IMI plc · LSE:IMI
IMI — H1 2020 Earnings Presentation
26 slides from IMI's earnings presentation, July 2020
Slide 1: 2020 Interim Results
IMI plc 2020 Interim Results Roy Twite – Chief Executive Daniel Shook – Finance Director
Slide 2: Key messages
IMI plc Key messages Resilient operational performance in demanding circumstances, reflects a strong and flexible business model. Profit improvement initiatives sustain margins. Strategic reorganisation projects progressing largely as planned with £19m of benefits in H1; full year benefits exp
Slide 3: Coronavirus
IMI plc Coronavirus Top priority remains the health and safety of IMI employees. Significant commitment to support Life Sciences customers – including rapid increase in production of ventilator components. Group-wide factory availability now over 97%. Rigorous protection and social distancin
Slide 4: Business review
IMI plc Business review Daniel Shook – Finance Director
Slide 5: Organic revenue and operating profit
IMI plc Organic revenue and operating profit £m 6 months to 30 June 2020 6 months to 30 June 2019 Adjusted Adjusted Adjusted Organic Adjusted Foreign Organic excluding PBM Growth Growth Exchange Resilient top-line through diverse end- (%) (%)* market exposure. Revenue Margins improved to 14.0% d
Slide 6: Income statement
IMI plc Income statement £m 2020 H1 2019 H1 Adjusted operating profit 121.0 118.0 Net interest expense lower due to loan Net interest expense (5.5) (7.8) repayment in second half of 2019. Net pension finance income/(expense) 0.1 (0.3) Group pension position now in overall Adjusted profit before
Slide 7: Operating cash flow
IMI plc Operating cash flow £m 2020 H1 2019 H1 Adjusted operating profit 121 118 Good cash delivery in the first half. Depreciation, impairment & amortisation 31 31 Selective inventory build to protect customer service during heightened Lease depreciation 15 15 supply chain uncertainty. EBITDA (
Slide 8: Net cash flow
IMI plc Net cash flow £m 2020 H1 2019 H1 Adjusting Operating cash flow 107 101 Adjusting items reflect £24m of restructuring spend, primarily in IMI Adjusting items (24) (6) Critical & IMI Precision. Statutory Operating cash flow 83 95 Adverse currency impact on net debt due Interest (5) (8) to
Slide 9: Rationalisation summary
IMI plc Rationalisation summary £m 2020 H1 2020 Future years Overall Restructuring charge (including programme impairment losses) IMI Precision Engineering (5) (10) (45) (75) IMI Critical Engineering (2) (35) - (54) IMI Hydronic Engineering (3) (5) (1) (6) Total charge (10) (50) (46) (135) Cash impa
Slide 10: IMI Precision Engineering operational review
IMI plc IMI Precision Engineering operational review £m 2020 H1 FX Organic 2019 H1 Ventilators Orders Sales Sales by Adjusted Adjusted £m business unit* Motion Control £203m Down 11% Adjusted revenue 430 1 (34) 463 2019 FY 21 23 Factory Automation £184m Down 11% Organic growth -7% -1% 2020 H1 107 49
Slide 11: IMI Critical Engineering operational review
IMI plc IMI Critical Engineering operational review Order input by sector* £m 2020 H1 Acq’n 2020 H1 FX Organic 2019 H1 Adjusted Adjusted Adjusted Oil & Gas £86m Up 56% excluding PBM New Construction £63m Up 103% Aftermarket £23m Down 5% Adjusted revenue 293 12 281 (1) (12) 294 Refining & £85m Down 2
Slide 12: IMI Hydronic Engineering operational review
IMI plc IMI Hydronic Engineering operational review £m 2020 H1 FX Organic 2019 H1 Sales by sector Adjusted Adjusted IMI TA £71m Down 4% Adjusted revenue 144 (1) (8) 153 IMI Heimeier £43m Down 9% Organic growth -5% 4% IMI Pneumatex £23m Down 1% Operating profit 24.6 0.8 (1.7) 25.5 Other £7m Down 13%
Slide 13: Group outlook
IMI plc Group outlook Our markets continue to be volatile which makes future forecasts challenging. However, based on current market conditions, and importantly no material changes in the second half of 2020 as a result of Coronavirus, we now expect full year 2020 adjusted earnings per share to be
Slide 14: Strategy Update
IMI plc Strategy Update Roy Twite – Chief Executive
Slide 15: Strategy update
IMI plc Strategy update No change to our divisional margin targets. Restructuring programmes on track to deliver £30m in 2020 benefits. ‘Breakthrough Engineering for a Better World’ purpose gaining traction. Building upon our already strong ESG credentials. Cash flow and balance sheet stre
Slide 16: Towards divisional margin targets
IMI plc Towards divisional margin targets Target: 20% top of cycle Target: 17%-20% Target: 20% £35m annualised benefits from £37m annualised benefits from £3m annualised benefits from footprint optimisation (£13m footprint optimisation (£6m supply chain optimisation. delivered in 2020 first ha
Slide 17: Breakthrough Engineering…for growth
IMI plc Breakthrough Engineering…for growth Customer problem Surge in ventilator demand to address Excessive noise & premature failure in Need to expand refrigeration Covid-19 pandemic. boiler feed-pump recirculation valves. capabilities for safe meat storage. IMI solution New capacity delivered for
Slide 18: Capital allocation for sustainable growth
IMI plc Capital allocation for sustainable growth Improve free cash flow through profit growth and margin expansion. Capital investment c.£50m in 2020. Continue to pursue strategically and financially attractive acquisitions. 2020 interim dividend targets baseline EPS cover of 3.0x. 18
Slide 19: Key messages
IMI plc Key messages Resilient operational performance in demanding circumstances. Profit improvement initiatives sustain margins. Strategic reorganisation projects progressing largely as planned. Sustainable growth culture gaining traction. 2019 final dividend re-instated. 2020 interim
Slide 20: Q&A
IMI Q&A
Slide 21: Appendices
IMI Appendices
Slide 22: Rationalisation plans (at full year announcement)
IMI plc Rationalisation plans (at full year announcement) £m 2019 2020 Overall Restructuring charge (including impairment losses) programme IMI Precision Engineering (31)* (30) (75) IMI Critical Engineering (19) (10) (29) IMI Hydronic Engineering - (5) (6) Total charge (50) (45) (110) Cash impact (2
Slide 23: 2019 sales & orders reclassifications
IMI plc 2019 sales & orders reclassifications IMI Precision sales reclassification £m New Segmentation: 2019 H1 Motion Factory Rail Fluid Life Process Energy Commercial Old segmentation: Total Control Automation Technologies Sciences Control Vehicle Industrial Automation 259 202 202 57 4 51 2 Commer
Slide 24: Pensions
IMI plc Pensions £m June Dec 2020 2019 Total Position: Liabilities (706) (655) Assets 708 624 Surplus/(deficit) 2 (31) UK Schemes: Liabilities (538) (500) Assets 629 548 Surplus 91 48 Overseas Schemes: Liabilities (168) (155) Assets 79 76 Deficit (89) (79) 24
Slide 25: Foreign exchange
IMI plc Foreign exchange HY 2020 HY 2019 Change Average Rates Euro 1.15 1.14 1% Ready Reckoner for translation impact of movement in FX rates on 2020 FY Performance US Dollar 1.26 1.29 -2% Sensitivity to +/- 1 cent June 2020 Dec-19 Change move in: Revenue Operating Profit Closing Rates Euro +/-£5.9m
Slide 26: This document may contain forward-looking statements that may or may not prove accurate. For
IMI plc This 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 t