Growing smarter Secure sustainable returns

Transcription

1 Annual Report and Accounts Growing smarter Secure sustainable returns Scapa Group plc

2 Highlights A global business that s close to its customers Industrial Healthcare Electronics Highlights of the year Product rationalisation and margin focus has delivered strong improvements in margin Consumer sector continues to perform well with focus on product extension and point of sales acquisition Investment in growth regions (India and Brazil) delivering results Shifting product portfolio in Industrial Assembly sector and specification work for OEM business solutions Highlights of the year New experienced management team in place focused on driving growth Successful completion and integration of WEBTEC acquisition Ability to offer true turn-key capabilities from raw materials, coating, converting, sterilisation, printing and packaging Launch of skin-friendly Scapa Soft-Pro silicone adhesive range Highlights of the year Completion and build-up of product range for Electronics solutions Obtained first specifications at global mobile phone producer and touch panel Leveraging Scapa s global footprint to focus on Electronics markets and design centres Maximising market and operational focus on Electronics segment through redesigned product portfolio, withdrawing commodity products Revenue 145.9m +0.2% Trading profit 7.2m +67.4% Trading margin 4.9% +1.9% Revenue 39.5m +16.9% Trading profit 5.5m +27.9% Trading margin 13.9% +1.2% Revenue 10.2m -20.9% Trading loss - 0.8m (-) Trading margin -7.8% -10.9%

3 Sector split Global split Electronics Healthcare Industrial Revenue by sector % Industrial Healthcare Electronics 145.9m +0.2% 39.5m +16.9% 10.2m -20.9% Asia North America Europe Revenue by region % Europe North America Asia 107.9m +1.1% 76.6m +5.4% 11.1m -14% Profit by sector % Industrial Healthcare Electronics 7.2m +67.4% 5.5m +27.9% - 0.8m (-) Healthcare Electronics Industrial Profit by region % Europe North America Asia 5.9m +78.8% 6.8m +28.3% - 0.8m (-) Asia Europe North America Europe North America Asia Highlights of the year Trading profits increased 78.8% to 5.9m Trading margins increased to 5.5% (: 3.1%) Continued to rationalise product range rebalancing mix towards value add products Consumer, cable, pipeline and emerging market products performed strongly Highlights of the year Trading profits increased 28.3% to 6.8m Trading margins increased to 8.9% (: 7.3%) Good growth in consumer and transportation market products Consolidated growth in healthcare and added WEBTEC to the portfolio of business Highlights of the year Established new presence in India to support growth and local customer base New line commissioned and fully operational early Invested in Sales and R&D functions to help drive future growth in the region Closed commodity cloth line in Korea in Revenue 107.9m +1.1% Trading profit 5.9m +78.8% Trading margin 5.5% +2.4% Revenue 76.6m +5.4% Trading profit 6.8m +28.3% Trading margin 8.9% +1.6% Revenue 11.1m -14.0% Trading loss - 0.8m (-) Trading margin -7.2% -10.3%

4 Contents Overview Contents Highlights Chairman s Statement 1 Business Review 2-15 Industrial 4 Healthcare 6 Electronics 8 Health & Safety 12 Principal Risks and Uncertainties 14 Governance Corporate and Social Responsibility 16 Board of Directors 18 Leadership Team 19 Report of the Directors 20 Directors Remuneration Report 23 Corporate Governance 29 Financial Statements Statement of Directors Responsibilities 34 Independent Auditor s Report 35 Consolidated Income Statement 36 Consolidated Statement of Comprehensive Income 36 Consolidated Balance Sheet 37 Consolidated Statement of Changes in Equity 38 Consolidated Cash Flow Statement 39 Group Accounting Policies 40 Notes on the Accounts 47 Five Year Summaries 74 Parent Company Financial Statements 75 Independent Auditor s Report 76 Company Balance Sheet 77 Statement of Accounting Policies 78 Notes on the Accounts 80 Who we are As a global manufacturer of bonding materials and solutions, Scapa is at the forefront of adhesive technology for the Industrial, Healthcare and Electronics markets. What we do Through an application driven focus, we support our global OEMs, distributors and consumers in maximising their product performance and process efficiency. Performance Financial highlights Revenue grew 1.7% to 195.6m (: 192.3m) Trading profit* increased 33.8% to 10.7m (: 8.0m) Profit before tax increased 72.1% to 10.5m (: 6.1m) Trading margins improved progressively to 5.5% for the year (: 4.2%) Basic earnings per share increased 87.5% to 4.5p (: 2.4p) Operational highlights Industrial trading margins increased to 4.9% (: 3.0%) Healthcare trading margins increased to 13.9% (: 12.7%) Successful completion and integration of WEBTEC acquisition New Healthcare leadership team appointed to deliver new strategy Self-help strategy continues to deliver good growth in cash and profits Investments made in emerging economies of Brazil and India Strong balance sheet to support strategic investment Revenue 195.6m +1.7% Trading profit* 10.7m +33.8% Profit before tax 10.5m +72.1% Earnings per share 4.5p +87.5% * Operating profit before exceptional items and amortisation of intangible assets.

5 Chairman s Statement A focus on sustainable profit Chairman s Statement Overview Strong cash flow and efficient working capital management ensured that we ended the year with net cash of 7.0m (: 18.8m), a good result following the acquisition of WEBTEC for an initial cash consideration of 18.0m (US$28.8m). No dividend is proposed for the year. The future recommendation of dividends will remain under review as the Group continues to make progress towards sustainable profitability and cash generation. I am delighted to report another year of profit growth and progress for the Group. Business Review Governance I am delighted to report another year of profit growth and progress for the Group. Our continued focus on higher quality revenues, operational efficiency, cost control and good cash management delivered strong operating profit and cash flow. Overview Against a backdrop of slowing economic growth and a turbulent macro-economic environment, during the fiscal year we continued to deliver on our strategy of margin improvement and cash generation through self-help measures. Whilst we are pleased with the progress, we believe that the opportunity for further improvement remains, and a number of new initiatives will be implemented during the current year. In addition to driving organic growth of profit and cash generation, we acquired WEBTEC Converting LLC (WEBTEC) in December. WEBTEC is a leading contract manufacturer and full-service converter, printer and packager of adhesive-backed medical devices. WEBTEC s capabilities combined with our material expertise enable us to provide turn-key solutions to the Healthcare market. The acquisition provides us with a strong platform for our Healthcare division, augments our management expertise and takes us further toward our goal of balancing our business portfolio across our three market divisions Industrial, Healthcare and Electronics. Financial highlights Revenues grew 1.7% to 195.6m. Trading profit grew by a healthy 33.8% to 10.7m. Profit before tax increased 72.1% to 10.5m and basic earnings per share increased 87.5% to 4.5p, both including non-recurring items. People As always, on behalf of the Board I would like to thank all of Scapa s employees around the world for their energy, commitment, dedication and hard work over the last financial year. Our people are an invaluable asset of the Group and are core to the further improvement of our performance and the achievement of our goals. Board and Governance The Board understands that a commitment to the highest standards of corporate governance is key to managing our business effectively and maintaining investor confidence. The Board has a thorough understanding of the business, knows its senior people and creates a culture which is conducive to open debate on the key issues, at the right level and at the right time. Good governance adds value and reduces risk; therefore we look to sustain, continually develop and improve our governance arrangements. As in previous years, the Board carried out a self-assessment of its performance to ensure that our corporate governance arrangements meet the needs of the business and corporate governance best practice. The results of this exercise showed that our arrangements accord with best practice and that the Board s mix of skills and experience meet the current needs of our business and will support the next phase of our development. Outlook The new financial year has commenced with our business performing in line with expectations. We continue to be mindful of the current macro-economic issues but we are well positioned to continue to execute the self-help agenda and to invest in repositioning the Group towards higher value added business. We look forward to making further progress in the new financial year. J A S Wallace Chairman Financial Statements Scapa Group plc Annual Report and Accounts 1

6 Business Review We are delivering on our strategy of margin improvement and cash generation through self-help measures. Overview /12 saw the Group build on its strategy of self-help and deliver improved operating profit, margins and cash generation. In December we also completed the acquisition of WEBTEC Converting LLC (WEBTEC) which complemented our organic growth and maintained our focus on improving the quality of our revenue streams and high margin products and markets. In the past year we have delivered against the core objectives outlined in May. We have: continued the market-focused strategy concentrating on higher quality revenue streams; further driven improvements in margin and cash generation and returns from our asset base through focus on self-help measures of cost out, operational efficiencies, centralisation and supply chain optimisation; strengthened the commercial and operational management team across the Group; and invested in opportunities to grow our business for the medium and longer term. At the core of our strategy for sustainable growth is a deep understanding of our markets, a global footprint that allows close working relationships with leading international partners and extensive technical knowledge to support the development of application-specific bonding material solutions. Results Revenue Trading profit Exceptional items and amortisation of intangibles 1.0 Operating profit Net finance costs (1.2) (1.9) Profit on ordinary activities before tax Basics earnings per share (p) Heejae Chae, Group Chief Executive 2 Scapa Group plc Annual Report and Accounts

7 Our goal is to deliver sustainable and profitable growth through focus on higher quality revenue streams from a balanced portfolio of business across Industrial, Healthcare and Electronics. Group revenue in the year was 195.6m (: 192.3m) with the acquisition of WEBTEC contributing 5.4m. In line with our strategy of improving the quality of our revenue by reducing complexity and removing low margin cash consuming business, revenue reduced by 1.1%, excluding the contribution from WEBTEC. The split between the first and second half of the financial year was 50.4% and 49.6% respectively, including the contribution from the acquisition. There was no material movement in revenue for the effects of exchange rates in the year. Trading profit increased 33.8% to 10.7m (: 8.0m). Group trading margin improved to 5.5% (: 4.2%). The contribution to trading profit from WEBTEC in the year amounted to 0.5m. Industrial The Industrial market is the largest segment of the Group s revenue, accounting for 74.6%. Its overall revenue remained in line with the prior year at 145.9m (: 145.6m) reflecting further and deliberate rationalisation of its product range. As reported in the interim results good growth was experienced in the Consumer and Cable markets. Trading profit increased 67.4% to 7.2m (: 4.3m) and trading margins increased to 4.9% (: 3.0%) reflecting both the improved product base and cost efficiencies. Healthcare Healthcare revenue increased by 16.9% to 39.5m (: 33.8m) on the back of improving market penetration and the growing level of opportunities for Scapa in this market. Healthcare revenue accounted for 20.2% of the Group s revenue and, on a pro-forma basis including WEBTEC, this increases to approximately 26.3%, improving and diversifying the revenue mix of the Group and taking us a step closer to our objective of a balanced market portfolio of revenue. Trading profit increased 27.9% to 5.5m (: 4.3m), delivering an improved margin of 13.9% (: 12.7%). Electronics As expected, Electronics revenue decreased to 10.2m (: 12.9m) and the division returned an operating loss of 0.8m (: 0.4m profit) driven by lower revenue and additional investments in research and development (R&D) and sales. We continued to move away from commodity business with limited growth potential during the year, closing our cloth tape line in Korea in December. As highlighted in November, our new production line and R&D laboratory came on line during the year and we have seen some pleasing design-in successes as we build up a new product portfolio. We continue to invest in this business for future growth and we believe that Electronics will see an improved performance in the next fiscal year. Overview Business Review Governance Financial Statements Scapa Group plc Annual Report and Accounts 3

8 Business Review Industrial Within the broad Industrial market, Scapa is able to accommodate the diverse performance requirements of market segments from construction to aerospace. Our extensive product portfolio and impressive converting capabilities ensure that we can provide a solution for any application. Business highlights Continued product rationalisation and margin focus has delivered strong improvements in margin Consumer segment sector continued to perform well through product extension and focus on point of sale acquisition Market overview Industrial is the largest segment for the Group covering wide range of markets including industrial assembly, cable, construction, transportation and consumer. Approximately, 40% of the segment is classified as consumables which are standard products that are sold in final end user formats through distributors and retail channels such as Travis Perkins, Walmart and Costco. The other portion of the segment is application-specific products that are designed in and sold through either our direct sales force or third parties. As one of the few bonding solution suppliers with a global footprint, we have a unique competitive proposition to address global customers who require a global supply chain solution. As customer requirements change, we have expanded our footprint to match their needs. During the past year, we have established our presence in India and Brazil to serve the existing global customers as well as to participate in opportunities at the fast growing local economies. Strategy Whilst the Industrial business covers a broad range of markets, we can classify the unit into two broad categories based on the end application of the products. For consumables, the strategy is to leverage our brands and our significant distribution network. We sell our consumables products under the brands including Barnier and Renfrew which have significant recognition in their respective markets. Our strategy is to expand our product portfolio through product extension as well as introduction of products beyond the core tapes which we can outsource and sell under our brands. We also sell our products through distributors, major retailers such as Walmart, Costco and 700 Travis Perkins stores, and over 3,700 retail outlets throughout Europe. We continue to focus on expanding our Point-of-Sale (POS) network to push through our expanding product range. The remaining part of Industrial is application-specific products that are designed in at the Original Equipment Manufacturers (OEM). Cable segment growth driven by the infrastructure investments in the developing economies Investments into growth regions (India and Brazil) delivering results Transportation performed well and improved margin benefiting from overall market strength Roll-out of a new product range of acrylic foams for Industrial applications Our main markets are cables, pipeline, and transportation. Our strategy for this segment is to gain a deep understanding of our core markets, close working relationships with leading global partners, extensive technical knowledge and global footprint to develop specialised bonding material solutions. Financial performance Industrial revenue was 145.9m, in line with the prior year. We have continued to improve our product mix and margin and rationalised our products which were not competitive or added complexity without any strategic benefit. Offsetting the rationalised revenues, consumer products performed well and the shift of our focus to acquisition of point of sale and leveraging the brands to introduce new non-tape products have had a positive impact. Cable, pipeline and transportation products also made positive contributions as we transitioned towards more application-specific products and leveraged our global footprint. This strategy has yielded an improvement in margins as trading profit increased to 7.2m (: 4.3m), a 67.4% increase on the prior year. 4 Scapa Group plc Annual Report and Accounts

9 Revenue 145.9m +0.2% 74.6% of Group revenue Trading profit 7.2m +67.4% 67.3% of Group trading profit 4.3m 145.9m 145.6m 7.2m Overview Business Review Trading margin 4.9% +1.9% Governance Financial Statements Barnier System Buildings generate an extremely large quantity of harmful gases such as CO 2. Coming under particular scrutiny of governments, consumers and environmentalists, the construction industry constantly aims to improve its performance in terms of energy, materials and waste. Scapa s Barnier System, a complete range of products for bonding, sealing and protection applications, which combine the latest technology and adhesives, has proven itself for more than 15 years. The system includes 16 products, all designed around the requirements of professional builders and complies with the latest government standards and European regulations. With Barnier System, builders can create the optimal insulating seal for houses, achieving temperature and humidity control, thus saving valuable energy. Scapa Group plc Annual Report and Accounts 5

10 Business Review Healthcare Scapa Healthcare is a leading global developer and manufacturer of innovative life-enhancing healthcare technologies in the areas of Medical Devices, Consumer Wellness, Advanced Wound Care and Transdermal/Drug Delivery systems offering a broad range of turn-key skin-friendly solutions. Business highlights Successful completion and integration of the WEBTEC acquisition New experienced management team in place focused on driving growth Ability to offer true turn-key capabilities from raw materials, coating, converting, sterilisation, printing and packaging Launch of the skin-friendly Scapa Soft-Pro silicone adhesive range Strengthened our strategic partnerships with Dow Corning and Bayer to offer a range of adhesives This year has seen an expansion through acquisition and realignment of the core healthcare business. We acquired WEBTEC to complete our total turn-key offering and, to reflect these changes, our Medical business is now known as Scapa Healthcare, thus reflecting the broader market we now serve. WEBTEC acquisition The successful completion of the WEBTEC acquisition brings a well-invested business which complements our existing healthcare operations in the US and the UK. We are able to support our global B2B partners through all aspects of product development, including raw materials, coating, converting, sterilisation, printing and packaging. WEBTEC has a solid partner base which further strengthens our presence in markets such as Consumer Wellness, Medical Devices and Advanced Wound Care. WEBTEC s benchmark level of quality and manufacturing is recognised throughout the industry. New management team We have invested in a new Global Healthcare team, with the appointment of Joe Davin as President of Scapa Healthcare, Professor Steven Percival as Global Healthcare R&D Director and new heads in Sales and Marketing. This team has the expertise, experience and knowledge to continue to expand and grow the Scapa Healthcare business. Research and Development We have expanded our investments in research and development, and fine-tuned the process by which we evaluate technologies and opportunities. We have also launched our global stage gate process, to ensure that projects are delivered on time and in budget. There are now two key elements to our R&D function; one is primary research, which is not part of our manufacturing operation but takes place with our academic university links and supports our next generation product pipelines. The other is the development departments, which are integrated within our operational sites. These are focused on supporting existing product specification changes and line extensions through to producing and delivering complete new product ranges. Turn-key capabilities from a single source Our turn-key solutions provide customers with a reliable, trusted, regulated, safe and cost-effective partnership, without sacrificing quality, compliance, intellectual protection, or patient satisfaction. We can now offer a complete design and project management service, tailor-made to meet our customers requirements. As a global manufacturer of raw materials, we produce a comprehensive range of high performing substrates, such as our Bio-Flex Polyurethane Films, Polyethylene and PVC Foams as well as Nonwovens and Hydrocolloids. These can be used in a variety of applications and form the foundation of our turn-key capabilities. Recognised quality As a highly regulated business, we have a very strict approach to the quality and care of our products and processes. We are subject to regular audits from our customers and regulatory authorities, including the MHRA (Medicines and Healthcare products Regulatory Agency) and the FDA (Food & Drug Administration) to ensure that we maintain our high standards and remain fully compliant. We are proud that this was recognised recently when we were awarded the Johnson & Johnson Supplier Relationship Management Award for the second consecutive year. Strategy With the Healthcare Skin-Friendly Turn-Key growth strategy now in place, we are ideally positioned to offer significant growth technology, combined with service and cost improvements. This along with positive global demographic trends and access to a strong established customer base are integral to the future success of the Scapa Healthcare business. Financial performance Healthcare grew 16.9% including contribution from WEBTEC, acquired in December. Excluding WEBTEC, the Healthcare segment grew by only 1.0%, affected by a natural end to the product life cycle of a specific customer programme. In addition, in line with Group strategy we continue to rationalise our product range. During FY13, we will benefit from a full contribution from WEBTEC; more importantly, the acquisition brings exciting opportunities to the Group with existing as well as new potential customers. 6 Scapa Group plc Annual Report and Accounts

11 Revenue 39.5m +16.9% 20.2%of Group revenue Trading profit 5.5m +27.9% 51.4% of Group trading profit 39.5m 33.8m 5.5m 4.3m Overview Business Review Trading margin 13.9% +1.2% Governance Financial Statements Skin-friendly solutions Our Soft-Pro silicone adhesive technology allows us to provide partners entry into the expanding Skin-Friendly market, which is currently estimated at over US$350 million worldwide and growing in excess of 20% per year. Following our initial launch of the skin-friendly silicone adhesives with a leading healthcare company, we have further strengthened our position in the dynamic market with a number of branded partners. During we will continue to expand our Soft-Pro silicone range and work with partners covering different sales channels and applications. Our strategic alliance with Dow Corning has continued to strengthen our global position, ensuring that we are able to offer rapid product modifications and produce potentially groundbreaking new technologies. We are also delighted to be working in partnership with Bayer to offer the unique Levagel breathable adhesive. We are currently involved in clinical trials for several key applications. Scapa Group plc Annual Report and Accounts 7

12 Business Review Electronics Scapa provides the latest technical tape solutions for the ongoing development and improvement of electrical devices from smartphones to home appliances. Working with global OEMs, we create application-specific solutions for enhanced product performance and design. Business highlights Market entry with first projects in the acrylic foam sector and Optical Clear Adhesives (OCA) to add value to customer products Maximised market and operational focus on Electronics segment through rationalised product portfolio, closing commodity cloth product line in Korea New value-add products added to the portfolio including OCA for use in the touch-panel applications Obtained first specifications at global mobile phone producer for touch panel Continued build-up of product range for Electronics Market overview Consumer Electronics including telecom and home appliances are continuing to grow globally. While growth in the TV and PC sector is still flat, demand in home appliances, mobile/smartphones and tablet PCs continue to perform strongly, where new product development, process innovation and total cost reduction are leading attributes. New design and functionalities require new assembly methods and thermal solutions that ask for functions beyond traditional tape and bonding technologies. The highly dynamic and fast-changing market environment is continuously making demands on the supply chain to innovate. Scapa is building up strong partnerships, leveraging our global presence and service throughout the value chain. We are helping OEM product design by introducing new products which contribute to the manufacturing process, enhancing re-workability and functionality improvements and adding new functionalities beyond traditional bonding solutions. Strategy Scapa partners with market leading Electronic OEMs, driving innovation through direct and early stage engagement. Our focus is on consumer electronics, mobile phones, tablets and white goods markets. Our product range includes OCA and Electro Magnetically Interference (EMI) solutions, as well as Acrylic Foam Tape (AFT) and Acrylic Film Foam Tape (AFFT). Core to this strategy is getting access into local OEMs and ODM by leveraging local and global reference points and building direct sales capability to local first tier OEMs, ODMs and contract manufacturers. We are positioning Scapa as a full-service supplier providing solutions for bonding, EMI and thermal management solutions to the OEM supply chain covering up to converting in selected areas and products. Early engagement with the OEMs at development stage is a critical success factor; thus investment in application development resources will continue. Financial performance Electronics accounts for 5.2% of the Group s revenue. Overall revenue in the year declined 20.9% as we continue to reposition Asia towards the Electronics market and transition away from commodity-based products. The investments we have made in the new production line and R&D laboratory which was commissioned in April are starting to produce positive results and have enabled us to finally close the legacy cloth line in the latter part of this year. We have achieved a number of design wins which should deliver during the year and we continue to build a pipeline of opportunities in the market. 8 Scapa Group plc Annual Report and Accounts

13 Revenue 10.2m -20.9% 5.2% of Group revenue Trading profit - 0.8m (-) -7.5% of Group trading profit 10.2m 12.9m - 0.8m 0.4m Overview Business Review Trading margin -7.8% -10.9% Governance Financial Statements AFFT/AFT With electronic devices becoming increasingly more compact, manufacturers are constantly striving to reduce the size and weight of their own products. Scapa s Acrylic Foam Film Tape (AFFT) and Acrylic Foam Tape (AFT) provide electronics manufacturers with a space saving, alternative bonding solution to mechanical fixings within a broad range of products from tablet PCs and smartphones to cameras and home appliances. They are proven to provide considerable protection from external influences by cushioning and absorbing impact and damping vibration. In addition, the product lifetime is extended due to their excellent UV, chemical and moisture resistance, ensuring that the end user enjoys long, uninterrupted performance. Scapa Group plc Annual Report and Accounts 9

14 Business Review Europe Revenue in Europe increased to 107.9m (: 106.7m), a 1.1% increase as we continue to rationalise our product range, rebalancing the product mix by transitioning towards more value add products in our chosen markets. The decrease in revenue from lower margin products was replaced through improved penetration of our consumer, cable, pipeline and emerging technology products which are more application-specific and deliver better margins. As a consequence trading profit improved by 78.8% to 5.9m (: 3.3m) improving the margin to 5.5% (: 3.1%). North America Revenue in North America was 76.6m (: 72.7m), a 5.4% increase. The strong growth of Healthcare last year was consolidated this year with the acquisition of WEBTEC, contributing an additional 5.4m in revenue. The strategy of product rationalisation was also implemented in North America, where the consequent reduction in revenue was broadly offset by strong performance in consumer and transportation products. Trading profit improved by 28.3% to 6.8m (: 5.3m) with margin improving to 8.9% (: 7.3%). Asia We continue to invest in our Asian operations and maintain the strategy of concentrating on more value added business, specifically in the Electronics and white goods markets. As a result of the closure of the legacy cloth line in the latter part of this year, revenue declined to 11.1m (: 12.9m). We continue to invest in emerging markets, establishing a new presence in India to support the local customer base and further investing in sales and R&D functions to secure the platform for future growth. As a result the region made an operating loss of 0.8m (: 0.4m profit). Exceptional items and intangible amortisation Total Group operating profit of 11.7m (: 8.0m) includes a net exceptional credit of 1.4m (: Nil) and intangible amortisation costs of 0.4m (: Nil). The exceptional credit is made up of pension service credits of 2.1m following the closure of the US defined benefit pension scheme and deficit repair project-work carried out in the UK netted against an exceptional cost of 0.7m relating to the acquisition of WEBTEC in December. Finance costs Net finance costs decreased to 1.2m (: 1.9m) and comprise net interest payable of 0.3m (: 0.3m) and notional interest of 0.9m (: 1.6m). The net interest payable related to the 20.0m multicurrency facility put in place in December. The Group s interest cost exposure risk is fully mitigated through an interest rate swap entered into in January. The notional interest relates to the defined benefit pension plans and the unwinding of the discount on the asbestos provision and assets. Taxation The Group s tax charge of 4.0m (: 2.6m) includes a 3.4m charge (: 2.1m) on operating activities and a 0.6m charge (: 0.5m) arising from a change in the UK corporation tax rate. The operating activities charge is made up of 1.4m of deferred tax and 2.0m of current tax. The announcement during the year of the future UK corporation tax rate reduction from 26% to 24% had a deferred tax impact of 1.2m (: 1.2m), of which 0.6m has been charged through the profit and loss account with the residue following the pension s movement through reserves. The headline effective rate of tax for the Group is 38.1% (: 42.6%) and is impacted by another charge following the reduction in the UK s corporation tax rate and from exceptional items which are not taxable. The effective rate excluding these exceptional items is 35.8% (: 34.4%). This underlying rate is higher than the UK standard rate of 26% due mainly to the Group operating in territories which have a higher statutory tax rate than the UK. Despite the high effective rate, the Group s cash tax payment in the year was again relatively small at 0.9m (: Nil) as the Group continues to benefit from its brought forward tax losses. As noted in the interim accounts, with continued profitability our cash tax will increase as our brought forward losses are utilised and we move to payments on account in some jurisdictions. Balance Sheet The Group Balance Sheet remains strong with only a small reduction in net assets from 68.6m in to 66.1m in the current year. The composition of the Balance Sheet has changed significantly with the acquisition of WEBTEC; the Group has increased borrowings to 9.9m (: 2.2m) and non-current assets have increased 23.6m predominantly from the acquisition of WEBTEC s goodwill and other intangible assets of 19.6m. Net cash at the end of the year was 7.0m (: 18.8m). Financial risk management/treasury/credit management In the normal course of business the Group is exposed to certain financial risks, principally foreign exchange, interest rate risk, liquidity risk and credit risk. Foreign exchange risk is managed predominantly through forward contracts and central decisions on hedging investments and borrowings. All forward contract movements are recognised in the Income Statement at the Balance Sheet date. During January the Group entered into an interest rate swap transaction to hedge the effects of interest rate movements on its US Dollar borrowings. The Group does not hedge account for the swap and the movements in fair value are taken directly to the Income Statement. Liquidity risk is centrally managed by the Group in conjunction with risk management policies and procedures that are reviewed and approved by the Board. Subject to certain conditions and policy excesses, the Group manages its credit risk of sales made from North America and Europe through credit insurance. In addition tight credit control and a clear central policy and process mean that the Group has very low overdue trading debts and has an excellent track record of recovery. Acquisition In December the Group acquired the business and assets of WEBTEC for an initial cash consideration of US$28.8m ( 18.0m). Depending on the achievement of operating profit targets over the two calendar years following acquisition, additional payments of US$10.0m and US$5.0m respectively will become payable, bringing total consideration to 27.2m (discounted). The addition of WEBTEC s conversion and packaging capability brings additional technology and know-how to the Group and complements Scapa s materials expertise and coating technologies; it also introduces a broader customer base and several new key customer contracts. Intangible assets of 7.0m and goodwill of 13.0m have been recognised on acquisition, with 0.4m of the intangible assets being amortised in the year. Earnings per share Basic earnings per share was 4.5p (: 2.4p) including non recurring items. Cash flow Cash generated by operations before exceptional items and working capital movements increased by 8.8% to 9.9m (: 9.1m). Capital expenditure increased to 2.6m net of the acquired assets of WEBTEC (: 1.6m) and was below the depreciation charge of 4.6m. The net cash outflow in respect of acquisitions and disposals was 20.4m (: 1.3m). Net cash was 7.0m (: 18.8m including restricted cash). Pensions The IAS 19 pension deficit has increased by 3.9m to 38.9m (: 35.0m). During the first half of /12 the US final salary pension scheme was closed, creating a curtailment gain of 1.1m that has been recognised in operating profit. This curtailment gain predominantly offsets increases in the overseas liabilities arising from the reduction in the rate used to discount the future commitments, creating an overall increase in the overseas deficits of 0.3m. 10 Scapa Group plc Annual Report and Accounts

15 KPIs Return on sales (*1) 5.5% Trading profit growth 33.8% Return on capital employed (*2) 4.3% Lost time injury frequency rate (*3) 1.4 Net cash flow (*4) 10.7m Interest cover (*5) 56x (*1) Trading profit/sales (*2) Profit after tax/total assets current liabilities (*3) Accidents per 200,000 worked hours (*4) Cash generated from operations before exceptional items (*5) EBITDA/net interest payable The three UK defined benefit schemes, which are closed to new members and to future accrual, represent the largest portion of the deficit and increased 3.6m to 32.4m (: 28.8m). The net movement in the UK deficits was the result of increases in asset values of 6.6m which were lower than the increases in total liabilities of 10.2m, the latter being mainly the impact of the change in discount rate from 5.6% to 4.75%. Despite the large movement in the discount rate the overall increase in liabilities has been contained by gains on two projects concluded in the period: a pension increase exchange project crystalised a net gain of 1.0m in operating profit and 0.8m in reserves, and the successful conclusion of the pensioner equalisation project saw the provision made for equalisation costs reduce by 4.1m. The Group s cash contributions to defined benefit pension schemes increased 2.0m to 6.4m (: 4.4m). The UK contributed 1.4m to this increase, 0.5m being contribution deferral from the prior year, 0.3m of RPI and costs associated with liability management activities and finally 0.6m which included the 0.3m prior year PPF fee after a delay caused by appealing the levy assessment. As noted above, the Group continues to recognise the deferred tax asset of 9.8m (: 9.4m) in respect of future pension deficit reduction payments which gain tax relief at the time of payment (as opposed to accrual). The pension deficit, net of deferred tax, is therefore 29.1m (: 25.6m) which includes a provision in the UK schemes for future administration and PPF levy costs of around 7.4m (: 5.3m). Asbestos litigation The Group carries a liability and equal and opposite insurance asset in relation to asbestos product liability issues in the United States of 20.5m (: 19.9m). The Group continues to hold the view that Scapa s products have not been the cause of any alleged personal injury and we therefore continue to adopt the same robust stance with respect to all of the remaining personal injury claims in the USA arising from businesses sold in The best estimate of total claims filed across varying jurisdictions in the United States against Waycross which are still pending is approximately 7,172 (: 8,116), down almost 27,000 since the peak of approximately 34,000 in The Group undertook a review of the asset and liability during the year and the Directors concluded that the current level of the provision is appropriate. The only movement in the provision and assets from the prior year relates to foreign exchange movements as the liability is in dollars, and the unwind of the discount. Shareholder funds Shareholder funds have decreased 2.5m to 66.1m (: 68.6m) reflecting a net pension loss in the period of 7.7m (: 0.9m gain), profit after tax of 6.5m (: 3.5m), movements in equity relating to share issues and share options adding 0.5m (: 0.4m), unfavourable currency impact on overseas asset values of 1.2m (: 0.8m) and tax charges of 0.6m (: 0.7m). Going concern The Directors have formed a judgement at the time of approving the financial statements that there is a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In forming this view, the Directors have reviewed the Group s budget and cash flow forecasts against undrawn facilities of 11.2m (: 9.1m) and the availability of financing in the market. The Directors also reviewed downside sensitivity analysis over the forecast period, thereby taking into account the uncertainties arising from the current economic climate. For this reason the Directors continue to adopt the going concern basis in preparing the financial statements. Scapa Group plc Annual Report and Accounts 11 Overview Business Review Governance Financial Statements

16 Business Review Health & Safety review of performance During the year we have continued to drive improvements in Health & Safety metrics and culture across the Group. This priority continues to be strongly reinforced by the Board with regular reviews of the performance. The key metric, Lost Time Injury Frequency Rate (LTIFR), improved year-on-year by over 40% to 1.4 lost time accidents per 200,000 hours. Key focus areas remain: Machine guarding improvements; Chemical handling; Material lifting, movement and handling; Solvent management and handling; Workplace transportation; Noise; and Employee training. In addition, our employee engagement safety opportunity identification has identified over 2,000 further opportunities for improvement across our sites this remains a critical part of the employee engagement activities. All sites within the Group continue to report key performance indicators on a monthly basis and are audited at least twice per year against a standard Group template to ensure compliance with Group policies and to identify opportunities for improvement. All Lost Time Incidents and Serious Incidents continue to be reviewed by the Group Operations Director and, in the most serious cases, by the Group Board. Improving safety culture Scapa considers the safety of its employees and the communities in which we operate to be a top priority. Our ultimate aim is to ensure that no employee is harmed whilst engaged in Scapa Group activities. Scapa and its employees agree that delivery of this goal is a shared responsibility and will only be achieved by constantly working together and driving key employee engagement activities to improve our safety culture. The Board continues to believe that it is the leadership behaviours, from the Board of Directors right through the organisation, which will drive the improvements in safety culture. Standards of performance are set and reviewed by the Board through safety-related KPIs that form an integral part of the Group s operational review process. Health & Safety /13 goals The ultimate goal for all sites will be to achieve zero Lost Time Incidents and zero lost days anything less would send a message that some level of injury is acceptable. We aim to continue to drive year-on-year improvement metrics and the Board has again targeted a 20% improvement in all safety-related KPIs. Supporting this critical objective of improving the safety culture, bonus payments will be made to Directors and Senior Managers which are, in part, related to achievement of key Health & Safety goals. Environmental Scapa Group plc continues to recognise the importance of managing the consumption of the world s natural resources as well as providing a safe and healthy working environment for our employees and the communities in which we operate. As the Scapa business grows then the consumption of resources will grow on an absolute basis as such, the Group continues to focus on reducing the resources consumed on a per unit basis. Air emissions Scapa actively seeks to minimise the discharge of VOCs and particulates into the atmosphere. Solvent-based adhesive coating processes are used at many Scapa locations. Evaporated solvents are effectively captured and destroyed or recycled using well maintained thermal oxidisers or solvent recovery systems. All solvent manufacturing sites undergo strict internal and external third party audits to ensure compliance with best practice. Solvent consumption Whilst Scapa uses solvent-based adhesive systems across some of its global manufacturing locations, work continues within our R&D teams to look at replacement adhesive systems that will further eliminate or reduce our solvent consumption. Within all our business units, we offer a comprehensive range of solventless adhesive tape solutions and will continue to look at new and innovative adhesive solutions. Utility consumption Gas and electricity remain significant inputs to Scapa manufacturing processes in all regions and constant reduction of energy usage is a key driver of our environmental programmes. We have and will continue to implement energy management solutions across our various sites to help reduce energy consumption. Targeted investment to drive self-help reduction of waste The Group continues to drive its self-help agenda to identify internal efficiency improvements that will eliminate non value added activities across the Group. Targeted improvement activities and implementation of Lean activities across all manufacturing sites will lead to further reductions in manufacturing waste and our environmental footprint. Examples of improvement activities through the last year include: We continue to target the overall reduction of manufacturing waste at all sites and have begun to further extend our recycling programme; In Valence, France, we have upgraded one of our key coaters to improve the energy utilisation and control systems; In Renfrew, Canada, we have installed energy efficiency lighting throughout the facility; In Windsor, USA, we have continued the work started last year to upgrade one of our adhesive coating lines that will achieve a step change reduction in solvent usage; In many of our sites, we continue to identify and invest in opportunities to upgrade control and drive systems to modern energy efficient equipment. Suppliers Scapa Group plc firmly believes in being a good corporate citizen. Our customers must be able to trust that we and our supply chains are robust and are acting in a socially responsible manner. To achieve this we must have robust procurement and supply chain policies and procedures in place that specifically address the issue of Corporate Social Responsibility (CSR) in the supply chain. The scope of these policies takes in the whole of the supply chain from the selection of raw materials, how third parties manufacture products and components, through the in-house manufacturing and packaging processes and on to final delivery to the customer. 12 Scapa Group plc Annual Report and Accounts

17 Lost Time Accidents (LTAs) FY12 18 FY11 FY10 15 FY During /13, Scapa will undertake an assessment of its current procurement and supply chain policies, reference appropriate United Nations Universal Declaration of Human Rights, International Labour Organisation Conventions and other Globally relevant CSR standards and, if appropriate, re-issue these policies. Through the Global Procurement teams we will then agree the priority supply chains, execute these policies and apply controls to ensure compliance. Overview Business Review Governance FY Financial Statements Scapa Group plc Annual Report and Accounts 13

18 Business Review Principal Risks and Uncertainties Risk is an inherent part of doing business. A successful risk management process balances risks and rewards and relies on sound judgement of their impact and likelihood. The Group Board has overall responsibility for ensuring the Group has an effective risk management framework aligned to our objectives. The senior management team, Audit Committee and Board review risks which could affect the Group throughout the year. Risk and issue tracking systems are reviewed by our internal auditors on a regular basis to ensure that the framework is in line with good practice in risk management and that identified mitigation plans are being adhered to. Risk Impact Business strategy If the Board develops the wrong business strategy or fails to implement its strategy effectively, this could have a negative impact on long-term growth prospects Financial and treasury risk The main financial risks we face are around the availability and cost of funding and foreign exchange rates Customer Over-reliance on particular markets or customers could put pressure on pricing, margins and profitability Raw material pricing Pensions Where our material prices are too high it will be difficult for the Group to remain competitive Liabilities increase due to increasing life expectancy, inflation, poor performance in investments compounded by fluctuations in the discount rate Acquisitions and disposals Poor decision making on restructuring adversely affects the Group s results weakening shareholder value Human resources We employ around 1,200 members of staff who are critical to the achievement of our objectives. Being able to attract, develop and retain the right people is essential to the growth, efficiency and sustainability of our business ICT systems and infrastructure The Group relies heavily on its ICT systems and infrastructure and interruptions to these services could have a significant impact on the business Product quality If our products are not up to the required quality and health and safety standards, this could impact on financial performance due to customer returns, product liability claims and ultimately affect customer trust in Scapa as a supplier Health & Safety Failure to ensure safe working practices leading to injury or loss of life Legal proceedings Potential litigation including claims arising from alleged exposure to asbestoscontaining products 14 Scapa Group plc Annual Report and Accounts

19 We take the view that the policies and monitoring systems which are in place and which have been reviewed regularly throughout the year remain sufficient to effectively manage the risks associated with our business. Key controls and mitigating factors Clear strategy in place which is reviewed by the Board on a regular basis Progress against the strategy is monitored by senior management and the Board on an ongoing basis Risks relating to the achievement of the Group s strategy are reviewed regularly All treasury policies are approved at Board level Corporate Treasury is not intended to be a profit centre The Group uses simple projects to hedge exposure with no speculative currency risk exposure Diverse range of customers with no specific weight towards one customer Credit limits set based on Group policy, with limits monitored regularly and customers put on stop as appropriate Expansion into new markets helps spread risk and encourage growth Credit insurance for worldwide turnover of North America and Europe The table below outlines the principal risks and uncertainties which the Group faces together with relevant key controls and mitigating factors. The list does not constitute a list of all risks faced by the Group and the risks are not presented in priority order. Overview Business Review Governance Global supply chain function now in place with clear cost reduction targets No final salary pensions schemes are open at the Group Closure of all schemes to future accrual in the UK Ongoing liability management programme Active de-risking investment strategy for assets Significant internal and external due diligence processes Acquisitions and disposals approved by the Board Monitoring of business portfolio and structure at senior management and Board level Integration planning for acquisitions across Finance, Operations, HR and Commercial Performance management system in place Succession and development planning process being rolled out across the business Reward and recognition programmes linked to performance utilised at all levels Employee communication and engagement programmes in place Financial Statements Group and site based business continuity and disaster recovery processes in place Multi-site back up of electronic data System architecture encourages resilience due to implementation of dual node solution Annual test of disaster recovery for key systems Minimum exposure from current e-commerce transactions Third party quality systems accreditation Internal quality audit processes are in place with issue resolution tracking Known problems are being addressed with rigorous root cause and corrective action to ensure they do not reoccur In process and final product quality checks take place Clear policies and procedures in place supported by training programmes to ensure that staff are aware of Group procedure Group Head of Health & Safety has redesigned the approach to Health & Safety Management during the year Health & Safety audit programme designed to monitor and improve compliance Best practice shared between sites Legal advisory teams for defence and insurance coverage Monitoring adequacy of insurance Product liability insurance many times higher than potential liabilities Specialist advisers in each field supporting in-house General Counsel Scapa Group plc Annual Report and Accounts 15

20 Governance Corporate and Social Responsibility The Christie case study celebrates Scapa s second year of a three-year fundraising partnership with The Christie, the charity that supports the renowned Christie Hospital in Manchester. One of Europe s leading cancer centres, The Christie Hospital treats over 40,000 patients a year. Based in Manchester it serves a population of 3.2 million across Greater Manchester and Cheshire, but as a national specialist around 15% of patients are referred from other parts of the UK. The Christie is also an international leader in research, with world first breakthroughs for over 100 years. Cancer research in Manchester, most of which is undertaken on The Christie site, has been officially ranked the best in the UK. Over the past 18 months, Scapa employees have taken part in a number of events, including a mountain climb up Ben Lomond in Scotland, the Manchester United Charity Challenge Cup and the recent BUPA Great Manchester Run, raising an impressive 16,000 for The Christie Charity. Partnering with The Christie has also had a positive impact on Scapa employees, as working together towards these joint goals has improved employees team spirit and inter-departmental communication. It also enables Scapa to make a real difference to the community in which our global headquarters are located. Scapa Chief Executive Heejae Chae, who also took part in this year s Great Manchester Run, commented It is always so fulfilling, both for individuals and for Scapa as a business, to give our time and effort to such a worthwhile cause, one which is at the heart of our community. Excellence Commitment Integrity Responsibility Teamwork An exceptional, World Class ethos, where people pursue and attain their highest potential, employing creativity, innovation and risk-taking High energy, enjoyment, flexibility and enthusiasm a passion for our business Honesty, trust and mutual respect for everyone in our business, our customers and in our communities We do what is right for the environment, our people and our communities Partnership and collaboration, working together to achieve a common goal 16 Scapa Group plc Annual Report and Accounts

21 Introduction At the heart of how Scapa does business are our Company Values of Excellence, Commitment, Integrity, Responsibility and Teamwork. These values support the operational delivery of our strategy and help us to maintain strong relationships with our stakeholders, including customers, investors, suppliers, employees and communities. Business conduct The Scapa Code of Conduct is a summary in one document of the principles, values, standards and rules of behaviour that guide the decisions, procedures and systems of our business. The Code sets out the standards that everyone in Scapa is expected to meet and provides specific guidance to leaders and all employees on how they should behave. The Code of Conduct has been translated into local languages and has been issued to all employees across the Group, and covers the following areas of behaviour: health, safety and environment; fair employment practices; community and charity involvement; recording of time, costs and materials; bribery and inducements; controllership; use of company information technology; use of company physical assets; personal information; conflicts of interest; intellectual property; share transactions and inside information; and competition and anti-trust. Included within the Code are details about how employees can raise concerns about any of these topics. In addition, in September the Scapa Board formally adopted the Group Corruption and Anti-Bribery Policy. The objective of this policy is the prevention, identification and earliest possible detection of any potential bribery or corruption issues for Scapa. As part of the development of this policy, training was provided to all senior leaders on UK legislation and the Company s policy and approach to such matters. Community involvement Scapa recognises its responsibility to the communities in which we operate. As part of this responsibility Scapa Group has agreed a formal three-year partnership with The Christie Charity that supports Christie Hospital to fundraise. The Christie Hospital is one of Europe s leading cancer centres, treating over 40,000 patients a year. Based in Manchester it serves a population of 3.2 million across Greater Manchester and Cheshire, but as a national specialist around 15% of patients are referred from other parts of the country. As part of this partnership Scapa employees have completed a number of fundraising activities including the Healthcare team climbing Loch Lomond and a team of employees entering the BUPA Great Manchester Run. To further strengthen our links with the North West of England Scapa announced in January their partnership with the Hallé and The Bridgewater Hall. The Hallé, whose home is the iconic Bridgewater Hall in Manchester, ranks among the UK s top symphonic ensembles. As a Corporate Sponsor, Scapa enjoys access to many first rate performances from the Hallé, a benefit that is being shared with our employees. The Company also supports employee led community activity. Our Windsor CT, USA facility has been supporting the American Cancer Society s Making Strides Against Breast Cancer for seven years. Our Valence site in France is involved with School for the Second Chance, an organisation that supports teenagers who have dropped out of school. Employees at our Ashton facility donated Christmas presents to the children s charity Barnado s in. Employee engagement The success of the execution of business strategy is dependent upon employees being fully engaged and committed. Scapa has worked hard to strengthen employee communications. Activities in this area include wider use of our Company Intranet site, a monthly newsletter translated into all key languages and local based team briefs. also saw the launch of the CEO Awards; this Group-wide award programme is designed to recognise, celebrate and share excellence in three categories: continuous improvement; service excellence; and innovation. The Award was well supported across the business with over 60 entrants from all parts of the Scapa family. The overall Award winners were invited to attend the Group Leadership Conference in May where their achievements were celebrated at an Award dinner. Reward and Benefits In the area of Reward and Benefits, Scapa is striving to provide a cost-effective and innovative approach that is valued by employees and reflects performance. The salary review has seen the link between pay and performance strengthened and the Group bonus scheme has been designed to support business cash and profit objectives. In the UK we have introduced salary sacrifice for pensions, bicycles and the opportunity to buy holidays is a first step towards flexible working arrangements. Developing leadership capability The alignment of employee objectives to performance and business strategy has been strengthened through the formal implementation of a Group-wide online performance management tool for senior employees called MyPerformance. The system for will include newly revised Scapa leadership competencies which will be used both for the identification and development of talent. Overview Business Review Governance Financial Statements Scapa Group plc Annual Report and Accounts 17

22 Governance Board of Directors H R Chae Group Chief Executive Heejae Chae joined the Board as Executive Director in September 2009 and subsequently became Group Chief Executive in November Prior to joining Scapa, Heejae was Group Chief Executive of Volex Group plc. He was previously the Group General Manager, Radio Frequency Worldwide, for Amphenol Corporation. He spent the early part of his career in finance at The Blackstone Group and Credit Suisse First Boston before moving into industry. P Edwards Group Finance Director Paul Edwards joined the Board in September 2010 as Group Finance Director. Prior to joining Scapa he was Group Finance Director of NCC Group plc. Paul is a Chartered Management Accountant and MBA and spent the earlier part of his career in manufacturing, logistics and services sectors. J A S Wallace Chairman James Wallace joined the Board in August 2007 and became Chairman in October He is currently also Chairman of the Nominations Committee. An accountant by qualification, he spent the majority of his very successful executive career at Pifco Holdings PLC until James has held various Non-Executive Director positions and was Chairman of Bodycote plc from January 2002 until April Currently James is a Non-Executive Director of Manchester Airport Group plc. R J Perry Non-Executive Director Richard Perry was appointed to the Scapa Board in June 2005 and is Chairman of the Audit Committee. Richard is currently Group Finance Director of Fenner plc to which position he was appointed in He was formerly a senior audit partner with Price Waterhouse. M C Buzzacott Non-Executive Director Mike Buzzacott joined the Board in March 2008 and is currently Chairman of the Remuneration Committee. Mike spent 35 years with BP Chemicals before retiring as Group Vice President Petrochemicals in Mike has extensive experience of the global chemicals industry. He is currently Non- Executive Director at Genus PLC and is a former Director of Croda International Plc and Rexam PLC. 18 Scapa Group plc Annual Report and Accounts

23 Leadership Team Overview Business Review Governance L-R: Ian Marchant, Tracy Sheedy, Ralf Seufert, Heejae Chae, Randy Holmes, Joe Davin, Paul Edwards. I R Marchant Group Operations Director T Sheedy Group HR Director R Seufert Group Commercial Director Financial Statements Ian Marchant joined the Company in February 2010 as Group Operations Director. Prior to joining Scapa, Ian held a number of senior management positions with two international manufacturing businesses, Avon Rubber plc and General Electric Inc. Tracy Sheedy joined Scapa in September 2010 as Group HR Director. Before joining the Company, Tracy was Head of Organisation and Capability Development with BAE Systems. Prior to this role Tracy held senior HR roles with ConvaTec, Georgia Pacific and Monsanto. Ralf Seufert joined Scapa as Group Commercial Director in October Before joining Scapa he was VP Sales & Marketing and member of the Board at Quadrant Plastic Composites AG in Switzerland. He has previously worked for GE Advanced Materials in senior management positions for global application development and sales. R Holmes Director of Global Development Randy Holmes joined Scapa as Director of Global Development through the acquisition of WEBTEC Converting in December. He has spent most of his professional career in contract manufacturing of adhesive backed medical devices. As Founder and CEO of WEBTEC, Randy had a vision to create a company that offered turn-key solutions to the medical device industry with a major emphasis on quality, service and employee satisfaction. J Davin Group President Healthcare Joe Davin joined Scapa as Group President Healthcare in September. He has over 30 years of experience in the medical equipment industry. His most recent role was Group President at Spacelabs Healthcare, a global provider of patient monitoring, anaesthesia, diagnostic cardiology and clinical information solutions with US$215m in turnover. Scapa Group plc Annual Report and Accounts 19