IMI plc · LSE:IMI

IMI — H1 2021 Earnings Presentation

27 slides from IMI's earnings presentation, Jul 23, 2021

  1. Slide 1: Interim Results 2021

    IMI plc 2021 Interim Results Roy Twite – Chief Executive Daniel Shook – Finance Director

  2. Slide 2: Key messages

    IMI plc Key messages  8% organic sales growth, 24% organic adjusted operating profit growth  Adjusted operating margin improved by 170bps in first half  Increased revenue, profits and margins across all three divisions  Growth Hub and Sprint Teams delivering early orders and sales  £101m delive

  3. Slide 3: Business review

    IMI plc Business review Daniel Shook – Finance Director

  4. Slide 4: Organic revenue and operating profit

    IMI plc Organic revenue and operating profit £m 6 months to 30 June 2021 6 months to 30 June 2020 Adjusted Adjusted Organic Adjusted Foreign Organic Growth (%) Growth (%)* Exchange  Organic revenue growth of 8% due to strong end markets and early Growth Hub delivery Revenue IMI Precision Engineerin

  5. Slide 5: Income statement

    IMI plc Income statement £m 2021 H1 2020 H1  Adjusted profit before tax up by £21m Adjusted operating profit 142.1 121.0  Net interest expense of £5.7m expected Net interest expense (5.7) (5.5) to be consistent in the second half Net pension finance income 0.3 0.1  Group pension position now in o

  6. Slide 6: Operating cash flow

    IMI plc Operating cash flow £m 2021 H1 2020 H1 Adjusted operating profit 142 121  Good cash delivery in the first half Depreciation, impairment & amortisation 29 31  Normal first half inventory build Lease depreciation 15 15  Debtors increase due to increased revenue, overdues and debtor days EBI

  7. Slide 7: Net cash flow

    IMI plc Net cash flow £m 2021 H1 2020 H1 Adjusted Operating cash flow 111 107  Adjusting items reflect £21m of restructuring spend, primarily in IMI Adjusting items (21) (24) Critical & IMI Precision Interest (6) (5)  Positive foreign exchange impact of Derivatives 26 (25) £28m Tax paid (28) (17)

  8. Slide 8: Restructuring summary

    IMI plc Restructuring summary £m 2021 H1 2021 FY Future years  Restructuring benefits of £12m Restructuring charge (including impairment losses) delivered in the first half and IMI Precision Engineering* (4) (41) (59) £22m expected for the full year IMI Critical Engineering (1) (8) (6) IMI Hydronic

  9. Slide 9: IMI Precision Engineering operational review

    IMI plc IMI Precision Engineering operational review £m 2021 H1 FX Organic 2020 H1 Sales by Adjusted Adjusted business unit Motion Control £211m Up 9% Revenue 440 (18) 28 430 Factory Automation £194m Up 10% Organic growth 7% -7% Rail £17m Operating profit 76.6 (3.4) 7.1 72.9 Down 6% Operating margin

  10. Slide 10: IMI Critical Engineering operational review

    IMI plc IMI Critical Engineering operational review Order input by sector £m 2021 H1 FX Organic 2020 H1 Adjusted Adjusted Aftermarket £186m Up 9% Power £75m Up 25% Refining & Petrochemical £55m Up 16% Revenue 297 (10) 14 293 Oil & Gas £20m Down 8% Nuclear £20m Down 20% Marine £5m Down 23% Organic gr

  11. Slide 11: IMI Hydronic Engineering operational review

    IMI plc IMI Hydronic Engineering operational review £m 2021 H1 FX Organic 2020 H1 Sales by sector Adjusted Adjusted IMI TA £81m Up 15% Revenue 170 (2) 28 144 IMI Heimeier £55m Up 27% Organic growth 20% -5% IMI Pneumatex £28m Up 27% Operating profit 34.2 (0.2) 9.8 24.6 Other £6m Down 1% Operating mar

  12. Slide 12: Group outlook

    IMI plc Group outlook  Based on the strong first half result and current market conditions we now expect 2021 full year adjusted EPS to be in the range of 85p to 90p  Previous FY 2021 guidance was for adjusted EPS of 81p to 87p  This guidance reflects our expected average share position in 2021 o

  13. Slide 13: Strategy update

    IMI plc Strategy update Roy Twite – Chief Executive

  14. Slide 14: Key enabling strategies

    IMI plc Key enabling strategies Our purpose Business model The Core Value Engineering & Value Applications today Customer satisfaction Expertise Foresight tomorrow Improving returns Talent Teams Continuous Generating growth through greater improvement Development & Growth through market-led customer

  15. Slide 15: IMI Growth Hub pipeline

    IMI plc IMI Growth Hub pipeline Phase 1 Phase 2 Phase 3 Phase 4 Problem Test & learn Develop Scale Identification & Assess  Growth funnel expanding  Continued shift in focus to high growth and sustainable markets  Expertise drawn from across the Group – and externally  New transformational growt

  16. Slide 16: Increased sustainable margin targets

    IMI plc Increased sustainable margin targets 20% through the cycle 20% 20%+ Prev. guidance: Prev. guidance: Prev. guidance: 20% at the top of the cycle 17% to 20% 20% 2020: 2020: 2020: 17.3% (+100bps) 16.6% (+280bps) 18.3% (+30bps) 16

  17. Slide 17: IMI Critical Engineering highlights

    IMI plc IMI Critical Engineering highlights 1. Ambitious management team 2. Excellent applications expertise 3. Jewel is Aftermarket in the installed base  5% Aftermarket CAGR over last 3 years, despite COVID  160k installed IMI valves, 280k competitor valves offer further growth 4. New Constructi

  18. Slide 18: IMI Precision and IMI Hydronic highlights

    IMI plc IMI Precision and IMI Hydronic highlights 1. Ambitious management team focused on customers and Purpose 2. Attractive end markets with positive growth outlook 3. Excellent applications expertise 4. Investing in growth  Growth Hub gaining traction and influence 5. Strong digital agenda under

  19. Slide 19: ESG: Living our Purpose

    IMI plc ESG: Living our Purpose  ‘Breakthrough Engineering for a Better World’ purpose a unifying driver  Significant improvements to communications and engagement  New internal platform delivering unprecedented collaboration  Focus on Inclusion & Diversity  On track to halve carbon dioxide int

  20. Slide 20: Key takeaways

    IMI plc Key takeaways  Strategy  Solving industry problems in attractive markets, at pace  Sustainable Value Today and Value Tomorrow  Culture  Breakthrough Engineering for a Better World  Sharpened customer focus and innovation  Outcome  Improving returns  Sustainable, profitable growth 20

  21. Slide 21: Q&A

    IMI Q&A

  22. Slide 22: Forward-looking statements disclaimer

    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

  23. Slide 23: Appendices

    IMI Appendices

  24. Slide 24: Foreign exchange

    IMI plc Foreign exchange HY 2021 HY 2020 Change Average Rates Euro 1.15 1.15 0% Ready Reckoner for translation impact of movement in FX rates on 2021 FY Performance US Dollar 1.39 1.26 10% Sensitivity to +/- 1 cent Adjusted Jun-21 Dec-20 Change move in: Revenue Operating Profit Closing Rates Euro +/

  25. Slide 25: Rationalisation summary

    IMI plc Rationalisation summary £m 2019* 2020 2021 H1 2021 FY Future Overall Restructuring charge years programme (including impairment losses) IMI Precision – Previous Initiatives (20) (8) (3) (34) (18) (80) IMI Precision – New Initiatives - - (1) (7) (41) (48) IMI Precision Engineering (20) (8) (4

  26. Slide 26: Pensions

    IMI plc Pensions £m June Dec 2021 2020 Total Position: Liabilities (667) (741) Assets 694 719 Surplus/(deficit) 27 (22) UK Schemes: Liabilities (510) (569) Assets 613 638 Surplus 103 69 Overseas Schemes: Liabilities (157) (172) Assets 81 81 Deficit (76) (91) 26

  27. Slide 27: Margin targets

    IMI plc Margin targets Target: 20% through the cycle Target: 20% Target: 20%+ 2020 margin: 17.3% 2020 margin: 16.6% 2020 margin: 18.3%  £35m annualised benefits from  £43m annualised benefits from  £3m annualised benefits from footprint optimisation footprint optimisation supply chain optimisatio

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