British automation group Invensys staved off the worst of the recession, as revenue for the year ended March 31 rose 8% to £2.3 billion and orders jumped 38% to £2.8 billion, even as net profit plunged 60% to £133 million. The company also announced that it will regroup its three automation divisions — Invensys Process Systems, Wonderware, and Eurotherm — into one new group called Invensys Operations Management.
Many of the top-line gains came from Invensys Rail as well as the units that now form the Invensys Operations Management division, with the oil and gas business driving them.
Word leaked in February that CEO Ulf Henriksson was considering combining the automation units in order to help customers integrate operations across various functions, including shop floor, ERP, sales and marketing, and supply chain. The announcement of Invensys Operations Management makes the move official.
“Relative to the market, there is strength in demand for our projects and solutions within our newly formed Invensys Operations Management division, and Invensys Rail has been successful in both its core and export markets,” Henriksson said in a statement. “This gives us confidence that both will continue to perform well during the current financial year. Invensys Controls faces continued weakness in its markets and we continue to manage it for positive cash flow.”
Free cash flow increased nearly fivefold year over year to £296 million, and operating cash flow spiked 16% to £298 million. The company said it is debt-free, with £309 million of net cash and deposits.
Invensys also said it incurred £17 million in restructuring charges for the year, and it anticipates £65 million in restructuring costs in the coming year.
Officials said the formation of the new division encompassing Process Systems, which makes automation hardware and software mainly for the process industries; the Wonderware manufacturing software operation; and Eurotherm, which makes process control and measurement equipment, will also help the bottom line. “Of course, it will lead to cost synergies,” Henriksson said on a conference call with analysts.
The move also represents an effort to present a more integrated company to customers. What’s more, Henriksson showed a slide during his analyst presentation stating that Invensys will gain “revenue potential from selling [the] entire range of offerings to each customer.”
Henriksson himself is serving as acting president and CEO of the new group. Sudipta Bhattacharya, who was president of Wonderware, will serve as Invensys Operations Management’s interim COO, reporting to Henriksson.
“We will provide additional clarity regarding the organizational structure and ongoing development of Invensys Operations Management as the integration of our industrial automation businesses continues,” an Invensys spokesman told Managing Automation.