under the annual bonus scheme in respect of the financial year.
(d) The amount shown relates to the market value of PSP awards whose performance period ended during the relevant financial year. Refer to
page 153 and 154 for details of PSP awards made during 2022.
Over the 2020 PSP vesting period the share price increased from £77.75 at grant (13th March 2020) for N J Anderson and from £78.42 (1st April
2020) the date of appointment for N B Patel, to £109.76, which was the average share price over October, November and December 2022; an
increase in value of the vesting shares of around £32 and £31 per share respectively. As the award will not vest before the publication of the 2022
annual results and therefore the value at vesting will not be known, the value will be restated next year in the single figure table when the share
price at vesting is known.
(e) The benefit of the ESOP awards is calculated as the number of shares awarded multiplied by the share price on the date of the award.
(f) UK tax legislation imposes penalty taxes on annual pension contributions where prescribed maximum amounts are exceeded. The Committee
has previously determined that impacted Executive Directors would receive pension benefits limited to the prescribed maximum amounts and
an additional taxable supplementary cash payment equal to the cost to the Group of the pension benefit forgone.
(g) Following a review of our reporting processes, we have this year included benefit figures for certain Non-Executive Directors relating to the
reimbursement, in accordance with our Policy, of international travel expenses incurred by Non-Executive Directors in performance of their
duties, which are deemed by HMRC to be taxable benefits in kind and are declared on PAYE settlement agreements. We have included last
year’s figure for consistency.
Additional requirements in respect of the single total figure table of remuneration
Performance related pay earned in the year to 31st December 2022
Annual bonus
Executive Directors participate in the annual bonus plan, which rewards them for financial and non-financial performance of the Group. Targets are
reviewed annually to ensure continuing alignment with strategy and are agreed at the start of the year. Resulting awards are determined following
the end of the financial year by the Committee, based on performance against these targets.
For the Group Chief Executive, achievement of target performance results in a bonus of 90% of salary, increasing to 150% of salary for maximum
performance. For the Chief Financial Officer, achievement of target performance results in a bonus of 75% of salary, increasing to 125% of salary
for maximum performance.
For the 2022 bonus Executive Directors were measured against the following financial and non-financial objectives:
The performance measured is adjusted to
reflect certain items including the amortisation
of acquisition-related intangible assets and
exceptional reorganisational costs and to
exclude any profit contribution and other
impacts such as major acquisitions or
disposals during the period as these were not
included within the targets when set by the
Committee. The Committee assessed the
metrics as follows:
Financial metrics
The table below summarises the achieved
performance in 2022 in respect of each of the
financial measures used in the determination
of annual bonus, together with an indication
of actual performance relative to target.
Remuneration continued
Annual Report on Remuneration continued
For the 2022 bonus, Executive Directors were measured
against the following financial and non-financial objectives:
Non-financial
Financial
70%
20%
10%
Group operating profit
Group cash generation
Personal objectives
Governance
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2022 Measures
Actual
performance
Achieved
(% of target) Threshold Target Maximum
Group operating profit
1
(70% weighting)
Operating profit (£m) £370.9m 101.9% £345.8m £364.0m £382.2m
% of metric achieved 75.14% 18% 60% 100%
Group cash generation
(20% weighting)
1
Cash generation £206.3m 83.1% £235.7m £248.1m £260.5m
% of metric achieved 0% 18% 60% 100%
% of total financial
metrics achieved (90%)
52.6%
1 In line with annual bonus plan rules these metrics have been adjusted to reflect all acquisitions and disposals made during the year therefore differ from the equivalent
reported statutory and adjusted figures in the income statement.
Non-financial metrics – personal objectives
The Executive Directors were each obliged to complete a self-assessed appraisal on their performance against each of their personal strategic
objectives. The Group Chief Executive reviewed this self-assessment with the Chief Financial Officer and made his own assessment. In the
case of the Group Chief Executive, the Chair of the Board conducted the assessment. A report was submitted to the Committee at its March
2023 meeting, the Committee reviewed the recommendations and approved a final decision.
Personal strategic
objective 2022 Description Commentary
Nicholas Anderson
Health, Safety
and Sustainability
(HS&S)
• Not achieved
Improve the Group’s Health
and Safety performance
The Group’s Health and Safety performance suffered a setback in 2022 as the accident
rate per 100,000 work hours rose marginally to 2.43 compared to 2.22 in 2021. The Lost
Time Accident rate was still very low at 1.2 for every million hours worked, our second-
best annual performance on record. Notwithstanding this, continual improvement has
been made to cultural and behavioral aspects of safety. Notwithstanding the above,
Nick continued to champion improved cultural and behavioural safety across the Group
including the launch and implementation of a refreshed Group H&S framework.
Sustainability
• Achieved
Improve the Group’s
Sustainability performance
Good progress was made in the implementation of the One Planet: Engineering with
Purpose Sustainability Strategy in 2022. Greenhouse Gas emissions were 30% below
those in 2021. Energy usage was 4% lower than 2021. Colleague volunteering was
encouraged with 81% increase in hours. The Group’s Education Fund was launched
with over £1m in grants to over 50 projects approved by the Trustees.
Inclusion, Equity
and Wellbeing
• Achieved
Implement the Group’s
Inclusion, Equity and
Wellbeing plan
The Group’s Global Inclusion Plan was launched in 2022, providing minimum standards
across the Group on key inclusion topics including parental leave, caregiver leave and
‘safe leave’ for those suffering domestic abuse.
There was a continued increase in the number of women in senior roles across the
Group and improved gender balance in our senior leadership team (GEC plus their
direct reports) which reached 34% female representation by October 2022. Although
usual attrition and employee changes in the fourth quarter reduced this to 32% at the
year-end, we anticipate female representation in our senior leadership will return to 34%
by April 2023 and we remain committed to reaching at least 40% female representation
across our senior leadership.
Result
Based on the above assessments, 67% of this metric was achieved.
Nimesh Patel
Health, Safety and
Sustainability
(HS&S)
• Partially
achieved
Actively support the improvement
of the Group’s H&S performance,
strengthening the H&S awareness
and culture
The Group’s Health and Safety performance suffered a setback in 2022 as the accident
rate per 100,000 work hours rose marginally to 2.43 compared to 2.22 in 2021. The
Lost Time Accident rate was still very low at 1.2 for every million hours worked, our
second-best annual performance on record.
Championed efforts to improve our safety conscious culture both on site visits and
during the Global Finance Forum.
Sustainability
• Achieved
Actively support the implementation of
the Group’s One Planet Sustainability
Strategy, with special emphasis
on your personal leadership of
Strategic Initiative #1 – Net Zero –
on a Group-wide basis
As a leader of the group-wide Net Zero initiative, good progress was made in the
implementation of the One Planet strategy in 2022. Greenhouse Gas emissions
were 30% below those in 2021. Energy usage was 4% lower than 2021. Led major
investment in Running Road UK site to advance further decarbonisation. Developed an
Electric vehicle employee purchase scheme now being piloted. Supported initiatives to
define Scope 3 targets and prioritise external reporting and improve data collection.
Governance
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151

Personal strategic
objective 2022 Description Commentary
Inclusion, Equity
and Wellbeing
• Achieved
Actively support the implementation
of the Group’s Everyone is Included
Plan, with special emphasis on
achieving further gender and
ethnicity diversity
Acted as the champion internally and externally for the Group’s Global Inclusion Plan,
launched in 2022, which provides minimum standards across the Group on key
inclusion topics.
There was a continued increase in the number of women in senior roles across the
Group and improved gender balance in our senior leadership team (GEC plus their
direct reports) which reached 34% female representation by October 2022. Although
usual attrition and employee changes in the fourth quarter reduced this to 32% at the
year-end, we anticipate female representation in our senior leadership will return to 34%
by April 2023 and we remain committed to reaching at least 40% female representation
across our senior leadership.
Continuous
Improvement
in Governance
and Control
Environment
• Achieved
Lead the implementation of the G3
Project on a Group-wide basis, with
special emphasis on improvement
of governance and control
structures, embedding changes in
the policy framework and control
processes, as well as development
of Fraud prevention frameworks.
Launched the Group’s internal controls framework project (G3) to roll-out revised policy,
processes, training and documentation portal to improve efficiency and reduce risks
through standardisation of enhanced controls.
Conducted a fraud risk workshop and review of prevention controls, reinforcing the
‘Tone from the Top’ and Group Values.
Information
Technology
and Systems
• Achieved
Advance the Group’s global cyber
security infrastructure, processes
and responsiveness. Support the
development of global ERPs, CRM
& BI across our three Businesses
and the implementation of our
Digital Strategy
Ensured development of Cyber Security plans and resources.
Development and implementation of new single platform for Groupwide collaboration.
Enhanced focus on key projects and initiatives such as the global ERPs, CRM and BI,
improving use of resources and outcomes. Ensured development of Cyber Security
plans and resources. Including the appointment of Group IT Director and developed
Cyber security road map and ensured appropriate resource.
Result
Based on the above assessments, 92% of this metric was achieved.
Performance targets
Fully achieved Partly achieved Not achieved
% of maximum
bonus (10%)
achieved
N.J. Anderson 2 0 1 6.7%
N.B. Patel 4 1 0 9.2%
The Committee is of the view that these outcomes accurately reflect the performance of the Executive Directors and the Company, consequently
no discretion was exercised by the Committee.
As a result of this performance in 2022, the following bonuses were earned:
Executive Directors Bonus achieved (£) Actual % of maximum Maximum bonus opportunity Bonus (% of salary)
N.J. Anderson £560,531 59.3% 150% 88.9%
N.B. Patel £388,413 61.8% 125% 77.3%
Under the 2020 Remuneration Policy Executive directors are required to defer any bonus achieved over 80% of maximum opportunity (60%
if shareholding guidelines have not been met) into shares, which they are required to hold for a minimum of two years. Both have met the
shareholding guidelines and as the bonus achieved is less than the 80% threshold for deferral, no portion of the bonus will be deferred into shares.
Spirax Sarco Performance Share Plan (PSP) – Scheme interests vested during the period
PSP awards vesting over 2020-2022
In March 2020 the Executive Directors received share awards under the PSP, with vesting subject to EPS growth and relative TSR performance.
The following tables set out details of the performance measures and targets that applied, along with the actual performance during the period 1st
January 2020 to 31st December 2022.
Relative TSR performance (40% of PSP award)
Over the three-year period to 31st December 2022, the Company delivered a TSR of 36.7%. This ranked in the top decile TSR of the
comparator group, significantly above the level required for full vesting. The comparator group, comprising 47 companies, for the purpose of
measuring relative TSR performance was the FTSE 350 Industrial Goods and Services Supersector constituents at the start and end of the
performance period.
Target TSR Vesting
Threshold Median TSR -0.8% 18.0%
Maximum Upper quartile TSR or above 18.6% 100.0%
Spirax-Sarco Engineering plc Actual 36.7% 100.0%
Remuneration continued
Annual Report on Remuneration continued
Governance
Spirax-Sarco Engineering plc Annual Report 2022152

EPS growth (60% of PSP award)
Over the three-year period to 31st December 2022, the Company delivered adjusted EPS growth of 40.3%. Over the three years, adjusted EPS
in line with scheme rules equates to a compound annual growth of 16.3% per annum. EPS is derived from the audited Annual Report for the
relevant financial year but adjusted to exclude the items shown separately on the face of the Consolidated Income Statement. EPS was adjusted
for the acquisitions of Durex Industries and the Vulcanic Group and the disposal of the Russian business.
Performance (over 3 years) Vesting
Threshold 15.0% 18.0%
Maximum 37.2% 100.0%
Actual 40.3% 100.0%
Recognising that the 2020 PSP targets were set in the pandemic year, the formulaic outcome of the results and the share price at grant have
been discussed and assessed by the Committee with a view to any windfall gains that might have occurred. The share price increased 40% from
grant until the end of 2022 (using the average of £109.76) and reflected the top quartile TSR performance achieved. The Committee is satisfied
that a windfall has not occurred and so no adjustment to the outcomes is considered necessary and therefore 100% of the shares awarded
under the 2020 PSP vested for Nicholas Anderson and Nimesh Patel. The Committee considers this a fair reflection of business performance
throughout the performance period and in line with shareholder experience.
Executive Directors
No. shares
granted
1
Price at Grant Value at grant
No. shares
vesting Vesting price
2
Vesting value
Amount
attributable
to growth in
shareprice
N.J. Anderson 15,485 £77.75 £1,203,959 15,485 £109.76 £1,699,634 £495,675
N.B. Patel 10,711 £78.42 £ 839,957 10,711 £109.76 £1,175,639 £335,683
1 Nicholas Anderson’s 2020 PSP award was granted on 13th March 2020. Nimesh Patel’s award was made on 27th July 2020, his date of appointment, using the share
price on 1st April 2020, the date of his service agreement.
2 Based on share price of £109.76, which was the average share price over October, November and December 2022. As the award vests after the publication of the 2022
annual results, figures will be restated for actual value in next year’s Annual Report.
Scheme interests awarded during the period
The awards were granted under the PSP as a contingent right to receive shares, with the face value calculated as a percentage (250% for the
Group Chief Executive and 175% for the Chief Financial Officer) of base salary, using the share price at date of award. Awards were made on 14th
March 2022.
For awards made in 2022, vesting is based on three performance conditions measured over a three-year period, which have been chosen as
they are aligned with our Strategy. In addition to the three-year vesting period, a two-year holding period applies. These performance conditions
are explained further on page 154.
Executive Directors PSP award Face value
1
Last day of the
performance
period
Vesting at
threshold
performance
N.J. Anderson 13,234 shares £1,576,169 31.12.24 18%
N.B. Patel 7,387 shares £ 879,792 31.12.24 18%
1 Based on share price at date of award of £119.10.
The Committee makes an annual conditional award of shares to each Executive Director under the PSP. Prior to award, the Committee reviews
the performance targets for each measure to ensure they remain sufficiently stretching. For EPS this includes a review of analysts’ forecasts.
Performance measure Weight Threshold requirement Maximum requirement
EPS growth 50% Global IP +2% pa
1
Global IP +8% pa
Relative TSR 30% Median TSR Upper quartile TSR
Reduction in greenhouse gas emissions from 2021 to 2023 20% 24% reduction 31% reduction
1 The Global Industrial Production (IP) data source is the CHR Metals Global IP Index, providing data that incorporates over 90% of global industrial output.
The value that can be earned for threshold performance is 18%. In 2022 for the measurement of EPS growth, the Committee set the vesting
curve slightly steeper from threshold to around the middle of the range, to allow for improved vesting levels for meeting challenging growth and
margin targets. Vesting levels for Relative TSR and GHG emissions remains a straight line between threshold and maximum.
*Vesting is calculated based on Spirax Sarco’s TSR relative to the median and upper quartile TSR of the peer group
Governance
Spirax-Sarco Engineering plc Annual Report 2022
153

The EPS element of the PSP is based on growth in excess of global industrial production growth rates, often referred to in our industry as ‘Global
IP’, rather than UK RPI. Global IP is a measure that the Board and management have used for some time as there is well documented evidence
that it is the best predictor of the global and industrial markets within which the Group operates. For these reasons, Global IP was used in the
formulation of the long-term strategic plan and targets for EPS growth approved by the Board. In setting the initial performance range in 2017,
which was intended to be long-term in nature, the Committee reviewed the historical and projected data (2008 to 2021), including the Group’s
performance, market benchmarks and analysts’ consensus. The Committee was confident that this range was sufficiently challenging across
various market environments. Adjustments are made to reflect businesses acquired and sold.
The TSR element of the PSP assesses TSR performance relative to a comparator group of companies that comprises the constituents of the
FTSE 350 Industrial Goods and Services Supersector at the start of the performance period. This is the same sector classification as Spirax-Sarco
Engineering and was selected as it objectively provides a sufficiently robust number of companies to compare performance against, that also
operate in the industrial goods and services arena. While the exact number of companies varies from year-to-year, the comparator group for the
2022 award was 49 companies.
Remuneration continued
Annual Report on Remuneration continued
Shares subject to EPS vesting
EPS growth
100%
75%
50%
25%
0%
Global IP +2% p.a. Global IP +8% p.a.
Shares subject to TSR vesting
TSR performance*
100%
75%
50%
25%
0%
Bottom Lower
quartile
Median Upper
quartile
Top
Shares subject to Sustainability vesting
GHG intensity emissions reduction
100%
75%
50%
25%
0%
0%
35%
30%25%15%10% 20%5%
The environmental element of the PSP assesses the extent to which we are meeting our sustainability goals. We have targeted management
through the PSP to reduce greenhouse gas emissions by between 24% and 31% between 2021 and 2024 for this part of the award to vest,
which will be on a straight line basis.
Employee Share Ownership Plan (ESOP)
Executive Directors are eligible to participate in an HMRC-approved Share Incentive Plan known as the ESOP.
During the year ended 31st December 2022, Nicholas Anderson purchased 17 partnership shares and was awarded 17 matching shares.
Nimesh Patel purchased 16 partnership shares and was awarded 16 matching shares. Further information is set out in the table on page 155.
The maximum annual investment in shares is £1,800 (the HMRC limit) for Executive Directors (and eligible UK employees). This can be matched
by the Company on a one-for-one basis for each share that is purchased. Dividends paid can be reinvested as shares.
Shares acquired under the ESOP are not subject to performance measures as the aim of the ESOP is to encourage increased shareholding in
the Company by all eligible UK employees. In 2022, around 92% of eligible UK employees purchased partnership shares and were awarded
matching shares under the ESOP.
Benefits (excluding pension)
Benefits N.J. Anderson N.B. Patel
Company car and associated running costs or cash alternative allowance £27,725 £17,517
Private health insurance £ 394 £ 394
Pension
Nicholas Anderson’s pension allowance has been frozen since 2020 and for the year ended 31st December 2022, he received £150,500.
The plan to achieve pension equity across the Group was accelerated in 2020. This included the closure of the UK final salary scheme during
the year. The Committee reviewed the impact of this decision in the UK and under the 2020 Policy, the maximum pension contribution for new
Executive Directors is the same as the majority of newly appointed employees receive in the market in which the Executive Director is based.
Therefore, Nimesh Patel receives 10% of his basic salary in cash which, in the year ended 31st December 2022, amounted to £50,280.
Payments to past Directors
There were no salary payments made to past Directors during the year ending 31st December 2022. However the 2020 PSP awards held by Neil
Daws and Kevin Boyd which have been pro-rated to their leaving date, will vest in the same proportions as other PSP holders at 100% vesting.
This will result in the vesting of 2,842 and 2,203 shares with an approximate value of £311,938 and £241,801 respectively, based on the three-
month average share price from October to December 2022. These shares have a two-year holding period (net of sales to pay taxes).
Governance
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Payments for loss of office
There were no payments made to Directors for loss of office during the year ended 31st December 2022.
External Directorships
Nicholas Anderson served as a Non-Executive Director at BAE Systems plc during 2022, for which he received and retained total fees of £85,000.
Statement of Directors’ shareholding and share interests
Share ownership guideline
The Executive Directors’ share ownership guidelines are 300% of base salary for the Group Chief Executive and 200% of base salary for other
Executive Directors.
The share ownership guidelines have been exceeded by both the Group Chief Executive and the Chief Financial Officer, who joined the Company
on 27th July 2020. The value of the shareholding is taken at 31st December 2022 as a percentage of 2022 base salary. The mid-market share
price on 31st December 2022 was £106.15.
0
100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400
N J Anderso
n
N B Patel
1,003.7%
Share ownership (% of salary)
230.8%
200%
CFO July
2025 target
CEO May
2025 target
300%
Outstanding share interests
The following table summarises the total interests of the Directors in shares of the Company as at 31st December 2022. These cover beneficial
and conditional interests. No Director had any dealing in the shares of the Company between 31st December 2022 and 28 February 2023 (being
the latest practicable date prior to publication).
Beneficial
1
PSP awards
2
Other awards
3
ESOP shares Total 31.12.22 Total 28.02.23
J. Pike 9,946 – – – 9,946 9,946
N.J. Anderson 59,618 39,152 – 797 99,567 99,567
N.B. Patel 10,932 25,377 7,105 64 43,478 43,478
R. Gillingwater 600 – – – 600 600
J.S. Kingston 5,480 – – – 5,480 5,480
K.J. Thompson 4,900 – – – 4,900 4,900
C.A. Johnstone 451 – – – 451 451
P. France 980 – – – 980 980
A. Archon 255 – – – 255 255
O. Qiu 800 – – – 800 800
1 Shares include any owned by connected persons
2 Subject to the performance measures
3 See pages 143 and 145 of the 2021 Annual Report
Unvested share awards (included in the above table)
PSP subject to performance conditions Share awards not subject to performance conditions
2020 2021 2022 Recruitment
1
ESOP
N.J. Anderson 15,485 10,433 13,234 797
N.B. Patel 10,711 7,279 7,387 7,105 64
1 This includes a nil cost option for 3,835 shares and a conditional award of 3,270 shares which vests in March 2023. See pages 143 and 145 of the 2021 Annual Report
for more information.
Governance
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155

Un-audited information
TSR performance graph
This graph demonstrates the growth in value of a £100 investment in the Company compared to the FTSE 350 Industrial Goods and Services
Supersector from December 2012 to December 2022. This comparison is chosen as it is the supersector within which the Company is classified
and it is a broad equity market index including companies of a similar size, complexity and sector. The graph also includes a comparison to the
FTSE 100 as this is the Index within which Spirax-Sarco Engineering is currently placed, and it shows a similar level of out-performance.
0
200
400
600
800
1000
Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2019 Dec 2021 Dec 2022Dec 2020Dec 2018
Source:
DataStream
Value (£)
FTSE 100
FTSE 350
Industrial Goods
and Services
Supersector
£546.30
£213.20
£184.70
Spirax-Sarco
Engineering plc
Aligning pay with performance
The table below shows the historic levels of the Group Chief Executive’s pay (single figure of total remuneration) and annual variable and PSP
awards as a percentage of maximum.
Group Chief Executive
Single figure
of annual
remuneration
Annual variable pay
as % of maximum
Vested PSP
awards value as
% of maximum
2022 £3,071,121 59.27% 100.00%
2021 £3,325,299 98.00% 100.00%
2020 £2,219,764 30.00% 73.90%
2019 £2,788,251 82.60% 100.00%
2018 £2,323,478 92.48% 100.00%
2017 £2,172,620 100.00% 100.00%
2016 £1,610,891 99.20% 40.00%
2015 £1,191,137 61.39% 80.33%
2014 (N.J. Anderson appointed Group Chief Executive in January 2014) £1,000,115 55.76% 33.06%
2013 £1,593,150 95.24% 29.93%
Percentage change in remuneration of the Directors and employees
The following table provides a summary of the increases in base salary, benefits and bonus for the Directors compared to the average increase
employees in the same period, for the last three years. The regulations require disclosure of the change in remuneration of the employees of the
parent company. As Spirax-Sarco Engineering plc only employs the Executive Directors (whose individual information is already included below),
the general UK employee population comparator group has been used to give a more meaningful disclosure.
2022 change 2021 change 2020 change
Base
salary/fee Benefits Bonus
Base
salary/fee Benefits Bonus
Base
salary/fee Benefits Bonus
General UK employee population 2.7% 2.7% -26.2% 2.0% 2.0% 120.7% 2.9% 2.9% -32.1%
N J Anderson 2.7% 2.6% -37.9% 2.0% 2.0% 233.2% 2.9% 2.9% -62.6%
N B Patel 2.7% -33.4% -36.5% 2.0% 2.0% 240.0% N/A N/A N/A
J Pike 32.3% N/A 2.0% N/A N/A 2.9% N/A N/A
J S Kingston
2
16.6% N/A 2.0% N/A N/A 2.9% N/A N/A
K J Thompson
2
16.6% N/A 2.0% N/A N/A 2.9% N/A N/A
C A Johnstone
2
16.6% N/A 2.0% N/A N/A 2.9% N/A N/A
P France 10.4% N/A 2.0% N/A N/A 2.9% N/A N/A
A Archon 10.4% N/A 2.0% N/A N/A N/A N/A N/A
O Qiu 10.4% N/A 2.0% N/A N/A N/A N/A N/A
R Gillingwater
1,2
16.6% N/A N/A N/A N/A N/A N/A N/A
1 Assumes fees for full year. The actual 2021 fee received was pro-rated from date appointed
2 The Chair and SID additional fees were increased from £10,000 to £15,000 in 2022
Remuneration continued
Annual Report on Remuneration continued
Governance
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Group Chief Executive pay ratio
The table below details the ratio of the Group Chief Executive’s single figure of total remuneration to the median, 25th and 75th percentile total
remuneration of the Group’s full-time equivalent UK employees. As in previous years, Option B has been chosen for these calculations as the
data used is consistent with that collected to inform the Group’s UK gender pay gap. To ensure that the individuals identified at the three quartiles
are representative of the UK workforce, the total pay and benefits for a small number of employees centred around each quartile were also
considered to confirm there were no anomalies. The individuals identified were deemed appropriately representative.
Financial year 25th percentile pay ratio 50th median pay ratio 75th percentile pay ratio
2022 91:1 65:1 51.1
2021 111:1 83:1 62:1
2020 76:1 66:1 45:1
2019 110:1 74:1 46:1
Single figure total remuneration
CEO 25th (lower quartile) 50th (median) 75th (upper quartile)
Salary £630,500 £29,836 £37,187 £51,438
Benefits £28,119 £394 £394 £394
Bonus £560,531 £408 £1,200 £1,761
PSP £1,699,634 – – –
Pension £150,500 £2,984 £7,662 £5,144
ESOP £1,837 – £973 £1,513
Total pay £3,071,121 £33,622 £47,416 £60,250
Year-on-year commentary
Our median CEO to Employee Pay Ratio in 2020 decreased due to CEO pay being impacted by the trading environment of 2020, a year
when the Group had not met its planned profit targets and EPS growth had performed to a lesser extent, therefore incentives were lower.
Group performance recovered in 2021 and this is reflected in the higher pay ratio figure. The decrease in CEO pay ratio for 2022 is primarily
attributed to a lower CEO bonus due to profit and cash generation performance.
Relative importance of spend on pay
The table below demonstrates the relative importance of total pay spend relative to total employee numbers, profit before tax (selected as the best
measure of efficiency) and dividends payable in respect of the year.
2022 2021 Change
Total employee pay spend £572.3m £481.2m 18.95%
Group average headcount 9,368 8,202 14.22%
Adjusted profit before tax £370.6m £333.9m 10.98%
Dividends payable £112.0m £100.2m 11.78%
Statement of voting at the Annual General Meeting
At the AGM in 2020, shareholders approved the Remuneration Policy 2020 (mandatory) and at the AGM in 2022, shareholders approved the
Annual Report on Remuneration 2020 (advisory). The following table shows the results which required a simple majority (i.e. 50%) of the votes
cast to be in favour for the resolutions to be passed.
Votes for % Votes against % Votes withheld
1
Remuneration Policy 2020 (2020 AGM) 60,088,522 95.71 2,690,784 4.29 378,510
Annual Report on Remuneration 2021 (2022 AGM) 59,727,069 97.37 1,610,654 2.63 241,438
1 A vote withheld does not constitute a vote in law and therefore has not been included when calculating the percentages above.
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Operation of Policy for 2023
The table below summarises how we will implement each element of remuneration under the 2023 Remuneration Policy assuming its adoption by
shareholders at the AGM on 10th May 2023.
Element of
remuneration
How we will implement the Policy in 2023
Salary Following the shareholder consultation as reported in the Remuneration Committee Chair’s letter, it was agreed that the CEO’s
base salary would be increased in 2023 in order to ensure it maintains parity with market levels. Therefore, as previously
disclosed, the CEO’s salary was raised to £750,000 per annum. The CFO has received a salary increase of 5.3%. The salaries
effective 1st January 2023 are:
– Group Chief Executive: £750,000
– Chief Financial Officer: £529,448
Pension Pension contributions for the Executive Directors will be:
– Group Chief Executive: 10% of salary
– Chief Financial Officer: 10% of salary
As indicated in the 2021 Annual Report the 2023 pension rate for the CEO has been aligned to the maximum pension
contribution rate available to the UK workforce of 10% of salary.
Annual bonus The annual bonus opportunities for the Executive Directors will be:
– Group Chief Executive: 150% of salary
– Chief Financial Officer: 125% of salary
The performance measures will be unchanged from 2022:
Performance measure Weighting (% of bonus)
Group operating profit 70%
Cash generation 20%
Personal strategic objectives 10%
The targets for the personal performance measures are considered to be commercially sensitive and therefore will be disclosed
in next year’s Directors’ Remuneration Report.
The Committee has discretion to adjust the formulaic outcome if it is not representative of the performance delivered.
Executive Directors will be required to use 25% of any bonus received to purchase shares in the Company which must be
held for a further two years. The exception to this rule is if a Director’s shareholding is already 150% above their shareholding
requirement, no deferral into shares will be required.
Performance
Share Plan
awards
The 2023 PSP award levels will be:
– Group Chief Executive: 200% of base salary.
– Chief Financial Officer: 175% of base salary.
Only minor changes to the performance measures are taking place for 2023, as summarised below with further explanation in
the Chair’s Statement on page 147.
• The EPS performance range for the 2023 PSP grant will start at IP+2% pa for threshold vesting rising to IP+7% pa for
maximum vesting. The top of the range is 1% lower than in 2022 continuing to reflect our margin progression ambition but at
a steadier, incremental rate, which is considered to be as stretching given the current market forecasts as the previous top of
the range.
• As an established FTSE 100 Company, the Committee considered it was appropriate to refine the TSR comparator group
from General Industrial companies in the FTSE 350 to a subset of the FTSE 100, excluding Mining, Oil & Gas, and Financial
Services with effect from 2023.
• The sustainability metric continues to reflect the central importance of the Group-wide One Planet Strategy to all plans.
In 2022 the first sustainability metric for GHG emissions reduction, was set as an intensity target (taking into account the effect
of planned sales growth). Improved understanding of the factors required to manage GHG emissions allows us to move to an
absolute target for the 2023 LTIP. The midpoint of the range set for 2025 is to half our GHG emissions in absolute terms from
our 2019 base. The impact of acquisitions and disposals may be adjusted for by the Committee.
Performance measure Weight Threshold requirement (18% vests) Maximum requirement (100% vests)
EPS growth 50% Global IP +2% pa Global IP +7% pa
Relative TSR 30% Median TSR Upper quartile TSR
Greenhouse Gas emissions 2025 20% 24,273 tonnes 21,962 tonnes
Remuneration continued
Annual Report on Remuneration continued
Governance
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Element of
remuneration
How we will implement the Policy in 2023
The Committee has discretion to adjust the formulaic outcome if it is not representative of the Company performance delivered.
A two-year post-vesting holding period will apply to the awards.
Non-Executive
Director fees
Effective from 1st January 2023, the Non-Executive Director basic fee was increased by 3.00%.
Directors’ service agreements and letters of appointment
Original appointment date
Current agreement/appointment/
reappointment letter Expiry date Notice period
No. years service as at
31 December 2022
Executive Directors
N.J. Anderson 15/03/2012 13/12/2013 N/A 12 months 10 Years, 9 Months
N.B. Patel 27/07/2020 01/04/2020 N/A 12 months 2 Years, 5 Months
Chair and Non-Executive Directors
J. Pike 01/05/2014 12/05/2021 11/05/2024 1 month 8 Years, 7 Months
A. Archon 01/12/2020 30/10/2020 30/11/2023 1 month 2 Years, 0 Months
P. France 06/03/2018 04/03/2021 05/03/2024 1 month 4 Years, 9 Months
R. Gillingwater 09/03/2021 01/03/2021 08/03/2024 1 month 1 Years, 9 Months
C.A. Johnstone 05/03/2019 04/03/2022 04/03/2025 1 month 3 Years, 9 Months
J.S. Kingston 01/09/2016 09/08/2022 31/08/2025 1 month 6 Years, 3 Months
O. Qiu 01/12/2020 27/10/2020 30/11/2023 1 month 2 Years, 0 Months
K.J. Thompson 15/05/2019 08/03/2022 14/05/2025 1 month 3 Years, 7 Months
Chair and Non-Executive Directors
The Chair and Non-Executive Directors have letters of appointment with the Company for a period of three years, subject to annual re-election
at the AGM. Appointments may be terminated by the Company or individual with one month’s notice. The appointment letters for the Chair and
Non-Executive Directors provide that no compensation is payable on termination, other than accrued fees and expenses.
Remuneration Policy
The 2020 Remuneration Policy, which applies to this year’s Directors Remuneration Report, was approved on 13th May 2020 and can be found
in full in our 2021 Annual Report on pages 152 to 160. The proposed 2023 Remuneration Policy follows the Directors Remuneration Report on
pages 160 to 168 of this Annual Report and on our website www.spiraxsarcoengineering.com.
This Annual Report on Remuneration 2022 has been approved by the Board of Directors of Spirax-Sarco Engineering plc and
signed on its behalf by:
Jane Kingston
Chair of Remuneration Committee
8th March 2023
Governance
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Remuneration continued
Remuneration Policy
Remuneration Policy 2023
The table on page 146 summarises the Remuneration Policy which, if approved, will be effective from the conclusion of the Group’s Annual
General Meeting (AGM) to be held on Wednesday 10th May 2023.
Changes to the Remuneration Policy
The main proposed changes to the Remuneration Policy are as follows:
• Salary: Permit salaries to be reviewed other than on 1st January in any year
• Annual Incentive Plan (AIP) award: Increase the maximum opportunity to 200% of salary; limit the percentage of the bonus payable for meeting
threshold performance to 20% (current practice); simplify and increase deferral into shares to 25% of any part of the bonus earned, but only
require this where the individual owns less than 1.5 times their shareholding requirement
• Performance Share Plan (PSP) award: Limit the weighting on non-financial measures to 30% of the award; limit the percentage of the bonus
payable for meeting threshold performance to 18% (current practice); as part of the updating of the PSP rules, include standard flexibility on
treatment of leavers’ awards
• Pensions and benefits: Simplify pensions so that there is alignment to the rate available to the majority of the relevant country’s workforce;
allow greater flexibility for any future non-UK appointments
• Recovery provisions and Committee discretion: Increase the period of potential clawback for PSP awards to two years after vesting
and broaden the Committee’s ability to exercise discretion from just business performance to include individual performance and
broader shareholder experience
Additional details and an explanation of the changes can be found in the Statement by the Remuneration Committee Chair on page 146.
Policy review process
In order to avoid any conflict of interest, remuneration is managed through well-defined processes ensuring that no individual is involved in
the decision-making process related to their own remuneration. In particular, the remuneration of all Executive Directors is set and approved
by the Committee and none of the Executive Directors are involved in the determination of their own remuneration arrangements.
Subject to approval by shareholders at the 2023 AGM, this Policy will be effective for the 2023 financial year and so will apply to incentive awards
with performance periods beginning on 1st January 2023. Payments to Directors can only be made if they are consistent with a shareholder-
approved Policy or amendment to the Policy.
Statement of consideration of employment conditions elsewhere in the Group
When determining the remuneration of Executive Directors, the Committee considers the pay of colleagues across the Group. When conducting
the annual salary review, the average base salary increase awarded to the UK workforce and senior managers across the Group provides a
key reference point when determining levels of increase for Executive Director remuneration. The Remuneration Policy was drawn up by the
Committee with the benefit of prior engagement with colleagues.
The Committee also determines the principles and policy of remuneration which shall apply to the Group’s senior managers. The responsibility
for determining precise compensation packages that meet local practice and performance targets lies with the Group Chief Executive
and the responsible Executive Director.
To ensure consistency in Remuneration Policy across the Group and to encourage a performance culture, senior managers participate in the
PSP. The Board believes that share ownership is an effective way of aligning the interests of managers and shareholders and to strengthen the
development of the business.
Remuneration policy for other colleagues
The Company’s approach to annual salary reviews is consistent across the Group, with consideration given to the scope of the role,
level of experience, responsibility, individual performance and market pay levels. The most senior managers in the business (approximately
350 people globally) participate in bonus arrangements with similar targets, measures and relative weightings to that of the Executive Directors.
Target and maximum potential values are lower and determined by the grade of the manager’s role. Performance targets are based on an
appropriate combination of Group, Business and local operating company financial measures, in addition to personal strategic objectives.
Contractual terms and benefits for the wider workforce are subject to local employment legislation and best practice.
Statement of consideration of colleague views
In our open culture, we welcome and encourage feedback from: colleagues in one-to-one performance reviews;
Works Council meetings in countries where they operate as a collective voice; engagement surveys;
through line manager dialogue: and up through the HR function to the Group Executive Committee and Remuneration Committee.
Governance
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We have continued to develop our Group-wide engagement activities including via the Colleague Engagement Committee and in the last year
we held two focus groups to discuss Executive and Colleague Reward arrangements. Colleagues drawn from different businesses, geographies,
functions and job roles came together to hear more about how our Executives and senior managers are rewarded as well as learning more
about the role of the Group’s Board and Remuneration Committee. We discussed the wider framework for pay and benefits across the Group.
We gained some valuable insights, including the importance of continuing to develop our understanding of gender and ethnicity data on pay and
the importance of holding more regular surgeries to help colleagues understand the benefits options open to them, give better insight into grading
systems and the need to think creatively about long-term retention tools. We were also pleased to have feedback on how our reward frameworks
could better reflect our Group’s Values and to receive feedback on our emerging Group reward principles.
Statement of consideration of shareholder views
In developing and reviewing the Company’s Remuneration Policy for Executive Directors and other senior executives, the Committee seeks and
takes into account the range of views of shareholders and institutional shareholder advisers. The Committee Chair actively engages with major
shareholders and institutional shareholder advisers when appropriate.
The Committee considers shareholder feedback received in relation to the AGM each year and guidance from institutional shareholder advisers
more generally. This feedback, plus any additional feedback received during the year at meetings with shareholders, is considered as part of the
Company’s annual Remuneration Policy review. At the AGMs in 2022 and 2021, the advisory votes on the 2020 and 2019 Annual Reports on
Remuneration received 97.37% and 95.93% in favour respectively. At the AGM in 2020 the Remuneration Policy received 95.71% in favour.
Specifically in relation to the renewal of this Policy, as set out in the statement by the Committee Chair on pages 144 to 147, engagement was
conducted with the Company’s largest shareholders and major proxy agencies. The views expressed were considered by the Committee and
helped in determining the proposed changes to the Policy.
Remuneration principles
Our remuneration principles are to maintain a competitive remuneration package that promotes the long-term success of the Group,
avoids excessive or inappropriate risk-taking and aligns management’s interests with those of shareholders.
Below is how remuneration is aligned with the principles of the Code.
Clarity Predictability Simplicity
Our remuneration framework is structured to
support the financial and strategic objectives
of the Company, aligning the interests of
our Executive Directors with those of our
shareholders. We are committed to transparent
communication with all our stakeholders,
including our shareholders.
The long-term PSP has a range of reward
and performance outcomes to align with our
business model and strategy.
We operate a simple but effective remuneration
framework which is applied on a consistent
basis for all colleagues. The annual bonus
rewards performance against key performance
indicators, while the PSP provides long-term
sustainable alignment with our shareholders.
There is clear line of sight for management
and shareholders.
Risk Proportionality Alignment to culture
Our incentives are structured to align with the
Company’s risk management framework.
The annual bonus and PSP also incorporate
malus and clawback provisions, and there is
overarching Committee discretion to adjust
formulaic outcomes in certain circumstances.
There is clear alignment between the
performance of the Company, the business
strategy, and the reward paid to Executive
Directors. We endeavour to ensure that
our target total compensation levels are set
competitively compared to other companies of
similar size and complexity to ensure we can
attract and retain the executives needed to
deliver the business strategy.
When considering performance, the Committee
takes account of the Group values, strategies
and the views of wider stakeholders including
shareholders and colleagues.
Having no release of PSP awards until five
years from the date of award creates long-term
alignment, as do our in- and post-employment
shareholding requirements.
Governance
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Remuneration continued
Remuneration Policy continued
Measure selection and the target-setting process
Measures are selected taking into account the key strategic priorities of the Company, shareholder expectations and factors that sit within an
individual’s span of control.
Targets are set with reference to internal and external forecasts to ensure that they are realistic, yet sufficiently stretching. An appropriate mix of
long- and short-term targets will be used, informed by the nature of the measure.
2023 Remuneration Policy table
The table below summarises the Remuneration Policy which will take effect, if approved, from the AGM to be held on 10th May 2023.
Fixed elements of Executive Director remuneration
Purpose and link to strategy Operation Performance measures Maximum potential value
Base salary
To enable the Group
to attract, retain and
motivate high performing
Executive Directors
of the calibre required
to meet the Group’s
strategic objectives
Normally reviewed on an annual basis by the Committee, taking
into account:
• scale, scope and complexity of the role
• skills and experience of the individual
• wider workforce comparisons
• market benchmarking, within defined external comparator
groups. The Committee uses this information with caution,
given the limited number of direct comparators and to avoid
remuneration inflation as a result of benchmarking exercises
with no corresponding improvement in performance
The Committee considers the impact of any base salary increase
on the total remuneration package.
Reviews take into
account Company
andindividual
performance.
Ordinarily, salary increases
will not exceed the average
increase awarded to other
Group colleagues from the
same country/region.
A salary increase
may be higher than
the average increase
awarded to colleagues
in circumstances such
as (i) where a new recruit
or promoted Executive
Director’s salary has been
set lower than the market
level for such a role; (ii)
where there is a significant
increase in the size and
responsibilities of the
Executive Director’s role;
or (iii) where the salary
level has fallen below the
lower quartile level against
market benchmarks.
Fixed elements of Executive Director remuneration
Purpose and link to strategy Operation Performance measures Maximum potential value
Pension
To offer appropriate levels
of pension and benefit.
To attract and retain
individuals with the
personal attributes, skills
and experience required to
deliver Group strategy.
For UK nationals, the Company provides a defined contribution
pension arrangement (DC plan) and/or contributions to a private
pension and/or a cash allowance.
N/A The maximum pension
contribution for Executive
Directors will be the same
basis as is available to
the majority of colleagues
in the market in which
the Executive Director
is based.
Incumbent Executive
Directors’ maximum
pension is in line with the
UK workforce, currently
10% of salary.
No element other than
base salary is pensionable.
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Fixed elements of Executive Director remuneration
Purpose and link to strategy Operation Performance measures Maximum potential value
Common benefits
To provide market
competitive benefits.
To enable the Executive
Directors to undertake their
roles through ensuring their
wellbeing and security.
The Company provides common benefits including:
• Company car and associated running costs or cash
alternative allowance
• private health insurance, telecommunications and
computer equipment
• life assurance
• long-term disability insurance
N/A The aggregate maximum
cash cost of providing
all common benefits
will not exceed 20% of
base salary.
Mobility-related benefits
To ensure that Executive
Directors who have
relocated nationally
or internationally are
compensated for
costs incurred.
The Company will pay all reasonable expenses and applicable tax
due for the Executive Director and his/her family to relocate on
appointment and for repatriation to the original home country at
the end of their assignment and/or employment.
Executive Directors are personally responsible for all taxes and
social charges incurred in the home and host locations as a result
of their appointment. The Company will pay for reasonable tax
advice and filing support in relation to work-related income for
international Executive Directors.
Executive Directors may be reimbursed under a Tax Treaty
Adjustment for any double tax they might be liable for as a result
of being subject to home country and host country taxation
typically for days worked in the home location.
Executive Directors are not entitled to tax equalisation.
N/A Based on individual
circumstances and subject
to written agreement.
Maximum values will not
exceed the normal market
practice of companies of
a similar size and nature at
the time of relocation.
Variable elements of Executive Director remuneration
Purpose and link to strategy Operation Performance measures Maximum potential value
Annual bonus
To incentivise and reward
performance against
selected KPIs which
are directly linked to
business strategy.
To recognise performance
through variable
remuneration and enable
the Company to flexibly
control its cost base
and react to events and
market circumstances.
To ensure a significant
proportion of Executive
Director remuneration
is directly linked to
business performance.
Measures, targets and their relative weightings are reviewed
regularly by the Committee to ensure continuing alignment with
strategic objectives and will be detailed in the relevant Annual
Report on Remuneration. Bonus is delivered in cash. If an
Executive Director has not reached the level of 1.5 times their
shareholding requirement, then they must use the net of tax
amount of 25% of their bonus opportunity to increase the level of
shareholding they have and to hold these shares for two years.
Bonus is subject to clawback and/or malus for up to
three years following payment. Circumstances include
financial misstatement, erroneous calculations determining
bonus payments, gross misconduct, corporate failure and
reputational damage.
The Committee can adjust some performance targets to reflect
certain non-operating items and retains the ability to adjust the
amount of a bonus if the formulaic outcome is not reflective
of the individual or business performance or the broader
shareholder experience.
Any measure can
be incorporated at
the Committee’s
discretion provided it is
aligned to the Group’s
strategic objectives.
At least 70% of the
bonus opportunity
will be governed
by financial
performance measures.
200% of salary.
Currently the maximum
award level is 150%
of salary. Any increase
beyond this level will
only take place following
consultation with
leading shareholders.
No more than 60% of
the bonus opportunity
can be earned for target
performance in any year.
No more than 20% of
maximum will be paid for
threshold performance.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
163

Remuneration continued
Remuneration Policy continued
Variable elements of Executive Director remuneration
Purpose and link to strategy Operation Performance measures Maximum potential value
Performance SharePlan (PSP)
To incentivise and reward
Executive Directors for
delivery against long-term
Group performance.
To align Executive
Directors’ interests to
those of shareholders.
To drive sustainable
Company performance.
To retain key
executive talent.
The Committee makes conditional awards of rights over shares
to Executive Directors.
Annual participation is subject to Committee approval.
Measures, targets and their relative weightings are reviewed
regularly by the Committee to ensure continuing alignment with
strategic objectives and will be detailed in the relevant Annual
Report on Remuneration.
Performance is measured over a three-year period, normally
starting at the beginning of the financial year in which awards
are granted.
An additional two-year post-vesting holding period will apply.
Awards can vest in the form of shares, a nil-cost option or,
exceptionally, cash.
Share awards are subject to clawback and/or malus for up to
five years following initial award. Circumstances include financial
misstatement, erroneous calculations determining payments,
gross misconduct, corporate failure and reputational damage.
The Committee retains the ability to adjust awards if the
formulaic outcome is not reflective of the individual or business
performance or broader shareholder experience.
The Committee will be able to add dividend equivalents accrued
during vesting and holding periods (which will normally be
delivered in shares) to any award granted under this policy.
Vesting for awards to
be granted in 2023
will be based on
three performance
measures, which have
been chosen as they
are clearly aligned with
our strategic objectives:
• EPS growth
• TSR
• Sustainability
To ensure continued
alignment with
the Company’s
strategic priorities,
the Committee may,
at its discretion, vary
the measures and
their weightings for
future grants from
time to time including
the consideration.
of financial and
non-financial measures.
At least 70% of the
award will be based on
financial and/or share
price related metrics.
The Committee
reserves the right to
adjust targets, for
example for the effects
of divestments or major
acquisitions, to ensure
that those results are in
line with the principles
that supported the
targets when they
wereoriginally set.
250% of the annual rate of
salary at the time of award.
Currently the maximum
award level is 200%
of salary. Any increase
beyond this level will
only take place following
consultation with
leading shareholders.
The threshold vesting level
will be no higher than 18%
of maximum.
Employee Share Ownership Plan (ESOP)
To offer all eligible UK-
based colleagues the
opportunity to build a
shareholding in a tax-
efficient way.
To align Executive
Director interests to those
of shareholders.
Eligible UK Executive Directors are entitled to participate in an
HMRC-approved Share Incentive Plan known as the ESOP.
Whilst not currently operated, if in the future colleague share
plans are offered outside the UK, or if alternative or additional
plans are operated within the UK, eligible Executive Directors
will be entitled to participate on the same basis as all other
eligible colleagues.
Awards granted under the ESOP are not subject to clawback
or malus.
The ESOP operates over a five-year period.
N/A Executive Directors
will be subject to the
same limitations as all
other participants.
Governance
Spirax-Sarco Engineering plc Annual Report 2022164

Other
Purpose and link to strategy Operation Performance measures Maximum potential value
Share ownership guidelines
To provide alignment with
shareholder interests.
Executive Directors are generally required to accumulate a
shareholding in the Company worth a minimum of 200% of their
annual salary. The Committee will determine the operation of the
guidelines from time to time and has determined that the level for
the Group Chief Executive is 300%.
On ceasing to be an Executive Director, the required shareholding
(or level of holding achieved by the date of ceasing) normally has
to be retained for two years.
N/A N/A
Chair and Non-Executive Directors
Purpose and link to strategy Operation Performance measures Maximum potential value
Fees
To attract and retain high
calibre individuals, with
appropriate experience or
industry-related skills, by
offering market competitive
fee levels.
The Chair is paid a single fee for all responsibilities.
The Non-Executive Directors are paid a basic fee. Additional fees
may be paid for additional responsibilities and time commitment
(e.g. the Chairs of the main Board Committees, the Senior
Independent Director and any individual with other separate
responsibilities are paid an additional fee to reflect their
extra responsibilities).
Fees for the Chair and the Non-Executive Directors are
reviewed annually by the Remuneration Committee and
Board respectively, with reference to any change in the time
commitment required, UK market levels and the average base
salary increase across the wider workforce.
The Chair and the Non-Executive Directors do not participate
in any annual bonus or incentive plans, pension schemes,
healthcare benefit arrangements, the Company’s PSP or ESOP.
They are not prohibited from participating in other benefit
arrangements that are available to substantially all UK-based
colleagues so long as there is no additional cost to the Company
in them doing so.
The Company repays the reasonable expenses (including any
tax due thereon) that the Chair and the Non-Executive Directors
incur in carrying out their duties as Directors.
N/A The aggregate value of
fees paid to the Chair
and Non-Executive
Directors will not exceed
the amount set out in the
Articles of Association.
Notes to the Policy table
Outstanding incentive awards and minor amendments
All incentive awards granted prior to this Policy coming into force will continue on their existing terms, including the exercise of discretion to amend
such awards.
The Committee may make minor amendments to the Policy set out in this Policy Report (for regulatory, exchange control, tax or administrative
purposes or to take account of a change in legislation) without obtaining shareholder approval for that amendment.
External directorships
Directors are permitted to hold external directorships in order to broaden their experience, to the benefit of the Company. Such appointments are
subject to approval by the Board and the Director may retain any fees paid in respect of such directorships. The Board ensures compliance by
Directors with Code provision 16.
Approach to recruitment and promotion remuneration
When appointing external hires, promoting executives, or an Executive Director internally, the Committee will continue to act in the best interests of
shareholders when determining remuneration, in line with the stated policy. The main elements of the Remuneration Policy for Executive Director
appointments are:
• base salary will be set on appointment taking into account the factors set out in the Policy table, but also the individual’s experience.
Depending on an individual’s prior experience, the Committee may set salary below market norms, with the intention that it is realigned over
time, typically two to three years, subject to performance in the role
Governance
Spirax-Sarco Engineering plc Annual Report 2022
165

Remuneration continued
Remuneration Policy continued
• pension benefits will not exceed the rate applicable to the relevant country’s workforce, as determined by the Committee; Executive Directors
who have transferred internally from overseas may continue to participate in home country pension arrangements and/or receive a cash
allowance in line with the relevant country’s workforce
• mobility-related benefits may include the payment of some or all of an individual’s tax on relocation expenses incurred within 12 months
of joining
• on-going annual incentive pay opportunity will not exceed the maximums stated in the Policy table (up to 200% of salary for annual bonus and
an award of up to 250% of salary under the PSP). In the year of appointment an off-cycle award under the PSP and different annual bonus
conditions may be made by the Committee to ensure an immediate alignment of individual interests
• in addition to the standard elements of remuneration, on the appointment of an external candidate, the Committee reserves the right to buy out
remuneration that the individual has foregone by accepting the appointment, if appropriate. The terms of such awards would be informed by
the amounts being forfeited and the associated terms (for example the extent to which the outstanding awards were subject to performance,
the vehicles and the associated time horizons). Awards would be made either through the existing share plans or in accordance with the
relevant provisions contained within the Listing Rules
• when an internal appointment to the Board is made, any pre-existing obligations may be honoured by the Committee and payment will be
permitted under this Remuneration Policy
Details of the remuneration for any new Chair or Executive Director appointed to the Board will be disclosed on the Group’s website,
www.spiraxsarcoengineering.com.
Service agreements and termination policy
The Company’s policy on service agreements and termination arrangements for Executive Directors is set out below. Service agreements are
designed to reflect the interests of the Company, as well as the individual concerned. Executive Directors’ service agreements are kept at the
Company’s headquarters in Cheltenham.
In accordance with the Code and guidelines issued by institutional investors, Executive Directors have service agreements that are terminable by
either the Company or the Executive Director on 12 months’ notice. In the event of termination or resignation, and subject to business reasons,
the Company would not necessarily hold the Executive Director to his or her full notice period. All Directors are subject to election (if newly
appointed in the year) or re-election at the AGM.
Service agreements set out restrictions on the ability of the Executive Director to participate in businesses competing with those of the Group or
to entice or solicit away from the Group any senior colleagues or to solicit/deal with clients of the Group or interfere with supply, in the 12 months
following the cessation of employment.
Salary, pension and benefits are included in the agreements and are treated as described in the policy table on pages 162 to 165. There is
no contractual entitlement to payment of an annual bonus or granting of an award under the PSP, until individual participation, level of award,
measures and targets have been set for a particular year.
The Chair and Non-Executive Directors do not have service agreements but serve the Company under letters of appointment, for an initial period
of normally three years, subject to annual re-election at the AGM. Appointments may be terminated by the Company or individual with up to three
months’ notice for a Non-Executive Director and up to six months’ notice for the Chair. Currently, notice periods are for one month only.
Current Executive Directors and policy for new appointments
The details of the service agreements of the Group Chief Executive and Chief Financial Officer and for new appointments to the Board, which
includes appointing an individual who is not an Executive Director but who still falls within this Policy, are outlined on the following page and
comply with best practice.
Treatment of leavers under the incentive plans
Whilst it is not an entitlement, it is expected that where an Executive Director is a ‘good leaver’ (i.e. where the cessation of employment is due to
death, disability, redundancy, retirement or the company business in which he/she works being disposed of or where the ending of employment is
instigated by the Company and is not for cause), payments will be made under the annual bonus plan if performance targets are met subject to,
and in accordance with, the plan rules and the Policy. If the Executive Director is not a ‘good leaver’ it is expected that no bonus will be paid.
The treatment of leavers under the PSP is determined in accordance with the shareholder-approved PSP rules. (i) For awards granted under the
2015 Performance Share Plan, any awards granted within six months prior to termination (or the giving or receiving of notice) will lapse and any
awards granted six months or longer prior to termination of employment (but prior to the end of the performance period) will lapse unless the
Executive Director is considered to be a ‘good leaver’. (ii) For awards granted under the 2023 PSP Plan, any awards will normally lapse unless the
Executive Director is considered to be a ‘good leaver’. In the case of such a ‘good leaver’ the award will normally vest on the normal vesting date.
Unless the Committee determines otherwise, vesting will be subject to the Committee’s assessment of performance and a pro-rata reduction in
the number of shares to take account the period employed within the performance period.
If the Executive Director is a ‘good leaver’ where the ending of employment is not for cause, the number of shares vested may be reduced
(including to zero) by the Committee in its absolute discretion.
Where an Executive Director ceases employment (or notice is given) on or after the end of the performance period but prior to the date on
which the Committee has determined the extent to which the award has vested, if the Executive Director is a ‘good leaver’, his/her award will be
preserved and will be treated in the same way as if his/her employment had continued, whereas if the Executive Director is not a ‘good leaver’,
his/her award will normally lapse on the earlier of his/her cessation of employment and the giving of notice.
Governance
Spirax-Sarco Engineering plc Annual Report 2022166

In relation to the ESOP, as an HMRC-approved plan, where an Executive Director leaves the treatment will be in line with the approved plan rules
and HMRC guidance.
Change of control
Bonus: Bonus in the year of change of control may be paid based on the Committee’s assessment of performance and, unless the Committee
determines otherwise, pro-rata for the portion of the year elapsed prior to the change of control.
If termination occurs within 12 months following a change of control, the Executive Director is entitled to (i) a lump sum payment in lieu of notice
and (ii) receive a full bonus payment calculated by reference to the average of the preceding three years’ bonus payments (without any reduction
or enhancement for performance).
PSP: The rules may provide that in the event of a change of control, outstanding share-based awards vest to the extent that the Committee
determines that performance targets are met shortly before the date of the event. Any such vesting would normally have regard to time pro-
rating. The Committee may, at its discretion, increase the level of vesting if it believes that exceptional circumstances warrant such treatment.
The Committee may replace one or more of the performance criteria or assess the extent to which it determines that targets have been met on a
basis that it deems is reasonable in the circumstances.
In each case, the Committee is the Remuneration Committee shortly before the change of control takes place.
Details of service agreement clauses
Notice period 12 months by the Executive Director and 12 months by the Company
Termination No payment if Executive Director commits a repudiatory breach of the service agreement or for gross misconduct or in
certain circumstances.
No additional termination payment if notice worked.
If notice only part worked/part on garden leave, payment in respect of unexpired period of notice, otherwise 12 months’ base
salary only.
Company discretion to pay in lieu of notice in lump sum or monthly except within 12 months of a change of control, when a
lump sum will be paid.
If paid monthly, payment will be reduced by the value of any salary, fees and benefits, excluding long-term incentives, earned in
new paid employment in that period (mitigation clause).
No automatic entitlement to payments under the annual bonus or PSP (further details below).
Payment of reasonable legal fees and any legally enforceable entitlements.
Garden leave clause.
Robust post-termination restrictions on confidentiality, non-compete, non-solicitation and non-interference with customers
or suppliers.
Service agreements may be terminated without notice and without payment of compensation on the occurrence of certain
events, such as gross misconduct or financial misstatement.
Clawback
ormalus
Bonus payments and PSP awards are subject to clawback or malus until the third anniversary of bonus payment and the fifth
anniversary of PSP grant respectively. Circumstances include financial misstatement, erroneous calculations determining bonus
payment, gross misconduct, reputational damage and corporate failure.
Governance
Spirax-Sarco Engineering plc Annual Report 2022
167

Remuneration continued
Remuneration Policy continued
Illustrations of application of the Remuneration Policy
Under the Remuneration Policy, a significant portion of remuneration is variable and depends on the Company’s performance. Below we illustrate
how the total pay opportunity for the Executive Directors varies under four performance scenarios: below threshold, on target, maximum and
maximum with a 50% share price increase.
The scenarios for 2023, informed by the current application of our pay policy, are as follows:
Element
Fixed pay, benefits
and ESOP
Fixed pay and ESOP does not vary with performance and comprises:
• base salary effective 1st January 2023
• benefits value based on 2022 disclosure
• pension value (cash allowance: rate applied to 2023 salary)
• ESOP participation of up to £1,800 1:1 matching shares for eligible Executive Directors
Percentage of base salary
Below threshold On target Maximum
Maximum with share
priceincrease
Annual bonus
(% of salary)
0% CEO: 90%
CFO: 75%
CEO: 150%
CFO: 125%
As for maximum
PSP
1
(% of salary at award)
0% CEO: 36.0%
CFO: 31.5%
CEO: 200%
CFO: 175%
As for maximum, with
illustration of the value
assuming a 50% increase
inshare price
1 A level of 18% vesting for on-target performance is equivalent to threshold performance under the PSP and annual bonus, which the Committee believes to be a fair
assumption for on-target performance given the approach taken to setting performance targets.
100%
£0.855m
Maximum
Maximum
with share
price increase
On-target
Below
Threshold
£0.0m £2.0m£1.0m £4.0m£3.0m
48% 37%
15%
25%
20% 53%
£1.8m
£3.48m
Total, including
share price growth:
£4.23m
43%
Nicholas Anderson (Group Chief Executive)
27%
32%
100%
£0.612m
Maximum
Maximum
with share
price increase
On-target
Below
Threshold
£0.0m £2.0m£1.0m £3.0m
52% 34%
14%
28%
23% 52%
£1.176m
£2.201m
Total, including
share price growth:
£2.664m
42%
Nimesh Patel (Chief Financial Officer)
24%
30%
Fixed pay, benefits and ESOP Annual bonus PSP
Governance
Spirax-Sarco Engineering plc Annual Report 2022168

“We regard compliance with
all standards of governance
ascritical.”
Andy Robson
Group General Counsel and Company Secretary
The Directors present their report and the
audited financial statements of the Group
for the year ended 31st December 2022.
The following Regulatory disclosures are
made in compliance with the Companies
Act 2006 (the Act), the Listing Rules (LR),
the Disclosure Guidance and Transparency
Rules (DTR) and the 2018 UK Corporate
Governance Code (the Code).
The Board has taken advantage of section
414C (11) of the Act to include disclosures
in the Strategic Report on those items
indicated in the table at the end of this report.
These, together with this report comprise the
Directors’ Report (Report).
Scope of the reporting in this
Annual Report
The Board has prepared a Strategic Report
(including the Chair’s Statement, the Chief
Executive’s Review, the Financial Review
and the Operating Review) which provides
an overview of the development and
performance of the Group’s business in the
year ended 31st December 2022 and its
position at the end of that year, which covers
likely future developments in the business of
the Company and the Group. The Strategic
Report can be found on pages 1 to 99.
For the purposes of compliance with DTR
4.1.5 R (2) and DTR 4.1.8 R, the required
content of the management report can be
found in the Strategic Report and these
Regulatory disclosures, including the
sections of the Annual Report incorporated
by reference.
For the purposes of LR 9.8.4C R, the
information required to be disclosed by LR
9.8.4 R, that is not covered in this Report, is
set out in the table at the end of this report.
DTR 7.2 requires certain information to
be included in a corporate governance
statement in the Directors’ Report.
Information that fulfils these requirements
can be found in the Corporate Governance
Statement on pages 100 to 127 and are
incorporated into this Report by reference.
Directors
The Directors who served during the year
were Jamie Pike, Richard Gillingwater, Angela
Archon, Peter France, Caroline Johnstone,
Jane Kingston, Olivia Qiu, Kevin Thompson,
Nicholas Anderson and Nimesh Patel.
We have exceeded the Board composition
requirements of the Parker Review on ethnic
diversity and the Women FTSE Leaders
Review on gender diversity.
Biographies of the Directors and details of the
gender and ethnic diversity of the Board can
be found on pages 104 to 107.
Results
The Group’s results for the year have been
prepared in accordance with the International
Financial Reporting Standards. They are set
out in the Consolidated Income Statement,
which appears on page 185.
Dividend
As at 31st December 2022, the Company
has distributable reserves of £581.8m (see
the Company Statement of Financial Position
on page 232). The Directors are proposing
the payment of a final dividend of 109.5p
(2021: 97.5p) which, together with the interim
dividend of 42.5p (2021: 38.5p), makes
a total distribution for the year of 152.0p
(2021: 136.0p). If approved at the Annual
General Meeting (AGM), the final dividend will
be paid on 29th May 2023 to shareholders
on the register at the close of business on
21st April 2023.
Directors’ and
Officers’Insurance
The Company provides Directors’ and
Officers’ Insurance for Board members,
Directors of the Group’s Operating
Companies and senior officers.
The Company has also provided each
Director with an indemnity to the extent
permitted by law in respect of the liabilities
incurred as a result of their holding office as a
Director of the Company.
Appointment, replacement
and powers of Directors
Subject to the provisions of the Articles of
Association, the Directors may exercise all the
powers of the Company.
The appointment and replacement of
Directors is governed by the Company’s
Articles of Association, the Code, the
Companies Act 2006 and related legislation.
The Directors stand for election or re-
election on an annual basis at each AGM, in
accordance with the Code.
All current Directors will seek re-election at the
AGM. The Board considers that all Directors
standing for re-election continue to perform
effectively and demonstrate commitment to
their roles. In addition, the Board considers
that all Directors have the necessary skills and
experience, as set out in their biographies on
pages 104 and 105.
Regulatory disclosures
Governance
Spirax-Sarco Engineering plc Annual Report 2022
169

Conflicts of interest
Under the Companies Act 2006 and the
provisions of the Company’s Articles of
Association, the Board is required to consider
potential conflicts of interest. The Company
has established formal procedures for the
disclosure and review of any conflicts and
potential conflicts of interest which the
Directors may have and for the authorisation
of such matters of conflict by the Board.
To this end the Board considers and, if
appropriate, authorises any conflicts, or
potential conflicts of interest as they arise and
reviews any such authorisation annually.
New Directors are required to declare any
conflicts and/or potential conflicts of interest
to the Board at the first Board meeting after
their appointment. The Board believes that
the procedures established to deal with
conflicts of interest are operating effectively.
Capital Structure
As at 31st December 2022, the Company’s
share capital was made up of ordinary
shares which each carry one vote at general
meetings of the Company. Except as set out
in the Articles of Association or in applicable
legislation, there are no restrictions on the
transfer of shares in the Company and there
are no restrictions on the voting rights in the
Company’s shares.
As at 28th February 2023, there were no
treasury shares held by the Company.
Movements in the Company’s issued
share capital, listed on the London Stock
Exchange, during the year are set out in Note
21 on page 215.
The Directors have been authorised to
issue and allot ordinary shares, pursuant to
the Articles. These powers are referred to
Shareholders at each AGM for renewal.
The total number of ordinary shares in issue
as at 31st December 2022 was 73,776,048.
Share Capital – special rights
and restrictions
Pursuant to the general provisions of the
Articles and prevailing legislation, there
are no specific restrictions on the size
of a shareholding or on voting rights of
holders of ordinary shares. The Directors
are not aware of any restrictions on the
transfer of ordinary shares in the Company
other than certain restrictions which may
from time to time be imposed by law and
regulations, e.g. insider trading laws, and
pursuant to the Listing Rules of the Financial
Conduct Authority (FCA) whereby certain
employees of the Company require the prior
approval from the Company to deal in the
Company’s securities.
The Company is not aware of any
agreements entered into between any
shareholders which restrict the transfer of
shares or the exercise of any voting rights
attached to the shares. No person has any
special rights of control over the Company’s
share capital and all issued shares are
fully paid.
Articles of Association
The Company’s Articles of Association are
available from Companies House in the UK
or by writing to the Group General Counsel at
the Group’s registered office in Cheltenham.
They are also available on the Company’s
website. Amendments to the Articles of
Association can only be made by means of a
special resolution at a general meeting of the
shareholders of the Company.
Change of Control
The Company is not a party to any significant
agreements that take effect, alter, or terminate
upon a change of control of the Company
following a takeover bid.
There are provisions in the Executive
Directors’ service agreements which state
that following a takeover or change of control,
if the Executive Director’s employment
is terminated then both salary/benefits
and a sum in respect of lost future bonus
opportunity become payable as a lump sum.
Substantial shareholdings
The voting rights in the table below have
been determined in accordance with the
requirements of the UK Listing Authority’s
Disclosure and Transparency Rules DTR
5 and represent 3% or more of the voting
rights attached to issued shares in the
Company as at 28th February 2023 and 31st
December 2022. There are no Controlling
Founder Shareholders.
Purchase of own shares
A shareholder’s authority for the purchase by
the Company of a maximum of 10% of its
own shares was in existence during the year.
However, the Company did not purchase any
of its shares during that time.
This authority expires at the forthcoming
AGM and it is proposed that a similar
authority be approved.
Employee Benefit Trust (EBT)
The number of shares held in the EBT at
31st December 2022 was 179,632 for the
purpose of satisfying the vesting of awards
and options granted to employees under the
various Company schemes. Dividends on
shares in the EBT are waived.
Substantial shareholdings
As at 31st December 2022 As at 28th February 2023
Number of
ordinary shares
% of issued
share capital
Number of
ordinary shares
% of issued
share capital
BlackRock, Inc. 7,527,441 10.2% 7,649,604 10.4%
The Capital Group Companies, Inc. 3,956,837 5.4% 3,975,137 5.4%
Fiera Capital Corporation 3,806,277 5.2% 3,714,311 5.0%
APG Groep N.V. 3,439,780 4.7% 3,481,909 4.7%
Vanguard Group Holdings 3,131,866 4.2% 3,141,882 4.3%
Impax Asset Management Group plc 2,788,891 3.8% 2,911,791 3.9%
Sun Life Financial, Inc. 2,195,165 3.0% 1,896,917 2.6%
Regulatory disclosures continued
Governance
Spirax-Sarco Engineering plc Annual Report 2022170

Auditor
The Company’s auditor throughout the
period of this Annual Report was Deloitte
LLP, having initially been appointed on 20th
May 2014.
During 2022, a competitive tender was
undertaken in relation to the Auditor
appointment. Full details of this can be found
in the Audit Committee Report on page
138. Deloitte LLP was successful in the
tender and has expressed its willingness to
continue in office as auditor. A resolution to
re-appoint Deloitte LLP will be proposed at
the forthcoming AGM.
Disclosure of information to
the auditor
As at the date of the approval of this Annual
Report, as far as each Director is aware, there
is no relevant audit information of which the
Company’s auditor is unaware. Each Director
has taken all such steps as they ought to
have taken as a Director to make themselves
aware of any relevant audit information and to
establish that the Company’s auditor is aware
of that information.
This confirmation is given and should be
interpreted in accordance with the provisions
of Section 418 of the Companies Act 2006.
Research and development
(R&D)
The Group continues to devote significant
resources to the research and development
and the updating and expansion of its range
of products to remain at the forefront of its
world markets.
The R&D functions in Steam Specialties:
Spirax Sarco, Cheltenham (UK) and Gestra,
Bremen (Germany); Electric Thermal
Solutions: Vulcanic, Neuilly-sur-Marne
(France) and Thermocoax, Normandy
(France); Watson-Marlow: Falmouth (UK)
and Aflex Hose, Huddersfield (UK); and
the Product Development functions in
Chromalox, Pittsburgh (USA) and Durex
Industries, Cary (USA) are tasked with
improving the Group’s pipeline of new
products, decreasing the time to launch,
expanding the Group’s addressable
market and realising additional sales.
Further information on the expenditure on
R&D is contained in Note 7 on page 203.
The amount of R&D expenditure capitalised,
and the amount amortised, in the year, are
given in Note 15 on page 209.
Treasury and foreign
exchange
The Group has in place appropriate treasury
policies and procedures, which are approved
by the Board. The treasury function manages
interest rates for both borrowings and cash
deposits for the Group. It is also responsible
for ensuring there is sufficient headroom
against any banking covenants contained
within its credit facilities and for ensuring there
are appropriate facilities available to meet the
Group’s strategic plans. The Group’s Treasury
Policy was reviewed, updated and approved
in May 2022 by the Audit Committee and
the Board.
To mitigate and manage exchange rate
risk, the Group routinely enters into forward
contracts and continues to monitor
exchange rate risk in respect of foreign
currency exposures.
All these treasury policies and procedures
are regularly monitored and reviewed. It is the
Group’s policy not to undertake speculative
transactions which create additional
exposures over and above those arising from
normal trading activity.
Additional information
Disclosure Page(s) Location in Annual Report
Asset values 184 Consolidated Statement of Financial Position
1
Charitable donations 67 Strategic Report: Sustainability Report
1
Risk management and Principal Risks 92-99 Strategic Report
1
Financial instruments and financial risk management 225-230 Note 28, financial statements
1
Future developments of the Group’s business 81, 86, 90 Strategic Report
1
Employee culture and engagement (includes employee
investment and reward)
49-55 and
114-117
Strategic Report: Sustainability Report
1
and Colleague
Engagement Report
Employee share schemes (includes Long-Term Incentive Plans) 154 and
220-221
Directors’ Remuneration Report and note 23,
financial statements
2
Health and safety and employee-related policies including
diversity and disability
48-50 Strategic Report: Sustainability Report
1
Movements in share capital 186 Consolidated Statement of Changes in Equity
Greenhouse gas emissions 56 Strategic Report: Sustainability Report
1
Going Concern statement 43 Strategic Report: Financial Review
Directors’ responsibility statement 173 Directors’ Statement of Responsibilities
Directors’ interests 155 Directors’ Remuneration Report
Stakeholder consideration and engagement 111-113 Corporate Governance Report: Section 172 statement
1
1 The Board has taken advantage of section 414C(11) of the Act to include disclosures in the Strategic Report on these items.
2 Information required to be disclosed by LR 9.8.4 R
Governance
Spirax-Sarco Engineering plc Annual Report 2022
171

Political donations
The Group has a policy of not making political
donations and no political donations were
made during the year (2021: nil).
Annual General Meeting
The Notice of Meeting convening the
AGM, to be held on Wednesday, 10th May
2023 and an explanation of the resolutions
sought, is set out in the Circular posted on
our website and sent to shareholders in the
format selected by them.
This year we are pleased to be able to
hold a physical meeting and welcome
our shareholders to the AGM in person.
The meeting will be held in the Cotswold
Suite, Tewkesbury Park Hotel, Lincoln Green
Lane, Tewkesbury, Gloucestershire, GL20
7DN, as our Group Headquarters at Charlton
House, Cheltenham, UK continues its
upgrade for the future in accordance with our
sustainability and business requirements.
While we are always delighted to meet
with our shareholders at our AGMs, all
shareholders are still able to vote by
submitting a Form of Proxy, in line with
the instructions set out in the Circular.
In 2022, 91.94% of the proxy votes received
were lodged electronically through the
CREST system.
The results of the votes will be announced
to the London Stock Exchange and
posted on the Group’s website,
www.spiraxsarcoengineering.com, shortly
after the conclusion of the meeting.
We appreciate your understanding. For up-to-
date information, please refer to our website:
https://www.spiraxsarcoengineering.com/
investors/shareholder-information/agm-
notices.
The Strategic Report and this Directors’
Report were approved by the Board on 8th
March 2023. Pages 169 to 172 form the
Directors’ Report for the purposes of the
Companies Act 2006.
By order of the Board
Andy Robson
Group General Counsel and
Company Secretary
8th March 2023
Spirax-Sarco Engineering plc
Registered no. 596337
Regulatory disclosures continued
Governance
Spirax-Sarco Engineering plc Annual Report 2022172

Board of Directors
The Directors are responsible for preparing
the Annual Report and the Financial
Statements in accordance with applicable
laws and regulations.
Company law requires the Directors to
prepare consolidated Group Financial
Statements for each financial year in
accordance with IFRS as adopted by the UK.
Parent Company Financial Statements are
prepared under FRS 101.
In addition, by law the Directors must not
approve the Financial Statements unless
they are satisfied that they give a true and fair
view of the state of affairs of the Group and
Parent Company and of their profit or loss
for that period. In preparing these Financial
Statements, the Directors are required to:
• properly select and apply
accounting policies,
• present information, including accounting
policies, in a manner which is relevant,
reliable, comparable and understandable;
• provide additional disclosures when
compliance with the specific requirements
in IFRS are insufficient to enable users
to understand the impact of particular
transactions, other events and conditions
on the entity’s financial position and
financial performance; and
• make an assessment of the Company’s
ability to continue as a going concern.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
transactions and disclose with reasonable
accuracy at any time the financial position
of the Company and enable them to ensure
that its Financial Statements comply with the
Companies Act 2006.
They are also responsible for safeguarding
the assets of the Company and hence for
taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for
the maintenance and integrity of the
corporate and financial information
included on the Group’s website,
www.spiraxsarcoengineering.com.
Legislation in the UK governing the
preparation and dissemination of Financial
Statements may differ from legislation in
other jurisdictions.
Cautionary statement
All statements other than statements of
historical fact included in this document,
including those regarding the financial
condition, results, operations and
Businesses of Spirax-Sarco Engineering
plc (its strategy, plans and objectives),
are forward-looking statements.
These forward-looking statements reflect
management’s assumptions made based on
information available at this time. They involve
known and unknown risks, uncertainties
and other important factors which could
cause the actual results, performance or
achievements of Spirax-Sarco Engineering
plc to be materially different from future
results, performance or achievements
expressed or implied by such forward-looking
statements. Spirax-Sarco Engineering plc
and its Directors accept no liability to third
parties in respect of this Report save as
would arise under English law.
Any liability to a person who has
demonstrated reliance on any untrue or
misleading statement or omission shall be
determined in accordance with schedule
10A of the Financial Services and Markets
Act 2000. Schedule 10A contains limits on
the liability of the Directors of Spirax-Sarco
Engineering plc and their liability is solely to
Spirax-Sarco Engineering plc.
Responsibility statement
We confirm that to the best of
our knowledge:
• the Financial Statements, prepared in
accordance with IFRS as adopted by the
UK, give a true and fair view of the assets,
liabilities, financial position and profit or
loss of the Company and the undertakings
included in the consolidation taken as
a whole
• the Strategic Report includes a fair review
of the development and performance
of the business and the position of the
Company and the undertakings included
in the consolidation taken as a whole,
together with a description of the Principal
Risks and uncertainties that they face
• the Annual Report 2022 taken as a whole,
is fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Company’s
financial position, performance, business
model and strategy
This responsibility statement was approved
by the Board of Directors on 8th March 2023
and is signed on its behalf by:
Nimesh Patel
Chief Financial Officer
8th March 2023
Statement of Directors’ responsibilities
“The Group’s strong financial
position underpins our stability
and viability, while supporting
investments to secure our future.”
Nimesh Patel
Chief Financial Officer
Governance
Spirax-Sarco Engineering plc Annual Report 2022
173

Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022174
Financial Statements
In this section
Independent Auditor’s report 175
Consolidated Statement of Financial Position 184
Notes to the Consolidated Financial
Statements 189

Report on the audit of the financial statements
1. Opinion
In our opinion:
• the financial statements of Spirax-Sarco Engineering plc (the ‘Parent Company’) and its subsidiaries (the give a true and fair view of the
state of the Group’s and of the Parent Company’s affairs as at 31 December 2022 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting
standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB);
• the Parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements which comprise:
• the Consolidated and Parent Company Statements of Financial Position;
• the Consolidated Income Statement;
• the Consolidated Statement of Comprehensive Income;
• the Consolidated and Parent Company Statements of Changes in Equity;
• the Consolidated Statement of Cash Flows;
• the related notes 1 to 28 to the Consolidated Financial Statements and 1 to 11 for the Parent Company Financial Statements.
The financial reporting framework that has been applied in the preparation of the Group Financial Statements is applicable law and United
Kingdom adopted international accounting standards and IFRSs as issued by the IASB. The financial reporting framework that has been applied
in the preparation of the Parent Company Financial Statements is applicable law and United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and Parent company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group and
Parent company for the year are disclosed in note 7 to the financial statements. We confirm that we have not provided any non-audit services
prohibited by the FRC’s Ethical Standard to the Group or the Parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters The key audit matters that we identified in the current year were:
• goodwill impairment review for the Electric Thermal Solutions (ETS) cash generating unit (CGU);
• the purchase price accounting for the acquisition of Vulcanic;
• defined benefit pension liability valuation; and
• revenue recognition in relation to cut off for certain components.
All key audit matters have remained at a similar risk level to the prior year, except for the key audit matter in relation to
the acquisition of Vulcanic which is new in the year.
Materiality The materiality that we used in the current year was £17.8m (2021: £15.0m) which was determined on the basis of
5% of forecast adjusted profit before tax.
Scoping We completed full scope audit work on 17 (2021: 18) reporting entities and specified audit procedures were
performed on 9 (2021: 6) reporting entities. Our full scope and specified audit procedures covered 73% (2021: 75%)
of total Group revenue, 75% (2021: 86%) of the Group’s net assets and 80% (2021: 73%) of adjusted profit
before tax.
Significant changes
in our approach
Given the significant acquisition of Vulcanic during 2022, the purchase price accounting for the valuation of the
Vulcanic brand asset has been identified as a new key audit matter.
We have revised our materiality benchmark in 2022 to adjusted profit before tax as defined in note 2 of the
consolidated financial statements. In 2021, we adjusted statutory profit before tax for a one-off gain of £2.0m from the
closure of the pension scheme in Germany to future accruals. We consider the adjusted profit before tax benchmark
to be more consistent with the metrics used by shareholders in the current year.
Independent Auditor’s Report
To the members of Spirax-Sarco Engineering plc
Spirax-Sarco Engineering plc Annual Report 2022 175
Financial Statements

4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group company’s ability to continue to adopt the going concern basis of
accounting included:
• evaluated the financing facilities available to the Group including nature of facilities, repayment terms and covenants;
• considered the business model and Principal Risks and uncertainties;
• challenged the assumptions used in the forecasts by reference to historical performance, trading run rate, and other supporting evidence,
such as the current macroeconomic environment;
• recalculated and assessed the amount of headroom in the forecasts (cash and covenants);
• performed a sensitivity analysis to consider specific scenarios including a reverse stress test; and
• evaluated appropriateness of the related disclosures.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing
the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
5.1. Goodwill impairment review for the Electric Thermal Solutions cash generating unit (CGU)
Key audit
matter description
The Group holds £703.3m (2021: £411.2m) of Goodwill. The value of goodwill for the ETS CGU as at the balance sheet date
was £514.9m (2021: £241.0m).
There is a high level of judgement surrounding the valuation of goodwill due to the significant growth anticipated in
management forecasts. Key judgements include assumptions in estimating future revenue and earnings before interest
and tax (EBIT) margins, alongside setting an appropriate discount rate. We have identified a key audit matter relating to the
impairment of goodwill and intangibles for the ETS CGU, due to sensitivity of the assumptions relating to the short term (2023-
2027) revenue growth and the discount rate.
The Audit Committee Report on page 132 refers to impairment of goodwill and other intangibles as an area considered by
the Audit Committee. Note 1 to the Consolidated Financial Statements sets out the Group’s accounting policy for testing
of goodwill and intangibles for impairment. The basis for the impairment reviews is outlined in Note 15 to the Consolidated
Financial Statements, including details of the discount rates and growth rates used. Note 15 to the Consolidated Financial
Statements also includes details of the extent to which the CGUs to which the goodwill and other intangible assets are
allocated are sensitive to changes in the key inputs.
How the scope
ofouraudit
respondedtothe
key auditmatter
In response to the key audit matter identified, we performed the following procedures to challenge management’s assumptions
and assessment:
• obtained an understanding of the relevant controls relating to the impairment review process, including assumption setting
for future cash flows, discount rates and an overarching review by the CFO of the impairment models;
• assessed the integrity of management’s impairment model through testing of the mechanical accuracy and evaluating the
application of the input assumptions;
• to assess the revenue and EBIT growth assumptions, held meetings with finance and commercial management and visited
the Durex facility to challenge and understand the growth assumptions within the impairment model;
• considered external evidence, such as forecast IP and GDP growth, market reports and order intake, to assess accuracy
and reasonableness of management’s forecasts;
• compared the change in model assumptions from 2021 and understood the driver of any variances;
• evaluated historical forecasting accuracy by comparing prior year plans to actual results achieved;
• challenged the discount rate used with input from our valuations specialists, utilising their knowledge and expertise;
• ran sensitivities on the assumptions within the model; and
• completed a stand back review by evaluating the reasonableness of the assumptions in aggregate, by comparing the EBIT
multiple of ETS to the EBIT multiple of the Group and enterprise value to the value in use;
• considered the appropriateness of the related disclosures.
Independent Auditor’s Report continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022176

5.1. Goodwill impairment review for the Electric Thermal Solutions cash generating unit (CGU)
Key observations
From the work performed above we are satisfied that the value in use supports the carrying value. This was on the basis that
the key assumptions, applied, when taken in aggregate, are within our acceptable range. We consider the related disclosures
to be appropriate.
5.2. The purchase price accounting for the acquisitions of Vulcanic
Key audit
matter description
On 30 September 2022, the Group announced the completion of the acquisition of 100% of Vulcanic for consideration of
£176.5m.
As a part of the accounting for the acquisition, the Directors performed a valuation of the assets and liabilities acquired and
as a result identified total intangible assets of £115.6m which included £107.4m in relation to the brand asset. The goodwill
arising from the acquisition is £119.2m.
The valuation of the brand asset is based on certain assumptions and estimates which require judgement and therefore
increases the risk of possible misstatement. We have identified a key audit matter relating to the valuation of Vulcanic brand
asset, in particular the future revenue growth rates assumption used in the valuation. This is due to the inherent uncertainty in
estimating these assumptions which require a higher degree of management judgement and auditor effort, including the use
of valuation specialists.
The Audit Committee Report on page 133 refers to Acquisitions – intangible assets valuations as an area considered by the
Audit Committee. This includes the acquisition of Vulcanic. Note 1 to the Consolidated Financial Statements sets out the
Group’s accounting policy for business combinations and note 26 includes details of fair values of acquired assets at the
acquisition date.
How the scope
ofouraudit
respondedtothe
key auditmatter
In response to the key audit matter identified, we performed the following procedures to challenge management’s
assumptions and assessment which are applicable for both acquisitions:
• Obtained an understanding of relevant controls in relation to management’s identification and valuation of acquired
intangible assets;
• Understood and challenged the key assumptions underpinning management’s forecast revenue growth, including by
reference to past performance and available third-party evidence;
• Evaluated management’s historical accuracy in forecasting revenues of newly acquired entities by comparing the forecast
revenues made for recent acquisitions to the actual performance;
• Involved valuation specialists to help assess the appropriateness and application of management’s valuation methodology;
• Tested the integrity of the model through testing mechanical accuracy, formulae and inputs;
• Tested the accuracy and completeness of the underlying data used in the calculation of the customer attrition rates;
• Tested the opening balance sheet as of acquisition date and related accounting policy and fair value adjustments;
• Performed independent sensitivity analysis on the model;
• Evaluated the internal consistency between the forecast assumptions with other forecast assumptions such as impairment;
and
• Considered the appropriateness of the related disclosures.
Key observations
Our audit procedures did not identify any material misstatement within the brand intangible asset, and we are satisfied that
assumptions used in the valuation are within an acceptable range. We consider the disclosure in relation to the acquisition to
be appropriate.
5.3. Defined benefit pension liability valuation
Key audit
matter description
At 31st December 2022 the gross retirement benefit liability recognised in the Consolidated Statement of Financial Position
was £393.3m (2021: £605.5m). There is a risk of material misstatement relating to the judgements made by management in
valuing the defined benefit pension liabilities including the use of key model input assumptions specifically the discount rates,
mortality assumptions and inflation rates over the four main schemes (three in the UK and one in the USA). These variables
can have a material impact in calculating the quantum of the retirement benefit liability. Management involved third party
actuaries to complete valuations of the pension liabilities.
Refer to Note 1 for the Group’s policy on defined benefit plans and post-retirement benefit key sources of estimation
uncertainty, note 23 for the financial disclosure including the key estimates and assumptions used in the defined benefit
pension plan valuation and the significant issues section of the Audit Committee Report on page 132.
How the scope
ofouraudit
respondedtothe
key auditmatter
Working with our internal actuarial specialists we assessed the key assumptions applied in determining the pension obligations
for the four main pension schemes, and determined whether the key assumptions are reasonable. Testing covered 93.9%
(2021: 95.5%) of defined benefit pension liabilities.
For each of the four schemes, we challenged management’s key assumptions by reference to illustrative benchmark rates,
sensitising any difference between management’s rates and the illustrative benchmark rates. Additionally we benchmarked the
key assumptions against other listed companies to check for any outliers in the data used.
We also evaluated the management expert’s competence, capabilities and objectivity and assessed their reports considering
compliance with IAS 19 and IFRIC 14 and have considered the appropriateness of the related disclosures.
Key observations
From the work performed above we are satisfied that the key assumptions applied in respect of the valuation of the schemes’
liabilities are appropriate.
Spirax-Sarco Engineering plc Annual Report 2022 177
Financial Statements

Independent Auditor’s Report continued
5.4. Revenue Recognition
Key audit
matter description
The Group policy is to recognise revenue when performance obligations have been fulfilled which, in the majority of cases, is
at time of dispatch (‘ex works’) or at time of delivery (‘FOB’). We have identified a key audit matter relating to a risk of material
misstatement, whether due to fraud or error, in relation to cut off for revenue recognition.
In particular, we pinpointed the risk to the potential overstatement of revenue in components where external revenue
recognised in December 2022 is both above the component’s materiality and contributes a higher proportion (10% or more)
of annual external revenue compared to the rest of the year. The risk for these components focuses on the recognition of
revenue by reference to the contracted shipping terms and meeting the performance obligations for product despatches and
deliveries spanning year end.
Refer to Note 1 for the Group’s revenue recognition policy and the significant issues section of the Audit Committee Report on
page 131.
How the scope
ofouraudit
respondedtothe
key auditmatter
In response to the key audit matter described above, we performed a risk assessment across the Group to identify
specific areas of risk, focusing our testing accordingly. Our audit response at the relevant components consisted of several
procedures including:
• performance of walkthroughs to obtain an understanding of the relevant controls relating to the revenue cycle; and
• review of the product despatch cycle and revenue recognition profile across the year-end period;
• testing of a sample of items by assessing whether the performance obligation was met in line with the revenue recognition
date in accordance with the terms of trade with customers.
• considered the appropriateness of the related disclosures.
Key observations
From the work performed above we are satisfied that there are no material cut-off errors.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in
evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group Financial Statements Parent Company Financial Statements
Materiality £17.8m (2021: £15.0m) £6.2m (2021: £5.3m)
Basis for
determining
materiality
We determined materiality on the basis of 5% of
forecasted adjusted profit before tax, this represents
4.8% of final adjusted profit before tax, as defined in note
2. (2021: 4.8% of statutory profit before tax adjusted for
a one-off gain of £2.0m from the closure of the pension
scheme in Germany to future accruals).
Parent Company materiality is set at 3% of net assets,
which is capped at 50% of the Group performance
materiality. This is consistent with prior year.
Rationale for the
benchmarkapplied
We have used adjusted profit before tax for determining
materiality. This is considered to be a key benchmark
as this metric is important to the users of the Financial
Statements (investors and analysts being the key users
for a listed entity) because it portrays the performance
of the business and hence its ability to pay a return on
investment to the investors.
We have considered net assets as the appropriate measure
given the Parent Company is primarily a holding Company
for the Group.
Adjusted PBT
Group materiality
Group materiality
£17.8m
Adjusted PBT
£370.6m
Component
materiality range
£5.0m to £6.2m
Audit Committee
reporting threshold
£0.9m
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022178

6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the Financial Statements as a whole.
Group Financial Statements Parent Company Financial Statements
Performance
materiality
70% (2021: 70%) of Group materiality 70% (2021: 70%) of Parent Company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered our risk assessment, including our assessment of the Group’s
overall control environment and the level of misstatements identified in previous audits. We have also considered
changes in key management personnel of the Group.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £890,000 (2021: £750,000), as
well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on
disclosure matters that we identified when assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing
the risks of material misstatement at the Group level. Based on that assessment, we focused our Group audit scope primarily on the audit work
at 26 (2021: 24) components. 17 (2021: 18) of these were subject to a full audit, whilst the remaining 9 components (2021: 6 components)
were subject to specified audit procedures where the extent of our testing was based on our assessment of the risks of material misstatement
and of the materiality of the Group’s operations at those components. These components represent the principal business units and account
for 75% (2021: 86%) of the Group’s net assets, 73% (2021: 75%) of the Group’s revenue and 80% (2021: 73%) of the adjusted profit before
tax. They were also selected to provide an appropriate basis for undertaking audit work to address the risks of material misstatement identified
above. The Parent Company is located in the UK and is audited directly by the Group audit team. Our work on the components, including the
Parent Company, was executed at levels of materiality applicable to each individual component, which were lower than Group materiality and
ranged from £5.0m to £6.2m (2021: £4.2m to £5.3m).
At the Parent Company level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that
there were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to audit
or audit of specified account balances.
73
27
Full audit scope and specified audit procedures
Revenue
Review at group level
80
20
Full audit scope and specified audit procedures
Profit before tax
Review at group level
75
25
Full audit scope and specified audit procedures
Net assets
Review at group level
7.2. Our consideration of the control environment
The Group operates a range of IT systems which underpin the financial reporting processes. This can vary by geography and/or reporting entity.
For certain components subject to full scope audits, we identified relevant IT systems for the purpose of our audit work. These were typically the
principal Enterprise Resource Planning (ERP) systems for each relevant component that govern the general ledger and transaction accounting
balances and also included the Group’s consolidation system. Our approach was principally designed to inform our risk assessment and, as
such, we obtained an understanding of relevant IT controls and tested the general IT controls for some operating entities using our IT specialists.
In the current year we did not plan to rely on the operating effectiveness of controls. This strategy reflected our historic knowledge of the control
environment, which we reconfirmed in the current year, as well as our understanding of the Group’s business transformation programme.
This programme seeks to enhance the internal control framework and has both IT and business control aspects. Therefore, in addition to the
audit work on IT controls described above, additional audit work on controls was limited to obtaining an understanding of the relevant controls in
key financial reporting process cycles to inform our risk assessment.
Spirax-Sarco Engineering plc Annual Report 2022 179
Financial Statements

7.2. Our consideration of the control environment continued
The Group continues to invest time in responding to and addressing our observations on IT and entity level controls. Management determines
their response to these observations and continues to monitor their resolution with reporting to and oversight from the Audit Committee as
explained in the Audit Committee report on page 136. As management develops and completes the business transformation project, we expect
our audit approach to evolve in future years alongside these developments in the internal control environment.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its financial statements.
The Group has assessed the risk and opportunities relevant to climate change which has been included as an emerging risk across the group.
This risk has also been considered and embedded into the businesses as explained in the Strategic Report on page 95 to 99.
As a part of our audit procedures, we have obtained management’s risk register and held discussions with those charged with governance
to understand the process of identifying climate-related risks, the determination of mitigating actions and the impact on the Group’s financial
statements. While management has acknowledged that the transition and physical risks posed by climate change have the potential to impact
the medium to long term success of the business, they have assessed that there is no material impact arising from climate change on the
judgements and estimates made in the financial statements as at 31 December 2022 as explained in note 1 on page 189.
We performed our own qualitative risk assessment of the potential impact of climate change on the Group’s account balances and classes
of transaction, and did not identify any additional risks of material misstatement. Our procedures included reading disclosures included in the
Strategic Report to consider whether they are materially consistent with the financial statements and our knowledge obtained in the audit.
7.4. Working with other auditors
The Group audit was conducted exclusively by a global network of Deloitte member firms under the direction and supervision of the UK Group
audit team. Dedicated members of the Group audit team were assigned to each component to facilitate an effective and consistent approach
to component oversight. We reviewed the work performed by component teams and discussed the results with them. We maintained regular
communication between the Group and component teams and remote access to relevant documents was provided.
8. Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report
thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and the Parent Company’s ability to continue as a
going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the Group and Parent Company or to cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Independent Auditor’s Report continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022180

11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Group’s remuneration
policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
• Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error that was approved by the board on
6 March 2023;
• results of our enquiries of management, internal audit, the Directors, and the Audit Committee about their own identification and assessment
of the risks of irregularities including those that are specific to the Group’s sector;
• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
• the matters discussed among the audit engagement team including significant component audit teams and relevant internal specialists,
including tax, valuations, pensions, and IT specialists, regarding how and where fraud might occur in the Financial Statements and any
potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified
the greatest potential for fraud in the following areas: revenue recognition in relation to cut-off for certain components. In common with all audits
under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those laws
and regulations that had a direct effect on the determination of material amounts and disclosures in the Financial Statements. The key laws and
regulations we considered in this context included the UK Companies Act, Listing Rules, pensions legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the Financial Statements but compliance
with which may be fundamental to the Group’s ability to operate or to avoid a material penalty.
11.2. Audit response to risks identified
As a result of performing the above, we identified revenue recognition in relation to cut-off for certain components as a key audit matter related
to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific
procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the Financial Statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws
and regulations described as having a direct effect on the Financial Statements;
• enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due
to fraud;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC;
and
• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;
assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal
specialists and significant component audit teams and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Spirax-Sarco Engineering plc Annual Report 2022 181
Financial Statements

Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the Financial Statements are
prepared is consistent with the Financial Statements; and
• the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the strategic report or the Directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the group’s compliance with the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the Financial Statements and our knowledge obtained during the audit:
• the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on pages 43 and 44;
• the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate set out on page 44;
• the Directors’ statement on fair, balanced and understandable set out on page 103;
• the Board’s confirmation that it has carried out a robust assessment of the emerging and Principal Risks set out on page 140;
• the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on
pages 141 and 142; and
• the section describing the work of the Audit Committee set out on page 128.
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have not been
made or the part of the Directors’ remuneration report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
Independent Auditor’s Report continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022182

15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the Directors and subsequently at the Annual General Meeting
on 11 May 2014 to audit the Financial Statements for the year ending 31 December 2014 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and reappointments of the firm is nine years, covering the years ending 31 December
2014 to 31 December 2022.
15.2. Consistency of the audit report with the additional report to the audit committee
Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these financial statements
form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage Mechanism of the UK
FCA in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no assurance over whether the
annual financial report has been prepared using the single electronic format specified in the ESEF RTS. We have provided assurance on whether
the annual financial report has been prepared using the single electronic format specified in the ESEF RTS and have reported separately to the
members on this.
Andrew Bond, FCA
(Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
8 March 2023
Spirax-Sarco Engineering plc Annual Report 2022 183
Financial Statements

Consolidated Statement of Financial Position
at 31st December 2022
Notes
2022
£m
2021
£m
Assets
Non-current assets
Property, plant and equipment 13 384.5 277.4
Right-of-use assets 14 67.2 62.9
Goodwill 15 703.3 411.2
Other intangible assets 15 500.3 255.7
Prepayments 2.0 1.3
Investment in Associate 12 – –
Taxation recoverable 5.1 4.9
Deferred tax assets 16 69.0 46.1
1,731.4 1,059.5
Current assets
Inventories 17 290.0 201.3
Trade receivables 28 341.1 272.3
Other current assets 18 79.6 44.7
Taxation recoverable 13.9 10.8
Cash and cash equivalents 24 328.9 274.6
1,053.5
803.7
Total assets 2,784.9 1,863.2
Equity and liabilities
Current liabilities
Trade and other payables 19 283.0 217.0
Provisions 20 12.0 5.2
Bank overdrafts 24 85.1 55.6
Current portion of long-term borrowings 24 202.9 59.6
Short-term lease liabilities 24 14.1 11.2
Current tax payable 40.4 33.1
637.5
381.7
Net current assets
416.0
422.0
Non-current liabilities
Long-term borrowings 24 731.3 289.9
Long-term lease liabilities 24 51.1 48.9
Deferred tax liabilities 16 128.1 81.8
Post-retirement benefits 23 52.1 44.7
Provisions 20 6.2 1.5
Long-term payables 8.8 4.7
977.6
471.5
Total liabilities
1,615.1
853.2
Net assets 2, 3 1,169.8 1,010.0
Equity
Share capital 21 19.8 19.8
Share premium account 88.1 86.3
Translation reserve 17.5 (40.5)
Other reserves 21 (23.4) (17.7)
Retained earnings 1,067.0 961.1
Equity shareholders’ funds 1,169.0 1,009.0
Non-controlling interest 0.8 1.0
Total equity 1,169.8 1,010.0
Total equity and liabilities 2,784.9 1,863.2
These Financial Statements of Spirax-Sarco Engineering plc, company number 00596337, were approved by the Board of Directors and
authorised for issue on 8th March 2023 and signed on its behalf by:
N J Anderson N B Patel Directors
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022184

Consolidated Income Statement
for the year ended 31st December 2022
Notes
Adjusted
2022
£m
Adjustments
2022
£m
Total
2022
£m
Adjusted
2021
£m
Adjustments
2021
£m
Total
2021
£m
Revenue 3 1,610.6 – 1,610.6 1,344.5 – 1,344.5
Operating costs 4 (1,230.4) (61.4) (1,291.8) (1,004.2) (19.4) (1,023.6)
Operating profit 2, 3 380.2 (61.4) 318.8 340.3 (19.4) 320.9
Financial expenses (15.2) (1.1) (16.3) (9.8) – (9.8)
Financial income 5.6 – 5.6 3.4 – 3.4
Net financing expense 3, 6 (9.6) (1.1) (10.7) (6.4) – (6.4)
Share of loss of Associate 12 – – – – – –
Profit before taxation 7 370.6 (62.5) 308.1 333.9 (19.4) 314.5
Taxation 9 (92.5) 9.4 (83.1) (83.9) 4.3 (79.6)
Profit for the period 278.1 (53.1) 225.0 250.0 (15.1) 234.9
Attributable to:
Equity shareholders 277.8 (53.1) 224.7 249.7 (15.1) 234.6
Non-controlling interest 0.3 – 0.3 0.3 – 0.3
Profit for the period 278.1 (53.1) 225.0 250.0 (15.1) 234.9
Earnings per share 2, 10
Basic earnings per share 377.2p 305.1p 338.9p 318.3p
Diluted earnings per share 376.3p 304.4p 338.0p 317.5p
Dividends 11
Dividends per share 152.0p 136.0p
Dividends paid during the year
(per share) 140.0p 123.0p
Adjusted figures exclude certain items, as set out and explained in the Financial Review and as detailed in Notes 2 and 3. All amounts relate to
continuing operations.
The Notes on pages 189 to 230 form an integral part of the Financial Statements.
Spirax-Sarco Engineering plc Annual Report 2022
185
Financial Statements

Consolidated Statement of Comprehensive Income
for the year ended 31st December 2022
Consolidated Statement of Changes in Equity
for the year ended 31st December 2022
Notes
2022
£m
2021
£m
Profit for the year 225.0 234.9
Items that will not be reclassified to profit or loss:
Remeasurement (loss)/gain on post-retirement benefits 23 (8.3) 46.3
Deferred tax on remeasurement loss/(gain) on post-retirement benefits 23 1.8 (8.9)
(6.5) 37.4
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences and net investment hedges 54.8 (6.8)
Transfer to Income Statement of cumulative translation differences on disposal of subsidiaries 27 3.2 –
Loss on cash flow hedges net of tax 21, 28 (3.5) (2.8)
54.5 (9.6)
Total comprehensive income for the year 273.0 262.7
Attributable to:
Equity shareholders 272.7 262.4
Non-controlling interest 0.3 0.3
Total comprehensive income for the year 273.0 262.7
Notes
Share
capital
£m
Share
premium
account
£m
Translation
reserve*
£m
Other
reserves
£m
Retained
earnings
£m
Equity
shareholders’
funds
£m
Non-
controlling
interest
£m
Total
equity
£m
Balance at 1st January 2022 19.8 86.3 (40.5) (17.7) 961.1 1,009.0 1.0 1,010.0
Profit for the year – – – – 224.7 224.7 0.3 225.0
Other comprehensive
income/(expense):
Foreign exchange translation differences
and net investment hedges 21 – – 54.8 – – 54.8 – 54.8
Transfer to Income Statement of
cumulative translation differences on
disposal of subsidiaries 21, 27 – – 3.2 – – 3.2 – 3.2
Remeasurement loss on
post-retirement benefits 23 – – – – (8.3) (8.3) – (8.3)
Deferred tax on remeasurement loss
on post-retirement benefits 16, 23 – – – – 1.8 1.8 – 1.8
Cash flow hedges 21, 28 – – – (3.5) – (3.5) – (3.5)
Total other comprehensive income/
(expense) for the year – – 58.0 (3.5) (6.5) 48.0 – 48.0
Total comprehensive income/
(expense) for theyear – – 58.0 (3.5) 218.2 272.7 0.3 273.0
Contributions by and distributions
to owners of the Company:
Dividends paid 11 – – – – (103.1) (103.1) (0.5) (103.6)
Equity settled share plans net of tax – – – – (9.2) (9.2) – (9.2)
Issue of share capital 21 – 1.8 – – – 1.8 – 1.8
Employee Benefit Trust shares 21 – – – (2.2) – (2.2) – (2.2)
Balance at 31st December 2022 19.8 88.1 17.5 (23.4) 1,067.0 1,169.0 0.8 1,169.8
* In prior years, the translation reserve was included within other reserves with a breakdown being disclosed separately in the notes to the Financial Statements.
Due to the material value of this reserve, we have presented it as a separate heading in the Statement of Changes in Equity for the year ended 31st December 2022.
The comparatives have also been amended to reflect this reclassification to ensure comparability and consistency.
Other reserves represent the Group’s cash flow hedges, capital redemption and Employee Benefit Trust reserves (see Note 21). The non-
controlling interest is a 2.5% share of Spirax Sarco Korea Ltd.
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022186

Consolidated Statement of Changes in Equity
for the year ended 31st December 2021
Notes
Share
capital
£m
Share
premium
account
£m
Translation
reserve*
£m
Other
reserves
£m
Retained
earnings
£m
Equity
shareholders’
funds
£m
Non-
controlling
interest
£m
Total
equity
£m
Balance at 1st January 2021 19.8 84.8 (33.7) (2.4) 782.8 851.3 1.0 852.3
Profit for the year – – – – 234.6 234.6 0.3 234.9
Other comprehensive
(expense)/income:
Foreign exchange translation
differences and net
investmenthedges 21 – – (6.8) – – (6.8) – (6.8)
Remeasurement gain on
post-retirement benefits 23 – – – – 46.3 46.3 – 46.3
Deferred tax on remeasurement gain
on post-retirement benefits 16, 23 – – – – (8.9) (8.9) – (8.9)
Cash flow hedges 21, 28 – – – (2.8) – (2.8) – (2.8)
Total other comprehensive
(expense)/income for the year – – (6.8) (2.8) 37.4 27.8 – 27.8
Total comprehensive (expense)/
income for theyear – – (6.8) (2.8) 272.0 262.4 0.3 262.7
Contributions by and distributions
to owners of the Company:
Dividends paid 11 – – – – (90.7) (90.7) (0.3) (91.0)
Equity settled share plans net of tax – – – – (3.0) (3.0) – (3.0)
Issue of share capital 21 – 1.5 – – – 1.5 – 1.5
Employee Benefit Trust shares 21 – – – (12.5) – (12.5) – (12.5)
Balance at 31st December 2021 19.8 86.3 (40.5) (17.7) 961.1 1,009.0 1.0 1,010.0
Spirax-Sarco Engineering plc Annual Report 2022 187
Financial Statements

Consolidated Statement of Cash Flows
for the year ended 31st December 2022
Notes
2022
£m
2021
£m
Cash flows from operating activities
Profit before taxation 308.1 314.5
Depreciation, amortisation and impairment 3, 4 81.0 69.0
Profit on disposal of property, plant and equipment 7 (1.4) (0.5)
Cash payments to the pension schemes greater than the charge to operating profit 23 (5.3) (7.6)
Loss on disposal of subsidiaries 27 7.0 –
Acquisition related costs 2 3.8 –
Restructuring related provisions and current asset impairments 10.2 –
Equity settled share plans 23 8.9 9.2
Net financing expense 6 10.7 6.4
Operating cash flow before changes in working capital andprovisions 423.0 391.0
(Increase)/decrease in trade and other receivables (56.3) (71.3)
(Increase)/decrease in inventories (58.3) (26.7)
(Decrease)/increase in provisions (0.8) (1.0)
Increase/(decrease) in trade and other payables 23.5 59.5
Cash generated from operations 331.1 351.5
Income taxes paid (90.0) (78.1)
Net cash from operating activities 241.1 273.4
Cash flows from investing activities
Purchase of property, plant and equipment 13 (104.3) (52.8)
Proceeds from sale of property, plant and equipment 4.0 2.0
Purchase of software and other intangibles 15 (8.9) (8.1)
Development expenditure capitalised 15 (4.3) (3.2)
Disposal of subsidiaries 27 (2.8) –
Acquisition of businesses net of cash acquired 26 (460.3) –
Interest received 6 5.6 3.4
Net cash used in investing activities (571.0) (58.7)
Cash flows from financing activities
Proceeds from issue of share capital 21 1.8 1.5
Employee Benefit Trust share purchase (20.8) (26.1)
Repaid borrowings 24 (511.1) (77.5)
New borrowings 24 1,008.8 –
Interest paid including interest on lease liabilities 6 (15.5) (8.5)
Repayment of lease liabilities 24 (12.9) (11.7)
Dividends paid (including minorities) (103.6) (91.0)
Net cash used in financing activities 346.7 (213.3)
Net change in cash and cash equivalents 16.8 1.4
Net cash and cash equivalents at beginning of period 24 219.0 224.0
Exchange movement 24 8.0 (6.4)
Net cash and cash equivalents at end of period 24 243.8 219.0
Borrowings 24 (934.2) (349.5)
Net debt at end of period 24 (690.4) (130.5)
Lease liabilities 24 (65.2) (60.1)
Net debt including lease liabilities at end of period 24 (755.6) (190.6)
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022188

Notes to the Consolidated Financial Statements
1 Accounting policies
Basis of preparation
The Consolidated Financial Statements have been prepared on a historical cost basis except for items that are required by International Financial
Reporting Standards (IFRS) to be measured at fair value, principally certain financial instruments. The Consolidated Financial Statements have
been prepared in accordance with IFRS which includes the standards and interpretations issued by the International Accounting Standards
Board (IASB) that have been adopted by the United Kingdom (UK).
The preparation of Financial Statements in conformity with IFRS requires the Directors to apply IAS 1 and make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not apparent from other sources. The estimates and associated
assumptions are based on historical experiences and other factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
Critical judgements in applying the Group’s accounting policies
The Directors have concluded that no critical judgements, apart from those involving estimations (which are dealt with separately below) have
been made in the process of applying the Group’s accounting policies.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are outlined below.
(i) Post-retirement benefits
The Group’s defined benefit obligation is assessed by selecting key assumptions. The selection of mortality rates and inflation are key
sources of estimation uncertainty which could lead to material adjustment in the defined benefit obligation within the next financial year.
These assumptions are set with close reference to market conditions.
The Group’s defined benefit obligation is discounted at a rate set by reference to market yields at the end of the reporting period on high
quality corporate bonds. The most significant criteria considered for the selection of bonds include the issue size of the corporate bonds,
quality of the bonds and the identification of outliers which are excluded.
The assumptions selected and associated sensitivity analysis are disclosed in Note 23.
Climate change
Climate change is a global challenge and an emerging risk to businesses, people and the environment across the world. We have a role to
play in limiting warming by improving our energy management, reducing our carbon emissions and by helping our customers do the same.
Growing awareness of climate change and customer sustainability targets will provide impetus for business growth as we provide products,
services and solutions that increase efficiency and reduce customers’ energy use and carbon emissions. As a result, in our view climate change
does not create any further key sources of estimation uncertainty. For further detail see the Risk Management and Sustainability sections of the
Strategic Report.
The Group has considerable financial resources together with a diverse range of products and customers across wide geographic areas and
industries. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.
Further information on the Group’s business activities, performance and position, together with the financial position of the Group, its capital
structure and cash flow are included in the Strategic Report from the inside front cover to page 94. In addition, Note 28 to the Financial
Statements discloses details of the Group’s financial risk management and credit facilities.
The Consolidated Financial Statements are presented in pounds sterling, which is the Company’s functional currency, rounded to the nearest
one hundred thousand.
The Group’s Income Statement includes an adjustment column where certain items are included. Details of the items included and the reasons
why they are included are disclosed in Note 2.
New standards and interpretations applied in the current year
During the current year, the Group has applied the following amendments to IFRS Standards and Interpretations issued by the International
Accounting Standards Board (IASB) effective for annual periods that begin on or after 1st January 2022. Adoption has not had a material impact
on the disclosures or on the amounts reported in these Financial Statements:
• Amendments to IFRS 3 Reference to the Conceptual Framework;
• Amendments to IAS 16 Property, Plant and Equipment— Proceeds before Intended Use;
• Amendments to IAS 37 Onerous Contracts—Cost of Fulfilling a Contract; and
• Annual Improvements to IFRS Accounting Standards 2018-2020 Cycle.
Spirax-Sarco Engineering plc Annual Report 2022 189
Financial Statements

1 Accounting policies continued
The Economies in Argentina and Turkey are subject to high inflation. At 31st December 2022 we have concluded that applying IAS 29 (Financial
Reporting in Hyperinflationary Economies) is not required as the impact of adoption is not material. We will continue to assess the position
going forward.
New standards and interpretations not yet applied
At the date of authorisation of these Financial Statements, the Group has not applied the following new and revised IFRS Standards that have
been issued but are not yet effective:
• IFRS 17 Insurance Contracts;
• IFRS 10 and IAS 28 (amendments): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture;
• Amendments to IAS 1: Classification of liabilities as Current or Non-current;
• Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies;
• Amendments to IAS 8: Definition of Accounting Estimates; and
• Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
The Directors do not expect that the adoption of the Standards listed above will have a material impact on the Financial Statements of the
Group in future periods.
Basis of accounting
(i) Subsidiaries
The Group Consolidated Financial Statements include the results of the Company and all its subsidiary undertakings. Subsidiaries are
entities controlled by the Group. Control is achieved when the Group has power over an entity, is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to use its power to affect those returns. In assessing control, potential voting
rights that presently are exercisable or convertible are taken into account. The Financial Statements of subsidiaries are included in the
Consolidated Financial Statements from the date that control commences until the date that control ceases.
(ii) Associates
Associates are those entities for which the Group has significant influence, but not control, over the financial and operating policies.
The Financial Statements include the Group’s share of the total recognised income and expense of Associates on an equity accounted
basis, from the date that significant influence commenced until the date that significant influence ceases.
(iii) Transactions eliminated on consolidation
Intra-Group balances, and any unrealised gains and losses or income and expenses arising from intra-Group transactions, are eliminated
in preparing the Group Consolidated Financial Statements. Unrealised gains arising from transactions with Associates are eliminated to the
extent of the Group’s interest in the entity.
Foreign currency
(i) On consolidation
The assets and liabilities of foreign operations are translated into sterling at exchange rates ruling at the date of the Consolidated Statement
of Financial Position (closing rate). The revenues, expenses and cash flows of foreign operations are translated into sterling at average rates
of exchange ruling during the year. Where the Notes to the Group Consolidated Financial Statements include tables reconciling movements
between opening and closing balances, opening and closing assets and liabilities are translated at closing rates and revenue, expenses and
all other movements translated at average rates, with the exchange differences arising being disclosed separately.
Exchange differences arising from the translation of the assets and liabilities of foreign operations are taken to a separate translation reserve
within equity. They are recycled and recognised in the Income Statement upon disposal of the operation. Any differences that have arisen
before 1st January 2004, the date of transition to IFRS, are not presented as a separate component of equity.
(ii) Foreign currency transactions
Transactions in foreign currencies are translated to the respective currencies of the Group entities at the foreign exchange rate at the date
of the transaction. Monetary assets and liabilities at the date of the Statement of Financial Position denominated in a currency other than
the functional currency of the entity are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the Income Statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates fair value was determined.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022190

1 Accounting policies continued
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a highly probable forecasted transaction, the
effective part of any gain or loss on the derivative financial instrument is recognised in other comprehensive income and presented in the cash
flow hedges reserve. The associated gain or loss is removed from equity and recognised in the Income Statement in the period in which the
transaction to which it relates occurs.
Net investment hedge accounting
The Group uses foreign currency denominated borrowings as a hedge against translation exposure on the Group’s net investment in overseas
companies. Where the hedge is fully effective at hedging, the variability in the net assets of such companies caused by changes in exchange
rates and the changes in value of the borrowings are recognised in the Consolidated Statement of Comprehensive Income and accumulated
in the net investment hedge reserve. The ineffective part of any changes in value caused by changes in exchange rates is recognised in the
Consolidated Income Statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at the fair value of consideration received, less directly attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are measured at amortised cost with any difference between cost and redemption
value being recognised in the Consolidated Income Statement over the period of the borrowings on an effective-interest basis.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.
The effective interest method is a method of calculating the amortised cost of the financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the
financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
The Group has not participated in any supplier financing arrangements during the current or prior year.
Property, plant and equipment
Items of property, plant and equipment are stated at cost or deemed cost, less accumulated depreciation.
Depreciation is charged to the Income Statement on a straight-line basis at rates which write down the value of assets to their residual values
over their estimated useful lives. Land is not depreciated.
The annual principal rate are as follows:
Freehold buildings 1.5-4.0%
Leasehold buildings Over life of lease
Plant and machinery 6.66-10%
Office furniture and fittings 10%
Office equipment 12.5-33.3%
Motor vehicles 20%
Tooling and patterns 10%
The depreciation rates are reassessed annually.
The Group has reviewed the principal depreciation rates and has determined a change for plant and machinery from 10-12.5% to 6.66-
10%. This is to reflect the extended usage of the large operating equipment around the Group. This impact on current and future periods is
not material.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method of accounting. Identified assets acquired and
liabilities assumed are measured at their respective acquisition date fair values. The excess of the fair value of the consideration given over the
fair value of the identifiable net assets acquired is recorded as goodwill. Acquisition-related costs are expensed as incurred. The operating results
of the acquired business are reflected in the Group’s Consolidated Financial Statements after the date of acquisition.
The cost of the acquisition is measured as the cash paid and also includes the fair value of any asset or liability resulting from a contingent
consideration arrangement at the acquisition date.
Spirax-Sarco Engineering plc Annual Report 2022 191
Financial Statements

1 Accounting policies continued
Intangible assets
(i) Goodwill
Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. Goodwill is
stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested
annually for impairment (see Note 15 for more detail). Annual impairment tests are performed on goodwill by comparing the carrying value
with the recoverable amount, being the higher of the fair value less cost to sell and value in use, discounted at an appropriate discount rate,
of future cash flows in respect of goodwill for the relevant cash-generating unit.
(ii) Research and development
Expenditure on R&D is charged to the Income Statement in the period in which it is incurred except that development expenditure is
capitalised where the development costs relate to new or substantially improved products that are subsequently to be released for sale
and will generate future economic benefits. The expenditure capitalised includes staff costs and related expenses. Capitalised development
expenditure is stated at cost less accumulated amortisation (see below) and any impairment losses.
(iii) Other intangible assets
Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation (see below) and any
impairment losses.
Where computer software is cloud based and the Group does not have control of the software, the configuration and customisation costs
are expensed over either:
• The period the services are received, where costs are distinct from the underlying software
• The period of the SaaS arrangement, where costs are not distinct from the underlying software
(iv) Amortisation
Amortisation is charged to the Income Statement on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill, from the date they are available for use. The annual principal amortisation rates are as follows:
Capitalised development costs 20%
ERP systems and software 12-33%
Brand names and trademarks 5-33%
Manufacturing designs and core technology 6-50%
Non-compete undertakings 20-50%
Customer relationships 6-33%
Inventories
Inventories are measured at the lower of cost and net realisable value. Inventory cost is calculated on both a first in, first out and weighted
average methodologies depending on which is deemed most appropriate. The cost of inventories includes expenditure incurred in acquiring the
inventories, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured
inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.
Trade receivables and other receivables
Trade receivables are carried at original invoice amount (which is considered a reasonable proxy for fair value) and are subsequently held at
amortised cost less a loss allowance. Other receivables are initially measured at fair value. The loss allowance of trade receivables is based on
lifetime expected credit losses. Lifetime expected credit losses are calculated by assessing historic credit loss experience, adjusted for factors
specific to the receivable and operating company. The movement in the provision is recognised in the Consolidated Income Statement.
Trade and other payables
Trade and other payables are recognised at fair value and subsequently held at amortised cost.
Provisions and contingent liabilities
A provision is recognised in the Consolidated Statement of Financial Position when the Group has a present legal or constructive obligation
as a result of a past event and it is probable that an outflow of resources, that to which can be reliably measured, will be required to settle the
obligation. If the obligation is expected to be settled within 12 months of the reporting date, the provision is included within current liabilities and
if expected to be settled after 12 months, it is included in non-current liabilities.
In respect of product warranties, a provision is recognised when the underlying products or services are sold. Obligations arising from
restructuring plans are recognised when detailed formal plans have been established and there is a valid expectation that such a plan will be
carried out. Provisions are recognised at an amount equal to the best estimate of the expenditure required to settle the Group’s liability. If the
likelihood of having to settle the obligation is less than probable but more than remote, or the amount of the obligation cannot be measured
reliably then a contingent liability is disclosed.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022192

1 Accounting policies continued
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less, and are held at
amortised cost. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the Statement of Cash Flows.
Going concern
The Group’s principal objective when managing liquidity is to safeguard the Group’s ability to continue as a going concern for at least 12 months
from the date of signing the 2022 Annual Report. The Group retains sufficient resources to remain in compliance with all the required terms and
conditions within its borrowing facilities with material headroom and no material uncertainties have been identified. Having assessed the relevant
business risks as discussed in our Principal Risks on pages 95 and 99 and considered the liquidity and covenant headroom available under
several alternative scenarios as set out in the viability assessment on page 44, the Directors consider it appropriate to continue to adopt the
going concern basis in preparing the financial statements. The full statement on the going concern assumption is set out on pages 43 and 44 .
Alternative performance measures
The Group reports under International Financial Reporting Standards (IFRS) and also uses alternative performance measures where the Board
believe that they help to effectively monitor the performance of the Group and users of the Financial Statements might find them informative.
Certain alternative performance measures also form a meaningful element of Executive Directors’ variable remuneration. A definition of the
alternative performance measures included in the Annual Report and a reconciliation to the closest IFRS equivalent are disclosed in Note 2.
Adjusted performance measures are not considered to be a substitute for, or superior to, IFRS measures.
Employee benefits
(i) Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the Income Statement as incurred.
(ii) Defined benefit plans
The costs of providing pensions under defined benefit schemes are calculated in accordance with the advice of qualified actuaries and
spread over the period during which benefit is expected to be derived from the employees’ services. The Group’s net obligation or surplus
in respect of defined benefit pensions is calculated separately for each plan by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods. Past service costs are recognised straight away.
That benefit is discounted at rates reflecting the yields on AA credit rated corporate bonds that have maturity dates approximating the terms
of the Group’s obligations to determine its present value. Pension scheme assets are measured at fair value at the Statement of Financial
Position date. Actuarial gains and losses, differences between the expected and actual returns, and the effect of changes in actuarial
assumptions are recognised in the Statement of Comprehensive Income in the year they arise. Any scheme surplus (to the extent it is
considered recoverable under the provisions of IFRIC 14) or deficit is recognised in full in the Statement of Financial Position.
The cost of other post-employment liabilities are calculated in a similar way to defined benefit pension schemes and spread over the period,
which benefit is expected to be derived from the employees’ services, in accordance with the advice of qualified actuaries.
(iii) Employee share plans
Incentives in the form of shares are provided to employees under share option and share award schemes. The fair value of these options
and awards at their date of grant is charged to the Income Statement over the relevant vesting periods with a corresponding increase in
equity. The value of the charge is adjusted to reflect expected and actual levels of options and share awards vesting.
(iv) Long-term share incentive plans
The fair value of awards is measured at the date of grant and the cost spread over the vesting period. The amount recognised as an
expense is not adjusted to reflect market-based performance conditions, but is adjusted for non-market-based performance conditions.
Revenue
The Group applies the following five-step framework when recognising revenue.
Step 1: Identify the contracts with customers.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
The criteria the Group uses to identify the performance obligations within a contract are:
• the customer must be able to benefit from the goods or services either on its own or in combination with other resources available to the
customer; and
• the entity’s promise to transfer the good or service to the customer is separable from other promises in the contract.
Spirax-Sarco Engineering plc Annual Report 2022 193
Financial Statements

1 Accounting policies continued
The transaction price is the value that the Group expects to be entitled to from the customer and includes discounts, rebates, credits, price
concessions, incentives, performance bonuses, penalties and liquidated damages, but is not reduced for bad debts. It is net of any value-added
tax (VAT) and other sales-related taxes. Variable consideration that is dependent on certain events is included in the transaction price when it is
highly probable that the variable consideration will occur.
Revenue is recognised over time as the product is being manufactured or a service being provided if any of the following criteria are met:
• the Group is creating a bespoke item which doesn’t have an alternative use to the Group (i.e. we would incur a significant loss to re-work and/
or sell to another customer) and the entity has a right to payment for work completed to date including a reasonable profit;
• the customer controls the asset that is being created or enhanced during the manufacturing process i.e. the customer has the right to
significantly modify and dictate how the product is built during construction;
• services provided where the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the
Group performs.
Judgement is made when determining if a product is bespoke and the value of revenue to recognise over time as products are being
manufactured. However due to the low value of orders for bespoke items in progress at the 31st December 2022 where we have a right to
payment of costs plus a reasonable profit, this is not considered a critical judgement.
The value of revenue to be recognised over time for goods being manufactured is calculated using a cost-based input approach. This is
considered a faithful depiction of the transfer of the goods as the costs incurred, total costs expected to be incurred and order value are known.
The value of revenue to be recognised over time for services being provided is calculated based on the stage of completion. This is assessed by
reference to the contractual performance obligations with each separate customer and the costs incurred on the contract to date in comparison
to the total forecast costs of the contract.
If the criteria to recognise revenue over time are not met then revenue is recognised at a point in time when the customer obtains control of the
asset and the performance obligation is satisfied. The customer obtains control of the asset when the customer can direct the use of the asset
and obtain the benefits from the asset.
Factors the Group considers when determining the point in time when control of the asset has passed to the customer and revenue
recognised include:
• the Group has a right to payment;
• legal title is transferred to the customer;
• physical possession of the asset has been transferred to the customer;
• the customer has the significant risks and rewards of ownership; and
• the customer has accepted the asset.
Control normally passes and revenue recognised when the goods are either despatched or delivered to the customer (in accordance with the
terms and conditions of the sale) or the installation and testing is completed.
A large proportion of the Group’s revenue qualifies for recognition on despatch or delivery of the goods to the customer as this is when
the performance obligation is satisfied. This is normally the trigger point for raising an invoice per the terms and conditions of the order.
Therefore invoicing for a large proportion of the Group’s revenue occurs at the same time as when the performance obligation is satisfied.
Contract assets at 31st December 2022 were £11.7m (0.7% of total revenue) (2021: £3.2m (0.2% of total revenue)).
All revenue recognised by the Group is generated through contracts with customers.
When the unavoidable costs of fulfilling the contract exceed the revenue to be recognised the contract is loss making and the expected loss is
recognised in the Consolidated Income Statement immediately.
Warranties that give assurance that a product meets agreed-upon specifications are accounted for as a cost provision and do not impact the
timing and value of revenue. The Group does not have any material warranties that promise more than just providing assurance that a product
meets agreed-upon specifications.
Costs of obtaining a contract, that are only incurred because the contract was obtained, are capitalised and expensed at a later date. At 31st
December 2022 no costs of obtaining a contract were capitalised. All other assets recognised to fulfil a contract are within the scope of other
accounting standards and policies.
Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognises a right-of-use asset and
a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases
with a lease term of 12 months or less) and leases of low value assets (assets with a value of less than £5,000). For these leases, the Group
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is
more representative of the time pattern in which economic benefits from the leased assets are consumed.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022194

1 Accounting policies continued
For new leases entered into, the lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the incremental borrowing rate for the related geographical location unless the rate implicit in the
lease is readily determinable. The incremental borrowing rate is calculated at the rate of interest at which the company would have been able to
borrow for a similar term and with a similar security the funds necessary to obtain a similar asset in a similar market.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in substance fixed payments), less any lease incentives receivable;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• the amount expected to be payable by the company under residual value guarantees;
• the exercise price of purchase options, if the company is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability and by reducing the carrying
amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• the lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise
of a purchase option; and
• the lease payments change due to changes in an index or rate or a change in expected payment under a residual guarantee value.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before
the commencement date and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership
of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-
use asset is depreciated over the useful life of the underlying asset.
Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use
asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs.
Judgement is required when determining whether to include or exclude optional extension periods within the lease term, and estimation
is required when calculating the incremental borrowing rate used to discount the future lease cash flows. These are not considered critical
judgements or a key source of estimation uncertainty.
Taxation
The tax charge comprises current and deferred tax. Income tax expense is recognised in the Income Statement unless it relates to items
recognised directly in equity or in other comprehensive income, when it is also recognised in equity or other comprehensive income respectively.
Current tax is the expected tax payable on the profit for the year and any adjustments in respect of previous years using tax rates enacted
or substantively enacted at the reporting date. Tax positions are reviewed to assess whether a provision should be made on prevailing
circumstances. Tax provisions are included within current taxation payable. Deferred tax is provided on temporary differences arising between
the tax base of assets and liabilities, and their carrying amounts in the Financial Statements. Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax is provided using rates of tax
that have been enacted or substantively enacted at the date of the Statement of Financial Position or the date that the temporary differences are
expected to reverse. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
Share capital and repurchased shares
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised
as a deduction from equity. Repurchased shares are classified as treasury shares or placed in an Employee Benefit Trust and are presented as a
deduction from total equity.
Spirax-Sarco Engineering plc Annual Report 2022 195
Financial Statements

2 Alternative performance measures
The Group reports under International Financial Reporting Standards (IFRS) and also uses alternative performance measures where the Board
believes that they help to effectively monitor the performance of the Group and users of the Financial Statements might find them informative.
Certain alternative performance measures also form a meaningful element of Executive Directors’ variable remuneration. Please see the Annual
Report on Remuneration 2022 on pages 143 to 168 for further detail. A definition of the alternative performance measures and a reconciliation
to the closest IFRS equivalent are disclosed below. The term ‘adjusted’ is not defined under IFRS and may therefore not be comparable with
similarly titled measures reported by other companies. Adjusted performance measures are not considered to be a substitute for, or superior to,
IFRS measures.
Adjusted operating profit
Adjusted operating profit excludes items that are considered to be significant in nature and/or quantum at either a Group or an operating
segment level and where treatment as an adjusted item provides all our stakeholders with additional useful information to assess the period-on-
period trading performance of the Group. The Group excludes such items including those defined as follows:
• amortisation and impairment of acquisition-related intangible assets;
• costs associated with acquisitions and disposals;
• reversal of acquisition-related fair value adjustments to inventory;
• changes in deferred and contingent consideration payable on acquisitions;
• gain or loss on disposal of subsidiary and disposal groups;
• costs associated with a significant restructuring programme;
• significant gains or losses on disposal of property;
• significant non-recurring pension costs or credits;
• accelerated depreciation, impairment and other related costs on one-off significant property redevelopments; and
• related tax effect on adjusting items above and other tax items which do not form part of the underlying tax rate.
A reconciliation between operating profit as reported under IFRS and adjusted operating profit is given below.
2022
£m
2021
£m
Operating profit as reported under IFRS 318.8 320.9
Amortisation of acquisition-related intangible assets 23.7 21.4
Reversal of acquisition-related fair value adjustments to inventory 1.8 −
Disposal of subsidiaries in Russia 7.1 −
Restructuring costs 15.5 −
Acquisition-related items 9.1 −
Accelerated depreciation and other related costs on one-off property redevelopments 4.2 −
Post-retirement benefit plan in Germany being closed to future accrual − (2.0)
Adjusted operating profit 380.2 340.3
The related tax effects of the above are included as adjustments in taxation as disclosed in Note 9.
Adjusted earnings per share
2022 2021
Profit for the period attributable to equity holders as reported under IFRS (£m) 224.7 234.6
Items excluded from adjusted profit (£m) 62.5 19.4
Tax effects on adjusted items (£m) (9.4) (4.3)
Adjusted profit for the period attributable to equity holders (£m) 277.8 249.7
Weighted average shares (million) 73.6 73.7
Basic adjusted earnings per share 377.2p 338.9p
Diluted weighted average shares (million) 73.8 73.9
Diluted adjusted earnings per share 376.3p 338.0p
Basic adjusted earnings per share is defined as adjusted profit for the period attributable to equity holders divided by the weighted average
number of shares. Diluted adjusted earnings per share is defined as adjusted profit for the period attributable to equity holders divided by the
diluted weighted average number of shares.
Basic and diluted EPS calculated on an IFRS profit basis are included in Note 10.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022196

2 Alternative performance measures continued
Adjusted cash flow
A reconciliation showing the items that bridge between net cash from operating activities as reported under IFRS to an adjusted basis is given
below. Adjusted cash from operations is used by the Board to monitor the performance of the Group, with a focus on elements of cash flow,
such as net capital expenditure, which are subject to day-to-day control by the business.
2022
£m
2021
£m
Net cash from operating activities as reported under IFRS 241.1 273.4
Restructuring and acquisition-related costs 10.2 −
Net capital expenditure excluding acquired intangibles from acquisitions (113.5) (62.1)
Income tax paid 90.0 78.1
Repayments of principal under lease liabilities (12.9) (11.7)
Adjusted cash from operations 214.9 277.7
Adjusted cash conversion in 2022 is 57% (2021: 82%). Cash conversion is calculated as adjusted cash from operations divided by adjusted
operating profit. The adjusted cash flow is included in the Financial Review on page 42. The impact of adjustments to operating profit
as reported under IFRS of £61.4m (2021: £19.4m) on net change in cash and cash equivalents is a total outflow of £13.5m (2021: £nil).
Included within cash generated from operations is acquisition-related items of £7.1m, related costs on one-off property redevelopments of
£0.3m and disposal related costs £0.1m. Included within net cash used in investing activities is restructuring costs of £3.2m and disposal of
subsidiaries in Russia of £2.8m.
Cash generation
Cash generation is one of the Group’s key performance indicators used by the Board to monitor the performance of the Group and measure
the successful implementation of our strategy. It is one of two financial measures on which Executive Directors’ variable remuneration is based.
Cash generation is calculated as adjusted operating profit after adding back depreciation and amortisation, less cash payments to pension
schemes in excess of the charge to operating profit, equity settled share plans, net capital expenditure excluding acquired intangibles,
working capital changes and repayment of principal under lease liabilities. Cash generation is equivalent to adjusted cash from operations,
a reconciliation between this and net cash from operating activities as reported under IFRS is shown on page 197.
Return on invested capital (ROIC) and return on capital employed (ROCE)
The Group distinguishes between invested capital and capital employed when calculating return on capital. Invested capital represents the
total capital invested in the business and is equal to total equity plus net debt and therefore includes the impact of acquisitions and disposals.
Capital employed is invested capital less certain non-current assets and non-current liabilities and therefore reflects capital that is more
operational in nature. Both of these return metrics are used to ensure a full assessment of business performance.
Return on invested capital (ROIC)
ROIC measures the post-tax return on the total capital invested in the business. It is calculated as adjusted operating profit after tax divided by
average invested capital. Average invested capital is defined as the average of the closing balance at the current and prior year end. Taxation is
calculated as adjusted operating profit multiplied by the adjusted effective tax rate.
An analysis of the components is as follows:
2022
£m
2021
£m
Total equity 1,169.8 1,010.0
Net debt including lease liabilities 755.6 190.6
Total invested capital 1,925.4 1,200.6
Average invested capital 1,563.0 1,157.9
Average invested capital (excluding acquisitions, disposals and leases) 1,263.8 1,108.4
Operating profit as reported under IFRS 318.8 320.9
Adjustments (see adjusted operating profit) 61.4 19.4
Adjusted operating profit 380.2 340.3
Taxation (94.9) (85.5)
Adjusted operating profit after tax 285.3 254.8
Adjusted operating profit after tax (excluding acquisitions, disposals and leases) 277.6 254.1
Return on invested capital 18.3% 22.0%
Return on invested capital (excluding acquisitions, disposals and leases) 22.0% 22.9%
Spirax-Sarco Engineering plc Annual Report 2022 197
Financial Statements

2 Alternative performance measures continued
Return on capital employed (ROCE)
ROCE measures effective management of fixed assets and working capital relative to the profitability of the business. It is calculated as adjusted
operating profit divided by average capital employed. Average capital employed is defined as the average of the closing balance at the current
and prior year end. More information on ROCE can be found in the Capital Employed and ROCE sections of the Financial Review on pages 41
and 42.
An analysis of the components is as follows:
2022
£m
2021
£m
Property, plant and equipment 384.5 277.4
Right-of-use assets 67.2 62.9
Software and development costs 44.5 38.9
Prepayments 2.0 1.3
Inventories 290.0 201.3
Trade receivables 341.1 272.3
Other current assets 79.6 44.7
Tax recoverable 19.0 15.7
Trade, other payables and current provisions (295.0) (222.2)
Current tax payable (40.4) (33.1)
Capital employed 892.5 659.2
Average capital employed 775.9 621.5
Average capital employed (excluding acquisitions, disposals and leases) 677.5 571.9
Operating profit 318.8 320.9
Adjustments (see adjusted operating profit on page 196) 61.4 19.4
Adjusted operating profit 380.2 340.3
Adjusted operating profit (excluding acquisitions, disposals and leases) 369.9 339.2
Return on capital employed 49.0% 54.7%
Return on capital employed (excluding acquisitions, disposals and leases) 54.6% 59.3%
A reconciliation of capital employed to net assets as reported under IFRS and disclosed on the Consolidated Statement of Financial Position is
given below.
2022
£m
2021
£m
Capital employed 892.5 659.2
Goodwill and acquired intangibles 1,159.1 628.0
Investment in Associate − −
Post-retirement benefits (52.1) (44.7)
Net deferred tax (59.1) (35.7)
Non-current provisions and long-term payables (15.0) (6.2)
Lease liabilities (65.2) (60.1)
Net debt (690.4) (130.5)
Net assets as reported under IFRS 1,169.8 1,010.0
Net debt including lease liabilities
A reconciliation between net debt and net debt including lease liabilities is given below. A breakdown of the balances that are included within
net debt is given within Note 24. Net debt excludes lease liabilities to be consistent with how net debt is defined for external debt covenant
purposes, as well as to enable comparability with prior years.
2022
£m
2021
£m
Net debt 690.4 130.5
Lease liabilities 65.2 60.1
Net debt and lease liabilities 755.6 190.6
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022198

2 Alternative performance measures continued
Net debt to earnings before interest, tax, depreciation and amortisation (EBITDA)
To assess the size of the net debt balance relative to the size of the earnings for the Group, we analyse net debt as a proportion of EBITDA.
EBITDA is calculated by adding back depreciation and amortisation of owned property, plant and equipment, software and development and
the 12 month pro-forma EBITDA impact of acquisitions and disposals to adjusted operating profit. Net debt is calculated as cash and cash
equivalents less bank overdrafts and external borrowings (excluding lease liabilities). The net debt to EBITDA ratio is calculated as follows:
2022
£m
2021
£m
Adjusted operating profit 380.2 340.3
Depreciation and amortisation of property, plant and equipment, software and development 37.4 36.2
Acquisitions and disposals pro-forma basis (EBITDA) 33.7 −
Earnings before interest, tax, depreciation and amortisation 451.3 376.5
Net debt 690.4 130.5
Net debt to EBITDA 1.5 0.3
The components of net debt are disclosed in Note 24.
Organic measures
As we are a multi-national Group of companies, who trade in a large number of currencies and also acquire and sometimes dispose of
companies, we also refer to organic performance measures throughout the Annual Report. These strip out the effects of the movement in
exchange rates and of acquisitions and disposals. The Board believe that this allows users of the accounts to gain a further understanding
of how the Group has performed. Exchange translation movements are assessed by re-translating prior period reported values to current
period exchange rates. Exchange transaction impacts on operating profit are assessed on the basis of transactions being at constant currency
between years.
The incremental impact of any acquisitions that occurred in either the current period or prior period is excluded from the organic results of the
current period at current period exchange rates. For any disposals that occurred in the current or prior period, the current period organic results
include the difference between the current and prior period financial results only for the like-for-like period of ownership.
The organic percentage movement is calculated as the organic movement divided by the prior period at current period exchange rates,
excluding disposals for the non like-for-like period of ownership. The organic bps change in adjusted operating margin is the difference between
the current period margin, excluding the incremental impact of acquisitions, and the prior period margin excluding disposals for the non like-for-
like period of ownership at current period exchange rates.
A reconciliation of the movement in revenue and adjusted operating profit compared to the prior period is given below.
2021 Exchange Organic
Acquisitions
and disposals
1
2022 Organic Reported
Revenue £1,344.5m £52.5m £191.6m £22.0m £1,610.6m +14% +20%
Adjusted operating profit £340.3m £13.0m £23.5m £3.4m £380.2m +7% +12%
Adjusted operating margin 25.3% 23.6% -160 bps -170 bps
1 Includes the impact of (i) the acquisition of Cotopaxi Limited, Durex Industries and Vulcanic and (ii) the treatment of our disposed Russian operating companies as
disposed from the date at which the Group suspended all trading with and within Russia.
Pro-forma Revenue
Due to the disposal of our Russian operating companies and the acquisitions of Cotopaxi Limited, Vulcanic and Durex Industries, our reported
financial results for 2022 only include the impact of these operations for the period of ownership by the Group. The table below reconciles
between statutory revenue as reported within the Consolidated Income Statement, and the 2022 pro-forma revenue had all acquisition and
disposal transactions occurred on 1st January 2022. This allows users of the accounts to see the split of revenue by operating segment on a
basis that will be like-for-like against 2023.
Revenue (statutory)
£m
Pro-forma adjustments*
£m
Revenue (pro-forma)
£m Proportion of Group
Steam Specialties 866.0 (1.2) 864.8 50%
Electric Thermal Solutions 256.1 126.8 382.9 22%
Watson-Marlow 488.5 (1.9) 486.6 28%
Total 1,610.6 123.7 1,734.3
* includes the 2022 pre-acquisition financial results of Cotopaxi Limited, Vulcanic and Durex Industries, and the removal of the 2022 statutory results of our Russian operating
companies disposed
The term ‘sales’ is used interchangeably with ‘revenue’ when describing the financial performance of the business. Drop through is calculated
as the organic increase in adjusted operating profit divided by the organic increase in revenue. The reconciliation for each segment is included in
the Strategic Report.
Spirax-Sarco Engineering plc Annual Report 2022 199
Financial Statements

3 Segmental reporting
As required by IFRS 8 Operating Segments, the following segmental information is presented in a consistent format with management
information considered by the Board.
No changes to the structure of operating segments have been made during the current period.
Analysis by operating segment
2022
Revenue
£m
Total
operating
profit
£m
Adjusted
operating
profit
£m
Adjusted
operating
margin
%
Steam Specialties 866.0 196.2 206.1 23.8%
Electric Thermal Solutions 256.1 7.3 39.9 15.6%
Watson-Marlow 488.5 154.4 160.0 32.8%
Corporate expenses (39.1) (25.8)
Total 1,610.6 318.8 380.2 23.6%
Net financing expense (10.7) (9.6)
Share of (loss)/profit of Associate − −
Profit before tax 308.1 370.6
2021
Revenue
£m
Total
operating
profit
£m
Adjusted
operating
profit
£m
Adjusted
operating
margin
%
Steam Specialties 754.9 186.8 188.7 25.0%
Electric Thermal Solutions 181.3 11.1 24.0 13.2%
Watson-Marlow 408.3 145.4 150.0 36.7%
Corporate expenses (22.4) (22.4)
Total 1,344.5 320.9 340.3 25.3%
Net financing expense (6.4) (6.4)
Share of (loss)/profit of Associate − −
Profit before tax 314.5 333.9
The following table details the split of revenue by geography for the combined Group:
2022
£m
2021
£m
Europe, Middle East and Africa 649.6 563.3
Asia Pacific 384.3 334.2
Americas 576.7 447.0
Total revenue 1,610.6 1,344.5
Revenue generated by Group companies based in the USA is £433.0m (2021: £342.4m), in China is £213.2m (2021: £181.6m), in Germany is
£134.3m (2021: £118.2m), in the UK is £115.7m (2021: £99.6m) and the rest of the world is £714.4m (2021: £602.7m).
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022200

3 Segmental reporting continued
The total operating profit for the period includes certain items, as analysed below:
2022
Amortisation
of acquisition-
related
intangible assets
£m
Reversal of
acquisition-related fair
value adjustments
to inventory
£m
Disposal of
subsidiaries
in Russia
£m
Restructuring
costs
£m
Acquisition-
related items
£m
Accelerated
depreciation and
other related costs on
one-off property
redevelopments
£m
Total
£m
Steam Specialties (4.6) − (5.3) − − − (9.9)
Electric Thermal Solutions (15.3) (1.8) − (15.5) − − (32.6)
Watson-Marlow (3.8) − (1.8) − − − (5.6)
Corporate expenses − − − − (9.1) (4.2) (13.3)
Total (23.7) (1.8) (7.1) (15.5) (9.1) (4.2) (61.4)
2021
Amortisation of acquisition-
related intangible assets
£m
German pension
plan closed to future
accrual
£m
Total
£m
Steam Specialties (3.9) 2.0 (1.9)
Electric Thermal Solutions (12.9) − (12.9)
Watson-Marlow (4.6) − (4.6)
Corporate expenses − − −
Total (21.4) 2.0 (19.4)
Net financing income and expense
2022
Income
£m
2022
Expense
£m
2022
Net
£m
2021
Income
£m
2021
Expense
£m
2021
Net
£m
Steam Specialties 3.6 (1.8) 1.8 3.0 (2.3) 0.7
Electric Thermal Solutions 0.3 (0.5) (0.2) − (0.2) (0.2)
Watson-Marlow 0.3 (0.6) (0.3) 0.1 (0.5) (0.4)
Corporate expenses 1.4 (13.4) (12.0) 0.3 (6.8) (6.5)
Total net financing expense 5.6 (16.3) (10.7) 3.4 (9.8) (6.4)
Net assets
2022
Assets
£m
2022
Liabilities
£m
2021
Assets
£m
2021
Liabilities
£m
Steam Specialties 766.4 (226.8) 658.0 (182.1)
Electric Thermal Solutions 1,174.2 (78.0) 536.9 (33.0)
Watson-Marlow 427.4 (57.3) 331.8 (57.9)
2,368.0 (362.1) 1,526.7 (273.0)
Liabilities (362.1) (273.0)
Net deferred tax (59.1) (35.7)
Net tax payable (21.4) (17.4)
Net debt including lease liabilities (755.6) (190.6)
Net assets 1,169.8 1,010.0
Non-current assets in the USA were £686.8m (2021: £345.6m), in France were £403.1m (2021: £150.5m), in the UK were £284.1m
(2021: £231.2m), in Germany were £165.6m (2021: £154.6m) and in the rest of the world were £191.8m (2021: £177.6m).
Spirax-Sarco Engineering plc Annual Report 2022 201
Financial Statements

3 Segmental reporting continued
Capital additions, depreciation, amortisation and impairment
2022
Capital
additions
£m
2022
Depreciation,
amortisation
and impairment
£m
2021
Capital
additions
£m
2021
Depreciation,
amortisation
and impairment
£m
Steam Specialties 47.1 37.3 35.6 33.9
Electric Thermal Solutions 285.4 24.7 16.6 18.3
Watson-Marlow 76.4 19.0 51.0 16.8
Group total 408.9 81.0 103.2 69.0
Capital additions include property, plant and equipment of £135.0m (2021: £52.8m), of which £30.7m (2021: £nil) was from acquisitions in the
period, and other intangible assets of £258.3m (2021: £11.3m) of which £245.1m (2021: £nil) relates to acquired intangibles from acquisitions
in the period. Right-of-use asset additions of £15.6m (2021: £39.1m) occurred during the 12-month period to 31st December 2022, of which
£4.1m (2021: £nil) relates to acquired leases from acquisitions in the period. Capital additions split between the USA, UK and rest of world are
USA £186.4m (2021: £4.7m), UK £51.8m (2021: £54.2m) and rest of world £170.7m (2021: £44.4m).
4 Operating costs
2022
Adjusted
£m
2022
Adjustments
£m
2022
Total
£m
2021
Adjusted
£m
2021
Adjustments
£m
2021
Total
£m
Cost of inventories recognised as an expense 381.2 3.9 385.1 304.7 − 304.7
Staff costs (Note 5) 570.3 − 570.3 478.5 − 478.5
Depreciation, amortisation and impairment 50.9 30.1 81.0 47.6 21.4 69.0
Other operating charges 228.0 27.4 255.4 173.4 (2.0) 171.4
Total operating costs 1,230.4 61.4 1,291.8 1,004.2 19.4 1,023.6
Total cost of inventories recognised as an expense includes the reversal of acquisition-related fair value adjustments to inventory £1.8m
(2021: £nil) and the write down of inventory resulting from the closure of the Chromalox’s manufacturing operations in Soissons (France) of
£2.1m (2021: £nil).
Total staff costs includes a credit of £2.0m (2021: £2.7m) relating to amounts capitalised during the year. Excluding this credit, total staff costs
were £572.3m (2021:£481.2m).
Total depreciation, amortisation and impairment includes amortisation of acquisition-related intangible assets of £23.7m (2021: £21.4m),
accelerated depreciation on one-off property redevelopments of £3.9m (2021: £nil) and impairment resulting from the closure of the Chromalox’s
manufacturing operations in Soissons (France) £2.5m (2021: £nil).
Total other operating charges includes restructuring costs (including the closure of Chromalox’s manufacturing operations in Soissons (France))
of £10.9m (2021: £nil), acquisition-related items of £9.1m (2021: £nil) relating to the acquisition of Cotopaxi Limited, Vulcanic and Durex
Industries, disposal of subsidiaries in Russia of £7.1m (2021: £nil) and related costs on one-off property redevelopments of £0.3m (2021: £nil).
Operating costs include exchange difference gains of £5.1m (2021: losses of £1.3m).
5 Staff costs and numbers
The aggregate payroll costs of persons employed by the Group were as follows:
2022
£m
2021
£m
Wages and salaries 463.2 390.3
Social security costs 79.9 70.3
Pension costs 29.2 20.6
Total payroll costs 572.3 481.2
The average number of persons employed by the Group (including Directors) during the year was as follows:
2022 2021
United Kingdom 2,699 2,225
Rest of World 6,670 5,977
Group average 9,369 8,202
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022202

6 Net financing income and expense
2022
£m
2021
£m
Financial expenses:
Bank and other borrowing interest payable (14.0) (7.4)
Interest expense on lease liabilities (1.5) (1.1)
Net interest on pension scheme liabilities (0.8) (1.3)
(16.3) (9.8)
Financial income:
Bank interest receivable 5.6 3.4
Net financing expense (10.7) (6.4)
Net bank interest (8.4) (4.0)
Interest expense on lease liabilities (1.5) (1.1)
Net pension scheme financial expense (0.8) (1.3)
Net financing expense (10.7) (6.4)
7 Profit before taxation
Profit before taxation is shown after charging:
2022
£m
2021
£m
Depreciation of property, plant and equipment (33.2) (28.3)
Depreciation of right-of-use assets (13.5) (11.4)
Amortisation of acquired intangibles (23.7) (21.4)
Leases exempt from IFRS 16 (short-term, low value or variable lease payments) (2.5) (2.6)
Exchange difference gains/(losses) 5.1 (1.3)
Profit on disposal of property, plant and equipment 1.4 0.5
Research and development (15.8) (13.0)
Auditor’s remuneration
2022
£m
2021
£m
Audit of these Financial Statements 0.4 0.3
Amounts receivable by the Company’s auditor and its Associates in respect of:
Audit of Financial Statements of subsidiaries of the Company 1.9 1.7
Total audit fees 2.3 2.0
Audit-related assurance services 0.1 0.2
Total non-audit fees 0.1 0.2
Total auditor’s remuneration 2.4 2.2
8 Directors’ emoluments
Directors represent the key management personnel of the Group under the terms of IAS 24 Related Party Disclosures. Total remuneration is
shown below.
Further details of salaries and short-term benefits, post-retirement benefits, share plans and long-term share incentive plans are shown in
the Annual Report on Remuneration 2022 on pages 143 to 168. The share-based payments charge comprises a charge in relation to the
Performance Share Plan and the Employee Share Ownership Plan (as described in Note 23).
2022
£m
2021
£m
Salaries and short-term benefits 2.9 3.3
Post-retirement benefits 0.2 0.2
Share-based payments 2.0 2.4
Total Directors’ remuneration 5.1 5.9
Spirax-Sarco Engineering plc Annual Report 2022 203
Financial Statements

9 Taxation
2022
Adjusted
£m
2022
Adjustments
£m
2022
Total
£m
2021
Adjusted
£m
2021
Adjustments
£m
2021
Total
£m
Analysis of charge in period
UK corporation tax:
Current tax on income for the period 7.3 (0.2) 7.1 8.7 − 8.7
Adjustments in respect of prior periods (0.7) − (0.7) (1.7) − (1.7)
6.6 (0.2) 6.4 7.0 − 7.0
Foreign tax:
Current tax on income for the period 89.4 (0.8) 88.6 74.5 − 74.5
Adjustments in respect of prior periods (1.3) − (1.3) (1.5) − (1.5)
88.1 (0.8) 87.3 73.0 − 73.0
Total current tax charge 94.7 (1.0) 93.7 80.0 − 80.0
Deferred tax – UK (0.4) (0.7) (1.1) 4.0 (0.3) 3.7
Deferred tax – rest of the world (1.8) (7.7) (9.5) (0.1) (4.0) (4.1)
Tax on profit on ordinary activities 92.5 (9.4) 83.1 83.9 (4.3) 79.6
Reconciliation of effective tax rate
2022
Adjusted
£m
2022
Adjustments
£m
2022
Total
£m
2021
Adjusted
£m
2021
Adjustments
£m
2021
Total
£m
Profit before tax and share of profit
of Associate 370.6 (62.5) 308.1 333.9 (19.4) 314.5
Expected tax at blended rate 87.5 (14.3) 73.2 81.4 (4.1) 77.3
Increased withholding tax on
overseas dividends 6.2 − 6.2 5.2 − 5.2
Non-deductible expenditure 0.6 3.0 3.6 2.6 − 2.6
Over provided in prior years (2.3) 2.0 (0.3) (4.9) − (4.9)
Other reconciling items 0.5 (0.1) 0.4 (0.4) (0.2) (0.6)
Total tax in Income Statement 92.5 (9.4) 83.1 83.9 (4.3) 79.6
Effective tax rate 25.0% 15.0% 27.0% 25.1% 22.2% 25.3%
The Group’s tax charge in future years is likely to be affected by the proportion of profits arising and the effective tax rates in the various territories
in which the Group operates. The rate may also be affected by the impact of any acquisitions. The Group monitors income tax developments
in the territories in which it operates, to include the OECD Base Erosion and Profit Shifting (BEPS) initiative. This includes the setting of a new
minimum global corporate tax rate of 15%. We will continue to monitor developments closely and assess whether this will lead to an increase in
tax from 2024.
The Group’s tax charge for the year ended 31st December 2022 includes a credit of £9.4m in relation to certain items excluded from adjusting
operating profit (as disclosed in Note 2). The tax impacts of these items are:
• Amortisation of acquisition-related intangible assets (£5.6m credit);
• Costs associated with the acquisition of Vulcanic (£1.8m credit);
• Costs associated with the acquisition of Durex Industries (£1.2m credit);
• Restructuring of the Chromalox manufacturing operations in Soissons (France) (£0.7m credit); and
• Costs associated with the redevelopment of the Group Head Office building in Cheltenham (UK) (£0.1m credit).
Excluding these adjustments the tax on profit and the effective tax rate are £92.5m and 25.0% respectively.
The UK deferred tax assets and liabilities at 31st December 2022 that are expected to reverse before 1st April 2023 have been calculated based
upon the rate of 19% whilst the UK deferred tax assets and liabilities expected to reverse on or after 1st April 2023 have been calculated based
upon the rate of 25%.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022204

9 Taxation continued
In October 2017, the European Commission (EC) opened a State Aid investigation into the UK’s Controlled Foreign Company (CFC) regime.
In April 2019, the EC published its final decision that the UK CFC Finance Company Exemption (FCE) constituted State Aid in certain
circumstances, following which the UK Government appealed the decision to the EU General Court. In June 2022, the EU General Court
dismissed the UK Government’s appeal following which the UK Government lodged a further appeal to the European Court of Justice.
The UK Government’s appeal has not yet been heard. Like other UK Groups, the Group submitted its own appeal against the EC’s decision.
The Group’s benefit from the FCE in the period from 1st January 2013 to 31st December 2022 is approximately £8.7m, including compound
interest. To date, the Group has received, paid, and appealed Charging Notices totalling £4.9m, assessed for the period from 1st January 2017
to 31st December 2018. The Group expects to recover this in the event of a successful appeal and has recognised a receivable for the full
amount at the year-end balance sheet date. The Group has not received a Charging Notice for the period prior to 1st January 2017, the benefit
for this period being £2.8m. HMRC has enquired into the benefit received during 2019, which the Group estimates to be £1.0m. No provisions
have been recognised at the year-end balance sheet date for either the Charging Notice amounts or for the estimates for the other periods.
No UK tax (after double tax relief for underlying tax) is expected to be payable on the future remittance of retained earnings of
overseas subsidiaries.
The effective tax rate is calculated as a percentage of profit before tax and a share of profits of Associates.
10 Earnings per share
2022 2021
Profit attributable to equity shareholders (£m) 224.7 234.6
Weighted average shares (million) 73.6 73.7
Dilution (million) 0.2 0.2
Diluted weighted average shares (million) 73.8 73.9
Basic earnings per share 305.1p 318.3p
Diluted earnings per share 304.4p 317.5p
Basic and diluted earnings per share calculated on an adjusted profit basis are included in Note 2.
The dilution is in respect of the Performance Share Plan.
11 Dividends
2022
£m
2021
£m
Amounts paid in the year:
Final dividend for the year ended 31st December 2021 of 97.5p (2020: 84.5p) per share 71.9 62.3
Interim dividend for the year ended 31st December 2022 of 42.5p (2021: 38.5p) per share 31.2 28.4
Total dividends paid 103.1 90.7
Amounts arising in respect of the year:
Interim dividend for the year ended 31st December 2022 of 42.5p (2021: 38.5p) per share 31.2 28.4
Proposed final dividend for the year ended 31st December 2022 of 109.5p (2021: 97.5p) per share 80.8 71.8
Total dividends arising 112.0 100.2
The proposed dividend is subject to approval in 2023. It is therefore not included as a liability in these Financial Statements. No scrip alternative
to the cash dividend is being offered in respect of the proposed final dividend for the year ended 31st December 2022.
Spirax-Sarco Engineering plc Annual Report 2022 205
Financial Statements

12 Investment in Associate
Associate
2022
£m
Associate
2021
£m
Cost of investment 1.4 1.4
Share of equity (1.4) (1.4)
Total investment in Associate − −
Summarised financial information (100% of the results of the Associate):
Revenue 1.8 0.6
Profit/(loss) for the period 0.1 (0.7)
Current assets 1.0 0.4
Non-current assets 0.3 0.4
Current and non-current liabilities 2.1 1.7
Details of the Group’s Associate at 31st December 2022 and 31st December 2021 is as follows:
Name of Associate
Country of incorporation
and operation
Proportion of ownership interest and
voting power held
Principal
activity
Econotherm (UK) Ltd UK 14.7% Manufacturing and selling
The Group’s share of profit/(loss) of Associate is £nil profit (2021: £0.1m loss). The Group’s share of profits in 2022 exceeded our total
investment value by £nil. As a result, in line with IAS 28 paragraph 38, the Group did not recognise a profit in the Consolidated Income
Statement. No further future profits/losses will be recognised in the Consolidated Income Statement going forward, and any share of profit will
only be recognised once it has exceeded the cumulative unrecognised loss of £0.3m. The proportion of ownership reduced during 2022, from
16.1% to 14.7%.
13 Property, plant and equipment
2022
Freehold
land and
buildings
£m
Leasehold
land and
buildings
£m
Plant and
machinery
£m
Fixtures,
fittings,
tools and
equipment
£m
Assets under
construction
£m
Total
£m
Cost:
At 1st January 2022 157.7 40.8 204.2 89.4 22.3 514.4
Exchange adjustments 6.1 1.7 9.0 3.1 1.8 21.7
163.8 42.5 213.2 92.5 24.1 536.1
Acquisitions 7.3 9.4 11.2 2.1 0.7 30.7
Additions 2.8 1.4 23.1 17.1 59.9 104.3
Transfers − 0.7 7.9 17.5 (26.4) (0.3)
Disposal of subsidiaries
− (0.3) (0.6) (0.3) − (1.2)
Disposals (8.8) (0.1) (10.4) (7.4) (0.1) (26.8)
At 31st December 2022 165.1 53.6 244.4 121.5 58.2 642.8
Depreciation:
At 1st January 2022 36.9 10.9 127.4 61.8 − 237.0
Exchange adjustments 1.8 0.5 5.9 2.7 − 10.9
38.7 11.4 133.3 64.5 − 247.9
Charged in year 6.4 1.8 15.5 9.5 − 33.2
Impairment 2.1 − 0.4 − − 2.5
Transfers − − − − − −
Disposals of subsidiaries − (0.3) (0.4) (0.2) − (0.9)
Disposals (8.7) − (9.6) (6.1) − (24.4)
At 31st December 2022 38.5 12.9 139.2 67.7 − 258.3
Net book value:
At 31st December 2022 126.6 40.7 105.2 53.8 58.2 384.5
All impaired assets have been impaired down to a recoverable amount of £nil. In 2022, the Group identified indicators of impairment as a result
of the restructuring of the Chromalox manufacturing operations in Soissons (France). A total of £2.5m was recognised within items excluded
from adjusted operating profit.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022206

13 Property, plant and equipment continued
The total amount of transfers relates to property, plant and equipment transferred to other intangible assets (see Note 15).
2021
Freehold
land and
buildings
£m
Leasehold
land and
buildings
£m
Plant and
machinery
£m
Fixtures,
fittings,
tools and
equipment
£m
Assets under
construction
£m
Total
£m
Cost:
At 1st January 2021 158.3 38.7 196.0 83.2 9.8 486.0
Exchange adjustments (3.9) 0.7 (3.5) (1.9) − (8.6)
154.4 39.4 192.5 81.3 9.8 477.4
Additions 1.8 0.9 18.2 10.1 21.8 52.8
Transfers 2.1 0.6 2.9 0.1 (9.2) (3.5)
Disposals (0.6) (0.1) (9.4) (2.1) (0.1) (12.3)
At 31st December 2021 157.7 40.8 204.2 89.4 22.3 514.4
Depreciation:
At 1st January 2021 35.1 9.5 123.3 56.8 − 224.7
Exchange adjustments (1.1) 0.1 (2.0) (1.2) − (4.2)
34.0 9.6 121.3 55.6 − 220.5
Charged in year 3.5 1.4 15.2 8.2 − 28.3
Transfers (0.2) − (0.1) (0.2) − (0.5)
Disposals (0.4) (0.1) (9.0) (1.8) − (11.3)
At 31st December 2021 36.9 10.9 127.4 61.8 − 237.0
Net book value:
At 31st December 2021 120.8 29.9 76.8 27.6 22.3 277.4
14 Leases
Right-of-use assets
2022
Leased land
and buildings
£m
Leased plant
and machinery
£m
Leased
fixtures,
fittings, tools
and equipment
£m
Total right-of-
use assets
£m
Cost:
At 1st January 2022 73.9 17.2 2.4 93.5
Exchange adjustments 3.9 1.0 0.2 5.1
77.8 18.2 2.6 98.6
Acquisitions 3.8 0.1 0.2 4.1
Additions 6.5 4.7 0.3 11.5
Disposals (1.9) (1.4) − (3.3)
At 31st December 2022 86.2 21.6 3.1 110.9
Depreciation:
At 1st January 2022 19.0 9.8 1.8 30.6
Exchange adjustments 1.6 0.6 0.1 2.3
20.6 10.4 1.9 32.9
Charged in the year 9.1 4.1 0.3 13.5
Disposals (1.5) (1.2) − (2.7)
At 31st December 2022 28.2 13.3 2.2 43.7
Net book value:
At 31st December 2022 58.0 8.3 0.9 67.2
Spirax-Sarco Engineering plc Annual Report 2022 207
Financial Statements

14 Leases continued
The vast majority of the right-of-use asset value relates to leased property where the Group leases a number of office and warehouse sites in a
number of geographical locations. The remaining leases are largely made up of leased motor vehicles, where the Group makes use of leasing
cars for sales and service engineers at a number of operating company locations. The average lease term is 4.4 years (2021: 4.3 years).
2021
Leased land
and buildings
£m
Leased plant
and machinery
£m
Leased
fixtures,
fittings, tools
and equipment
£m
Total right-of-
use assets
£m
Cost:
At 1st January 2021 41.6 14.0 2.3 57.9
Exchange adjustments (0.9) (0.6) (0.1) (1.6)
40.7 13.4 2.2 56.3
Additions 34.4 4.5 0.2 39.1
Disposals (1.2) (0.7) − (1.9)
At 31st December 2021 73.9 17.2 2.4 93.5
Depreciation:
At 1st January 2021 13.3 7.0 1.3 21.6
Exchange adjustments (0.2) (0.4) − (0.6)
13.1 6.6 1.3 21.0
Charged in the year 7.0 3.9 0.5 11.4
Disposals (1.1) (0.7) − (1.8)
At 31st December 2021 19.0 9.8 1.8 30.6
Net book value:
At 31st December 2021 54.9 7.4 0.6 62.9
The maturity analysis of lease liabilities is presented in Note 28.
Amounts recognised in Consolidated Income Statement
31st
December
2022
£m
31st
December
2021
£m
Depreciation expense on right-of-use assets 13.5 11.4
Interest expense on lease liabilities 1.5 1.1
Expense relating to short-term leases 1.9 2.0
Expense relating to leases of low value assets 0.4 0.4
Expense relating to variable lease payments not included in the measurement of the lease liability 0.2 0.2
Income from subleases right-of-use assets (0.2) (0.1)
Total impact on profit before tax 17.3 15.0
The total cash outflow for leases during 2022 was £16.9m (2021: £15.3m).
The following cash outflows (undiscounted) are those that the Group is potentially exposed to in future periods but are currently not reflected in
the measurement of lease liabilities:
• £0.1m relating to variable lease payments not based on an index or rate (2021: £0.1m);
• £1.1m relating to optional extension periods that are not reasonably certain to be exercised as at 31st December 2022 (2021: £1.2m); and
• £28.1m relating to leases that the Group are committed, but have not commenced as at 31st December 2022 (2021: £37.7m).
Notes to the Consolidated Financial Statements continued
Financial Statements
S pirax-Sarco Engineering plc Annual Report 2022208

15 Goodwill and other intangible assets
2022
Acquired
intangibles
£m
Development
costs
£m
Computer
software
£m
Total other
intangibles
£m
Goodwill
£m
Cost:
At 1st January 2022 359.2 30.2 78.0 467.4 418.4
Exchange and other adjustments 28.8 0.3 1.7 30.8 33.1
388.0 30.5 79.7 498.2 451.5
Acquisitions 244.6 0.1 0.4 245.1 259.3
Additions − 4.3 8.9 13.2 −
Transfers from property, plant and equipment − − 0.3 0.3 −
Disposal of subsidary − − (0.3) (0.3) −
Disposals − − (0.4) (0.4) −
At 31st December 2022 632.6 34.9 88.6 756.1 710.8
Amortisation:
At 1st January 2022 142.4 19.5 49.8 211.7 7.2
Exchange adjustments 10.7 0.2 2.0 12.9 0.3
153.1 19.7 51.8 224.6 7.5
Amortisation 23.7 2.3 5.8 31.8 −
Disposal of subsidary − − (0.3) (0.3) −
Disposals − − (0.3) (0.3) −
At 31st December 2022 176.8 22.0 57.0 255.8 7.5
Net book value:
At 31st December 2022 455.8 12.9 31.6 500.3 703.3
2021
Acquired
intangibles
£m
Development
costs
£m
Computer
software
£m
Total other
intangibles
£m
Goodwill
£m
Cost:
At 1st January 2021 368.6 27.1 69.8 465.5 429.8
Exchange and other adjustments (9.4) (0.2) (1.3) (10.9) (11.4)
359.2 26.9 68.5 454.6 418.4
Additions − 3.2 8.1 11.3 −
Transfers from property, plant and equipment − 0.1 3.4 3.5 −
Disposals − − (2.0) (2.0) −
At 31st December 2021 359.2 30.2 78.0 467.4 418.4
Amortisation:
At 1st January 2021 125.4 17.6 45.9 188.9 7.4
Exchange adjustments (4.4) (0.1) (0.9) (5.4) (0.2)
121.0 17.5 45.0 183.5 7.2
Amortisation 21.4 2.0 5.9 29.3 −
Transfers from property, plant and equipment − − 0.5 0.5 −
Disposals − − (1.6) (1.6) −
At 31st December 2021 142.4 19.5 49.8 211.7 7.2
Net book value:
At 31st December 2021 216.8 10.7 28.2 255.7 411.2
Spirax-Sarco Engineering plc Annual Report 2022 209
Financial Statements

15 Goodwill and other intangible assets continued
Acquired intangibles
The disclosure by class of acquired intangible assets is shown in the tables below.
2022
Customer
relationships
£m
Brand names
and
trademarks
£m
Manufacturing
designs and
core
technology
£m
Non-compete
undertakings
and other
£m
Total
acquired
intangibles
£m
Cost:
At 1st January 2022 87.1 190.2 60.2 21.7 359.2
Exchange and other adjustments 5.0 19.0 3.9 0.9 28.8
92.1 209.2 64.1 22.6 388.0
Acquisitions 89.8 128.9 20.1 5.8 244.6
At 31st December 2022 181.9 338.1 84.2 28.4 632.6
Amortisation and impairment:
At 1st January 2022 42.2 49.9 28.6 21.7 142.4
Exchange adjustments 2.9 5.0 1.8 1.0 10.7
45.1 54.9 30.4 22.7 153.1
Amortisation and impairment 6.8 12.1 4.4 0.4 23.7
At 31st December 2022 51.9 67.0 34.8 23.1 176.8
Net book value:
At 31st December 2022 130.0 271.1 49.4 5.3 455.8
Customer relationships are amortised over their useful economic lives in line with the accounting policies disclosed in Note 1. Within this balance
the individually material balances relate to Durex Industries £83.3m (2021: £nil) and Thermocoax £26.9m (2021: £27.8m). The remaining
amortisation periods are 14.9 years and 11.4 years respectively. Brand names and trademark assets are amortised over their useful economic
lives in line with the accounting policies disclosed in Note 1. Within this balance individually material balances relate to Vulcanic £106.1m
(2021: £nil), Durex Industries £21.2m (2021: £nil), Chromalox £103.5m (2021: £98.9m) and Gestra £22.4m (2021: £23.6m). The remaining
amortisation periods are 19.8 years, 19.9 years, 14.5 years and 9.3 years respectively.
Manufacturing designs and core technology are amortised over their useful economic lives in line with the accounting policies disclosed in
Note 1. There are no individually material items within this balance. Non-compete undertakings are amortised over their useful economic lives
in line with the accounting policies disclosed in Note 1.
2021
Customer
relationships
£m
Brand names
and
trademarks
£m
Manufacturing
designs and
core
technology
£m
Non-compete
undertakings
and other
£m
Total
acquired
intangibles
£m
Cost:
At 1st January 2021 91.4 192.3 61.8 23.1 368.6
Exchange and other adjustments (4.3) (2.1) (1.6) (1.4) (9.4)
87.1 190.2 60.2 21.7 359.2
Acquisitions − − − − −
At 31st December 2021 87.1 190.2 60.2 21.7 359.2
Amortisation and impairment:
At 1st January 2021 37.9 40.4 24.8 22.3 125.4
Exchange adjustments (1.7) (0.6) (0.7) (1.4) (4.4)
36.2 39.8 24.1 20.9 121.0
Amortisation and impairment 6.0 10.1 4.5 0.8 21.4
At 31st December 2021 42.2 49.9 28.6 21.7 142.4
Net book value:
At 31st December 2021 44.9 140.3 31.6 − 216.8
Impairment
In accordance with the requirements of IAS 36 Impairment of Assets, goodwill is allocated to the Group’s cash-generating units, or groups of
cash-generating units, that are expected to benefit from the synergies of the business combination that gave rise to the goodwill.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022210

15 Goodwill and other intangible assets continued
Goodwill impairment is considered based on groups of CGUs that represent the lowest level to which goodwill is monitored for internal
management purposes, being each operating segment as disclosed in Note 3. The breakdown of the goodwill value at 31st December across
these is shown below:
2022
Goodwill
£m
2021
Goodwill
£m
Steam Specialties 127.4 110.6
Electric Thermal Solutions 514.9 241.0
Watson-Marlow 61.0 59.6
Total goodwill 703.3 411.2
The goodwill balance has been tested for annual impairment on the following basis:
The carrying values of goodwill have been assessed by reference to value in use. These have been estimated using cash flows based on
forecast information for the next financial year which have been approved by the Board and then extended up to a further seven years
based on the most recent forecasts prepared by management. Cash flow forecasts extend beyond five years only for Electric Thermal
Solutions, incorporating further medium-term revenue growth expected during that period which is consistent with (i) the acquisition plan that
indicated a period of greater than five years would be required before a newly acquired segment reaches long-term expected performance
and (ii) the extension of forecasts to 2030 aligns with anticipated growth from industrial decarbonisation driven by net zero commitments
made by customers. The Group has a strong track record of consistent organic growth over many years and this, coupled with the global
decarbonisation targets to which our products support, provides a reliable basis for forecasts longer than five years. The forecast period beyond
five years, however, is not a key judgement that would impact the outcome of the impairment tests performed on the Electric Thermal Solutions
group of CGUs. The forecast period will be reduced by one year over each of the next three years, such that a five year forecast period will be
used from 2025 onwards.
The key assumptions on which the impairment tests are based are the discount rates and forecast cash flows which are driven by growth rates
and EBIT margins.
• pre-tax discount rates are based on estimations of the assumptions that market participants operating in similar sectors to the Group would
make, using the Group’s economic profile as a starting point and adjusting appropriately; taking into account the size of the business along
with specific geographical and industry risk factors. Discount rates are not adjusted for estimated impacts of inflation, which is consistent with
the calculation of the future operating cash flows to which they are applied;
• short to medium-term growth rates based on external market growth rates (where available) and historical experience within each group of
CGUs. The short to medium-term is defined as not more than eight years;
• long-term growth rates are set using the weighted average GDP growth rates (IMF and Oxford Economics) of the group of CGUs end
markets; and
• EBIT margins are based on historical performance and expected improvements in operational efficiency and leverage from
completed projects.
The principal value in use assumptions were as follows:
Operating segment
2022
Discount rate
2022
Short to
medium-term
growth rate
2022
Long-term
growth rate
Period of
annual
cashflow
forecast
(years)
2021
Discount rate
2021
Short to
medium-term
growth rate
2021
Long-term
growth rate
Period of
annual
cashflow
forecast
(years)
Steam Specialties 14.1% 5.5% – 10.5% 3.1% 5 10.7% 5.7–7.9% 2.5% 5
Electric Thermal Solutions 11.3% 5.9% – 10.1% 2.4% 8 9.8% 3.5–14.9% 1.7% 9
Watson-Marlow 12.0% (1.0)% – 12.4% 2.7% 5 10.2% 4.9–18.2% 2.0% 5
The results of the Group’s impairment tests are dependent upon estimates, particularly in relation to the key assumptions described above.
Sensitivity analysis to potential changes in the key assumptions has been undertaken based on the following reasonably possible change
sensitivities in isolation:
• a 100 bps increase in the discount rate applied to each group of CGUs;
• a range of 0 bps – 220 bps reduction in the short to medium-term growth rates and a 50 bps reduction in long-term growth rates used in the
cash flow projections;
• a range of 10 – 170 bps reduction in the EBIT margin used in the cash flow projections; and
• a 100 bps increase in the discount rates and a 50 bps reduction in long-term growth rates, combined with a range of 0 – 220 bps reduction
in the short to medium-term growth rates and a range of 10 – 170 bps reduction in forecast EBIT margins specifically in relation to the Electric
Thermal Solutions group of CGU’s used in the cash flow projections.
For each group of CGUs, the Directors do not consider that there are any reasonably possible change sensitivities for the business that could
arise in the next 12 months that would result in an impairment charge being recognised.
Spirax-Sarco Engineering plc Annual Report 2022 211
Financial Statements

16 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2022
Assets
£m
2021
Assets
£m
2022
Liabilities
£m
2021
Liabilities
£m
2022
Net
£m
2021
Net
£m
Accelerated capital allowances 0.6 0.5 (23.4) (12.8) (22.8) (12.3)
Provisions 12.0 8.3 (0.2) (0.2) 11.8 8.1
Losses 16.2 5.6 − − 16.2 5.6
Inventory 8.2 6.6 (0.9) (1.6) 7.3 5.0
Pensions 18.6 15.8 (5.4) (3.8) 13.2 12.0
Acquired intangibles − − (91.0) (55.0) (91.0) (55.0)
Other temporary differences 13.4 9.3 (7.2) (8.4) 6.2 0.9
Tax assets/(liabilities) 69.0 46.1 (128.1) (81.8) (59.1) (35.7)
Movement in deferred tax during the year 2022
1st January
2022
£m
Recognised
in income
£m
Recognised
in OCI
£m
Recognised
in equity
£m
Acquisitions
£m
31st December
2022
£m
Accelerated capital allowances (12.3) (9.9) − (0.4) (0.2) (22.8)
Provisions 8.1 3.4 (0.4) 0.5 0.2 11.8
Losses 5.6 9.5 − 0.1 1.0 16.2
Inventory 5.0 2.3 − − − 7.3
Pensions 12.0 (1.5) 1.7 0.7 0.3 13.2
Acquired intangibles (55.0) 4.1 (2.3) (5.6) (32.2) (91.0)
Other temporary differences 0.9 2.7 2.8 (0.4) 0.2 6.2
Group total (35.7) 10.6 1.8 (5.1) (30.7) (59.1)
Movement in deferred tax during the year 2021
1st January
2021
£m
Recognised
in income
£m
Recognised
in OCI
£m
Recognised
in equity
£m
31st December
2021
£m
Accelerated capital allowances (8.8) (3.7) − 0.2 (12.3)
Provisions 8.8 (0.4) 0.1 (0.4) 8.1
Losses 3.9 1.9 − (0.2) 5.6
Inventory 4.3 0.7 0.1 (0.1) 5.0
Pensions 22.7 (1.4) (9.5) 0.2 12.0
Acquired intangibles (61.1) 4.9 − 1.2 (55.0)
Other temporary differences 1.7 (2.1) 1.3 − 0.9
Group total (28.5) (0.1) (8.0) 0.9 (35.7)
At the Balance Sheet date, the Group has deductible temporary differences, unused tax losses and unused tax creditors of £30.0m
(2021: £14.4m) available for offset against future profits. A deferred tax asset has been recognised in respect of £16.2m (2021: £5.6m).
No deferred tax asset has been recognised in respect of the remaining £13.8m (2021: £8.8m) as it is not considered probable that there will
be future taxable profits available against which the relevant deduction can be offset. The losses may be carried forward indefinitely. A deferred
tax credit of £1.7m (2021: £9.5m charge) recognised in the Consolidated Statement of Comprehensive Income (page 185) associated with the
measurement of defined benefit obligations comprises £1.8m relating to remeasurement loss (2021: £8.9m relating to remeasurement gains)
offset by £0.1m relating to exchange movement gains (2021: £0.6m loss).
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022212

17 Inventories
2022
£m
2021
£m
Raw materials, consumables and components 136.1 81.6
Work in progress 39.5 26.7
Finished goods and goods for resale 114.4 93.0
Total inventories 290.0 201.3
The write-down of inventories recognised as an expense during the year was £9.0m (2021: £2.0m). This comprises a cost of £10.5m
(2021: £3.4m) to write-down inventory to net realisable value reduced by £1.5m (2021: £1.4m) for reversal of previous write-down reassessed
as a result of customer demand. A total of £2.1m was recognised within items excluded from adjusted operating profit.
The value of inventories expected to be recovered after more than 12 months is £12.6m (2021: £13.1m).
There is no material difference between the Statement of Financial Position value of inventories and their replacement cost. None of the inventory
has been pledged as security.
18 Other current assets
2022
£m
2021
£m
Other receivables 42.4 22.6
Contract assets 11.7 3.2
Prepayments 25.5 18.9
Total other current assets 79.6 44.7
Contract assets relate to revenue recognised that has not yet been invoiced to the customer.
Other receivables comprise various assets across the Group including sales tax receivables and other non trade balances.
19 Trade and other payables
2022
£m
2021
£m
Trade payables 89.9 67.8
Contract liabilities 20.6 17.1
Social security 9.4 7.3
Other payables 49.9 39.1
Accruals 113.2 85.7
Total trade and other payables 283.0 217.0
Contract liabilities relate to advance payments received from customers that have not yet been recognised as revenue.
£15.7m of the contract liabilities at 31st December 2021 was recognised as revenue during 2022 (2021: £11.2m).
Other payables comprise various balances across the Group including sales tax payable.
Spirax-Sarco Engineering plc Annual Report 2022 213
Financial Statements

20 Provisions
2022
Product
warranty
£m
Legal,
contractual
and other
£m
Total
£m
At 1st January 2022 2.1 4.6 6.7
Additional provision in the year 0.6 7.9 8.5
Utilised or released during the year (0.9) (2.5) (3.4)
Acquisition of subsidiary 0.8 5.2 6.0
Exchange adjustments 0.1 0.3 0.4
At 31st December 2022 2.7 15.5 18.2
2021
Product
warranty
£m
Legal,
contractual
and other
£m
Total
£m
At 1st January 2021 2.0 6.1 8.1
Additional provision in the year 0.7 3.1 3.8
Utilised or released during the year (0.6) (4.3) (4.9)
Exchange adjustments – (0.3) (0.3)
At 31st December 2021 2.1 4.6 6.7
2022
£m
2021
£m
Current provisions 12.0 5.2
Non-current provisions 6.2 1.5
Total provisions 18.2 6.7
Product warranty
Product warranty provisions reflect commitments made to customers on the sale of goods in the ordinary course of business. These are
expected to be incurred in the next three years.
Legal, contractual and other
Legal, contractual and other provisions mainly comprise amounts provided against open legal and contractual disputes arising from trade and
employment. These costs are based on past experience of similar items and other known factors and represent management’s best estimate
of the likely outcome. The Group has taken action to enforce its rights and protect its intellectual property rights around the world.
Reflecting the inherent uncertainty within many legal proceedings, the timing and amount of the outflows could differ significantly from the
amount provided. Management does not expect that the outcome of such proceedings, either individually or in aggregate, will have a material
adverse effect on the Group’s financial condition or results of operations. Of the total legal, contractual and other provisions at 31st December
2022 £9.8m (2021: £3.5m) has been included within current and £5.7m (2021: £1.1m) within non-current provisions.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022214

21 Called-up share capital and reserves
2022
£m
2021
£m
Ordinary shares of 26 12/13p (2021: 26 12/13p) each:
Authorised 111,428,571 (2021: 111,428,571) 30.0 30.0
Allotted, called up and fully paid 73,776,048 (2021: 73,776,048) 19.8 19.8
28,262 (2021: 33,856) shares with a nominal value of £7,609 (2021: £9,155) were issued in connection with the Group’s Employee Share
Ownership Plan with external consideration of £1.8m (2021: £1.5m) received by the Group. In 2022, all shares were provided to employees
through the Employee Benefit Trust and not through the issue of share capital.
At 31st December 2022, 179,632 shares were held in an Employee Benefit Trust and available for use in connection with the Group’s Employee
Share Schemes. 108 senior employees of the Group have been granted options on Ordinary shares under the Performance Share Plan (details
in Note 23).
Translation reserve in the Consolidated Statement of Changes in Equity on pages 186 to 187 is made up as follows:
1st January
2022
£m
Change
in year
£m
31st December
2022
£m
Net investment hedge reserve 12.7 (15.4) (2.7)
Translation reserve (53.2) 73.4 20.2
Total translation reserve (40.5) 58.0 17.5
1st January
2021
£m
Change
in year
£m
31st December
2021
£m
Net investment hedge reserve (6.1) 18.8 12.7
Translation reserve (27.6) (25.6) (53.2)
Total translation reserve (33.7) (6.8) (40.5)
Net investment hedge reserve
The reserve records the cumulative gain or loss on hedging instruments designated in net investment hedges. Together with the translation
reserve, these are the foreign currency translation reserves of the Group.
Other reserves in the Consolidated Statement of Changes in Equity on pages 186 to 187 are made up as follows:
1st January
2022
£m
Change
in year
£m
31st December
2022
£m
Cash flow hedges reserve (0.2) (3.5) (3.7)
Capital redemption reserve 1.8 – 1.8
Employee Benefit Trust reserve (19.3) (2.2) (21.5)
Total other reserves (17.7) (5.7) (23.4)
1st January
2021
£m
Change
in year
£m
31st December
2021
£m
Cash flow hedges reserve 2.6 (2.8) (0.2)
Capital redemption reserve 1.8 – 1.8
Employee Benefit Trust reserve (6.8) (12.5) (19.3)
Total other reserves (2.4) (15.3) (17.7)
Cash flow hedges reserve
The reserve records the cumulative net change in the fair value of forward exchange contracts where they are designated as effective cash flow
hedge relationships.
Capital redemption reserve
This reserve records the historical repurchase of the Group’s own shares.
Employee Benefit Trust reserve
The Group has an Employee Benefit Trust which is used to purchase, hold and issue shares in connection with the Group’s employee share
schemes. The shares held in Trust are recorded in this separate reserve.
Spirax-Sarco Engineering plc Annual Report 2022 215
Financial Statements

22 Capital commitments and contingent liabilities
2022
£m
2021
£m
Capital expenditure contracted for but not provided 67.0 40.5
All capital commitments are related to property, plant and equipment and computer software. The Group has no material contingent liabilities
at 31st December 2022 (no material contingent liabilities existed at 31st December 2021), but does have a non-material contingent liability in
relation to tax estimated at approximately £3.8m (2021: £3.8m). See Note 9 for further details.
23 Employee benefits
Retirement benefit obligations
The Group operates a wide range of retirement benefit arrangements, which are established in accordance with local conditions and practices
within the countries concerned. These include funded defined contribution and funded and unfunded defined benefit schemes.
Defined contribution arrangements
The majority of the retirement benefit arrangements operated by the Group are of a defined contribution structure, where the employer
contribution and resulting Income Statement charge is fixed at a set level or is a set percentage of employees’ pay. Contributions made to
defined contribution schemes and charged to the Income Statement totalled £27.0m (2021: £16.5m). In Germany, following the closure of the
defined benefit schemes to new entrants in 2021, the main scheme for new employees is a defined contribution scheme.
Defined benefit arrangements
The Group operates several funded defined benefit retirement schemes where the benefits are based on employees’ length of service.
Whilst the Group’s primary schemes are in the UK, it also operates other material benefit schemes in the USA as well as less material schemes
elsewhere. In funded arrangements, the assets of defined benefit schemes are held in separate trustee-administered funds or similar structures
in the countries concerned.
UK defined benefit arrangements
The defined benefit schemes in the UK account for 47% (2021: 22%) of the Group’s net liability for defined retirement benefit schemes.
Spirax-Sarco operates three UK schemes: the Spirax-Sarco Employees Pension Fund, the Spirax-Sarco Executives’ Retirement Benefits
Scheme and the Watson-Marlow Pension Fund. These are all final salary pension schemes and are closed to new members. There is a mix of
different inflation-dependent pension increases (in payment and deferment) which vary from member to member according to their membership
history and which scheme they are a member of.
All three schemes have been set up under UK law and are governed by a Trustee committee, which is responsible for the scheme’s
investments, administration and management. A funding valuation is carried out for the Trustees of each scheme every three years by an
independent firm of actuaries. Depending on the outcome of that valuation a schedule of future contributions is negotiated with Spirax-Sarco.
Further information on the contribution commitments is shown in the Financial Review on pages 38 to 45.
US defined benefit schemes
The Group operates a pension scheme in the USA, which is closed to new entrants and frozen to future accrual. The pension scheme defines
the pension in terms of the highest average pensionable pay for any five consecutive years prior to retirement. No pension increases (in payment
and deferment) are offered by this scheme. It also operates a post-retirement medical plan in the USA, which is unfunded, as is typical for
these plans.
Germany defined benefit scheme
The Group operates an unfunded pension scheme in Germany which was closed to future accrual with effect from 1st January 2021 with
active members becoming deferred at this date. This curtailment was recognised as a past service credit of £2.0m in the 2021 Consolidated
Income Statement .
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022216

23 Employee benefits continued
Principal Risks
The pension schemes create a number of risk exposures. Annual increases in benefits are, to a varying extent from scheme to scheme,
dependent on inflation so the main uncertainties affecting the level of benefits payable are future inflation levels and the actual longevity of the
membership. Benefits payable will also be influenced by a range of other factors including member decisions on matters such as when to retire
and the possibility to draw benefits in different forms. A key risk is that additional contributions are required if the investment returns fall short
of those anticipated when setting the contributions to the pension schemes. All pension schemes are regulated by the relevant jurisdictions.
These include extensive legislation and regulatory mechanisms that are subject to change and may impact on the Group’s pension schemes.
The IAS 19 liability measurement known as Defined Benefit Obligation (DBO) and the Service Cost are sensitive to the actuarial assumptions
made on a range of demographic and financial matters that are used to project the expected benefit payments, the most important of these
assumptions being the future inflation levels and the assumptions made about life expectation. The DBO and Service Cost are also very
sensitive to the IAS 19 discount rate, which determines the discounted value of the projected benefit payments. The discount rate depends on
market yields on high-quality corporate bonds. Investment strategies are set with funding rather than IAS 19 considerations in mind and do not
seek to provide a specific hedge against the IAS 19 measurement of DBO. As a result the difference between the market value of the assets
and the IAS 19 DBO may be volatile. Further information on the investment strategy for the UK schemes can be found in the Financial Review
on pages 38 to 45.
Sensitivity analysis to changes in discount rate and inflation are included on page 220.
The financial assumptions used at 31st December were:
Assumptions weighted by value of liabilities % per annum
UK pensions
Overseas pensions
and medical
2022
%
2021
%
2022
%
2021
%
Rate of increase in salaries n/a n/a 2.9 3.1
Rate of increase in pensions 2.9 3.2 2.6 1.8
Rate of price inflation 3.2 3.3 2.4 2.0
Discount rate 4.7 1.8 4.7 2.5
Medical trend rate n/a n/a 7.5 7.5
The UK pensions are closed to future accrual therefore the rate of increase in salaries is not applicable.
The weighted average duration of the defined benefit obligation at 31st December 2022 was approximately 15 years (2021:19 years) for the
Spirax-Sarco Employees Pension Fund, 10 years (2021:12 years) for the Spirax-Sarco Executives’ Retirement Benefits Scheme and 16 years
(2021:19 years) for the Watson-Marlow Pension Fund.
The mortality assumptions for the material defined benefit schemes at 31st December 2022 and 31st December 2021 were:
Spirax-Sarco Employees
Pension Fund
At 31st December 2022: 100% of SAPS 3, with CMI 2021 projections with a long-term 1.25% pa and an
initial addition parameter of 0.25% and w2020 parameter of 10%.
At 31st December 2021: 100% of SAPS 3, with CMI 2020 projections with a long-term 1.25% pa and an
initial addition parameter of 0.25% and w2020 parameter of 10%.
Spirax-Sarco Executives’
Retirement Benefits Scheme
At 31st December 2022: 84/87% (male/female) of SAPS S3 light normal, CMI 2021 projections with a
long-term trend 1.25% and an initial addition parameter of 0.25% and w2020 parameter of 10%.
At 31st December 2021: 84/87% (male/female) of SAPS S3 light normal, CMI 2020 projections with a
long-term trend 1.25% and an initial addition parameter of 0.25% and w2020 parameter of 10%.
Watson-Marlow Pension Fund At 31st December 2022: 102% of SAPS S3, CMI 2021 projections with a long-term trend of 1.25% pa
and an initial addition parameter of 0.25% and w2020 parameter of 10%.
At 31st December 2021: 102% of SAPS S2, CMI 2020 projections with a long-term trend of 1.25% pa
and an initial addition parameter of 0.25% and w2020 parameter of 10%.
US Pension Scheme At 31st December 2022: SOA Pri-2012 Amount-Weighted Blue Collar mortality tables with Mortality
Improvement Scale MP2021.
At 31st December 2021: SOA Pri-2012 Amount-Weighted Blue Collar mortality tables with Mortality
Improvement Scale MP2021.
By way of example the mortality tables indicate the following life expectancy across the UK schemes:
2022 Life expectancy at 65 2021 Life expectancy at 65
Current age Male Female Male Female
65 22.1 24.6 22.1 24.3
50 23.0 25.6 23.0 25.5
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the timescale
covered, may not necessarily be borne out in practice.
Spirax-Sarco Engineering plc Annual Report 2022 217
Financial Statements

23 Employee benefits continued
The amounts recognised in the Consolidated Statement of Financial Position are determined as follows:
UK pensions
Overseas pensions
and medical Total
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Fair value of schemes’ assets 284.6 497.5 57.0 63.2 341.6 560.7
Present value of funded schemes’ liabilities (309.2) (507.5) (65.5) (76.1) (374.7) (583.6)
Deficit in the funded schemes (24.6) (10.0) (8.5) (12.9) (33.1) (22.9)
Present value of unfunded schemes’ liabilities – – (19.0) (21.8) (19.0) (21.8)
Retirement benefit liability recognised in the
Consolidated Statement of Financial Position (24.6) (10.0) (27.5) (34.7) (52.1) (44.7)
Related deferred tax asset 6.2 2.5 7.0 9.5 13.2 12.0
Net pension liability (18.4) (7.5) (20.5) (25.2) (38.9) (32.7)
Fair value of scheme assets
UK pensions
Overseas pensions
and medical Total
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Quoted equities 46.9 28.9 30.1 36.0 77.0 64.9
Quoted bonds 132.5 14.9 13.1 17.7 145.6 32.6
Other 54.4 6.8 7.4 2.7 61.8 9.5
Total with quoted market price 233.8 50.6 50.6 56.4 284.4 107.0
Cash and cash equivalents 45.9 28.3 0.6 0.8 46.5 29.1
Unquoted equities 2.8 109.5 – – 2.8 109.5
Unquoted bonds – 273.0 – – – 273.0
Real estate 0.3 36.1 – – 0.3 36.1
Other 1.8 – 5.8 6.0 7.6 6.0
Total other securities 50.8 446.9 6.4 6.8 57.2 453.7
Total market value in aggregate 284.6 497.5 57.0 63.2 341.6 560.7
The actual return on plan assets was a decrease of £211.6m (2021: an increase of £43.2m).
The UK pensions assets include investments in Liability Driven Investment (LDI) funds. LDI funds allow the schemes to hedge a larger proportion
of the underlying interest rate exposure that exists within the schemes liabilities. As a result of the structure of LDI funds the schemes may
be required to provide additional cash collateral to the LDI funds in order to maintain the current level of hedging should market interest rates
increase materially. The LDI funds of £83.4m are included within the quoted bonds in the table above.
The movements in the defined benefit obligation recognised in the Consolidated Statement of Financial Position during the year were:
UK pensions
Overseas pensions
and medical Total
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Defined benefit obligation at beginning of year (507.5) (522.8) (97.9) (107.5) (605.4) (630.3)
Acquisitions – – (1.5) – (1.5) –
Current service cost – – (0.7) (0.1) (0.7) (0.1)
Past service credit – Curtailments – – – 2.0 – 2.0
Interest cost (9.1) (6.7) (2.5) (2.1) (11.6) (8.8)
Administration costs – – (0.7) (0.6) (0.7) (0.6)
Remeasurement gain 207.0 8.7 23.0 4.9 230.0 13.6
Actual benefit payments 15.9 16.5 5.3 4.7 21.2 21.2
Experience (loss)/gain (15.5) (3.2) (0.5) 0.3 (16.0) (2.9)
Currency (loss)/gain – – (9.0) 0.5 (9.0) 0.5
Defined benefit obligation at end of year (309.2) (507.5) (84.5) (97.9) (393.7) (605.4)
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022218

23 Employee benefits continued
The movements in the fair value of plan assets during the year were:
UK pensions
Overseas pensions
and medical Total
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Value of assets at beginning of year 497.5 474.7 63.2 57.0 560.7 531.7
Acquisitions – – 0.4 – 0.4 –
Expected return on assets 9.0 6.1 1.8 1.4 10.8 7.5
Remeasurement gain (210.9) 28.6 (11.5) 7.1 (222.4) 35.7
Contributions paid by employer 5.4 5.3 1.8 1.7 7.2 7.0
Contributions paid by members – – – – – –
Actual benefit payments (15.9) (16.5) (5.3) (4.7) (21.2) (21.2 )
Administration costs (0.5) (0.7) – – (0.5) (0.7)
Currency gain – – 6.6 0.7 6.6 0.7
Value of assets at end of year 284.6 497.5 57.0 63.2 341.6 560.7
The estimated employer contributions to be made in 2023 are £6.3m.
The history of experience adjustments is as follows:
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
Defined benefit obligation at end of year (393.7) (605.4) (630.3) (559.1) (526.1 )
Fair value of schemes’ assets 341.6 560.7 531.7 487.8 441.0
Retirement benefit liability recognised in the Statement
of Financial Position (52.1) (44.7) (98.6) (71.3) (85.1 )
Experience adjustment on schemes’ liabilities (16.0) (2.9) 11.4 – (0.6)
As a percentage of schemes’ liabilities 4.1% 0.5% 1.8% 0.0% 0.1%
Experience adjustment on schemes’ assets (222.4) 35.7 46.5 49.0 (27.3 )
As a percentage of schemes’ assets 65.1% 6.4% 8.7% 10.0% 6.2%
The expense recognised in the Group Income Statement was as follows:
UK pensions
Overseas pensions
and medical Total
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Current service cost – – (0.7) (0.1) (0.7) (0.1)
Administration costs (0.5) (0.7) (0.7) (0.6) (1.2) (1.3 )
Past service credit – Curtailment – – – 2.0 – 2.0
Net interest on schemes’ liabilities – (0.6) (0.8) (0.7) (0.8) (1.3)
Total expense recognised in
Income Statement (0.5) (1.3) (2.2) 0.6 (2.7) (0.7 )
The expense is recognised in the following line items in the Consolidated Income Statement:
2022
£m
2021
£m
Operating costs (1.9) (1.4)
Adjustments – closure of defined benefit schemes – 2.0
Net financing expense (0.8) (1.3 )
Total expense recognised in Income Statement (2.7) (0.7 )
Spirax-Sarco Engineering plc Annual Report 2022 219
Financial Statements

Notes to the Consolidated Financial Statements continued
23 Employee benefits continued
The gain or loss recognised in the Statement of Comprehensive Income (OCI) was as follows:
UK pensions
Overseas pensions
and medical Total
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Remeasurement effects recognised in OCI:
Due to experience on DBO (15.5) (3.2) (0.5) 0.3 (16.0) (2.9)
Due to demographic assumption changes in DBO 4.3 (1.4) – (0.2) 4.3 (1.6)
Due to financial assumption changes in DBO 202.8 10.1 23.0 5.0 225.8 15.1
Return on assets (210.9) 28.6 (11.5) 7.1 (222.4) 35.7
Total remeasurement (loss)/gain recognised in OCI (19.3) 34.1 11.0 12.2 (8.3) 46.3
Deferred tax on remeasurement (loss)/gain and change
in rate recognised in OCI 4.8 (5.9) (3.0) (3.0) 1.8 (8.9)
Cumulative loss recognised in OCI at
beginning of year (39.6) (67.8) (21.1) (30.3) (60.7) (98.1)
Cumulative loss recognised in OCI at end
of year (54.1) (39.6) (13.1) (21.1) (67.2) (60.7 )
Sensitivity analysis
The effect on the defined benefit obligation at 31st December 2022 of an increase or decrease in key assumptions is as follows:
UK pensions
£m
Overseas
pensions and
medical
£m
Total
£m
(Decrease)/increase in pension deficit:
Discount rate assumption being 1.0% higher (39.7) (8.5) (48.2)
Discount rate assumption being 1.0% lower 46.2 10.1 56.3
Inflation assumption being 1.0% higher 29.3 1.5 30.8
Inflation assumption being 1.0% lower (26.9) (1.3) (28.2)
Mortality assumption life expectancy at age 65 being one year higher 10.0 2.3 12.3
The above sensitivities reflect reasonable possible changes in the assumptions therefore have been selected on this basis.
The average age of active participants in the UK schemes at 31st December 2022 was 53 years (2021: 53 years) and in the overseas schemes
47 years (2021: 47 years).
Cash payments to the pension scheme greater or less than the expense to operating profit
2022
£m
2021
£m
Defined benefit arrangements (1.9) 0.6
Defined contribution arrangements (27.0) (16.5 )
Total expense recognised in operating costs (28.9) (15.9)
Defined benefit arrangements 7.2 7.0
Defined contribution arrangements 27.0 16.5
Total contributions paid by employer 34.2 23.5
Cash payments to the pension scheme greater than the expense to operating profit 5.3 7.6
Share-based payments
Disclosures of the share-based payments offered to employees are set out below. More detail on each scheme is given in the Annual Report on
Remuneration 2022 on pages 143 to 168. The charge to the Income Statement in respect of share-based payments is made up as follows:
2022
£m
2021
£m
Performance Share Plan 7.3 7.9
Employee Share Ownership Plan 1.6 1.3
Total expense recognised in Income Statement 8.9 9.2
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022220

23 Employee benefits continued
Performance Share Plan
Awards under the Performance Share Plan are made to Executive Directors and other senior managers and take the form of contingent rights to
acquire shares, subject to the satisfaction of a performance target. To the extent that they vest, awards may be satisfied in cash, in shares or an
option over shares. For the 2022 grant onwards, the performance criteria is split into three separate parts.
30% of the award is based on a TSR measure where the performance target is based on the Company’s total shareholder return (TSR) relative
to the TSR of other companies included in the FTSE 350 Industrial Goods and Services Supersector over a three-year performance period
where awards will vest on a sliding scale. All shares within an award will vest if the Company’s TSR is at or above the upper quartile. 18% will
vest if the TSR is at the median and the number of shares that will vest will be calculated pro-rata on a straight-line basis between 18% and
100% if the Company’s TSR falls between the median and the upper quartile. No shares will vest if the Company’s TSR is below the median.
The second part, amounting to 50% of the award, is subject to achievement of a target based on aggregate EPS over a three-year performance
period. 18% will vest if the compound growth in EPS is equal to the growth in global industrial production (IP) plus 2% as published by CHR
Economics, and 100% will vest if the compound growth in EPS is equal to or exceeds the growth in global IP plus 8% (changing to IP plus 7%
from the 2023 grant onwards), there is pro-rata vesting for actual growth between these rates.
The final 20% of the award compares greenhouse gas intensity emission in the base year of the three-year performance period to the final year.
Performance will be measured relative to £m of sales at base year prices to ensure that efficiency savings are not distorted by inflation. 18% will
vest if there is 24% reduction in GHG intensity emission, and 100% will vest if there is a reduction in GHG intensity emission equal to or exceeds
31%, there is pro-rata vesting for actual reduction between these rates.
Shares awarded under the Performance Share Plan have been valued using the Monte Carlo simulation valuation methodology. The relevant
disclosures in respect of the Performance Share Plan grants are set out below.
2018
Grant
2019
Grant
2020
Grant
2021
Grant
2022
Grant
Grant date 4th April 15th May 12th March 5th May 14th March
Mid-market share price at grant date 5,560.0p 8,161.0p 7,775.0p 11,770.0p 11,910.0p
Number of employees 134 133 104 106 108
Shares under scheme 145,041 112,159 140,934 89,806 92,951
Vesting period 3 years 3 years 3 years 3 years 3 years
Probability of vesting 73.5% 74.1% 74.3% 73.9% 76.1%
Fair value 4,084.4p 6,048.9p 5,779.2p 8,698.0p 9,057.6p
Employee Share Ownership Plan
UK employees are eligible to participate in the Employee Share Ownership Plan (ESOP). The aim of the ESOP is to encourage increased
shareholding in the Company by all UK employees and so there are no performance conditions. Employees are invited to join the ESOP when
an offer is made each year. Individuals save for 12 months during the accumulation period and subscribe for shares at the lower of the price at
the beginning and the end of the accumulation period under HMRC rules. The Company provides a matching share for each share purchased
by the individual.
Shares issued under the ESOP have been measured using the Present Economic Value (PEV) valuation methodology. The relevant disclosures
in respect of the Employee Share Ownership Plans are set out below.
2018
Grant
2019
Grant
2020
Grant
2021
Grant
2022
Grant
Grant date 1st October 1st October 1st October 1st October 1st October
Exercise price 7,240.0p 7,835.0p 11,102.0p 15,043.3p 10,348.3p
Number of employees 1,294 1,318 1,373 1,400 1,671
Shares under scheme 16,687 16,820 12,480 9,429 16,832
Vesting period 3 years 3 years 3 years 3 years 3 years
Expected volatility 19% 21% 25% 26.5% 28.7%
Risk-free interest rate 0.8% 0.5% 0.1% 0.2% 4.0%
Expected dividend yield 2.0% 1.8% 1.5% 1.0% 1.0%
Fair value 7,623.7p 8,305.1p 11,956.9p 16,382.2p 11,579.7p
The accumulation period for the 2022 ESOP ends in September 2023, therefore some figures are projections.
Spirax-Sarco Engineering plc Annual Report 2022 221
Financial Statements

24 Analysis of changes in net debt, including changes in liabilities arising from
financing activities
2022
At 1st
January
2022
£m
Cash flow
£m
Acquired
debt*
£m
Disposal of
subsidiaries
£m
Exchange
movement
£m
At 31st
December
2022
£m
Current portion of long-term borrowings (59.6) (202.9)
Non-current portion of long-term borrowings (289.9) (731.3)
Total borrowings (349.5) (934.2)
Comprising:
Borrowings (349.5) (497.7) (67.0) – (20.0) (934.2)
Changes in liabilities arising from financing (349.5) (497.7) (67.0) – (20.0) (934.2)
Cash at bank 274.6 46.3 – (2.8) 10.8 328.9
Bank overdrafts (55.6) (26.7) – – (2.8) (85.1)
Net cash and cash equivalents 219.0 19.6 – (2.8) 8.0 243.8
Net debt (130.5) (478.1) (67.0) (2.8) (12.0) (690.4)
Lease liabilities (60.1) 12.9 (15.2) – (2.8) (65.2)
Net debt including lease liabilities (190.6) (465.2) (82.2) (2.8) (14.8) (755.6)
*Debt acquired includes both debt acquired due to acquisition, and debt recognised on the balance sheet due to entry into new leases.
The net cashflow from borrowings of £497.7m consists of £1,008.8m of new borrowings and £511.1m of repaid borrowings.
New borrowings include acquisition-related short-term bank facilities of €265.0m (£232.8m) and US$185.0m (£153.5m), a US$150.0m
(£124.4m) term loan, revolving credit facility drawdowns of £35.0m and €90.0m (£76.8m) and new private placement debt of €265.0m
(£234.6m) and $185.0m (£149.8m) that was issued to repay of the acquisition related short-term bank facilities.
Repaid borrowings include €70.0m (£59.7m) of term loan that matured during the year, €265.0m (£234.6m) and US$185.0 (£149.8m) of
acquisition related short-term bank facilities, €76.3m (£67.0m) of acquired debt that was repaid on completion of the Vulcanic acquisition.
At 31st December 2022, total lease liabilities consist of £14.1m (2021: £11.2m) short-term and £51.1m (2021: £48.9m) long-term.
See Note 28 for further information on net debt and lease liabilities.
2021
At 1st
January
2021
£m
Cash flow
£m
Acquired
debt*
£m
Disposal of
subsidiaries
£m
Exchange
movement
£m
At 31st
December
2021
£m
Current portion of long-term borrowings (0.6) (59.6)
Non-current portion of long-term borrowings (452.2) (289.9)
Total borrowings (452.8) (349.5)
Comprising:
Borrowings (452.8) 77.5 – – 25.8 (349.5)
Changes in liabilities arising from financing (452.8) 77.5 – – 25.8 (349.5)
Cash at bank 246.2 35.7 – – (7.3) 274.6
Bank overdrafts (22.2) (34.3) – – 0.9 (55.6)
Net cash and cash equivalents 224.0 1.4 – – (6.4) 219.0
Net debt (228.8) 78.9 – – 19.4 (130.5)
Lease liabilities (34.1) 11.7 (39.1) – 1.4 (60.1)
Net debt including lease liabilities (262.9) 90.6 (39.1) – 20.8 (190.6)
25 Related party transactions
Transactions with Directors are disclosed separately in Note 8 and are shown in the Annual Report on Remuneration 2022 on pages 143
to 168.
There were no other related party transactions in either 2021 or 2022.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022222

26 Purchase of businesses
The provisional fair value accounting is shown below:
2022
Cotopaxi
fair value
£m
Vulcanic
fair value
£m
Durex
fair value
£m
Total
£m
Non-current assets:
Property, plant and equipment – 15.8 14.9 30.7
Right-of-use assets – 4.1 – 4.1
Acquired intangibles 2.8 115.6 126.2 244.6
Software and other intangibles – 0.5 – 0.5
Deferred tax assets – 2.9 0.5 3.4
2.8 138.9 141.6 283.3
Current assets:
Inventories – 17.4 7.3 24.7
Trade receivables 0.8 24.5 9.5 34.8
Other receivables 0.4 3.5 1.2 5.1
Cash and cash equivalents 0.6 10.3 14.8 25.7
1.8 55.7 32.8 90.3
Total assets 4.6 194.6 174.4 373.6
Current liabilities:
Trade payables 0.1 7.5 1.1 8.7
Other payables, accruals and provisions 0.6 15.9 7.0 23.5
Short-term lease liabilities – 1.1 – 1.1
0.7 24.5 8.1 33.3
Non-current liabilities:
Long-term borrowings – 67.0 – 67.0
Long-term payables – 3.7 – 3.7
Long-term lease liabilities – 3.0 – 3.0
Deferred tax liabilities 0.6 33.4 0.1 34.1
Non-current provisions – 4.6 0.1 4.7
Post-retirement benefit plans – 1.1 – 1.1
0.6 112.8 0.2 113.6
Total liabilities 1.3 137.3 8.3 146.9
Total net assets 3.3 57.3 166.1 226.7
Goodwill 10.0 119.2 130.1 259.3
Total 13.3 176.5 296.2 486.0
Satisfied by:
Cash paid 13.3 176.5 296.2 486.0
Total consideration 13.3 176.5 296.2 486.0
Cash outflow for acquired businesses in the Statement of Cash Flows:
Cash paid for businesses acquired in the period and debt repaid 13.3 243.5 296.2 553.0
Debt repaid – (67.0) – (67.0)
Cash paid for businesses acquired in the period 13.3 176.5 296.2 486.0
Less cash acquired (0.6) (10.3) (14.8) (25.7)
Net cash outflow 12.7 166.2 281.4 460.3
1. On a debt-free cash-free basis the cash outflow for acquisitions was £535.5m consisting of £486.0m paid to the vendors, £67.0m of debt
acquired and repaid and £8.2m of acquisition costs less cash acquired of £25.7m.
2. The acquisitions of 100% of Vulcanic (completed on 29th September 2022 for consideration of €200.8m or £176.5m), 100% of Durex
Industries (completed on 30th November 2022 for consideration of US$357.1m or £296.2m) and 100% of Cotopaxi Limited (completed
on 30th January 2022 for consideration of £13.3m) have all been accounted for under the acquisition method. The separately identified
intangibles of all three acquisitions are recorded as part of the provisional fair value adjustment. The acquired intangibles relate to brand
names and trademarks, manufacturing designs and core technology and customer relationships. The goodwill recognised represents the
skilled workforce acquired and the opportunity to achieve synergies from being part of a larger Group.
Spirax-Sarco Engineering plc Annual Report 2022 223
Financial Statements

26 Purchase of businesses continued
3. Vulcanic is a European leader in industrial process heating solutions and is highly complementary to Chromalox within our ETS Business.
As the lead brands within ETS for electric process heating, Chromalox and Vulcanic will support the effective deployment of our industry-
leading decarbonisation solutions alongside Steam Specialties. Goodwill arising on the acquisition of Vulcanic is not expected to be tax
deductible. Following completion of the acquisition, Vulcanic generated €34.8m (£29.7m) of revenue and €8.3m (£7.1m) of adjusted
pre-tax profit. Had the acquisition been made on 1st January 2022, Vulcanic revenue and adjusted pre-tax profit would have been
approximately €111.9m (£95.5m) and €21.1m (£18.0m) respectively.
4. Durex Industries, located in Illinois (USA), is a specialist in custom electric thermal solutions for ultra-high criticality industrial equipment
and is highly complementary to Thermocoax within our ETS Business. Together, Thermocoax and Durex Industries are well positioned
to capitalise on the growing demand for increasingly stringent thermal energy requirements in high-technology equipment within market
sectors with high barriers to entry. Goodwill arising on the acquisition of Durex Industries is expected to be tax deductible in the USA.
Following completion of the acquisition, Durex Industries generated US$5.6m (£4.5m) of revenue and US$1.2m (£1.0m) of adjusted pre-
tax profit. Had the acquisition been made on 1st January 2022, Durex Industries revenue and adjusted pre-tax profit would have been
approximately US$81.3m (£65.5m) and US$26.4m (£21.3m) respectively.
5. Cotopaxi Limited is a UK based digitally-enabled global energy consulting and optimisation company, which will enable Steam Specialties
to digitally enhance its customer bonding through the provision of physical and digital connections to customers’ infrastructure and
equipment. Goodwill arising on the acquisition of Cotopaxi is not expected to be tax deductible. Following completion of the acquisition,
Cotopaxi generated £2.9m of revenue and £0.5m of pre-tax profit. Had the acquisition been made on 1st January 2022, Cotopaxi revenue
and pre-tax profit would not have been materially different from the figure disclosed.
6. As at the date of approval of the Financial Statements, the accounting for all current year acquisitions is provisional relating to the
finalisation of the acquired intangible assets valuation and certain other provisional balances. Due to their contractual dates, the fair value of
receivables acquired approximate to the gross contractual amounts receivable. The amount of gross contractual receivables not expected
to be recovered is immaterial.
2021
No subsidiaries were acquired during 2021.
27 Disposal of subsidiary
The loss on disposal of subsidiaries relates wholly to the disposal of 100% of Spirax Sarco Russia and Watson-Marlow Russia on 6th July 2022.
The consideration amounted to £nil which resulted in a loss on disposal for Spirax Sarco Russia of £2.2m and £1.7m for Watson-Marlow
Russia, including £0.1m of legal fees, and cumulative currency translation losses recycled to the income statement of £3.2m. £2.8m of cash
and cash equivalents were disposed as part of the transaction.
These disposals did not meet the definition of a discontinued operation given in IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, and therefore, no disclosures in relation to discontinued operations have been made.
2021
No subsidiaries were disposed of during 2021.
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022224

28 Derivatives and other financial instruments
The Group does not enter into significant derivative transactions. The Group’s principal financial instruments comprise borrowings, cash and
short-term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other
financial instruments such as trade debtors and trade creditors, which arise directly from its operations. It is, and has been throughout the period
under review, the Group’s policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are credit risk, interest rate risk, liquidity risk and foreign currency risk. The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
Credit risk
The Group sells products and services to customers around the world and its customer base is extremely varied in size and industry sector.
The Group operates credit control policies to assess customers’ credit ratings and provides for any debt that is identified as non-collectable.
Interest rate risk
The Group’s policy is to hold a mixture of fixed and floating rate debt. When new debt facilities are entered into, the Group assesses if this
should be fixed or floating depending on the specific circumstances at the time. In addition the Group aims to achieve a spread of maturity date s
in order to avoid the concentration of funding requirements at any one time. The ratio of fixed to floating rate debt and debt maturity profile is
kept under review by the Chief Financial Officer in conjunction with the Board.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of overdrafts, loans, facilities and
leases as appropriate.
Capital management
The Group’s objective is to ensure support of the Group’s operations and maximise shareholder value. The Group uses cash generated from
operations to invest organically or to finance acquisitions. The capital structure comprises of debt and borrowings (see Note 24), cash and cash
equivalents (see Note 24) along with equity as disclosed in the Consolidated Statement of Changes in Equity.
The Group is not subject to externally imposed capital requirements, other than financial covenant requirements on external borrowing.
Foreign currency risk
The Group has operations around the world and therefore its Consolidated Statement of Financial Position can be affected significantly by
movements in the rate of exchange between sterling and various other currencies particularly the US dollar and euro. The Group seeks to
mitigate the effect of this structural currency exposure by borrowing in these currencies where appropriate while maintaining a low cost of debt.
In addition the Group employs Net Investment Hedge Accounting where appropriate to mitigate these exposures, with such hedges being
designated in both 2022 and 2021. The loss on net investment hedges during 2022 included in the Consolidated Statement of Comprehensive
income was £15.4m (2021: £18.8m gain). This is included within translation reserves in the Consolidated Statement of Changes in Equity (see
Note 21).
The Group also has transactional currency exposures principally as a result of trading between Group companies. Such exposures arise from
sales or purchases by an operating unit in currencies other than the unit’s functional currency. The Group operates a programme to manage this
risk on a Group-wide net basis, through the entering into of both forward contracts and non-deliverable forward contracts with a range of bank
counter-parties.
Fair values of financial assets and financial liabilities
Fair values of financial assets and liabilities at 31st December 2022 are not materially different from book values due to their size or the fact that
they were at short-term rates of interest. Fair values have been assessed as follows:
• Derivatives
Forward exchange contracts are marked to market by discounting the future contracted cash flows using readily available market data.
• Interest-bearing loans and borrowings
Fair value is calculated based on discounted expected future principal and interest cash flows.
• Lease liabilities
The fair value is estimated as the present value of future cash flows, discounted at the incremental borrowing rate for the related geographical
location unless the rate implicit in the lease is readily determinable.
• Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.
Spirax-Sarco Engineering plc Annual Report 2022 225
Financial Statements

28 Derivatives and other financial instruments continued
The following table compares amounts and fair values of the Group’s financial assets and liabilities:
2022
Carrying
value
£m
2022
Fair
value
£m
2021
Carrying
value
£m
2021
Fair
value
£m
Financial assets:
Cash and cash equivalents 328.9 328.9 274.6 274.6
Trade, other receivables and contract assets 395.2 395.2 298.1 298.1
Total financial assets 724.1 724.1 572.7 572.7
2022
Carrying
value
£m
2022
Fair
value
£m
2021
Carrying
value
£m
2021
Fair
value
£m
Financial liabilities:
Borrowings 934.2 918.1 349.5 358.3
Lease liabilities 65.2 65.2 60.1 60.1
Bank overdrafts 85.1 85.1 55.6 55.6
Trade payables 89.9 89.9 67.8 67.8
Other payables and contract liabilities 70.5 70.5 56.2 56.2
Long-term payables 8.8 8.8 4.7 4.7
Accruals 113.2 113.2 85.7 85.7
Total financial liabilities 1,366.9 1,350.8 679.6 688.4
There are no other assets or liabilities measured at fair value on a recurring or non-recurring basis for which fair value is disclosed.
Derivative financial instruments are measured at fair value. Fair value of derivative financial instruments are calculated based on discounted cash
flow analysis using appropriate market information for the duration of the instruments.
Financial instruments fair value disclosure
Fair value measurements are classified into three levels, depending on the degree to which the fair value is observable:
• Level 1 fair value measurements are those derived from quoted prices in active markets for identical assets and liabilities;
• Level 2 fair value measurements are those derived from other observable inputs for the asset or liability; and
• Level 3 fair value measurements are those derived from valuation techniques using inputs that are not based on observable market data.
With the exception of the Group’s private placement borrowings, there were no significant differences between the carrying value and the
fair value of the Group’s financial assets and liabilities. The fair value of private placement borrowings are estimated by discounting the future
contracted cash flows using readily available market data and represents a Level 2 measurement in the fair value hierarchy.
We consider that the derivative financial instruments also fall into Level 2.
Interest rate risk profile of financial liabilities
The interest rate profile of the financial liabilities of the Group as at 31st December was as follows:
2022
Total
£m
Fixed rate
financial
liabilities
£m
Floating rate
financial
liabilities
£m
Financial
liabilities on
which no
interest is paid
£m
Euro 762.9 642.2 44.9 75.8
US dollar 341.9 283.6 3.0 55.3
Sterling 107.3 21.0 36.3 50.0
Renminbi 46.3 2.0 – 44.3
Other 108.5 18.3 36.1 54.1
Group total 1,366.9 967.1 120.3 279.5
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022226

28 Derivatives and other financial instruments continued
2021
Total
£m
Fixed rate
financial
liabilities
£m
Floating rate
financial
liabilities
£m
Financial
liabilities on
which no
interest is paid
£m
Euro 452.8 366.8 45.0 41.0
US dollar 49.8 8.9 4.0 36.9
Sterling 65.1 20.0 – 45.1
Renminbi 51.6 1.8 – 49.8
Other 60.3 14.6 – 45.7
Group total 679.6 412.1 49.0 218.5
Terms and debt repayment schedule
The terms and conditions of outstanding borrowings were as follows:
Currency
Nominal
interest rate
Year
of maturity
2022
Carrying value
£m
2021
Carrying value
£m
Unsecured private placement – €225.0m € 1.1% 2023 202.0 189.6
Unsecured private placement – $185.0m $ 5.3% 2028 152.9 –
Unsecured bank facility – $150.0m $ 5.5% 2025 124.0 –
Unsecured private placement – €140.0m € 3.9% 2027 123.9 –
Unsecured private placement – €125.0m € 4.2% 2029 110.6 –
Unsecured private placement – €120.0m € 2.4% 2026 106.2 101.1
Unsecured bank facility € 3.5% 2027 79.6 –
Unsecured bank facility £ 0.0% 2023 39.3 4.0
Unsecured bank facility € 0.0% 2023 38.5 45.0
Unsecured bank facility £ 4.0% 2027 35.0 –
Unsecured bank facility € 0.0% 2023 5.2 –
Unsecured bank facility € 0.5% 2023 2.0 –
Unsecured bank facility € 1.4% 2023 0.1 0.1
Unsecured bank facility SEK 0.0% 2022 – 0.6
Unsecured bank facility – €160.0m € 0.7% 2022 – 58.8
Unsecured bank facility CNY 3.5% 2022 – 5.8
Unsecured bank facility PLN 0.0% 2023 – 0.1
Total outstanding borrowings 1,019.3 405.1
New private placement borrowings of €265.0m (£234.6m) and US$185.0m (£149.8m) along with a term loan of US$150.0m (£124.4m) all
relate to the funding of acquisitions made during the year.
The weighted average interest rate paid during the year was 3.3% (2021: 1.2%) .
Interest rate risk profile of financial assets
The interest rate profile of the financial assets of the Group as at 31st December was as follows:
2022
Total
£m
Fixed rate
financial
assets
£m
Floating rate
financial
assets
£m
Financial assets
on which no
interest is
earned
£m
Sterling 49.5 0.1 19.6 29.8
Euro 205.8 0.2 62.2 143.4
US dollar 186.3 0.8 36.4 149.1
Renminbi 92.4 6.4 41.1 44.9
Other 190.1 8.6 22.7 158.8
Group total 724.1 16.1 182.0 526.0
Spirax-Sarco Engineering plc Annual Report 2022 227
Financial Statements

2021
Total
£m
Fixed rate
financial
assets
£m
Floating rate
financial
assets
£m
Financial assets
on which no
interest is
earned
£m
Sterling 63.9 0.1 43.3 20.5
Euro 119.2 0.1 23.4 95.7
US dollar 124.2 – 16.0 108.2
Renminbi 91.2 4.0 40.9 46.3
Other 174.2 12.8 17.3 144.1
Group total 572.7 17.0 140.9 414.8
Financial assets on which no interest is earned comprise trade and other receivables and cash at bank. Floating and fixed rate financial assets
comprise cash at bank or cash placed on deposit.
Currency exposures
As explained on page 225, the Group’s objectives in managing the currency exposures arising from its net investment overseas (in other words,
it’s structural currency exposures) are to maintain a low cost of debt while partially hedging against currency depreciation. All gains and losses
arising from these structural currency exposures are recognised in the Consolidated Statement of Comprehensive Income. In addition the Group
employs Net Investment Hedge Accounting in order to mitigate these impacts where appropriate.
Transactional (or non-structural) exposures give rise to net currency gains and losses that are recognised in the Consolidated Income
Statement. Such exposures include the monetary assets and monetary liabilities in the Consolidated Statement of Financial Position that are not
denominated in the operating (or functional) currency of the operating unit involved. At 31st December 2022 the currency exposures in respect
of the euro was a net monetary liability of £280.8m (2021: £176.4m net monetary liability) and in respect of the US dollar a net monetary liability
of £225.0m (2021: £121.4m net monetary asset).
At 31st December 2022, the percentage of debt to net assets, excluding debt was 53% (2021: 28%) for the euro, 7% (2021: 1%) for the US
dollar and nil% (2021: 1%) for the Chinese renminbi.
Maturity of financial liabilities
The Group’s financial liabilities at 31st December mature in the following periods:
2022
Trade, other
payables
and contract
liabilities
£m
Overdrafts
£m
Lease
liabilities
£m
Long-term
borrowings
£m
Total
£m
In six months or less, or on demand 271.0 85.1 7.9 37.3 401.3
In more than six months but no more than twelve 6.8 – 7.0 201.4 215.2
In more than one year but no more than two 1.7 – 10.9 84.2 96.8
In more than two years but no more than three 1.3 – 7.7 147.0 156.0
In more than three years but no more than four 0.8 – 5.6 107.5 113.9
In more than four years but no more than five – – 4.2 341.5 345.7
In more than five years 0.8 – 28.1 142.6 171.5
Total contractual cash flows 282.4 85.1 71.4 1,061.5 1,500.4
Statement of Financial Position values 282.4 85.1 65.2 934.2 1,366.9
2021
Trade, other
payables
and contract
liabilities
£m
Overdrafts
£m
Lease liabilities
£m
Long-term
borrowings
£m
Total
£m
In six months or less, or on demand 201.8 55.6 6.4 67.0 330.8
In more than six months but no more than twelve 8.0 – 5.8 2.1 15.9
In more than one year but no more than two 2.4 – 11.0 193.4 206.8
In more than two years but no more than three 1.1 – 6.9 2.4 10.4
In more than three years but no more than four 0.6 – 4.7 2.3 7.6
In more than four years but no more than five – – 3.6 102.1 105.7
In more than five years 0.5 – 28.3 – 28.8
Total contractual cash flows 214.4 55.6 66.7 369.3 706.0
Statement of Financial Position values 214.4 55.6 60.1 349.5 679.6
Notes to the Consolidated Financial Statements continued
28 Derivatives and other financial instruments continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022228

28 Derivatives and other financial instruments continued
The Group did not employ any supply chain or similar forms of financing during 2022 or 2021.
Cash flow hedges
The Group uses forward currency contracts to manage its exposure to movements in foreign exchange rates. The forward contracts are
designated as hedging instruments in a cash flow hedging relationship. At 31st December 2022 the Group had contracts outstanding to
economically hedge or to purchase £38.9m (2021: £45.5m), and €12.9m (2021: €20.3m) with US dollars, £70.4m (2021: £74.3m) with euros,
£20.3m (2021: £18.9m), and €8.4m (2021: €13.1m) with Chinese renminbi, £10.6m (2021: £7.7m) and €3.4m (2021: €3.1m) with Korean won,
£2.5m (2021: £6.3m) with Singapore dollar and DKK54.2m (2021: DKK31.6m) with euros. The fair values at the end of the reporting period
were a liability of £3.7m (2021: £0.2m liability), included within Trade and other payables on the Consolidated Statement of Financial Position.
The fair value of cash flow hedges falls into the Level 2 category of the fair value hierarchy in accordance with IFRS 13. The fair value of derivative
financial instruments is estimated by discounting the future contracted cash flow using readily available market data.
The contractual cash flows on forward currency contracts at the reporting date are shown below, classified by maturity. The cash flows shown
are on a gross basis and are not discounted.
2022
Less than
6 months
£m
6 to 12
months
£m
More than
12 months
£m
Total
£m
Contracted cash in/(out):
Sterling 72.8 70.0 – 142.8
Euro (30.4) (26.2) – (56.6)
US dollar (23.7) (27.9) – (51.6)
Other (22.8) (20.8) – (43.6)
Total contractual cash flows (4.1) (4.9) – (9.0)
2021
Less than
6 months
£m
6 to 12 months
£m
More than
12 months
£m
Total
£m
Contracted cash in/(out):
Sterling 61.5 62.1 21.4 145.0
Euro (21.6) (16.8) (8.0) (46.4)
US dollar (24.0) (30.5) (9.7) (64.2)
Other (14.6) (15.4) (3.6) (33.6)
Total contractual cash flows 1.3 (0.6) 0.1 0.8
It is anticipated that the cash flows will take place at the same time as the corresponding forward contract matures. At this time the amount
deferred in equity will be reclassified to profit or loss.
All forecast transactions which have been subject to hedge accounting during the year have occurred or are still expected to occur.
A loss on derivative financial instruments of £3.5m (2021: £2.8m loss) was recognised in other comprehensive income during the period.
As at 31st December 2022 no ineffectiveness has been recognised in profit or loss arising from hedging foreign currency transactions.
Borrowing facilities
The Group has various borrowing facilities available to it. The undrawn committed facilities available at 31st December in respect of which
all conditions precedent had been met at that date were as follows:
2022
£m
2021
£m
Expiring in one year or less – −
Expiring in more than one year but no more than two years – −
Expiring in more than two years but no more than three years – 350.0
Expiring in more than three years 285.4 −
Total Group undrawn committed facilities 285.4 350.0
At 31st December 2022, the Group had available £285.4m (2021: £350.0m) of undrawn committed borrowing facilities in respect of its
£400.0m (2021: £350.0m) pound sterling revolving credit facility, of which all conditions precedent had been met. This facility expires on 13th
April 2027.
Spirax-Sarco Engineering plc Annual Report 2022 229
Financial Statements

28 Derivatives and other financial instruments continued
Sensitivity analysis
In managing interest rate and currency risks, the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings. Over the
longer term, however, permanent changes in foreign exchange and interest rates would have an impact on consolidated earnings. At the year
end borrowings totalled £1,019.3m (2021: £405.1m). At 31st December 2022, it is estimated that a general increase of one percentage point in
interest rates would decrease the Group’s profit after tax and equity by approximately £1.7m (2021: £0.1m).
For the year ended 31st December 2022, it is estimated that a decrease of five percentage points in the value of sterling weighted in relation
to the Group’s profit and trading flows would have increased the Group’s profit before tax by approximately £17.0m (2021: £13.5m). The effect
can be very different between years due to the weighting of different currency movements. Forward exchange contracts have been included in
this calculation.
The credit risk profile of trade receivables
The ageing of trade receivables at the reporting date was:
Gross
2022
£m
Impairment
2022
£m
Net
2022
£m
Gross
2021
£m
Impairment
2021
£m
Net
2021
£m
Not past due date 236.2 (1.8) 234.4 197.6 (1.9) 195.7
0–30 days past due date 48.8 (0.1) 48.7 40.9 (0.2) 40.7
31–90 days past due date 29.0 (0.1) 28.9 22.9 (0.5) 22.4
91 days to one year past due date 26.9 (1.3) 25.6 15.4 (1.9) 13.5
More than one year 13.9 (10.4) 3.5 8.4 (8.4) –
Group total 354.8 (13.7) 341.1 285.2 (12.9) 272.3
Other than those disclosed above no other impairment losses on receivables and contract assets arising from contracts with customers have
been recognised. Other than trade receivables there are no financial assets that are past their due date at 31st December 2022.
Payment terms across the Group vary depending on the geographic location of each operating company. Payment is typically due between 20
and 90 days after the invoice is issued.
All contracts with customers do not contain a significant financing component.
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
2022
£m
2021
£m
Balance at 1st January 12.9 17.8
Additional impairment 1.0 2.0
Amounts written off as uncollectable (0.3) (1.2 )
Amounts recovered (0.6) (1.2 )
Impairment losses reversed (0.3) (4.3 )
Exchange differences 1.0 (0.2 )
Balance at 31st December 13.7 12.9
Notes to the Consolidated Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022230

In this section
Company Statement of Financial Position 232
Company Statement of Changes in Equity 233
Notes to the Company Financial Statements 234
Spirax-Sarco Engineering plc Annual Report 2022 231
Financial Statements
Company Financial Statements

Notes
2022
£m
2021
£m
Assets
Non-current assets
Property, plant and equipment 11 5.9 5.8
Loans to subsidiaries 3, 9 106.2 291.0
Investment in subsidiaries 2 756.6 748.8
Deferred tax assets 6 10.5 0.1
Post-retirement benefits 7 3.9 5.1
883.1 1,050.8
Current assets
Loans to subsidiaries 3,9 200.2 –
Due from subsidiaries 9 17.4 0.7
Other current assets 4 3.8 5.4
Cash and cash equivalents 20.5 19.0
241.9 25.1
Total assets 1,125.0 1,075.9
Equity and liabilities
Current liabilities
Trade and other payables 5 10.6 5.4
Current portion of long-term borrowings 10 235.1 0.9
Short-term borrowings 49.8 0.1
295.5 6.4
Net current liabilities / assets (53.6) 18.7
Non-current liabilities
Long-term borrowings 10 106.2 289.8
Deferred tax liabilities 6 1.4 1.3
Due to subsidiaries 9 30.2 10.4
137.8 301.5
Total liabilities 433.3 307.9
Net assets 691.7 768.0
Equity
Share capital 8 19.8 19.8
Share premium account 88.1 86.3
Other reserves 8 2.0 4.5
Retained earnings 581.8 657.4
Equity shareholders’ funds 691.7 768.0
Total equity 691.7 768.0
Total equity and liabilities 1,125.0 1,075.9
The loss before dividends received was £30.6m (2021: £18.6m). Dividends from subsidiary undertakings of £72.4m (2021: £146.4m) are
excluded from this amount. Total profit recognised during the year was £41.8m (2021: £127.8m).
These Financial Statements of Spirax-Sarco Engineering plc, company number 00596337 were approved by the Board of Directors and
authorised for issue on 8th March 2023 and signed on its behalf by:
N.J. Anderson N.B. Patel Directors
Company Statement of Financial Position
at 31st December 2022
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022232

Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1st January 2022 19.8 86.3 4.5 657.4 768.0
Profit for the year – – – 41.8 41.8
Other comprehensive income:
Cash flow hedges net of tax – – (3.5) – (3.5)
Remeasurement loss on post-retirement benefits – – – (1.3) (1.3)
Deferred tax on remeasurement loss on post-retirement
benefits – – – 0.3 0.3
Total other comprehensive income for the year – – (3.5) (1.0) (4.5)
Total comprehensive income for the year – – (3.5) 40.8 37.3
Contributions by and distributions to owners of the Company:
Dividends paid – – – (103.1) (103.1)
Equity settled share plans net of tax – – – (13.3) (13.3)
Issue of share capital – 1.8 – – 1.8
Employee Benefit Trust shares – – (2.2) – (2.2)
Investment in subsidiaries in relation to share options granted – – 3.2 – 3.2
Balance at 31st December 2022 19.8 88.1 2.0 581.8 691.7
For the year ended 31st December 2021
Share
capital
£m
Share
premium
account
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1st January 2021 19.8 84.8 16.2 628.4 749.2
Profit for the year – – – 127.8 127.8
Other comprehensive income:
Transfer between reserves – – – – –
Cash flow hedges net of tax – – (2.8) – (2.8)
Remeasurement loss on post-retirement benefits – – – (0.3) (0.3)
Deferred tax on remeasurement loss on post-retirement
benefits – – – (0.2) (0.2)
Total other comprehensive income for the year – – (2.8) (0.5) (3.3)
Total comprehensive income for the year – – (2.8) 127.3 124.5
Contributions by and distributions to owners of the Company:
Dividends paid – – – (90.7) (90.7)
Equity settled share plans net of tax – – – (7.6) (7.6)
Issue of share capital – 1.5 – – 1.5
Employee Benefit Trust shares – – (12.5) – (12.5)
Investment in subsidiaries in relation to share options granted – – 3.6 – 3.6
Balance at 31st December 2021 19.8 86.3 4.5 657.4 768.0
Other reserves represent the Company’s share-based payments, capital redemption and Employee Benefit Trust reserves (see Note 8).
The Notes on pages 234 to 240 form an integral part of the Financial Statements.
Company Statement of Changes in Equity
for the year ended 31st December 2022
Spirax-Sarco Engineering plc Annual Report 2022 233
Financial Statements

1 Accounting policies
The separate Financial Statements of the Company are presented as required by the Companies Act 2006. The Company meets the definition
of a qualifying entity under FRS 100. Accordingly the Company has adopted FRS 101 (Reduced Disclosure Framework). As permitted
by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to share-based
payments, financial instruments and the presentation of a Cash Flow Statement. Where relevant, equivalent disclosures have been given in the
Consolidated Financial Statements.
Under section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own Income Statement.
As permitted by the audit fee disclosure regulations, disclosure of non-audit fees information is not included in respect of the Company.
The Company’s accounting policies are the same as those set out in Note 1 of the Consolidated Financial Statements, except as noted below.
The Directors have concluded that no critical judgements or key sources of estimation uncertainty have been made in the process of applying
the Company’s accounting policies.
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Loans to or from other Group undertakings and all other payables and receivables are initially recorded at fair value, which is generally the
proceeds received. They are then subsequently carried at amortised cost.
2 Investments in subsidiaries
2022
£m
2021
£m
Cost:
At 1st January 748.8 737.1
Share options issued to subsidiary company employees 3.2 3.6
Disposals (0.2) –
Additions 4.8 8.1
At 31st December 756.6 748.8
Investments are stated at cost less provisions for any impairment in value.
Additions in the year relate to the transfer of ownership of Spirax-Sarco Engineering (China) Limited from Spirax-Sarco Investments Limited to
Spirax-Sarco Engineering plc for £4.8m.
Disposals in the year relate to the disposal of the operating entities in Russia.
Details relating to subsidiary undertakings are given on pages 242 to 246. Except where stated all classes of shares were 100% owned by
the Group at 31st December 2022. The country of incorporation of the principal Group companies is the same as the country of operation
withthe exception of companies operating in the United Kingdom which are incorporated in Great Britain. All operate in steam, electrical
thermalenergy solutions, fluid path technologies or peristaltic pumping markets except those companies identified as a holding company
onpages 242 to 246.
Notes to the Company Financial Statements
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022234

3 Loans to subsidiaries
2022
£m
2021
£m
Cost:
At 1st January 291.0 309.9
Advances – –
Interest 4.7 4.6
Repayments (4.7) (4.6)
Exchange adjustment 15.4 (18.9)
At 31st December 306.4 291.0
The terms and conditions of loans to subsidiaries at 31st December 2022 were as follows:
Currency
Nominal interest
rate
Year of
maturity
2022
£m
2021
£m
Spirax-Sarco Overseas Limited € 1.10% 2023 199.8 189.8
Spirax-Sarco Overseas Limited € 2.36% 2026 106.6 101.2
Total loans to subsidiaries 306.4 291.0
Due within one year 200.2 1.0
Due after more than one year 106.2 290.0
4 Other current assets
2022
£m
2021
£m
Prepayments and accrued income 3.8 5.4
Total other current assets 3.8 5.4
5 Trade and other payables
2022
£m
2021
£m
Accruals 10.6 5.4
Total trade and other payables 10.6 5.4
Trade and other payables are due within one year.
6 Deferred tax assets and liabilities
Movement in deferred tax during the year 2022
1st January
2022
£m
Recognised
in income
£m
Recognised
in OCI
£m
Recognised
in equity
£m
31st December
2022
£m
Other temporary differences asset 0.1 9.5 0.9 – 10.5
Pensions liability (1.3) 0.3 (0.4) – (1.4)
Company total (1.2) 9.8 0.5 – 9.1
Movement in deferred tax during the year 2021
1st January
2021
£m
Recognised
in income
£m
Recognised
in OCI
£m
Recognised
in equity
£m
31st December
2021
£m
Other temporary differences asset – 0.1 – – 0.1
Pensions liability (1.1) – (0.2) – (1.3)
Company total (1.1) 0.1 (0.2) – (1.2)
Spirax-Sarco Engineering plc Annual Report 2022 235
Financial Statements

Notes to the Company Financial Statements continued
7 Employee benefits
Pension plans
The Company is accounting for pension costs in accordance with International Accounting Standard 19.
The disclosures shown here are in respect of the Company’s defined benefit obligations. Other plans operated by the Company were defined
contribution plans.
The total expense relating to the Company’s defined contribution pension plans in the current year was £0.9m (2021: £0.6m).
At 31st December 2022 the post-retirement mortality assumptions in respect of the Company Defined Benefit Scheme follows 84%/87%
(male/female) of SAPS S3 light, CMI 2021 projections with a long term trend of 1.25% p.a., initial addition of 0.25% and w2020 parameter of
10%. At 31st December 2021 the post-retirement mortality assumptions in respect of the Company Defined Benefit Scheme follows 84%/87%
(male/female) of SAPS S3 light, CMI 2020 projections with a long term trend of 1.25% p.a., initial addition of 0.25%. These assumptions are
regularly reviewed in light of scheme-specific experience and more widely available statistics.
The financial assumptions used at 31st December were:
Weighted-average
assumptions used to define the
benefit obligations
2022
%
2021
%
Rate of increase in salaries n/a n/a
Rate of increase in pensions 2.9 3.2
Rate of price inflation 3.2 3.3
Discount rate 4.7 1.8
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions, which due to the timescale
covered, may not necessarily be borne out in practice.
Fair value of scheme assets:
2022
£m
2021
£m
Equities 5.2 11.1
Bonds 22.7 35.4
Other 14.6 13.8
Total market value in aggregate 42.5 60.3
£32.5m (2021: £nil) of scheme assets have a quoted market price in an active market.
The actual return on plan assets was a loss of £15.0m (2021: a gain of £3.1m).
The amounts recognised in the Company Statement of Financial Position are determined as follows:
2022
£m
2021
£m
Fair value of scheme’s assets 42.5 60.3
Present value of funded scheme’s liabilities (38.6) (55.2)
Retirement benefit asset recognised in the Statement of Financial Position 3.9 5.1
Related deferred tax (1.4) (1.3)
Net pension asset 2.5 3.8
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022236

7 Employee benefits continued
The movements in the Defined Benefit Obligation (DBO) recognised in the Statement of Financial Position during the year were:
2022
£m
2021
£m
Defined benefit obligation at beginning of year (55.2) (55.2)
Current service cost – –
Interest cost (1.0) (0.7)
Contributions from members – –
Remeasurement (loss)/gain 14.9 (2.7)
Actual benefit payments 2.7 3.4
Experience loss – –
Defined benefit obligation at end of year (38.6) (55.2)
The movements in the fair value of plan assets during the year were:
2022
£m
2021
£m
Value of assets at beginning of year 60.3 60.8
Expected return on assets 1.1 0.7
Remeasurement (loss)/gain (16.1) 2.4
Contributions paid by employer – –
Administration costs (0.1) (0.2)
Actual benefit payments (2.7) (3.4)
Value of assets at end of year 42.5 60.3
The estimated employer contributions to be made in 2023 are £nil.
The history of experience adjustments is as follows:
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
Defined benefit obligation at end of year (38.6) (55.2) (55.2) (53.9) (52.7)
Fair value of scheme’s assets 42.5 60.3 60.8 59.5 56.4
Retirement benefit recognised in the Statement of
Financial Position 3.9 5.1 5.6 5.6 3.7
Experience adjustment on scheme’s liabilities 0.9 3.5 (5.0) – (0.3)
As a percentage of scheme’s liabilities 2.3% 6.3% 9.1% 0.0% 0.1%
Experience adjustment on scheme’s assets (16.1) 2.4 2.6 4.1 (2.4)
As a percentage of scheme’s assets 37.9% 4.0% 4.3% 6.9% 4.3%
The expense recognised in the Company Income Statement was as follows:
2022
£m
2021
£m
Current service and administration cost (0.1) (0.2)
Net interest on scheme’s assets and liabilities 0.1 0.1
Total expense recognised in Income Statement 0.0 (0.1)
Spirax-Sarco Engineering plc Annual Report 2022 237
Financial Statements

7 Employee benefits continued
Statement of Comprehensive Income (OCI)
2022
£m
2021
£m
Remeasurement effects recognised in OCI:
Due to experience on DBO (0.9) (3.5)
Due to demographic assumption changes in DBO 0.5 0.2
Due to financial assumption changes in DBO 15.3 0.6
Return on assets (16.1) 2.4
Total remeasurement loss recognised in OCI (1.2) (0.3)
Deferred tax on remeasurement amount recognised in OCI 0.3 (0.2)
Cumulative loss recognised in OCI at beginning of year (10.6) (10.1)
Cumulative loss recognised in OCI at end of year (11.5) (10.6)
Sensitivity analysis
The effect on the defined benefit obligation at 31st December 2022 of an increase or decrease in key assumptions is as follows:
Increase/(decrease) in pension defined benefit obligation £m
Discount rate assumption being 1.00% higher (3.3)
Discount rate assumption being 1.00% lower 3.7
Inflation assumption being 1.00% higher 2.1
Inflation assumption being 1.00% lower (2.0)
Mortality assumption life expectancy at age 65 being one year higher 1.7
Share-based payments
Disclosures of the share-based payments offered to employees of the Company are set out below. The description and operation of each
scheme is the same as outlined in the Group disclosure.
Share Option Scheme
As at 31st December 2022 the number of shares outstanding were nil, due to performance conditions in respect of all exercisable shares being
met. No options have been granted since 2011.
Performance Share Plan
The relevant disclosures in respect of the Performance Share Plan grants are set out below.
2018
Grant
2019
Grant
2020
Grant
2021
Grant
2022
Grant
Grant date 4th April 15th May 12th March 5th May 14th March
Mid-market share price at grant date 5,560.0p 8,161.0p 7,775.0p 11,770.0p 11,910.0p
Number of employees 12 12 19 15 13
Shares under scheme 60,899 60,626 82,607 45,815 42,573
Vesting period 3 years 3 years 3 years 3 years 3 years
Probability of vesting 73.5% 74.1% 74.3% 73.9% 76.05%
Fair value 4,084.4p 6,048.9p 5,779.2p 8,698.0p 9,057.6p
Notes to the Company Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022238

8 Called-up share capital and reserves
2022
£m
2021
£m
Ordinary shares of 26
12
/
13
p (2021: 26
12
/
13
p ) each
Authorised 111,428,571 (2021: 111,428,571) 30.0 30.0
Allotted, called up and fully paid 73,776,048 (2021: 73,776,048) 19.8 19.8
28,262 shares with a nominal value of £7,609 were issued in connection with the Group’s Employee Share Schemes for a consideration
of£1.8m received by the Company.
In 2022 the Parent Company purchased 180,000 shares representing 0.24% of called-up share capital with a nominal value of £48,462 for a
consideration of £20,712,752. The shares were placed in an Employee Benefit Trust (EBT) to be used in connection with the Group’s Employee
Share Scheme.
At 31st December 2022 179,632 shares were held in an Employee Benefit Trust and available for use in connection with the Group’s Employee
Share Schemes.
13 senior employees of the Company have been granted options on Ordinary shares under the Share Option Scheme and Performance Share
Plan (details in Note 7).
Other reserves in the Company Statement of Changes in Equity on page 233 are made up as follows:
1st January
2022
£m
Change
in year
£m
31st December
2022
£m
Share-based payments reserve 22.2 3.2 25.4
Cash flow hedges reserve (0.2) (3.5) (3.7)
Capital redemption reserve 1.8 – 1.8
Employee Benefit Trust reserve (19.3) (2.2) (21.5)
Total other reserves 4.5 (2.5) 2.0
Share-based payments reserve
This reserve records the Company’s share-based payment charge that is recognised in reserves.
Cash flow hedges reserve
This reserve records the Company’s cumulative net change in the fair value of forward exchange contracts where they are designated as
effective cash flow hedge relationships.
Capital redemption reserve
This reserve records the historical repurchase of the Company’s own shares.
Employee Benefit Trust reserve
The Company has an Employee Benefit Trust which is used to purchase, hold and issue shares in connection with the Group’s employee share
schemes. The shares held in Trust are recorded in this separate reserve.
9 Related party transactions
2022
£m
2021
£m
Dividends received from subsidiaries 72.4 146.4
Loans due from subsidiaries at 31st December 306.4 291.0
Amounts due from subsidiaries at 31st December 17.4 0.7
Amounts due to subsidiaries at 31st December 30.2 10.4
Spirax-Sarco Engineering plc Annual Report 2022 239
Financial Statements

10 Financial instruments
The terms and conditions of outstanding loans at 31st December 2022 are as follows:
Currency
Nominal
interest rate
Year of
maturity
Carrying
value
£m
Unsecured private placement – €225.0m € 1.1% 2023 199.8
Unsecured private placement – €120.0m € 2.4% 2026 106.5
Revolving Credit Facility – Drawdown £35.0m £ 4.0% 2027 35.0
Total outstanding loans 341.3
Current portion of long-term borrowings due before 31st December 2023 235.1
Long-term borrowings payable after 31st December 2023 106.2
Total outstanding loans 341.3
11 Other information
Dividends
Dividends paid by the Company are disclosed in Note 11 of the Consolidated Financial Statements.
Property, plant and equipment
The Company holds freehold property with a cost of £7.1m (2021: £9.7m), accumulated depreciation of £1.2m (2021: £3.9m) and a net book
value of£5.9m (2021: £5.8m). During the year the Company started construction of a new head office with £3.3m being written off the value of
freehold property in respect of the demolition of the previous offices.
Included within the net book value of £5.9m as at 31st December 2022 is an amount of £3.9m (2021: £nil) in relation to assets
under construction.
Employees
The total number of employees of the Company at 31st December 2022 was 117 (2021: 112).
Directors’ remuneration
The remuneration of the Directors of the Company is shown in the Annual Report on Remuneration 2022 on pages 143 to 168.
Auditor’s remuneration
Auditor’s remuneration in respect of the Company’s annual audit has been disclosed on a consolidated basis in the Company’s Consolidated
Financial Statements as required by Section 494(4)(a) of the Companies Act 2006.
Contingent liabilities and capital commitments
The Company has no contingent liabilities or capital commitments at 31st December 2022 (2021: £nil).
Notes to the Company Financial Statements continued
Financial Statements
Spirax-Sarco Engineering plc Annual Report 2022240

In this section
Our Global Operations 242
Officers and Advisers 247
Spirax-Sarco Engineering plc Annual Report 2022 241
Corporate Information
Corporate Information

Our Global Operations
Steam Specialties – EMEA
Country/Territory Company Name Registered Office address
Belgium Spirax Sarco NV Industriepark 5, B-9052 Zwijnaarde, Belgium
Czech Republic Spirax Sarco spol sro Prazska 1455, 102 00 Praha, Hostivar, Czech Republic
Egypt Spirax Sarco Egypt 19 Farid Street, Heliopolis, Cairo, Egypt
Spirax Sarco Energy Solutions LLC (H) 19 Farid Street, Heliopolis, Cairo, Egypt
Finland Spirax Oy Niittytie 25 A 24, 01300 Vantaa, Helsinki, Finland
France Spirax Sarco SAS Zone Industrielle des Bruyères 8 Avenue le Verrier, 78190 Trappes, France
Spirax-Sarco France HoldCo SAS (H) 23 Route de Château-Thierry, 02200 Noyant-et-Aconin, Soissons, France
Gestra France SAS Zone Industrielle des Bruyères, 8 Avenue Le Verrier 78190 Trappes, France
Spirax Sarco North & West Africa SAS Zone Industrielle des Bruyères, 8 Avenue Le Verrier, 78190 Trappes, France
Germany Spirax Sarco GmbH Regelapparate Reichenaustr. 210, 78467 Konstanz, Germany
Spirax-Sarco Germany Holdings GmbH (H) Reichenaustr. 210, 78467, Konstanz, Germany
Gestra AG Muenchener Str. 77, 28215, Bremen, Germany
Gestra HoldCo GmbH (H) Muenchener Str. 77, 28215, Bremen, Germany
Hungary Spirax-Sarco Kft 1103 Budapest Koér utca 2/A, Hungary
Italy Spirax Sarco Srl Via Per Cinisello 18, 20834 Nova Milanese, Italy
Italgestra Srl Via Per Cinisello 18, 20834 Nova Milanese, Italy
Kenya Spirax Sarco East Africa Ltd Clifton Park, Mombasa Road, Nairobi, Kenya
Morocco Spirax Sarco Maghreb Secteur 3, Lot 146, Rue Arfoud, Bureaux 5 et 6, commerce 2-12000 Temara, Morocco
Netherlands Spirax-Sarco Netherlands BV Industrieweg 130A, 3044 AT, Rotterdam, Netherlands
Spirax-Sarco Engineering BV (H) Industrieweg 130A, 3044 AT, Rotterdam, Netherlands
Spirax-Sarco Investments BV (H) Industrieweg 130A, 3044 AT, Rotterdam, Netherlands
Spirax-Sarco Netherlands Holdings Coöperative
WA (H)
Sluisstraat 7, 7491 GA Delden, Delden, Netherlands
Norway Spirax Sarco AS Vestvollveien 14A, N-2019 Skedsmokorset, Norway
Poland Spirax Sarco Sp Zoo Jutrzenki 98, 02-230, Warszawa, Poland
Gestra Polonia Sp Zoo
ul Ku Ujściu 19, PL 80-172, Gdansk, Poland
Portugal Spirax Sarco Equipamentos Ind Lda Rua Quinta do Pinheiro, No 8 & 8A, 2794-058 Carnaxide, Portugal
Gestra Portugal, Lda Avenida Dr Antunes Guimaraes, Numero 1159, Porto 4100-082, Portugal
Romania Spirax-Sarco SRL 2-4 Traian Street, Cluj-Napoca Municipality, Cluj County, Romania
South Africa Spirax Sarco Investments (Pty) Ltd (H) Corner Brine Avenue and Horn Street, Chloorkop Ext 23, Gauteng 1624, South Africa
Spirax Sarco South Africa (Pty) Ltd Corner Brine Avenue and Horn Street, Chloorkop Ext 23, Gauteng 1624, South Africa
Spain Spirax-Sarco SAU C/ Sant Josep, 130 08980 Sant Feliu de Llobregat, Barcelona, Spain
Spirax-Sarco Engineering SLU (H) C/ Sant Josep, 130 08980 Sant Feliu de Llobregat, Barcelona, Spain
Gestra Espanloa SA Calle Luis Cabrera 86-88, 28002, Madrid, Spain
Sweden Spirax Sarco AB Evenemansgatan 40, 169 56 Solna, Sweden
Switzerland Spirax Sarco AG Gustav-Maurer-Strasse 9, 8702 Zollikon, Switzerland
Turkey
Spirax Sarco Valf Sanayi ve Ticaret A.
.
Serifali Mevkii, Edep Sok No 27, 34775 Yukari Dudullu – Ümraniye, Istanbul, Turkey
United Arab
Emirates
Spirax Sarco Trading LLC 38-0, R338 Um Hurair Second, Dubai, United Arab Emirates
United Kingdom Spirax-Sarco Ltd* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco America Ltd (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco America Investments Ltd* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco Investments Ltd* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco Overseas Ltd* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Gestra Holdings Ltd* (H) Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Gestra UK Ltd Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco Engineering plc Annual Report 2022
242
Corporate Information

Steam Specialties – Americas
Country/Territory Company Name Registered Office address
Argentina Spirax Sarco SA Av. del Libertador 498, 12th Floor, Buenos Aires C1001ABR, Argentina
Brazil Spirax Sarco Ind e Com Ltda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo, 06705-050, Brazil
Spirax-Sarco Servicos de Engenharia Ltda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo, 06705-050, Brazil
Hiter Controls Engenharia Ltda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo, 06705-050, Brazil
Canada Spirax Sarco Canada Ltd 383 Applewood Crescent, Concord, ON L4K 4J3, Canada
Chile Spirax-Sarco Chile Ltda Las Garzas 930, Galpón E, Quilicura, Santiago de Chile, Chile
Inversiones Spirax-Sarco Chile Ltda (H) Las Garzas 930, Galpón D, Quilicura, Santiago de Chile, Chile
Colombia Spirax Sarco Colombia SAS Carretera Panamericana No 3-150, Jamundi, Valle del Cauca, Cali, Colombia
Mexico Spirax Sarco Mexicana, SAPI DE CV Boulevard Alianza 30B, Parque Industrial CPA, Ciénega de Flores Nuevo León,
CP 65550, Mexico
Peru Spirax Sarco Peru SAC Av. Guillermo Dansey 2124, Lima, Lima, Perú
United States Spirax Sarco Inc 1209 Orange Street, Wilmington, DE 19801, United States
Sarco International Corp (H) 1209 Orange Street, Wilmington, DE 19801, United States
Spirax Sarco Investments, Inc (H) 251 Little Falls Drive, Wilmington, DE 19808-1674, United States
Gestra USA, Inc 1209 Orange Street, Wilmington, DE 19801, United States
Steam Specialties – Asia Pacific
Country/Territory Company Name Registered Office address
Australia Spirax Sarco Pty Ltd 14 Forge St., Blacktown, NSW 2148, Australia
China Spirax-Sarco Engineering (China) Ltd No 800 XinJun Ring Road, Pujiang Hi Tech Park, Shanghai, China
Spirax Sarco Trading (Shanghai) Co Ltd No 800 XinJun Ring Road, Pujiang Hi Tech Park, Shanghai, China
Gestra (Shanghai) Fluid Control Technology Co
Ltd
Room 333 3rd Floor of 4th Area Building 1, No.2001 North Yanggao Road China (Shanghai)
Free Trade Pilot Zone, Shanghai, China
Hong Kong Spirax Sarco Hong Kong Co Ltd Unit 1507, 15th Floor, Prosperity Center, 25 Chin Yip Street, Kwun Tong, Kowloon, Hong Kong
India Spirax-Sarco India Private Ltd Plot No. 6, Central Avenue, Mahindra World City, Chengalpattu Taluk,
Kancheepuram District 603004, India
Indonesia PT Spirax Sarco Indonesia Kawasan Infinia Park Blok C-99, Jl. Dr Sahardjo No. 45, Manggarai Tebet, Jakarta
Selatan12850, Indonesia
Japan Spirax Sarco Godo Gaisha 261-0025, 2-37 Hamada, Mihama-ku, Chiba, Japan
Malaysia Spirax Sarco Sdn Bhd No 10, Temasya 18, Jalan Pelukis U1/46A, 40150 Shah Alam, Selangor, Malaysia
Spirax Sarco Investment Limited (H) 6th Floor, Akademi Etiqa, No23 Jalan Melaka, 50100 Kuala Lumpur, Malaysia
Myanmar Spirax Sarco Ltd No.192, Kabar Aye Pagoda Road, Myanmar Centre – Tower 2, Unit.1218, Bahan Township,
Yangon, Myanmar
New Zealand Spirax Sarco Ltd 6 Nandina Avenue, East Tamaki, Auckland 2013, New Zealand
Philippines Spirax-Sarco Philippines Inc 2308 Natividad Building, Chino Roces Avenue Extension, Makati City, Philippines
Singapore Spirax Sarco Pte Ltd 21 Changi South Avenue 2, #01-01 Singapore 486630, Singapore
Spirax-Sarco APAC Investments Pte Ltd 21 Changi South Avenue 2, #01-01 Singapore 486630, Singapore
Gestra Singapore Pte Ltd 21 Changi South Avenue 2, #01-01 Singapore 486630, Singapore
South Korea Spirax Sarco Korea Ltd Steam People House, 99 Sadangro 30gil, Dongjak-gu, Seoul, Republic of Korea
Taiwan Spirax Sarco Co Ltd 6F-3, No. 12, Lane 270, Sec. 3, Pei Shen Road, Shen Keng District, New Taipei City
22205,Taiwan
Thailand Spirax Sarco (Thailand) Ltd 38 Krungthepkreeta Road, Khlong Song Ton Nun, Lat Krabang, Bangkok 10520, Thailand
Vietnam Spirax Sarco Vietnam Co Ltd 4th Floor, 180 Nguyen Van Troi Street, Ward 8, Phu Nhuan District, Ho Chi Minh City, Vietnam
Spirax-Sarco Engineering plc Annual Report 2022
243
Corporate Information

Our Global Operations continued
Electric Thermal Solutions
Country/Territory Company Name Registered Office address
Australia Vulcanic TEE Pty Ltd 7 Buckman Cl, Toormina NSW 2452, Australia
Belgium Vulcanic SA Uitbreidingstraat 60-62, 2600 Berchem, Belgium
Brazil Chromalox Engenharia Ltda Avenida Manoel Lages do Chão, 268, Bairro Portão, Cotia, São Paulo, 06705-050, Brazil
Canada Canadian Heat Acquisition Corp (H) 7051 68th Ave NW, Edmonton, Alberta, T6B 3E3, Canada
China Chromalox Precision Heat Control (Shanghai)
Co Ltd
88 Taigu Road, Suite A2, 4th Floor – Fenggu Building, Shanghai, 200131, China
Chromalox Precision Heat Control (Suzhou)
CoLtd
T02, No 1801, Pangjin Road, Pangjin Industrial Park, Wujiang, Suzhou, 215200, China
Thermocoax (Chengdu) Co Ltd No.11 Fujiang Road, Shuangliu Park, Jiaelong Industry Port, Chengdu, Sichuan, China
France Constructions Electro-Thermiques D’Alsace SAS 42 Rue des Aviateurs, 67500 Haguenau, France
Etirex SAS 23 Route de Château Thierry, Noyant-et-Aconin, Soissons, Cedex, F 02203, France
Loreme SAS 12 Rue des Potiers d’Etain, 57070 Metz, France
RS Isolec SAS 45 Avenue des Acacias, 45120 Cepoy, France
Thermocoax Developpement SAS 40 Boulevard Henri Sellier, 92150 Suresnes, France
Thermocoax SAS Usine de Planquivon, Athis-de-l’Orne, 61430 Athis-Val de Rouvre, France
Univers 32 SAS (H) 41 Avenue de Friedland, 75008 Paris, France
Vulcanic Assets SAS (H) 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Vulcanic Management 1 SAS (H) 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Vulcanic Management 2 SAS (H) 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Vulcanic Group Holding SAS (H) 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Vulcanic SAS 48 Rue Louis Ampère, 93330 Neuilly-sur-Marne, France
Germany Chromalox Isopad GmbH Englerstraße 11, 69126 Heidelberg, Germany
Vulcanic GmbH Donaustraße 21, 63452 Hanau, Germany
Vulcanic Triatherm GmbH Flurstraße 9, 96515 Sonneberg, Germany
Hong Kong Chromalox Hong Kong Holdings Ltd (H) 33/F, Shui On Centre, Nos 6-8 Harbour Road, Wanchai, Hong Kong
India Chromalox India Precision Heat & Control
PrivateLimited
1st Floor, 6 Unicom House, A-3 Commercial Complex, New Delhi, Janakpuri, 110058, India
Mexico ELW Industrial S. de R. L. de C.V. Carretera Nacional, K.M. 8.5, Modulo Industrial de America, Lote #5, Nuevo Laredo,
Tamaulipas, 88277, Mexico
Singapore Chromalox Precision Heat and Control
(Singapore) Pte Ltd
No 11 Woodlands Close, #05-34, Singapore, 737854, Singapore
Spain Vulcanic Termoelectrica SLU Carretera de Viernoles no.32, 39300 Torrelavega, Cantabria, Spain
Thailand Chromalox (Asia Pacific) Ltd 383/2, The Village Business Centre, Unit D16-A, Moo 12, Sukhumvit Road, Nongprue,
Banglamung, Chon Buri, 20151, Thailand
United Arab
Emirates
Chromalox Gulf DWC, LLC PO Box 390012, Office No: E-2-0226, Business Park, Dubai Aviation City, United Arab Emirates
United Kingdom Chromalox (UK) Ltd AMP House, 2nd Floor, Dingwall Road, Croydon, Surrey, CR0 2LX, United Kingdom
Thermocoax UK Ltd Tower House, Lucy Tower Street, Lincoln, LN1 1XW, United Kingdom
Vulcanic UK Ltd Windward Barn, Honningham Thorpe Business Park Norwich Road, Colton, Norwich,
NR95BZ, United Kingdom
United States 190 Detroit Street, LLC 2280 Hicks Rd., STE 500 Rolling Meadows, IL 60008, United States
305 Cary Point, LLC 190 Detroit Street, Cary, IL 60013, United States
325 Cary Point, LLC 190 Detroit Street, Cary, IL 60013, United States
Cary Detroit, LLC 190 Detroit Street, Cary, IL 60013, United States
Chromalox, Inc. 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, United States
Durex HoldCo Corp (H) 1209 Orange Street, Wilmington, DE 19801, United States
Durex International, LLC 251 Little Falls Drive, Wilmington, DE 19808-1674, United States
Heat Acquisition Corp (H) 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, United States
Thermocoax, Inc 1209 Orange Street, Wilmington, DE 19801, United States
Vulcanic EML, LLC 5907 Breen Drive, Houston, TX 77086, United States
Spirax-Sarco Engineering plc Annual Report 2022
244
Corporate Information

Watson-Marlow Fluid Technology Solutions
Country/Territory Company Name Registered Office address
Australia Watson-Marlow Pty Ltd Unit 15, 19-26 Durian Place, Wetherill Park, NSW 2164, Australia
Austria Watson-Marlow Austria GmbH Rathaus Viertel 3/1 OG/TOP 311, Guntramsdorf A 2353, Wien, Austria
Belgium Watson-Marlow NV Industriepark 5, B-9052 Zwijnaarde, Belgium
Brazil Watson-Marlow Bredel Ind e Com de Bombas
Ltda
Alameda Oceania, 63, Polo Empresarial Tamboré, Santana de Parnaiba, São Paulo,
CEP 06543-308, Brazil
Canada Watson-Marlow Canada Inc 383 Applewood Crescent, Concord, ON L4K 4J3, Canada
Chile Watson-Marlow Bombas Chile Ltda Las Garzas 930, Galpón E, Quilicura, Santiago de Chile, Chile
China Watson-Marlow No. 211, Wenjing Road, Shanghai Minhang District, China
Colombia Watson-Marlow Colombia SAS Carretera Panamericana No 3-150, Jamundi, Valle del Cauca, Cali, Colombia
Czech Republic Watson-Marlow sro Pražská 1455/18a, 102 00 Praha 10, Czech Republic
Denmark Watson-Marlow Flexicon A/S Frejasvej 2, 4100 Ringsted, Denmark
Finland Watson-Marlow Finland Oy Niittytie 25 A 24, 01300 Vantaa, Helsinki, Finland
France Watson-Marlow SAS 9 Route De Galluis, Zi Les Croix, 78940 La Queue Lez Yvelines, France
Germany Watson-Marlow GmbH Kurt-Alder-Str. 1, 41569 Rommerskirchen, Germany
Hungary Watson-Marlow Kft Lajos ucta 30, Budapest 1023, Hungary
India Watson-Marlow India Private Ltd Mahalaxmi Icon, S. No. 132/2A-3A, Near Sai HP Petrol Pump, Pune-Mumbai Bypass Road,
Tathawade, Pune, Maharashtra, 411 033, India
Ireland Watson-Marlow Ltd Unit 1013, Gateway Business Park, New Mallow Rd., Cork, Ireland
Italy Watson-Marlow Srl Via Padana Superiore 74/D, 25080 Mazzano, Brescia, Italy
Japan Watson-Marlow Co Ltd 4-23-21 Ukima Kita-ku, Tokyo 115-0051, Japan
Malaysia Watson-Marlow SDN BHD 6th Floor, Akademi Etiqa No. 23 Jalan Melaka, 50100 Kuala Lumpur W.P., Malaysia
Mexico Watson-Marlow S de RL de CV Boulevard Alianza 30B, Parque Industrial CPA, Ciénega de Flores Nuevo León,
CP 65550, Mexico
Netherlands Watson-Marlow BV Oslo 9 – 11, 2993LD Barendrecht, Netherlands
Watson-Marlow Bredel BV Sluisstraat 7, 7491 GA, Delden, Netherlands
Watson-Marlow Bredel Holdings BV (H) Sluisstraat 7, 7491 GA, Delden, Netherlands
Watson-Marlow Bredel Holdings II BV (H) Sluisstraat 7, 7491 GA, Delden, Netherlands
New Zealand Watson-Marlow Ltd Unit F, 6 Polaris Place, East Tamaki, Auckland 2013, New Zealand
Norway Watson-Marlow Norge AS Vestvollveien 14A, 2019 Skedsmokorset, Norway
Philippines Watson-Marlow Inc 10th Floor EGI Rufino Plaza, Sen. Gil Puyat Avenue, Corner Taft Avenue, Barangay,
38 Pasay City, Fourth District, Philippines
Poland Watson-Marlow Sp Zoo Al. Jerzego Waszyngtona 146, 04-076 Warszawa, Poland
Singapore Watson-Marlow Pte Ltd 421 Tagore Industrial Avenue, #01-13, Singapore 787805, Singapore
South Africa Watson-Marlow Bredel SA (Pty) Ltd Unit 6 Cradleview Industrial Park, Cnr Beyers Naude Drive & Johan Street, Laser Park,
South Africa
Spain Watson-Marlow SLU Tuset, 20 3 – 08006, Barcelona, Spain
Sweden W-M Alitea AB Hammarby Fabriksväg 29-31, SE-120 30 Stockholm, Sweden
Switzerland Watson-Marlow AG Gustav-Maurer-Strasse 9, 8702 Zollikon
Taiwan Watson-Marlow Co Ltd No.9 Lane 270 Sec. Beishen Road, Shenkeng District, New Taipei City 222, Taiwan
United Arab
Emirates
Watson Marlow FZCO Office Number FZJOA2005, Jafza One, Jebel Ali Free Zone, Dubai, United Arab Emirates
United Kingdom Aflex Hose Ltd Dyson Wood Way, Bradley, Huddersfield, HD2 1GZ, United Kingdom
BioPure Technology Ltd Bickland Water Road, Falmouth, Cornwall, TR11 4RU, United Kingdom
Watson-Marlow Ltd* Bickland Water Road, Falmouth, Cornwall, TR11 4RU, United Kingdom
United States ASEPCO 1161 Cadillac Ct, Milpitas, CA 95035, United States
Watson-Marlow America Manufacturing Inc 37 Upton Drive, Wilmington, MA 01887, United States
Watson Marlow Inc 37 Upton Drive, Wilmington, MA 01887, United States
Watson Marlow Inc 37 Upton Technology Park, Wilmington, MA 01887, United States
Watson-Marlow Flow Smart Inc 1675 South State St., Suite B, Dover, DE 19901 United States
Spirax-Sarco Engineering plc Annual Report 2022
245
Corporate Information

Dormant companies
Country/Territory Company Name Registered Office address
Canada Canadian Heat Holding Corp 6600-100 King Street W., 1 First Canadian Place, Toronto, Ontario, M5X 1B6, Canada
France Heat Holding France SAS 23 Route de Château-Thierry, 02200 Noyant-et-Aconin, Soissons, France
Russia Vulcanic (Representative Office) Business Centre Grad, 1 Bld, 3A Solnechnaya Street, Moskovskoe Poselenie, 108811
Moscow, Russia
United Kingdom Gervase Instruments Ltd* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Heat Holding (UK) Limited AMP House, 2nd Floor, Dingwall Road, Croydon, Surrey, CR0 2LX, United Kingdom
SARCO Ltd* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Sarco Thermostats Ltd Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax Manufacturing Co Ltd Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco Europe Ltd* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
Spirax-Sarco International Ltd* Charlton House, Cirencester Road, Cheltenham, Gloucestershire GL53 8ER, United Kingdom
United States Electronic Control Systems, Inc. 103 Gamma Drive, Pittsburgh, PA 15238, United States
Heat Asset Acquisition Corp. 251 Little Falls Drive, Wilmington, DE 19808-1674, United States
Mexican Heat Holding Corp. c/o RA PO Box 20380, Carson City, Nevada, 89706, United States
Mexican Heat Holding, LLC 160 Greentree Dr., Suite 101, Dover, Delaware, 19904, United States
Ogden Manufacturing Co. 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, United States
The global operations listed on pages 242 to 246 are registered companies.
Key
* Direct subsidiary owned by
Spirax-Sarco Engineering plc
(H) Holding company
In addition to these operations we have a number of other operating units, including an Associate company; a company that is part owned with
a third-party trust; branches of Spirax Sarco steam or Watson-Marlow companies; and several Watson-Marlow businesses that operate via
Spirax Sarco steam business companies. Also, during 2021, the Spirax Sarco Group Education Fund was established, however under IFRS 10
the Group does not have control of this fund and therefore is not included in the Consolidated Financial Statements.
Notes
1. All subsidiaries in the tables on pages 242 to 246 are indirect subsidiaries
of Spirax-Sarco Engineering plc, unless indicated*. All subsidiaries listed are
100% owned by the Group, except as follows:
Company % owned by the Group
Spirax Sarco Egypt 98.867%
Spirax Sarco Energy Solutions LLC, Egypt 98.992%
Spirax Sarco Korea Ltd 97.5%
Spirax-Sarco Philippines Inc 99.998%
Spirax Sarco Services South Africa (Pty) Ltd 48.51%. (51.49% is owned by a
third-party trust, The Tomorrow
Trust). The Group has control of
the company and exposure, or
rights, to variable returns from its
investment in the investee.
Spirax Sarco (Thailand) Ltd 99.995%
2. In addition to the subsidiaries in the tables on pages 242 to 246, we have the
following operations:
Steam Specialties (Spirax Sarco):
Country Operating as a branch of
Cambodia Spirax Sarco Pte Ltd, Singapore
Denmark Spirax-Sarco Limited, UK
Ghana Spirax-Sarco Limited, UK
Greece Spirax-Sarco Limited, UK
Ireland Spirax-Sarco Limited, UK
Japan Spirax-Sarco Limited, UK
Pakistan Spirax-Sarco Limited, UK
Saudi Arabia Spirax-Sarco Limited, UK
Sri Lanka Spirax-Sarco India Private Ltd, India
Tanzania Spirax-Sarco Limited, UK
Uganda Spirax-Sarco Limited, UK
United Arab Emirates Spirax-Sarco Limited, UK
Zambia Spirax Sarco South Africa (Pty) Ltd,
South Africa
Watson-Marlow Fluid Technology Solutions:
Country Operating as a branch of
Serbia Watson-Marlow Austria GmbH
Operating via
Argentina Spirax Sarco SA, Argentina
China Spirax-Sarco Engineering
(China) Ltd
Indonesia PT Spirax-Sarco Indonesia
South Korea Spirax Sarco Korea Ltd
Thailand Spirax Sarco (Thailand) Ltd
Vietnam Spirax Sarco Vietnam Co Ltd
This complete list of our global operations, including subsidiaries, forms part
of the audited Financial Statements. For more information see Note 2 in the
Company Financial Statements.
3. UK registered subsidiaries exempt from audit:
BioPure Technology Ltd (company no. 03665190), Chromalox (UK) Ltd (company
no. 04325451), Gestra UK Ltd (company no. 10639879), Spirax-Sarco America
Ltd (company no. 07829847), Spirax-Sarco Investments Ltd (company no.
00100995), Spirax-Sarco Overseas Ltd (company no. 01472201), V.C.E Restored
Ltd (company no. SC126116), Gestra Holdings Ltd (company no. 11612492),
Spirax-Sarco America Investments Ltd (company no. 11639451), Heat Holding
(UK) Limited (company no. 04325456), Aflex Hose Ltd (company no. 01088141)
and Thermocoax U.K. Ltd (company no. 03504380) qualify to take the statutory
audit exemption as set out within section 479A of the Companies Act 2006
for the period ended 31stDecember 2022. Spirax-Sarco Engineering plc will
guarantee the debts and liabilities of the companies claiming the statutory audit
exemption at the balance sheet date in accordance with section 479C of the
Companies Act 2006.
Our Global Operations continued
Spirax-Sarco Engineering plc Annual Report 2022246
Corporate Information

Officers and Advisers
Secretary and registered office
A.J. Robson
Group General Counsel and Company Secretary
Spirax-Sarco Engineering plc
Charlton House
Cirencester Road
Cheltenham
Gloucestershire GL53 8ER
Tel: 01242 521361
Email: group.legal@uk.spiraxsarco.com
Web: www.spiraxsarcoengineering.com
Auditor
Deloitte LLP
Financial advisers
Rothschild
JPMorgan Securities plc (JPMorgan Cazenove)
Financial PR
Citigate Dewe Rogerson
Bankers
Barclays Bank PLC
HSBC Bank PLC
BNP Paribas
Citibank, N.A.
Crédit Industriel et Commercial
ING Bank, N.V.
UniCredit Bank AG
Wells Fargo Bank, N.A.
Corporate brokers
JPMorgan Securities plc (JPMorgan Cazenove)
Morgan Stanley & Co International plc
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Tel: 0371 384 2349* (UK)
or +44 (0)121 415 7047 (overseas)
* Lines open 8.30 am to 5.30 pm, Monday to Friday,
excluding public holidays in England and Wales
Website: www.shareview.co.uk
Solicitors
Baker & McKenzie LLP
Important dates
Annual General Meeting 10th May 2023
2023 Half Year Results 10th August 2023
Final dividend**
Ordinary shares quoted ex-dividend 20th April 2023
Record date for final dividend 21st April 2023
Final dividend payable 19th May 2023
**Subject to shareholder approval at the AGM.
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