Gud Holdings Ltd, AustraliaFiltration Industry Analyst

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COMPANY WATCH 10

Filtration Industry Analyst February 2014

GUD Holdings Ltd,

Australia

Key Figures (A$ million)

Six months ended 31.12 2013 2012

Revenue 298.4 311.8

Of Which:

Automotive Products 48.0 43.9

Water Products 53.5 53.2

Cost of Goods Sold 198.1 197.3

Gross Profit 100.3 114.4

Operating Income 9.5 27.7

Of Which:

Automotive Products 15.4 13.9

Water Products 4.6 4.9

Profit before Income Tax 6.3 25.2

Net Profit 4.8 18.2

COMMENT

GUD Holdings, the Australiabased diversified supplier of industrial and consumer products, has posted revenues for the first half of fiscal 2014 of A$298.4 million.

The result was a 4.3% fall on the prior year, with growth in

Automotive and Water Products sales offset by bigger declines in its Consumer and Industrial markets.

GUD’s Automotive Products segment was the company’s star performer for the period with sales up 9.3% on the 2013 comparator at A$48.0 million and EBIT climbing 10.8% to a record A$15.4 million.

The withdrawal of a major competitor from the local automotive filtration market contributed to the result, while

GUD’s Ryco and Goss brands were active in launching new product programs that are expected to provide further sales growth in future periods.

The Water Products division, which includes filters and water treatment products, saw sales increase 0.6% on fiscal 2013 to reach A$53.5 million.

EBIT declined, however, falling 6.2% to A$4.6 million. GUD reported that local market conditions for the sector remained subdued, with a delayed start to the traditional summer selling season.

To counter the rising cost of imported products from the depreciation of the Australian dollar, GUD has implemented price increases in the sector that are forecast to contribute to profitability in the second halfyear.

GUD’s net profit for the halfyear slumped 73.6% on the prior year to A$4.8 million.

The result included A$14.5 million in pre-tax restructuring costs relating to its Dexion and

Sunbeam brands. Dexion, a supplier of industrial storage products and part of GUD’s

Industrial Products segment, took a A$13.9 million charge for exiting one of its business areas and transferring manufacturing for another from Australia to

Asia. ■ www.gud.com.au

Parker Hannifin Corp,

USA

Key Figures (US$ million)

Second quarter ended 31.12 2013 2012

Net Sales 3106.0 3065.5

Of Which:

Industrial North America 1325.4 1317.4

Industrial International 1276.9 1219.5

Cost of Sales 2420.0 2422.0

Gross Profit 686.0 643.5

Operating Income 379.9 367.7

Net Income 253.4 181.1

Six months ended 31.12 2013 2012

Net Sales 6332.2 6280.4

Of Which:

Industrial North America 2713.3 2742.7

Industrial International 2547.6 2468.0

Cost of Sales 4896.4 4899.4

Gross Profit 1435.8 1381.0

Operating Income 844.8 830.2

Net Income 497.7 421.1

COMMENT

Parker has recorded second quarter fiscal 2014 sales of

US$3.11 billion, up 1.3% on the prior year.

Organic growth for the quarter was 3.1%, which excludes an increase of 0.3% from acquisitions, a decrease of 0.7% from foreign currency translation, and a decrease of 1.4% from a joint venture agreement with GE Aviation.

Parker’s profitability for the quarter also improved compared with the year earlier, with operating income up 3.3% at US$379.9 million and net income 39.9% stronger at

US$253.4 million.

Performance in the Industrial segments mirrored the overall picture.

The company’s Industrial

North American second quarter sales increased 0.6% on the 2013 figure to US$1.33 billion, while operating income rose 5.4% to US$200.6 million.

Industrial International second quarter sales increased 4.7% to US$1.28 billion, with operating income up 7.4% at

US$134.2 million. “Operationally, our outlook is essentially unchanged,” Parker’s chair, CEO and president,

Don Washkewicz, said. “We are optimistic that modestly improved macro-economic trends will continue and anticipate that we will deliver another strong year.” ■ www.parker.com