Imi Plc · LSE:IMI
Imi — Investor Day (September 2009)
87 slides from Imi's investor day presentation, Sep 30, 2009
Slide 1: IMI Fluid Power Capital Markets Day
IMI Fluid Power Capital Markets Day 30 September 2009
Slide 2: Agenda for the Afternoon
Agenda g for the Afternoon » Norgren Strategy and Vision Roy Twite » Target Sectors Paul Cleaver » Commercial Vehicle Sector Gordon Scott » Rail Sector Kelvin Austin » Oil, Oil Chemical & Gas Sector David Leakey » Life Sciences Sector Richard Edwards 2
Slide 3: Agenda
Agenda g » IMI Context » Fluid Power Global Market » Strategy » Margin Progression » Future Prospects 3
Slide 4: IMI Context
IMI Context 2008 Sales Merchandising 11% £202m Severe Service 23% £443m Beverage Dispense p se spe Dispense 16% £305m Indoor Indoor Climate Fluid Power 15% £281m 35% £666m 4
Slide 5: Global Pneumatics Market
Global Pneumatics Market Total Market - £6.3bn Asia Pacific Americas Others SMC £1 9b £1.9bn £2 0bn £2.0bn 33% 22% Bosch Festo Europe Rexroth Parker 19% Norgren £2.4bn 6% 10% 10 % IMI estimates 5
Slide 6: Norgren Sales by Region
Norgren g Sales by y Region g Asia Pacific Americas 10% 30% Europe 60% IMI estimates 6
Slide 7: Norgren Products
Norgren Products FRL Fittings Valves 7 Actuators
Slide 8: Norgren Sales by Customer Group
Norgren g Sales by y Customer Group p General Market / Factory Automation Sectors 28% 37% Aftermarket Af k 35% 2009 H1 Sales 8
Slide 9: Norgren Strategic Focus
Norgren Strategic Focus » Sectors » Aggressively grow » Number one in each chosen sector niche » KAM / Customer insight g » Engineering advantage » Good growth in sales and margins » Aftermarket » Grow through Norgren Express » Attractive and more resilient end market » Availability is the key sale
Slide 10: Sector Sales
Sector Sales Other sectors 6% Commercial Vehicles Rail 13% 2% Oil, Chemical & Gas 4% Auto In-plant Life Sciences 5% 7% 2009 H1 Sales 10
Slide 11: Sector Applications
Sector Applications Sector Target applications Competitors Valve solutions for seats, horns, ventilation; Parker, Voss, Wabco, Commercial Vehicles complete ssystem stem sol solutions tions for Transmission Ra foss Bosch Raufoss, Bosch, applications. Pierberg, Festo Geo Tooling for robotic welding ap
Slide 12: Major Global Customers
Major Global Customers PACCAR KNORR-BREMSE A: DeLavall FLOWSERVE WOLVO ALSTOM | BOMBARDIER —o - acon pe 12 ) NORGREN
Slide 13: Strategy: Engineering Advantage
Strategy: gy Engineering g g Advantage g Sales uplift Customer IMI value margin Life costs Acquisition cost 13
Slide 14: Strategy: Engineering Advantage
Strategy: gy Engineering g g Advantage g »What do we need to excel at? Customer intimacy, insight and ideation Win-Win Differentiation and knowledge g Strong Regional Tech centres Rapid response 14
Slide 15: Engineering Advantage: Portable ventilators
Strategy: gy Engineering g g Advantage g » Sector: Life Sciences » Application: Portable ventilators » Engineering Advantage: Size / weight Sales uplift p Life costs Acquisition cost 16
Slide 16: Engineering Advantage: Automotive stamping press
Strategy: gy Engineering g g Advantage g » Sector: In Plant Automotive » Application: Automotive stamping press » Engineering Advantage: Increased throughput Sales uplift Lif costs Life t Acquisition cost 17
Slide 17: Engineering Advantage: Rail iron ore wagon doors
Strategy: gy Engineering g g Advantage g » Sector: Rail » Application: Door systems for Iron Ore Wagons » Engineering Advantage: Reliability in harsh conditions Sales uplift Life costs Acquisition cost 18
Slide 18: Engineering Advantage: Park brake interlock
Strategy: gy Engineering g g Advantage g » Sector: Commercial Vehicles » Application: Interlock for Park Brake system » Engineering Advantage: Replaces more expensive components Sales uplift Life costs Acquisition cost 19
Slide 19: New Product Sales - % of Sales
New Product Sales - % of Sales 11% 6% 2005 2008 20
Slide 20: Aftermarket Sales
Aftermarket Sales Norgren Express » Replacement of Norgren Parts Product availability Great service Technical expertise 21
Slide 21: General Market / Factory Automation Sales
General Market / Factory y Automation Sales » Focus on key regional markets Packaging Factory automation » Local customer intimacy » Application expertise » Drivers: Factory capital investment New production lines New factories 22
Slide 22: Focus on Improving Margins
Focus on Improving Margins » Revenue growth » Focus on cost base » Further expansion of low cost manufacturing capacity » Procurement initiatives » Improve efficiencies 23
Slide 23: Fluid Power Sales and Margin Development
Fluid Power S l and Sales d Margin M i Development D l t 2000 2001 2002 2003 2004 2005 2006 2007 2008 Sales £m 444 416 379 410 439 492 557 571 666 Operating profit* £m 46.6 26.9 25.3 36.0 45.8 59.7 72.4 75.4 91.3 Operating margin % 10.5 6.5 6.7 8.8 10.4 12.1 13.0 13.2 13.7 Long Term Margin Target =
Slide 24: Fluid Power H1 2009 Results
Fluid Power £m H1 H1 Year 2009 2008 change 2008 Revenue 255 339 -25% 666 O Organic i growth th % -36 36 +7 7 +3 3 Operating profit 7.4 48.2 -85% 91.3 Operating margin % 29 2.9 14 2 14.2 13 7 13.7 » Markets stabilising g after sharp p fall » Commercial vehicle and in-plant automotive worst hit » Rapi
Slide 25: Future Prospects
Future Prospects » Norgren remains cyclical cyclical, but becoming more resilient » High added value business » Looking to maximise drop-through on the upside » Clear game plan for Norgren in each market area » Prioritise resources accordingly » There is no shortage of opportunities for growth 26
Slide 26: Sectors
1 NORGREN
Slide 27: Norgren Sector Criteria
Norgren g Sector Criteria » Global niche markets » High concentration of global customers » With an appetite for partnership and differentiated solutions 28
Slide 28: Global Vehicle
i NORGREN GLOBAL VEHICLE
Slide 29: Customer Drivers
Customer Drivers Powertrain Chassis & Cab Fluid Management & Transmission Controls Air Management & Vehicle Dynamics » IMPROVE Fuel Economy » IMPROVE Fuel Economy » REDUCE Emissions » REDUCE Air Wastage » IMPROVE Reliability R li bilit » IMPROVE Total Cost Ownership Current Drivers – Minimal Cost, M
Slide 30: Chassis Applications
Chassis Applications Suspension Controls Air Management Lift Axle Control Ai M Air Manifolds if ld Fuel Systems Fittings Tire Inflation 31
Slide 31: Engine Control Applications
Engine Control Applications Intake Throttle Fan Clutch Control Multi Function Engine Control Module Variable Geometry Turbo Control EGR Valve Control Wastegate Control Exhaust Brake Control 32
Slide 32: Transmission Applications
Transmission Applications Filter/Regulator Shift Control V l Valve Shift inhibit module Modular Retarder control t l Shift Control Module Clutch by Wire Control 33
Slide 33: Rail
ENGINEERINGADVANTAGE G. NORGREN
Slide 34: 35 Year History in the Rail Industry
35 Year History y in the Rail Industry y » Norgren g currently y supplies pp to the world’s leading g rail companies ROSCOs Angel, HSBC, Porterbrook TOCs Arriva First Arriva, First, National Express OEMs Faiveley, Fandstan, Knorr Bremse Consultants WS Atkins, Delta Rail, Interfleet Car Bui
Slide 35: Rail Pneumatic Applications
Rail Pneumatic Door Ventilation V il i Applications pp Control Control Pantograph Modules Internal Doors Control Sanding External Systems Doors Seat Adjustment Drinks Hose Dispense System Windscreen Wipers Brakes control Retractable Mirrors Horn control Air Door Step Suspension p Control Shoe Oil Ca
Slide 36: Rolling Stock Automation
Rolling Stock Automation Manifolds - Couplers Actuators - Steps Valves - Brakes Controls - Pantographs 37
Slide 37: Oil Chemical & Gas
Oil Chemical & Gas
Slide 38: Our Target Markets
Our Target Markets E l ti Exploration T Transportation t ti P d ti Production Maxseal products Off Shore On Shore Petrochemical Refining Herion Products 39
Slide 39: Our Products and What They Do
Our Products and What They Do Norgren FRL Watson Smith Herion Maxseal hore On Sh Off Shore Our solutions are centred around industrial valve automation 40
Slide 40: Oil Chemical & Gas - Target Applications
Oil Chemical & Gas - Target Applications Valve Emergency Partial Stroke Automation Shut Down Testing Arctic Valve Drill Waste Positioner Automation g Management Control Automated Drill Switch Box Compressor Skid Selection Control Pressure Control 41
Slide 41: Life Sciences
Life Sciences
Slide 42: Life Sciences – Norgren Capability
Life Sciences – Norgren g Capability p y Over 40 yyears experience p in Life Sciences,, with dedicated regional g technical centres and a global network of key account managers. • An unrivalled range of precision technologies for liquid handling and gas control • GMP compliant assembly areas and cla
Slide 43: Life Sciences – Application Areas
Life Sciences – Application pp Areas • Anaesthesia & Ventilation • In-Vitro Diagnostics • Drug Infusion • Dialysis • Surgical Insufflation • Oxygen Therapy • Dental systems • Portable Equipment • Hospital Mains Gas • Oxygen Concentrators • Pain Management • Sterilisation & Decontamination • Laborato
Slide 44: Life Sciences – Customer Benefits
Life Sciences – Customer Benefits Life science customers choose to ppartner with Norgren g because we understand their needs and are able to offer innovative solutions for their demanding applications. • Enhanced fluid control performance • Innovative design • “Plug & Play” sub-systems • Reduced siz
Slide 45: Global Vehicle
i NORGREN GLOBAL VEHICLE
Slide 46: Commercial Vehicles
Commercial Vehicles Powertrain Chassis & Cab Fluid Management & Transmission Controls Air Management & Vehicle Dynamics » IMPROVE Fuel Economy » IMPROVE Fuel Economy » REDUCE Emissions » REDUCE Air Wastage » IMPROVE Reliability R li bilit » IMPROVE Total Cost Ownership Current Drivers – Minimal Cost
Slide 47: Electric Trailer Brake
Electric Trailer Brake Norgren proportional valve solution Application » Replace cab mounted pneumatic valve with electronic switch » Norgren scope to supply chassis mounted proportional valve to convert electrical input to variable pressure output Location » Chassis mounted proportional valve repla
Slide 48: Electronic Ride Height Control
Electronic Ride Height Control Application » Norgren working in partnership with electronics company to develop a replacement to current mechanical air suspension valves » Electronic solenoid valve pack incorporating; High flow balanced TiO cartridge valves - Norgren Contactless Hall effect sens
Slide 49: UREA Heat Valve
UREA Heat Valve Application » Controls/diverts engine coolant to prevent urea from freezing at low ambient temperatures Engineering Advantage/Customer Benefit » Robust industry proven design » High reliability » Reduced hammer effect to coolant system components » Customised fittings solution Sales
Slide 50: Auxiliary Solenoid Valve
Auxiliary u a y Solenoid So e o d Valve a e Application pp » On board vehicle auxiliary functions; Diff Lock 5th wheel slide Horn Engine Brake Power take off etc, Engineering g g Advantage/Customer g Benefit » Utilizes proven Norgren technology » Environmentally sealed, over-moulded design
Slide 51: Rail
ENGINEERINGADVANTAGE G. NORGREN
Slide 52: Challenge: Reliability
Challenge: g Reliability y The Problem » Air Line Blockage Shearingg of auxiliary y drive shaft,, leading to fuel system shut down and in-service vehicle failure » Air Line Fouling Failure of brake relay valve major safety implications Failure of brake reservoir check valve major safety im
Slide 53: Solution: Customised Filtration System
Solution: Customised Filtration System Application: » Train Air Main system Customer: » Train operating companies Advantage: » Improved system efficiency » Reliable operation of brake and door valves » Reduced maintenance costs / increased revenue » Extended component life Key: » Proven products » R
Slide 54: Challenge: Weight Reduction
Challenge: g Weight g Reduction The Problem » Train T i b builders ild need d tto provide id more efficient ffi i t ttrains: i Increased energy efficiency Reduced CO2 emissions Reduced track access charges Higher speeds require lighter vehicles 55
Slide 55: Solution: Light Weight Fittings
Solution: Light g Weight g Fittings g Application: » Train Air Main pipe system C t Customer: » Global Gl b l railil vehicle hi l manufacturers f t (OEM (OEMs)) Advantage: » 61% fittings system weight reduction » Increased fuel efficiency » Reduction in end user 30 year life cycle costs » Reduced tr
Slide 56: Challenge: Reduce Complexity
Challenge: g Reduce Complexity p y The Problem » The customer wants couplers, couplers not pneumatic circuits Less purchasing and accounting administration Less inventory handling Increase capacity Less re-work from multiple component assembly Modular solution to retain flexibility 57
Slide 57: Solution: Customised Manifold
Solution: Customised Manifold Application: » Manifold to control the coupling & uncoupling of train carriages Customer: » Coupler OEM Advantage: g » Plug g and p play y system y » Increased performance » Reduced installation time » Reduced maintenance time Key: » Worked closely with customer to deve
Slide 58: Challenge: Safe Access Systems
Challenge: Safe Access Systems The Problem Passenger load / unload is a critical safety element » Door p performance affects: Operating capacity Passenger comfort and convenience Vehicle V hi l up-time ti Maintenance schedule / down-time 59
Slide 59: Solution: Door Control Systems
Solution: Door Control Systems Application: » Interior door system for refurbishment contract Customer: » Vehicle OEMs,, train maintenance companies p Advantage: » Door system designed to meet with existing interface » System developed to customer specifications » Ability to provide bespoke customer
Slide 60: Challenge: Increase Efficiency
Challenge: Increase Efficiency The Problem » Unstable / inefficient current collection: Varying climatic conditions Subject j to considerable shocks Subject to persistent vibration Vehicle speeds are increasing Need to improve energy efficiency 61
Slide 61: Solution: Manostat Pressure Regulator
Solution: Manostat Pressure Regulator Application: » Train Pantographs, 400km/h (250mph) Customer: » Pantograph OEMs Advantage: » Improved efficiency and reliability » Reduced compressed air consumption » Extended contact shoe life » Extended power cable life Key: » Ability to function from -40oC to
Slide 62: Challenge: Safe Access Systems
Challenge: Safe Access Systems The Problem Passenger load / unload is a critical safety element » Step performance affects: Passenger safety Operating capacity Vehicle up up-time time step Maintenance schedule / down-time “Mind the gap”! 63
Slide 63: Solution: Retractable Step Control
Solution: Retractable Step Control Application: » Train Steps Customer: » Vehicle OEMs Advantage: » Compact and robust construction » Interlocking function » Customised C t i d actuators t t ffully ll validated lid t d ffor railil use Key: » Slide and swing (folding) operation options » Integrated w
Slide 64: Summary = Engineering Advantage
Summary y » Sell customised solutions based on world-class products » Building a global team of industry specialist, experienced Key Account Managers supported by product and project management » Focussed on driving specification, technical and commercial differentiation = Engineering Advantage Focu
Slide 65: Oil Chemical & Gas
Oil Chemical & Gas
Slide 66: Creating SAFE Technology
Creating SAFE Technology •A smart way to test emergency shut down valves – partial stroking •Enhancing safety integrity levels •Maximising production Sales uplift Life costs Acquisition cost 67
Slide 67: Engineering Advantage – Norgren Technology Inside
Engineering Advantage – Norgren Technology Inside • Providing P idi a modular d l solution l ti to t valve l positioning • Eliminating internal engineering costs Improving speed to market Sales uplift Life costs Acquisition cost 68
Slide 68: Engineering Advantage for Waste to Energy Producers
Engineering Advantage for Waste to Energy Producers OLD SYSTEM • An automated pneumatic p hammer system that reduces hot spot carbon contamination • Increases efficiency • Increases revenue NEW SYSTEM Sales Uplift Life costs Acquisition cost 69
Slide 69: Engineering Advantage for Off-Shore Automated Drill Selection
Engineering Advantage for Off-Shore Automated Drill Selection • A repackaged repackaged, environmental proof solution for automated drill selection • Reduced weight, size, shipping costs Sales Uplift Life costs Acquisition cost 70
Slide 70: Engineering Advantage for Offshore Drill Waste Disposal System
Engineering Advantage for Offshore Drill Waste Disposal System • 100% safe, pneumatic air agitation system • Supporting an award winning design • Won significant new orders • Fantastic end user & environment benefits Sales Uplift Life costs Acquisition 71 cost
Slide 71: Life Sciences
Life Sciences
Slide 72: Customer Profile – Penlon Ltd
Customer Profile – Penlon Ltd Established 1943 in Abingdon g as a “spin-off” p from Oxford University. Manufactures systems for anaesthesia anaesthesia, ventilation, intubation, oxygen therapy, suction and medical gas pipelines. • Approx 200 employees worldwide • 20% market share in UK • Exports E t
Slide 73: Penlon Ltd – Products
Penlon Ltd – Products Prima SP & SP2 Anaesthetic Workstations AV-S & AV-900 El Electronic i VVentilator il AV-800 Electro Pne matic Electro-Pneumatic Ventilator Nuffield 200 Pneumatic Ventilator Medical Gas Distribution 74
Slide 74: Penlon & Norgren
Penlon & Norgren g £ value APL AV800 Valve HP Manifold AVS GAM Manifold AVS Relief Valve RM1 FAS Nuffield Alarm Al 200 Components Reservoir 2003 2004 2005 2006 2007 2008 2009 2010 75
Slide 75: Penlon – AVS 900 Ventilator
Sales PENLON – AVS 900 Ventilator Uplift Life costs Application: Acquisition cost • Gas control and patient manifolds for a “High-End” digital ventilator Advantage: • Enhanced ventilator functionality • “Platform” gas control module • Reduced size & complexity • Class Cl 100,000 100 000 clean l room
Slide 76: Customer Profile – Luxfer Group
Customer Profile – Luxfer Group p Established in 1898 and based in Nottingham, g , UK. Worlds leading supplier of Aluminium and Composite cylinders. 17 manufacturing facilities on three continents continents, producing over 3 million high pressure cylinders per year. • 1,600 employees p y in 26 coun
Slide 77: Luxfer – Medical Regulator
LUXFER – Medical Regulator g Sales Uplift Life costs Application: Acquisition cost • Portable oxygen system for home care and ambulatory applications • Option for 1L & 2L cylinder designs Advantage: • Directly integrated into cylinder • Smallest & Lightest system available • Ergonomic E i ddesign i
Slide 78: Customer Profile – UPZ
Customer Profile – UPZ Established in 1907 and based in Ekaterinburg, g, Russia. Specialising in medical equipment, but with divisions producing aerospace components and energy supply equipment equipment. • 1979 - First medical devices (patient monitoring equipment) • 1989 - Launched first Anaesthet
Slide 79: UPZ – Respirator Manifolds
UPZ – Respirator p Manifolds Sales Uplift Life costs Application: Acquisition cost • Gas inlet, mixing & control manifolds for intensive care unit respirator Advantage: • Technological advance for Eastern Europe • Class 100,000 clean room assembly • Fully integrated modular design • Expandable to co
Slide 80: Customer Profile – Astra Tech
Customer Profile – Astra Tech Medical device manufacturer based in Molndal,, Sweden. Wholly owned subsidiary of Astra Zeneca. • Founded in 1948 • Approx 2,000 Employees, with subsidiaries in 16 countries • Innovation driven company 81
Slide 81: Astra Tech – Infusion Regulator
ASTRA TECH – Infusion Regulator g Sales Uplift Life costs Application: Acquisition cost • Regulator for an infusion pump • Doses drug at a controlled rate • Integrated filter and relief valve Advantage: g • Stable flow of drug over time • Designed to eliminate leakage • Suitable for high volume manu
Slide 82: Customer Profile – UTAS
Customer Profile – UTAS Established in 1992 and based in Zhelyabova, y , Ukraine. Having developed a good reputation for complex electronic patient monitoring equipment equipment, the company is diversifying into ICU ventilators and anaesthetic workstations. • Electrocardiographs • Pulse Oximeters •
Slide 83: UTAS – Ventilator Manifolds
UTAS – Ventilator Manifolds Sales Uplift Life costs Application: Acquisition cost • Inspiritory, Expiritory and control manifolds for ICU Ventilator Advantage: • Improved ventilator performance • Fully programmable ventilation modes • Plug & Play “Platform” modules 84
Slide 84: Customer Profile – Steritrox
Customer Profile – Steritrox Steritrox p provide decontamination equipment q p for the food ((Radical)) and Healthcare (Meditrox) sectors. Developed in 2004, 2004 Steritrox have patented a chemical free system using Ozone for surface or whole room decontamination. • Effective against MRSA & C.Diffic
Slide 85: Steritrox – High Pressure Regulator
STERITROX – High g Pressure Regulator g Sales Uplift Life costs Application: Acquisition cost • High pressure cartridge regulator integrated into a disposable Oxygen cylinder Advantage: • Eliminates the risk inherent with high pressure gas connections • Operators require less skill/training • Compli
Slide 86: Summary
Summary » Clear game plan for Norgren in each market area » Prioritise resources accordingly » There is no shortage of opportunities for growth 87
Slide 87: Questions & Answers
Questions & Answers