13%
29%58%Asia Pacific
Americas
Europe
Key brands
Revenue
£708m% of Group revenue
43%Operating profit
£118.5mReturn on Sales
16.7%Number of employees
5,300
Our performance in 2016 Our product categories
Pneumatic valves
Fluid control valves
Pneumatic actuators
Air preparation
Industrial Automation
£396mOr 56% of total
Commercial Vehicle
£161mOr 23% of total
Energy
£63mOr 9% of total
Life Sciences
£57mOr 8% of total
Rail
£31mOr 4% of total
Product Photo
Product Photo
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Product PhotoPneumatic fittings
IMI Precision Engineering at-a-glance
2
We specialise in developing motion and fluid control technologies for applications where precision, speed and reliability are essential. Our integrated solutions improve the productivity and efficiency of customers’ equipment
We operate in attractive markets with strong long term growth drivers, and where we have strong competitive positions that underpin our ambition to lead. Our strategy seeks to leverage this, and catapult us into the market leadership group.
Revenue split by geography
Industrial Automation
Commercial Vehicle
Energy Life Sciences Rail
Over 80 years experience supporting production lines worldwide in automotive, food and beverage, printing, and electronics.
Covering every major commercial vehicle system, from the front bumper to the rear.
Production, transportation, refining, petrochemical, chemical, power generation, waste to energy.
Supporting advances in medical devices, diagnostic equipment and biopharm and analytical instruments.
Innovation for air preparation, dryers, brake components, door controls, coupling control, pantograph control and toilet applications.
Our verticalsA business structured around its customers
3
44%
26%
19%
7% 4%
Western Europe
North America
Emerging Markets
UK
RoW
IMI Precision Engineering footprintGlobal manufacturing and technical development
5 Global Technical Centres: USA, Germany, China, Switzerland and UK
26 Manufacturing Centres: USA, Germany, China, UK, Switzerland, Czech Republic, Mexico, and Brazil
2016 Revenue split by geography
Global technical, sales, manufacturing centre
Manufacturing, sales & technical centre
Sales office
Noida, IND
Querétaro MEX
Alpen, GERFellbach GERBad Oeynhausen, GERMerklingen, GER
Shanghai, CN
Sao Paulo, BR
Littleton, USA
Brookville US
UKFradley Bristol,
Leeds & Poole
Las Vegas, USA
Seattle, USAGeneva, CH
Brno, CZ
Singapore
Melbourne, Aus
4
▶ Product rationalisation
▶ Global quality system▶ Ongoing lean
implementation▶ Development of
regional IT strategies
▶ Aligned organisation to regional primacy
▶ Introduced lean initiatives
▶ Re-branding to IMI Precision Engineering
▶ 15+ new products introduced
▶ On time delivery improved
▶ Above market organic growth
▶ Factory utilisation improved
▶ Supply chain organisation now in place
▶ NPD New Product Development process in place
▶ New core product ranges introduced
▶ Organisation fully aligned with growth strategy
▶ Organic expansion yielding results in all regions▶ Net Promoter Score (NPS) improved▶ Growth targets achieved
Delivering against IMI Group strategy
Growth phase strategy 2017+Fix & Focus phase strategies up to 20165
✓
Year 0:The hard work begins
2014
✓
Year 1:Increased investment
2015
✓
Year 2:Benefits starting to show
2016
Year 3:Nearly firing on all cylinders
2017
Year 4:Up to full speed
2018
Ambition:Double operating profits
IMI Precision Engineering Deliverables
IMI Precision Engineering: strategic roadmapKey strategic initiatives
Key Initiatives
Our
pur
pose
Our
dre
am
True North
Our
Str
ateg
y CustomerSatisfaction
Profitable Growth
Operational Excellence
Delight our customers providing a world-class service.
Grow the top line, targeting verticals that offer opportunity to win.
Enhance business delivery with common and efficient processes and systems, and fully utilise our talents.
Strategic Objectives
Mission
Vision
Be your preferred partner in developing motion and control solutions where precision, speed & reliability are essential.
Be a world leader and your preferred partner in delivering world-class solutions supported by industry leading services.
Our
Prio
ritie
s
Products
Go To Market
Operations
Organisation
M & A6
GROW
Fix – Focus – GrowMoving to growth phase, focusing on our customers
FIX
FOCUS
Continue Lean journey and continuous improvement initiatives
FIX8 to drive operational excellence.
Improve execution (Policy Deployment).
Transform our supply chain through projectJanus to optimise our global business model.
Develop and launch great new products supported by new marketing campaign (M5).
Build an agile vertical organisation focused on customers.
Leverage & expand IMI Norgren Express channel to market, with a new website and app (digital transformation).
Create a growth culture &passion for IMI Precision Engineering.
7
Fundamental change is being successfully executedGreat achievements in ‘Fix, Focus and Grow’
Significant progress on ‘Fix’ activities
Organisation Transformation
New vertical structure
▶ New vertical structure to reflect the go-to market strategy in Americas
▶ Continental and Western Europe merged
▶ Vertical organisational structure in Europe implemented early 2017
Lean and Health & SafetyBusiness Improvement
Organisational structure reflects customers needs
33%In 2014
67.2% In H1 2017
Great Progress in ‘FIX’
▶ Infrastructure investments▶ New ERP system in Americas▶ New global NPD process▶ New global Quality System▶ Improved sales forecasting▶ Product portfolio rationalised
All units continue to improve
▶ 83% Lean score in Seattle (USA)
▶ 7 sites with a combined score over 70%
▶ Majority of sites have Health, Safety & Environment scores above 8.5/10
Transformation of global footprint ▶ Machining insourcing driving
improved utilisation▶ Localising production closer to
customer, reducing supply chain complexity, cost and inventory
▶ Increasing leverage of our low cost European manufacturing operations
▶ Tactical cost reduction programme
Project Janus
On-time, on budget
Combined Score, H1 2017 (%)
8
Increasing focus on growthThe penultimate phase of the plan
Great new platform products
Digital Transformation
Driving IMI Norgren Express forward, with a unique mobile app and a new integrated global website.
New CampaignNew Products
Market leading digital channel to market
Putting the emotion into motion
The first major platform products for many years, launched at Hannover Messe April 2017.
A differentiating campaign that helps us show what we do, how we do it and why we do what we do.
9
Large market with strong growth drivers
Commercial Vehicle£1.2bn (addressable)2016 sales: £161m
Life Science£1.0bn (addressable)2016 sales: £57m
Ageing population
Global increase of middle class
Increase of chronic diseases
Fuel efficiency
Emissions legislation
Reduced total cost of ownership
Industrial Automation£5.7bn (addressable)2016 sales: £396m
Reduced energy consumption
Reduced total cost of ownership
Increased demand for smart solutions
Safety legislation
Resource scarcity
× Increasing use of renewables
× Oil price uncertainty
Energy£0.7bn (addressable)2016 sales: £63m
10
£13.8bn total market£8.6bn addressable
New Product DevelopmentCustomer–focused process = significant pipeline
Time to develop new products was years, now it’s months12
Plan Prepare Execute▶ 5-year strategy▶ Voice of Customer▶ Voice of Sales▶ Innovation events
▶ NPD process▶ PPM – Planned
Procedures Manual▶ Weekly reviews▶ APQP – Advanced
Product Quality Planning
The Internet of Things (IoT) and Industry 4.0A clear strategy for maximum commercial benefit
Act
Create Data
CommunicateAggregate
Analyse
What is IoT in Industrial Automation (IA) MarketsIoT / 4.0 Information Value Chain
Our strategy takes us to this pointNo plans to move beyond this
IoT/Industry 4.0 is an environment of connected devices sharing data to allow local analysis and decision making – a “cyber physical” system.
The goal is to optimise processes and the supply chain with “cyber physical” systems able to communicate and co-operate with each other in real time.
Potential applications in IA are:
▶ Integration of sensors into individual products, machines or entire factories
▶ Linking of sensors via software and controls to allow proactive monitoring of a
component, machine or factory
▶ Use of the cloud to hold this data to allow multiple users to access this and
control machine or factory performance in real time
The benefits to the operator include:
▶ Proactive replacement of worn parts before a breakdown
▶ Predictive maintenance
▶ Machine performance optimisation
▶ Cost reduction
▶ Supply chain optimisation
Sensors
Actuators
Network
Standards
Augmented Intelligence
AugmentedBehaviours
14
The Internet of Things (IoT) and Industry 4.0A clear strategy for maximum commercial benefit
Our strategyISOLine cylinder with IoT/4.0 connectivity
Meet current customer demandAs a component supplier, we focus on delivering products to customer demand; they require sensor technology for condition monitoring and machine optimisation, and potentially the ability to link into their current or future connected systemsAll NPD activity includes use of sensor technology to allow condition or monitoring of performance and basic communication capability.
Develop connectivity platform technology to a position where we have the option to move rapidly if and when customer demand becomes a reality e.g. ▶ Valve Islands to be capable of enhanced connectivity for phase 2
development if required
Monitor customer demand and market as customer requirements change
1
2
3
Modern platforms with sensingValve Island – Phase 1 Electric ActuatorsAir Preparation – Excelon Plus FRLPneumatic Actuators – ISOLineCylinder
Communication capabilityValve Island Phase 2Valve Island I/O module
Solid state sensor switch with IO-Link
capability on ISOLineTM cylinder
15
Example of productsUpgrading products with enhanced connectivity
Added to our proven platform, the best available Industrial Ethernet.
▶ These were the first. More will follow…
Valve Islands with Industrial Ethernet M/50 IO-Link Switch
IO-Link capable magnetically operated switchAble to remotely sensor the operating mode and condition of the actuator, using a IO-link
16
Industrial Automation at-a-glanceSignificant opportunity: focused strategy for success
Key brandsSegments
Revenue split by geography
With over 90 years experience in fluid & motion control technologies, we develop solutions for our customers in the machinery, food & beverage, printing and factory automation industries.
Key competitors
Factory AutomationAuto In-PlantPackagingMaterialsMechanicalFood & BeverageProcess AutomationRail
Products
2016 Global revenue of £396m
Pneumatic valves
Fluid control valves
Pneumatic actuators
Air preparation
Product Photo
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Product PhotoPneumatic fittings
18
10%
29%
61%Asia Pacific
Americas
Europe
Applications at-a-glanceFactory Automation: Compressed air system In-Plant Automation: Tri-axis press
19
Air PreparationFilters, regulates and lubricates air
ValvesDirect or control the flow of air by opening, closing, or partially obstructing various passageways.
ActuatorsUses the air to move a piston, which in turn moves a mechanism or system
Applications at-a-glance – Food & Beverage
Air preparation equipment
Valve islands
Pressure switch & sensors
Stainless steel products
Cooling valves40 bar blowing blocks
Air recovery products Cylinders for
filling valves
Pneumatic stretch actuators
Rotary stretch blow moulding Filling
20
Valves
Energy at-a-glanceReliability in the harshest environments
Applications
Solenoid Valves
Pressure & Flow Control
Partial Stroke Testing
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Setting the standard for safety and reliability, we offer a comprehensive range of world-class products which deliver precision control in even the harshest environments.
Upstream
Midstream
Downstream & Chemical
Other (inc. PowerGen)
Products
Key brands
Key competitors
IMI Maxseal ICO4-PST(Smart
Solenoid)
23
Revenue split by geography2016 Global revenue of £63m
25%
7%
68% Asia Pacific
Americas
Europe
Pressure & flow control
ICO4-PST
Solenoid valves
Applications at-a-glanceProducts for extreme environments
24
Hydraulic valvesCustom solutions
Redundant valve manifolds
Deluge systems
Three stage filtration
Pilot operatedvalves
Rail at-a-glanceRising urban populations will drive rail investment
Sectors
Air dryer
Mirror control
Water management
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For over 30 years, we have delivered robust, reliable and bespoke solutions to the rail sector, improving safety, reliability and life cycle costs across the world’s most challenging physical environments.
Urban transportation
Regional & high speed
Freight
Products
Key brands
Key Competitors
Pantograph control
26
37%
7%
56%Asia Pacific
Americas
Europe
Revenue split by geography2016 Global Revenue of £31m
Applications at-a-glanceRegional rail & high speed transport solutions
Mirror control systems
Horn control valves
Fire & smoke retardant tubing Pantograph
controls
Lightweight compression fitting
Pressure switches
Brass push-in fittings
Toilet and water control systems
Door systemsMain line compressor filtration & dryers
Step systems
Points control -Actuators & Control
Auto coupling controls & actuators
Pressure regulators
27
Life Sciences at-a-glanceStrong competitive position in a growth market
Applications
Precision pumps
Precision solenoid valves
Precision integration
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Leveraging 35 years of application expertise, a global range of precision products and integration capabilities, we help OEM increase performance of their systems, enabling cutting edge devices that improve health and the environment.
ProductsKey brands
Key competitors
Precision regulators
Medical DevicesDiagnostic Instruments
Analytical Instruments
Biotechnology
29
Revenue split by geography2016 Global revenue of £57m
12%
50%
38%
Asia Pacific
Americas
Europe
Life Sciences at-a-glanceA world of diverse applications
Medical DevicesDevices used for diagnosis, prevention, monitoring, treatment or alleviation of disease, injury or handicap.
Diagnostic Instrumentation Instrumentation providing laboratory tests demonstrating presence of physiologically significant substances in blood, urine, tissue, or body fluids, with application to the diagnosis or therapy of disease with results reported to the patient.
Analytical InstrumentationInstrumentation providing qualitative tests or quantitative measurements (for research, process control or commercial applications) of substances in industrial, academic, environmental monitoring or medical contexts.
BiotechnologyInstrumentation designed to understand and manipulate the building blocks of biology (DNA, RNA, proteins, lipids, metabolic components etc.).
16%
30%49%
5% 35%
31%
19%
15%DiagnosticAnalyticalMedicalBiotechnology
Addressable Market - £1bn
IMI Precision Engineering sales-£57m
30
Typical diagnostic application Typical medical application
Applications at-a-glanceHelping optimise OEM system performance
Washing stationlaminated manifold
3-way media separated valves
Liquid dispenseNX3 syringe
pump
Liquid selection rotary valve
3-way media separated valves
Micro-litre dispenseneedle
Syringe
Anaesthetic agent vaporisation
FLATPROP/ MICROSOL
NIST/DISS portsNIST/DISS connection
Fresh gas mixingFLATPROP DA
Sensor calibrationFLEXISOL
PEEP controlCHIPPROP
High pressure regulation
HP regulator
Low pressure regulation
RM1
Anaesthesia gas flow control
FLATPROP DA
Drive gas control
FLATPROP EQP
31
Outrunning the competitionWe give Precision Engineering a whole new meaning
Global collaboration wins leading analytical account▶ New product launch outperformed competition ▶ Americas, Europe and APAC global account management▶ Success leveraged to five opportunities
OEM co-development wins in Biotechnology▶ Integration capability with laminated manifolds key to success▶ Collaboration between USA and Switzerland technical centers▶ New win in high growth Biotech market
32
Commercial Vehicle at-a-glancePutting growth into high gear
Applications
Engine control
Transmission automation
Air suspension
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Safety and comfort
Our range of cab, chassis and powertrain solutions deliver fuel efficiency, emissions reduction and faster assembly times for the world’s leading commercial vehicle manufacturers.
Fuel efficiency, and emissions
Comfort, automation and reliability
Truck & Bus
ProductsKey brands
Key competitors
34
Revenue split by geography2016 Global revenue of £161m
9%
36%55%
Asia Pacific
Americas
Europe
Commercial Vehicles at-a-glanceA world of diverse applications
Powertrain EngineHigh performance pneumatic and electric control using innovative valve and actuation technology for all current and future engine control requirements.
Powertrain TransmissionModular or standard version, our transmission products are built to be reliable, robust and reduce weight.Solutions providing pneumatic assistance on manual transmissions and high performance solenoid valve technology for automated manual transmission (AMT).
Chassis / CABBoth standard and customised pneumatic control solutions that comply with all regulatory requirements for use in primary and auxiliary applications. High performance, stackable solenoid valves have a single air supply when mounted in multi array, whilemanifolds reduce the overall weight and footprint.
41%
34%
6%5%
2%3%
9%
23%
25%
10%
12%
8%
3%
19%
Heavy Duty PowertrainHeavy Duty ChassisMedium Duty PowertrainMedium Duty ChassisOff-HighwaySUVMobile Pneumatics
Addressable Market - £1,178bn
IMI Precision Engineering sales-£179m
35
Applications at-a-glanceRegional development, global technology
IMI Norgren CV35
Natural gas and diesel electric inlet throttle
Integrated cartridge UTHV
Compact trailer hand brake valve
Americas/Europe
Seat controls
Powertrain Chassis
36
GROW
Fix – Focus – GrowMoving to growth phase, focusing on our customers
FIX
FOCUS
Continue Lean journey and continuous improvement initiatives
FIX8 to drive operational excellence.
Improve execution (Policy Deployment).
Transform our supply chain through projectJanus to optimise our global business model.
Develop and launch great new products supported by new marketing campaign (M5).
Build an agile vertical organisation focused on customers.
Leverage & expand IMI Norgren Express channel to market, with a new website and app (digital transformation).
Create a growth culture &passion for IMI Precision Engineering.
37
DisclaimerThis document may contain forward-looking statements that may or may not prove accurate. For example, statements regarding expected revenue growth and operating margins, market trends and our product pipeline are forward-looking statements. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward-looking statement which could cause actual results to differ materially from those currently anticipated. Any forward-looking statement is made in good faith and based on information available to IMI plc as of the date of the statement. All written or oral forward-looking statements attributable to IMI plc are qualified by this caution. IMI plc does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in IMI plc’s expectations.