IMI plc · LSE:IMI
IMI — H1 2004 Earnings Presentation
26 slides from IMI's earnings presentation, Sep 6, 2004
Slide 1: Interim Results Presentation
Interim Results Presentation 6 September 2004 1
Slide 2: Martin Lamb, Chief Executive
Martin Lamb Chief Executive 2
Slide 3: Agenda
Agenda • Results overview MJL • Sector performance MJL • Cashflow & balance sheet TJS • Other matters TJS • Outlook MJL • Questions and answers MJL/TJS/DCN/WW 3
Slide 4: Results overview - highlights
Results overview - highlights • Solid growth in sales and orders • Margins improving despite input cost increases • Strong earnings growth • Dividend increased 4
Slide 5: Results overview
Results overview £m H1 H1 Change Year 2004 2003 % 2003 Sales 801 780 +3 1573 Operating profit* pre rationalisation 81.5 74.0 +10 153.5 rationalisation -2.3 -2.4 -5.7 after rationalisation 79.2 71.6 +11 147.8 Interest -4.8 -5.7 -10.9 Profit before tax* 74.4 65.9 +13 136.9 Organic sales growth +6% +3%
Slide 6: Sector performance
Sector performance On the following slides, operating profit is stated before goodwill amortisation and organic growth numbers strip out the impact of acquisitions and exchange translation effects. 6
Slide 7: Severe Service
Severe Service £m H1 H1 Year 2004 2003 2003 Sales 71 80 168 Operating profit* pre rationalisation 7.7 8.1 20.3 rationalisation - - - after rationalisation 7.7 8.1 20.3 Operating margin 10.8% 10.1% 12.1% Organic growth -5% +13% * before goodwill amortisation • Order momentum continuing • Shipments im
Slide 8: Fluid Power
Fluid Power £m H1 H1 Year 2004 2003 2003 Sales 214 205 410 Operating profit* pre rationalisation 22.5 17.4 36.0 rationalisation (1.7) (1.9) (5.0) after rationalisation 20.8 15.5 31.0 Operating margin 9.7% 7.6% 7.6% Organic growth +8% +5% * before goodwill amortisation • Double digit sector growth •
Slide 9: Indoor Climate
Indoor Climate £m H1 H1 Year 2004 2003 2003 Sales 82 77 169 Operating profit* pre rationalisation 11.7 11.1 23.8 rationalisation - - - after rationalisation 11.7 11.1 23.8 Operating margin 14.3% 14.4% 14.1% Organic growth +7% +1% * before goodwill amortisation • German TRV sales steadied • Developin
Slide 10: Beverage Dispense
Beverage Dispense £m H1 H1 Year 2004 2003 2003 Sales 142 149 278 Operating profit* pre rationalisation 13.2 12.9 22.2 rationalisation (0.2) (0.5) (0.7) after rationalisation 13.0 12.4 21.5 Operating margin 9.2% 8.3% 7.7% Organic growth +3% -7% * before goodwill amortisation • Markets stabilising • U
Slide 11: Merchandising Systems
Merchandising Systems £m H1 H1 Year 2004 2003 2003 Sales 92 73 170 Operating profit* pre rationalisation 9.5 6.3 18.2 rationalisation - - - after rationalisation 9.5 6.3 18.2 Operating margin 10.3% 8.6% 10.7% Organic growth +19% +10% * before goodwill amortisation • Continuing sales and order moment
Slide 12: Building Products
Building Products £m H1 H1 Year 2004 2003 2003 Sales 200 191 370 Operating profit* pre rationalisation 16.9 18.2 33.0 rationalisation (0.4) - - after rationalisation 16.5 18.2 33.0 Operating margin 8.3% 9.5% 8.9% Organic growth +5% +3% * before goodwill amortisation • UK construction sector buoyant
Slide 13: Trevor Slack, Finance Director
Trevor Slack Finance Director 13
Slide 14: Cash flow summary
Cash flow summary £m H1 H1 H2 Year 2004 2003 2003 2003 EBITDA 108 104 110 214 W orking capital (47) (30) 48 18 Capital expenditure (21) (25) (26) (51) Asset sales 1 1 14 15 Operating cash flow 41 50 146 196 Interest (5) (6) (6) (12) Tax (28) (12) (30) (42) Cash generation 8 32 110 142 Dividends paid
Slide 15: Balance sheet
Balance sheet £m June June December 2004 2003 2003 Shareholders funds 558 537 539 Net borrowings 152 199 136 Gearing 27% 37% 25% EBITDA/debt 0.7 1.0 0.6 EBITDA/interest 22x 18x 20x Interest cover 17x 13x 14x 15
Slide 16: Other matters
Other matters • Exchange rates - Translation - Transaction • Interest • Tax - Expected rate 33% unchanged from 2003 • European Commission enquiry 16
Slide 17: Other matters – current exchange rates
Other matters – current exchange rates Profit & loss impact Exchange rate impact Year 2003 Operating £m Sales Sales Profit UK 464 - - Europe 531 (18) (2.0) Americas 510 (50) (4.2) Rest of W orld 60 (2) (0.3) 1565 (70) (6.5) Half Year Year Average rates Average 2003 Euro 1.48 1.44 -3% US$ 1.82 1.64 -
Slide 18: Other matters – current exchange rates
Other matters – current exchange rates Profit & loss impact Exchange rate impact H1 2004 Operating £m Sales Sales Profit Severe Service 71 (5) (0.1) Fluid Power 214 (8) (0.7) Indoor Climate 82 (2) (0.3) Beverage Dispense 142 (11) (0.8) Merchandising Systems 92 (9) (0.8) Building Products 200 - - Fir
Slide 19: European Commission enquiry
European Commission enquiry • Plumbing tube: - Notification received Friday 3 September - Not yet received details - Prospects for appeal to be assessed - Charge will be exceptional item in 2004 results • Plumbing fittings: - No change from previous guidance 19
Slide 20: Martin Lamb, Chief Executive
Martin Lamb Chief Executive 20
Slide 21: Outlook
Outlook • US and Asian markets remain positive • Europe recovery patchy • Raw material inflation continuing • New products and cost reduction will support margin improvement • Further progress in second half 21
Slide 22: Additional information
Additional information 22
Slide 23: Sales & operating profit bridge
Sales & operating profit bridge H1 2004 v H1 2003 £m Operating profit before Operating Sales rationalisation* Rationalisation profit* H1 2003 780 74.0 (2.4) 71.6 Exchange (35) (2.7) (2.7) Acquisitions 18 2.9 2.9 Disposals (5) - - Savings / efficiencies 3.0 3.0 Raw material costs (4.1) (4.1) Volume /
Slide 24: Sales bridge
Sales bridge £m H1 Translation Acquisitions Organic H1 2003 2004 Severe Service 80 (5) - (4) 71 Fluid Power 205 (8) - 17 214 Indoor Climate 77 (2) 2 5 82 Beverage Dispense 149 (11) - 4 142 Merchandising Systems 73 (9) 16 12 92 Building Products 191 - - 9 200 775 (35) 18 43 801 Discontinued 5 - Total
Slide 25: Profit bridge
Profit bridge £m H1 Translation Acquisit- Savings Material Rational- Organic H1 2003 ions costs isation 2004 Severe Service 8.1 (0.1) (0.3) 7.7 Fluid Power 15.5 (0.7) 1.5 0.2 4.3 20.8 Indoor Climate 11.1 (0.3) 0.2 (0.5) 1.2 11.7 Beverage Dispense 12.4 (0.8) 1.5 (0.8) 0.3 0.4 13.0 Merchandising Syste
Slide 26: Restructuring summary
Restructuring summary 2001 2002 2003 2004 Year Year H1 H2 Year H1 H2 Year Cost savings vs 2000 base 2 13 9 9 18 12 13 25 Investments vs 2000 base 11 19 11 11 22 11 11 22 26