Slide 1: 2022 Preliminary Results
IMI plc 2022 Preliminary Results Roy Twite – Chief Executive Daniel Shook – Finance Director
Slide 2: Strategic execution delivering sustainable growth
Strategic execution delivering sustainable growth 10% revenue growth, of which 4% was organic 15% adjusted earnings per share growth Resilient order book up in all divisions, with IMI Critical Engineering up 18% £52m of Growth Hub orders, pipeline growing across divisions Three acquisition
Slide 3: Business review
IMI plc Business review Daniel Shook – Finance Director
Slide 4: Revenue and profit growth in all divisions
Revenue and profit growth in all divisions £m 2022 2021 Adjusted Organic Growth (%) Growth (%)* Revenue Group revenue growth of 10% and IMI Precision Engineering 986 836 18% 5% adjusted operating profit growth of 14% IMI Critical Engineering 713 691 3% 2% Organic revenue growth of 4% and IMI Hyd
Slide 5: Third year of profit and margin improvement
Third year of profit and margin improvement Revenue (£m) Adjusted operating profit (£m) Adjusted operating margin (%) 17.8% 17.0% 15.6% 14.2% -15 2019 2020 2021 2022 5
Slide 6: Clear pathway to our 20% margin target
Clear pathway to our 20% margin target £42m future restructuring benefits from complexity 20% reduction through- cycle Continued focus on aftermarket 17.8% Growth in high margin sectors 6
Slide 7: Statutory profit after tax increased by 15%
Statutory profit after tax increased by 15% £m 2022 2021 Adjusted profit before tax up 13% Adjusted operating profit 363.8 318.1 Financing costs, including pensions, Net interest expense (19.2) (12.1) expected to increase to £25m in 2023 following acquisitions and Net pension finance income 1.5
Slide 8: Complexity reduction continues to deliver benefits
Complexity reduction continues to deliver benefits £m 2022 2023 2024 2025 Restructuring charge Restructuring benefits of £13m (including impairment losses) delivered in 2022, ahead of plan IMI Precision Engineering (25) (28) (11) - £20m benefits expected in 2023 IMI Critical Engineering - (8) (3
Slide 9: Maintaining continued cash discipline
Maintaining continued cash discipline £m 2022 2021 Adjusted operating profit 364 318 Adjusted operating cash flow higher than 2021, cash conversion at 80% Depreciation & amortisation 61 58 Capital expenditure of £71m Lease depreciation 32 28 represents 1.2x of depreciation and amortisation Adjus
Slide 10: Continued strategic progress, targeted M&A
Continued strategic progress, targeted M&A £m 2022 Acquisition FX Organic 2021 Adjusted / Disposal Adjusted Improving the resiliency of the business Revenue 986 67 41 42 836 Organic Growth* 5% 7% 69% 31% 47% 53% Operating Profit 182.6 11.9 7.4 14.4 148.9 Operating Margin 18.5% 17.8% 2009** 2022 Sale
Slide 11: Record order book, further progress on margins
Record order book, further progress on margins £m 2022 Disposal FX Organic 2021 Adjusted Adjusted Accelerating Aftermarket growth Revenue 713 (16) 23 15 691 Organic Growth* 2% 2% 2019 orders 2022 orders Operating Profit 135.5 (3.3) 5.0 8.8 125.0 £364m +8% CAGR £458m Operating Margin 19.0% 18.1% Grow
Slide 12: Continued growth and margin expansion
Continued growth and margin expansion £m 2022 Disposal FX Organic 2021 Adjusted Adjusted Strong demand for energy saving solutions Growth 4% organic sales growth Revenue 350 (5) 3 13 339 Margins improved to 20.3% Acquisition of Heatmiser completed, significant opportunity Organic to accelerate
Slide 13: UK pension now fully de-risked
UK pension now fully de-risked £m Dec Dec 2022 2021 Total Position: UK pension fully bought in Liabilities (425) (657) Special pension contribution of £7m per annum no longer required Assets 406 720 (Deficit) / surplus (19) 63 UK Schemes: Liabilities (297) (503) Assets 325 632 Surplus 28 129 Ove
Slide 14: Continued disciplined approach to capital allocation
Continued disciplined approach to capital allocation Capital investment focused on Better World organic growth R&D as a percentage of sales now above 3% Continue to pursue strategically and financially attractive acquisitions Returns must exceed cost of capital by year three, and must not be
Slide 15: Group outlook
Group outlook Based on the strong 2022 results and current market conditions we expect 2023 full year adjusted EPS to be around 111p Interest at £25m Tax rate at 22% FX tailwind c.2% 15
Slide 16: Strategy update
IMI plc Strategy update Roy Twite – Chief Executive
Slide 17: Delivering on our strategy
Delivering on our strategy £m 2022 2019 Growth Revenue 2,049 1,873 +3% CAGR Adjusted Operating Margin 17.8% 14.2% +360bps Adjusted Profit Before Tax 346 251 +11% CAGR Return on Invested Capital 12.7% 11.4% +130bps Adjusted EPS 105.5p 73.2p +13% CAGR 17
Slide 18: Purpose-led strategy solves acute customer problems
Purpose-led strategy solves acute customer problems Our Breakthrough Engineering for a better world purpose Customer Market-led Complexity satisfaction innovation reduction Pillars How we create value
Slide 19: Aligned to attractive markets supported by macro trends
Aligned to attractive markets supported by macro trends Apply our engineering knowledge and expertise to improve our customers’ energy efficiency, sustainability, productivity and safety 19
Slide 20: Better World growth strategy delivering orders
Better World growth strategy delivering orders Hydrogen Refuelling EroSolve Halo-B Stations Thermostatic Radiator Valve FY22 orders: £3m FY22 orders: £17m FY22 orders: £4m Case Study: Case Study: Case Study: High pressure control Maximising customer uptime Maintaining municipal components for Hydrog
Slide 21: Acquisitions accelerating Better World growth
Acquisitions accelerating Better World growth Adaptas CorSolutions Bahr Heatmiser Attractive, Better Leaders in mass Electric actuation UK leader in smart World markets spectrometry specialist thermostatic control Great cross-selling Opportunity to leverage Significant opportunity to Scalable within
Slide 22: ESG: Creating a Better World
ESG: Creating a Better World Empowering people Sustainable solutions Climate action We will develop and empower We will engineer solutions that We will play our part to address people to make an impact and help our customers become climate change by minimising the create a better working world. safe
Slide 23: Key messages
Key messages Purpose-led strategy continues to deliver results 4% organic revenue growth, 15% adjusted EPS growth Order book up in all divisions Growth Hub momentum building with £52m orders Four Better World acquisitions completed in last 18 months Based on current market conditions, we
Slide 24: Q&A
IMI Q&A for a better world. Breakthrough Engineering
Slide 25: Cautionary statement
Cautionary statement By attending (whether in person, by telephone or webcast) this presentation or by reading the presentation slides, you agree to be bound by the limitations and conditions set out in this Cautionary statement. This presentation is for your information only and contains forward-lo
Slide 26: Appendices
IMI Appendices
Slide 27: Foreign exchange
Foreign exchange 2022 2021 Change Average Rates Euro 1.17 1.16 -1% Ready Reckoner for translation impact of movement in FX rates on 2022 FY Performance US Dollar 1.24 1.38 +10% Dec-22 Dec-21 Change Sensitivity to +/- 1 cent Adjusted move in: Revenue Operating Profit Closing Rates Euro 1.13 1.19 +5%