IMI plc · LSE:IMI
IMI — Investor Day (October 2012)
127 slides from IMI's investor day presentation, Oct 4, 2012
Slide 1: Capital Markets Presentation: Niche Leadership
Capital Markets Presentation Niche Leadership 4 October 2012
Slide 2: Forward-looking content disclaimer
These capital markets day materials include forward-looking content with respect to the markets in which the Group operates. Such content may be affected by a number of risks and uncertainties that can cause results and developments to differ materially from those currently anticipated. IMI undertak
Slide 3: Welcome and Introduction
Welcome and Introduction Martin Lamb Chief Executive, IMI plc
Slide 4: Strategic convergence
Strategic convergence Focusing on the ‘sweetspot’ • Share progress through Capital Markets series • Drive ‘sweetspot’ convergence from 55% today to 75% over next 5 years
Slide 5: Sweetspot reminder
Sweetspot reminder Favourable end markets = higher growth Differentiated technologies + leadership market positions 20.0% = Attractive and 15.0% 16.7% 17.0% 17.5% 16.6% 14.0% 12.7% 13.0% 13.1% sustainable 10.0% 9.2% 9.8% 10.5% 12.2% 7.7% margins 5.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 6: October 2011 – Fluid Technologies
October 2011 – Fluid Technologies • Physics – shared fundamentals • Applications focus - challenging environments - critical outcomes
Slide 7: Next year – Growth Drivers
Next year – Growth Drivers • Shaping the future • 20 year + trends / non cyclical • High Emerging Market content • Strong growth • Ripe for innovation
Slide 8: Today – Niche Leadership
Today – Niche Leadership • Our niches • The importance of leadership • Execution competencies - Knowledge management - Engineering Advantage - Key Account Management
Slide 9: Our niches
Our niches Future CAGR 15% CDD Opps Efficiency Frozen Rail Hydronic Energy Sector ConditioningSector Hydronic 10% Aftermarket Balancing Foodservice Variety, Nuclear Life Sciences Health & Food & Petrochem Wellness Beverage & Refin LNG Fossil Commercial Vehicle Iron & 5% Steel TRV's Leadership positi
Slide 10: Current sweetspot positions
Current sweetspot positions % Business platform sweetspot Severe Service 70% Fluid Power 60% Indoor Climate 81% Beverage Dispense 24% Merchandising 0% Group 55%
Slide 11: Driving sweetspot convergence
Driving sweetspot convergence From 55% today to 75% over next 5 years • Underlying niche CAGR 5-7% versus CAGR 1-2% non sweetspot • Incremental growth from new product development, through market share gain and technology ‘amplification’ • M&A (acquisitions + disposals)
Slide 12: Niche markets growth
Niche markets growth Underlying niche markets expected to exhibit CAGR 5-7% over next 5 years • Favourable global mega trends - Climate change, resource scarcity, urbanisation, ageing population • Increased legislation - Energy and fuel efficiency - Emissions legislation - Resource and labour utilis
Slide 13: New product development
New product development New product development pipelines should deliver incremental CAGR 1-2%, over and above niche growth • Pipeline should generate £300m + incremental new product revenues by year 5 • Growth opportunities arising from market share gain, expansion of customer base (most notably in
Slide 14: M&A
M&A • Balance sheet capacity • Acquisitions targeted in sweetspot areas - existing niche markets - close adjacencies • Selective disposals of some non-sweetspot activities
Slide 15: Sweetspot development 5 year illustrative scenario
Sweetspot development 5 year illustrative scenario 2012 H1 sweetspot 55% • Niche market growth (mix impact) - Sweetspot organic growth 5-7% CAGR, non sweetspot 0-2% +7% • New product development - £300m + of new products /market share gains, all sweetspot +4% - Incremental 1-2% CAGR • Acquisitions -
Slide 16: Today's key messages
Today’s key messages • Focus on niche markets supports IMI’s growth and margin ambitions - Strong underlying growth in niche markets - Significant opportunities for niche expansion and share gains through investment in sales and new product development • Niche leadership is pivotal • Niches share co
Slide 17: Agenda
Agenda Welcome & Introduction Martin Lamb Niche Leadership at IMI Sean Toomes Deep dive into niches Energy Sector (Norgren) Jon Taylor LNG Sergio Sartoni Hydronic Balancing Mike Carbine / Dominique Vernier CV Engine Control Gordon Scott Questions and Answers Executive Directors Closing comments Mart
Slide 18: Niche Leadership at IMI
Niche Leadership at IMI Sean Toomes
Slide 19: Overview
Overview Niche Market leadership…… 1. IMI Niche definition and characteristics 2. Execution and competences 3. IMI Niches and growth
Slide 20: What is a genuine Niche Market for IMI
What is a genuine Niche Market for IMI • Focused on customer needs • Application specific • Differentiation through technology and/or knowledge/expertise • Market leadership position • High barriers to entry
Slide 21: What is a genuine Niche Market for IMI?
What is a genuine Niche Market for IMI? IMI IMI $30m $30m Total Valve Package $40m LNG Plant Cost $5bn
Slide 22: Why is market leadership so important?
Why is market leadership so important? Benefits of Niche Market leadership…… • Customer intimacy • ‘wouldn’t it be great if’ • Influence/innovation • Engineering Advantage • Pricing responsibility • Value Creation
Slide 23: Maximising barriers to entry
Maximising barriers to entry How we keep winning..… • Trusted partner • Risk and cost of failure • Integrity of the solution • Intellectual property • Long established knowledge/expertise
Slide 24: Niche Market leadership
Niche Market leadership…… 1. IMI Niche definition and characteristics 2. Execution and competences 3. IMI Niches and growth
Slide 25: Key competences
Key competences We need to be good at…… • Knowledge Management • Key Account Management Execution Backing • Engineering Advantage ability winners Capturing Insight value Engineering Advantage
Slide 26: Backing winners
Backing winners Smart Choices…… KAM – Choosing winning :- • Dragons Den/Shark Tank • End market drivers • Customers Backing • Projects • Fit with strategy winners • Real differentiation • Customer value Fluid Power Dragons Den Shanghai
Slide 27: Insight
Insight Customer Intimacy…… KAM – Choosing winning :- • End market drivers • Key Account Customers • Customers Backing • Projects winners • Understanding end market drivers • Deliver World Class expertise Insight and knowledge KAM - Insight • Genuine knowledge Voice of Customer • Customer relationsh
Slide 28: Shenzi Deep Water Oil Field, Gulf of Mexico
Shenzi Deep Water Oil Field, Gulf of Mexico Joe Steinke Valve Dr Tungsten Carbide Valve Stack
Slide 29: Engineering Advantage
Engineering Advantage Application of expertise...... KAM – Choosing winning :- • End market drivers • Engineering Support centres • Customers Backing • Projects winners • Create advantage for our customers • Creativity and innovation Insight KAM - Insight Engineering • Genuine knowledge Advantage •
Slide 30: Capturing value
Capturing value Sustainable margins KAM – Choosing Delivering value..... • Execution ability winning :- • Continuous • Understanding • End market driversvalue innovation • Customers Execution • Eliminate Backing • Projects non value ability winners added features • Communicate the value Capturing •
Slide 31: Engineering Advantage Masterclass
Engineering Advantage Masterclass
Slide 32: Execution ability
Execution ability Sustainable margins Net KAM Promoter – Choosing Score • Execution ability winning :- • Continuous • End market drivers innovation • Ultimate question 2.0 • Customers Execution Backing • Projects ability winners • ‘How likely are you to recommend us to a colleague?’ Insight 13% 35%
Slide 33: Key Account Management
Key Account Management Sustainable margins KAM – Choosing • Execution ability winning :- • Continuous • End market drivers innovation • Customers Execution Backing • Projects ability winners Capturing Insight value KAM - Highly valued KAM - Insight • Clear value creation Engineering • Genuine knowle
Slide 34: Niche Market leadership
Niche Market leadership…… 1. IMI Niche definition and characteristics 2. Execution and competences 3. IMI Niches and growth
Slide 35: Niche Markets
Niche Markets Future CAGR 15% CDD Opps Efficiency Frozen Rail Sector Hydronic Energy Conditioning Sector Hydronic 10% Aftermarket Balancing Foodservice Variety, Nuclear Life Sciences Health & Food & Wellness Petrochem Beverage LNG & Refin Fossil Commercial Vehicle Iron & Steel 5% TRV's Leadership po
Slide 36: Information sheets
Information sheets Engineering Advantage IMI Severe Service INFORMATION SHEET Engineering Advantage LNG THE NICHE COMPETITIVE POSITION ‘Severe service application valves & actuation into Niche Size c.£210m LNG (Liquefied Natural Gas) plants. IMI Share % 10 40-20 20-30 Market Position 1 ; Koso, PBVS,
Slide 37: Niche deep dive
Niche deep dive Norgren - Energy Sector Severe Service - LNG Indoor Climate - Hydronic Balancing Norgren - Commercial Vehicles
Slide 38: Energy Sector Norgren
Energy Sector Norgren Jon Taylor
Slide 39: What is the niche?
What is the niche? Norgren Energy Sector – Actuator Control • Application: Control of actuators which, in turn, operate safety or production critical on/off valves • Scope of supply: Solenoid valves & instrumentation products • Environment: Hostile conditions; often offshore in ambient temps of -60
Slide 40: Our key markets
Our key markets • Key Market: Energy • Upstream Oil & Gas & LNG • Refining & Petrochemical • Chemical
Slide 41: Competitive position
Competitive position Niche Size c.£200m IMI Share % <10 10-20 20-30 >30 Market Position 2 Key Competitors Asco, Bifold, Midland, Versa Abu Dhabi National Oil Key Customers Company, Exxon Mobil, Saudi Aramco Source: IMI estimates
Slide 42: Expected growth
Expected growth CAGR 2012-2017 Industry growth 3 - 4% Source: EIC reports Niche growth 4 - 6% Incremental revenue growth 4 - 6% opportunities Source: IMI estimates
Slide 43: Growth drivers
Growth drivers • Global energy consumption expected to grow at 1.6% p.a. • Increased upstream Oil & Gas investment • More hostile environments require higher quality actuation and valve solutions • Unconventional reserves carry higher recovery costs • Increase in safety standards in upstream Oil & G
Slide 44: Niche growth
Niche growth • Growth is predominantly in Upstream Oil & Gas and LNG, driven by; • 10% YOY increases in global Cap. Ex. • Increasing safety standards • Development of unconventional reserves with higher recovery costs • More hostile climates • Shale abundance / improved drilling technologies • LNG m
Slide 45: Key technologies
Key technologies Norgren Solenoid Valves • Highest return spring force in the industry – critical safety element • Low friction ‘poppet’ designs • Industry-leading ‘force vs. friction ratio’ • No recorded coil failures • Fully SIL 3 approved • Field-proven 800 yr. MTBF (reliability) figures • Certif
Slide 46: Key technologies
Key technologies Newly Launched ‘Redundant Valve Manifold’ • Use of multiple solenoid valves protects against solenoid valve failure • Compact modular design replaces complex piped systems • Unique capability to use 2 designs of solenoid valve protects against common-mode failures • Visual indicator
Slide 47: Key technologies
Key technologies ‘Smart Solenoid’ Partial Stroke Testing System • Patented development due for launch in Q4 2013 •On-board electronics to move on / off valve through a proportion of its travel • On-board diagnostics to evaluate performance of on / off valve • Commitment to buy received from 7 of the
Slide 48: Barriers to the competition
Barriers to the competition • Conservative industry • Technically superior valves • Only solenoid coil in the market never to have failed • Highest return spring forces in the industry • Certification (ATEX, Gost, Inmetro, FM, CSA etc.) • 60 years proven field experience in arduous conditions • Fiel
Slide 49: IMI strategy
IMI strategy • Improve technological advantage through; • Accelerated product development • Insight into the world’s largest end-users • Close key-account management • Lobby industry for minimum standards • Certification • Force friction ratio • Field proven MTBF • Focus on key emerging markets • BR
Slide 50: Sector case study
Sector case study Actuator Control Solenoid Valves in Harsh Climates • Customers: Selected End-Users who have a high Cap. Ex. budget, a high exposure to inhospitable climates, and culture for driving innovation & safety • Likely causes of failure: High solenoid valve friction, insufficient spring fo
Slide 51: Sector case study
Sector case study Actuator Control Solenoid Valves in Harsh Climates Example: This; Replaced this; Providing; High force to friction ratio to ensure safe operation Industry-leading coil technology to ensure continued operation Dual-redundancy of all solenoid valve components Fewer potential leak pat
Slide 52: Sector case study
Sector case study Actuator Control Solenoid Valves in Harsh Climates •Results: • Our products have been specified / selected by part number by several of the world’s largest End-Users in the past 6 months • We are becoming a trusted partner to many of the world’s largest International & National Oil
Slide 53: Summary
Summary • Our market niche is growing rapidly • We increase our market share each year • There are significant barriers to entry for competition
Slide 54: Liquefied Natural Gas (LNG)
Liquefied Natural Gas (LNG) Sergio Sartoni
Slide 55: Content
Content LNG Overview LNG Market Drivers IMI Strategy IMI Technology in LNG
Slide 56: LNG Process
LNG Process • Gas gathering • Treatment • Gas cooled to -161° C • Gas reduces 1/600th in volume • Loading into cryogenic ships • Regasification & distribution
Slide 57: LNG milestones
LNG milestones • First LNG plant build in Ohio in 1941 • World's first LNG tanker to Canvey Island UK in 1959 • Intro of gas turbines allowed doubling of plant output
Slide 58: LNG Growth Drivers
LNG Growth Drivers • Economic growth and urbanisation • Address security of supply • Environmental benefits LNG demand by Region MTPA 800 600 400 200 0 2010 2015 2020 2025 2030 Africa Asia AsiaPac Europe CIS LA NA ME
Slide 59: IMI Strategy for LNG
IMI Strategy for LNG • Technology as differentiator • New generation of control & cryogenic valve • Customer alignment • Larger valve sizes • FLNG • Expanded services • Localised capabilities & support
Slide 60: Competitive position
Competitive position Niche Size c.£210m IMI Share % <10 10-20 20-30 >30 Market Position 1 Koso, PBVS, Severn Glocon, Key Competitors Vanessa (Tyco) Bechtel, Chevron, JGC, Key Customers Petronas, Shell, Woodside Source: IMI estimates
Slide 61: Expected growth
Expected growth CAGR 2012-2017 Industry growth Source: IEA, Douglas 6 - 8% Westwood Niche growth 6 - 8% Incremental revenue 0 - 2% growth opportunities Source: IMI estimates
Slide 62: Niche success rate
Niche success rate LNG projects awarded in the last 12 months: Wheatstone LNG 10mtpa Won Australia Pacific LNG 9mtpa Won Gladstone LNG 3.5mtpa Won Ichthys (JGC) 10mtpa Won IMI IMI IMI $30m $30m $30m Sabine Pass LNG 10mtpa Won Total Valve Total Valve Package $40m Package $40m Prelude (Shell) FLNG 3.6
Slide 63: IMI Solutions for LNG plants
IMI Solutions for LNG plants 63
Slide 64: Barrier to Entry – LNG AntiSurge
Barrier to Entry – LNG AntiSurge • Protecting the compressors from reverse flow • Bespoke solutions & patented actuators • World’s largest installed base General Electric LNG Axial Compressor
Slide 65: Customer's impact
Customer’s impact • Operate closer to compressor surge line • Increased efficiency • One unplanned shut down costs £2m* in lost production LNG Compressor Performance LNG Compressor Anti –Surge Valves 110% 100% 90% 80% * For a 4 MTPA LNG Plant
Slide 66: Customer impact
Customer impact Darwin Platform efficiency issues: IMI Solution: 33% increase in output. Over 25% noise reduction “IMI’s valves are now responsible for the control on one of the longest subsea pipelines in the southern hemisphere. Your valve will allow us to extend the operating time of our LNG plan
Slide 67: Conclusion
Conclusion • LNG industry growing • IMI reference • IMI innovation & customer alignment
Slide 68: Hydronic Balancing
Hydronic Balancing Michael Carbine MBE Vice President, Emerging Markets Dominique Vernier Business Unit Director, South America
Slide 69: Overview
Overview • Our Niche • Our growth opportunity • Our strategy for Niche Leadership • Our differentiation • Our barriers to entry • Our case study - Brazil • The future
Slide 70: Our Niche
Engineering Advantage Our Niche
Slide 71: Energy efficient hydronic distribution in HVAC
Energy efficient hydronic distribution in HVAC Building Management System (BMS) Production Distribution Dissipation
Slide 72: 3 system critical hydronic competencies
3 system critical hydronic competencies Hydronic Conditioning Thermostatic Radiator Valves (TRVs) Balancing & Control
Slide 73: Our focus today - Hydronic Balancing
Our focus today - Hydronic Balancing ... Balancing The science of ensuring each terminal unit has enough heating or cooling to meet the user’s requirements The heart of what we do: • We deliver system controllability • We deliver desired indoor comfort • We deliver energy efficient systems
Slide 74: Our European competitive position
Our European competitive position European Niche Size c.£170m IMI Share % <10 10-20 20-30 >30 Market Position 1 Key Competitors Danfoss, Oventrop Ahlsell, Arup, Cordes & Graefe, Key Customers GDF Suez, Saint Gobain, Skanska Source: IMI estimates
Slide 75: Our Growth Opportunity
Engineering Advantage Our Growth Opportunity
Slide 76: Growth opportunities – global expansion
Growth opportunities – global expansion GLOBAL CAGR 2012-2017 Industry growth Source: Comparable Heating & Cooling Equipment, 2 - 4% Freedonia World HVAC Equipment Study 2012 Niche growth 4 - 5% Incremental revenue growth 5 - 6% opportunities Source: IMI estimates
Slide 77: From Europe to Emerging Markets
Our Growth Opportunity- creating our own markets From Europe to Emerging Markets Established Evolving Balancing Balancing Market Market Europe - Renovation Emerging Markets - New Build
Slide 78: Our Strategy for Niche Leadership
Our Strategy for Niche Leadership
Slide 79: How we approach the market
How we approach the market Consultants IMI Indoor Wholesalers Installers Owners Climate Knowledge based Pull marketing strategy
Slide 80: The hydronic challenge
The hydronic challenge • Hydronic systems are highly complex systems • The right hydronic knowledge is needed
Slide 81: Our differentiation - total system solutions
Our differentiation - total system solutions People Training Design Technology Support Applied Knowledge Seminars
Slide 82: Barriers to competition
Barriers to competition • Knowledge is very difficult to copy • Hydronic College: • 350 experts • 71 Hydronic Gurus • 27 Hydronic Training centres • Global Engineering Support Centre • Depth of relationship
Slide 83: How we create value
How we create value Building Value Customer Total Life Cost IMI value margin Upfront Costs
Slide 84: The first step in our strategy: Hydronic Seminars
The first step in our strategy: Hydronic Seminars UAE Austria China Japan 90,000+ customers in 2012 alone 243,000 attendees in the last 3 years Poland Canada Hong Kong
Slide 85: Developing Brazil & Driving Growth
Developing Brazil & Driving Growth Dominique Vernier Business Unit Director, South America
Slide 86: Developing Brazil & driving growth
Developing Brazil & driving growth
Slide 87: Our strategy is consistent
Developing Brazil & driving growth Our strategy is consistent • Global trends are local trends • We educate and we apply knowledge • With customers from design to installation & handover • Developing deep relationships based on customer value
Slide 88: The first step in our strategy: Hydronic Seminars
The first step in our strategy: Hydronic Seminars • 2010 Salvadore Norte Shopping Centre • 17% energy saving • £200k to IMI Hydronic Seminar, Recife, North East Brazil • 2012 Rio Mar Shopping Centre • The largest shopping centre in Brazil! • £500k to IMI • Introduction of Hydronic Conditioning • Ove
Slide 89: The challenge
The challenge Rio Mar Shopping Centre, Recife North East Brazil • Opening Oct 2012 • 140,000m2 • Design period: 2.5 years • Efficient use of energy No.1 priority • Next generation cooling solution • Pushing HVAC system demands
Slide 90: The owner investing in energy efficiency
The owner investing in energy efficiency The Owner • JCPM is a leading company in Brazil specialising in shopping centres • Energy efficiency and sustainability are their number one priorities Gustavo Barbosa, Contracts Manager, JCPM
Slide 91: The owner investing in energy efficiency
The owner investing in energy efficiency
Slide 92: The owner investing in energy efficiency
The owner investing in energy efficiency Applied Knowledge • Energy efficiency • Sustainability
Slide 93: The consultant, from seminar to design
The consultant, from seminar to design The Consultant • Leading consultant in North East Brazil • Green Building Council member • A seminar brought us closer! • Converted to Hydronic Balancing • Converted to Hydronic Conditioning Francisco Dantas, Owner, interPlan
Slide 94: The consultant, from seminar to design
The consultant, from seminar to design
Slide 95: The consultant, from seminar to design
The consultant, from seminar to design Applied Knowledge • Energy efficiency • Quality, portfolio and brand • Design engineering support
Slide 96: The installer – from design to reality
The installer – from design to reality The Installer • The number one installer in the region • 1,600 employees • 60 engineers dedicated to optimising energy efficiency Luis Carlos, Owner, Arclima
Slide 97: The installer – from design to reality
The installer – from design to reality
Slide 98: The installer – from design to reality
The installer – from design to reality Applied Knowledge • Ensure system performs according to design • 4000+ hydronic balancing & conditioning products to install and commission • Peace of mind: Ease of installation
Slide 99: Developing Brazil & driving growth: Investing for growth
Developing Brazil & driving growth Investing for growth 2010 2012 2014 Salvadore Norte Rio Mar Fortaleza Shopping Centre Shopping Centre Shopping Centre £200k £500k Up to £1m
Slide 100: The future: Developing the Niche Globally
The future Developing the Niche Globally
Slide 101: Underlying growth drivers
Underlying growth drivers • 40 % of the world’s energy is consumed by buildings • HVAC systems use 50 % of this energy • Optimised systems can save 20% or more
Slide 102: Driven by energy efficient legislation
Driven by energy efficient legislation
Slide 103: From Europe to the World: Accelerating our growth
From Europe to the World Accelerating our growth • 8 new countries in the last 18 months • 200 Hydronic experts in Emerging Markets • 70 more planned • 16 Hydronic Training centres in Emerging Markets • 14 more planned • 50,000 seminar attendees in Emerging Markets • Growing to 100,000+ • New Produc
Slide 104: Today we spoke about Brazil
Today we spoke about Brazil We could have picked anywhere Hong Kong Polytechnic University Marina Bay Sands, Singapore Melbourne Street, Cidade Administrativa, Brisbane, Australia Minas Gerais, Brazil
Slide 105: Commercial Vehicles Engine Control
Commercial Vehicles Engine Control Gordon Scott
Slide 106: What is the niche?
What is the niche? Power train Chassis Cab Transmission Transmission Engine Engine Continued focus Unique Customers Solutions Compelling Industry Events across Sector Having Right Enablers within IMI Business
Slide 107: Competitive position
Competitive position Niche Size c.£580m IMI Share % <10 10-20 20-30 >30 Market Position 1 Key Competitors Bendix, Bosch, Pierburg, Wabco Cummins, Eaton, Ford, MAN Key Customers Paccar, Navistar, Scania, Volvo, Daimler, ZF, Voith, Isuzu, Hino Source: IMI estimates
Slide 108: Expected growth
Expected growth CAGR 2012-2017 Industry growth 3 - 5% Source: LMC, Stark, ATC Niche growth 4 - 6% Incremental revenue growth 1 - 2% opportunities Source: IMI estimates
Slide 109: CV market growth
CV market growth Heavy truck volume (Thousands) • Underlying growth of 3-5% CAGR 3000 2000 1000 0 • Niche expansion – current technology USA Eu Brazil Japan China - Emissions (BRIC) - Off highway • Niche expansion new technology - New legislation - truck efficiency
Slide 110: CV sector growth
CV sector growth • Expansion of engine applications - New legislation (Greenhouse gasses) • Developing BRIC economies - Legislation - Emissions / secondary braking - Derivate product and technology - Upgrade • Developing off highway - Derivative product and technology - Legislation – emission
Slide 111: CV market potential
CV market potential CV SECTOR Market Potential GLOBAL PERSPECTIVE • Customers • Compelling events • Applications • Existing capabilities • New technologies Market potential USA/Europe FOCUS £900 £800 • New technology £700 £600 • Legislation £ million £500 PT Engine • New products £400 £300 Chassis C
Slide 112: Focus on engine controls
Focus on engine controls CV Sector – Growth Opportunities Chassis Cab Transmission Engine Continued focus Unique Customers Solutions Compelling Industry Events across Sector Having Right Enablers within IMI Business
Slide 113: Engine niche growth opportunities
Engine niche growth opportunities • Expansion of engine niche • Emissions (EU technology) • Engine efficiency (WHR) • Legislative driven • EPA Greenhouse gas • NHTSA – fuel efficiency • Compelling USA targets / objectives - 530m barrels of oil - 270m metric tons of CO2 - $50b in fuel cost by vehicle
Slide 114: Case study 1 – emissions legislation
Case study 1 – emissions legislation Euro VI Emissions are achieved (by sophisticated engine tuning) through air intake and exhaust control valves • Norgren electric inlet throttle valves • How we Engineer Advantage • Amplification potential
Slide 115: Emissions Legislation
Emissions Legislation • High barriers to entry • Customer relationships • Long development times – 3 Yrs • High specification / environment conditions • Unique solution / packaging Euro VI business secured 115
Slide 116: Case study 2 – waste heat recovery
Case study 2 – waste heat recovery Growth drivers • Legislation - selecting technologies in pursuit of new legislation • Business case is strong - based on fuel savings - very compelling Strategy • Differentiation • Early customer / project involvement • Rapid pre-development teams
Slide 117: Waste heat recovery
Waste heat recovery For niche engine applications Precision Liquid Control Module • Challenging technical requirements - High pressure - Precision liquid control and high pressure steam management - Temperature, vibration and voltage - High integrity safety valves - Freeze proof technology • High ba
Slide 118: Case study 3 - off highway - growth
Case study 3 - off highway - growth • Emissions legislation • Indentified key customers • Applications and products
Slide 119: Off highway - growth
Off highway - growth Why we will win • Understand applications • Understand compelling events • Market Potential £170m - 2018 - Emissions - Fuels • Proven (on highway) technology
Slide 120: Case study 4 – BRIC growth
Case study 4 – BRIC growth Focus on BRIC • Following Western emissions - Amplification - validated solutions • Significant volume potential China 1 million trucks • Global footprint Customer relationship Engineering Manufacturing
Slide 121: BRIC - China emissions
BRIC - China emissions • Emissions legislation - Beijing launch EU 4, 2012 - Expansion expected 2015 • Secondary braking - Legislation 2012 - Several phases – HD trucks / coaches - Retarder, Exhaust Brake, Engine Brake
Slide 122: China secondary braking
China secondary braking Secondary Braking (Retarder) • Legislative driven • Proven existing technology – EU Norgren Retarder Solution • Long development / test times • Durability and reliability First contract secured
Slide 123: Case study - Brazil
Case study 5 - Brazil • Customer problem Norgren solution - Significant warranty with turbo chargers - Cause – Competitor control valve - In field replacement and production • Engineering Advantage Long term solution - Proven validated solution - Integrated sensor & electronics - Local support Brazi
Slide 124: Commercial vehicle sector summary
Commercial vehicle sector summary CV Sector – In summary A growing market niche • Engines • BRIC • Off highway High barriers to entry 100% • Long development times • Demanding specification / environment • Bespoke solutions • High cost entry Global footprint • • Engineering 0 • Manufacturing • Proje
Slide 125: Questions?
Questions? Executive Directors
Slide 126: Closing comments
Closing comments Martin Lamb
Slide 127: Today's key messages
Today’s key messages • Focus on niche markets supports IMI’s growth and margin ambitions - Strong underlying growth in niche markets - Significant opportunities for niche expansion and share gains through investment in sales and new product development • Niche leadership is pivotal • Niches share co