IMI Critical Engineering - IMI plc reports... · IMI Critical Engineering New Construction 2016 New...

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IMI Critical Engineering Roy Twite – Divisional Managing Director 1

Transcript of IMI Critical Engineering - IMI plc reports... · IMI Critical Engineering New Construction 2016 New...

Page 1: IMI Critical Engineering - IMI plc reports... · IMI Critical Engineering New Construction 2016 New Construction orders: 9% Gas Power 9% LNG 2% Nuclear 16 Other Oil & Gas 34%. Coal

IMI Critical EngineeringRoy Twite – Divisional Managing Director

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Behind the numbers

£69m Orders H1 2017 from Value Engineering

12 Plants consolidated or sold, 17 remaining

£17m Invested in new ERP and CRM systems

12,000 Continuous improvement actions in 2016

8New products already launched in 2017

Value Engineering workshops held in the last 12 months100

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IMI Critical Engineering at-a-glance

Revenue

£651m% of Group revenue

39%Operating profit

£81.8mNumber of employees

3,700

Controlvalves

Butterflyvalves

Actuation

Ballvalves

Slidevalves

FCCvalves

Order intake 2016

£614mAftermarket

£299mPower

£94mOil & Gas

£135mPetrochemical

£45mNuclear Power

£10mOther

£31m

Our performance in 2016 Our brands Our product categoriesWe help our customers control critical in-plant processes by providing superior, custom-engineered valves, actuation and control systems.

16%

22%

51%

4%7%

Western Europe

North America

Emerging Markets

UK

RoW

Revenue split by geography

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Leading the market

▶ Supporting the customer▶ Successful adoption of Value Engineering tools

▶ Realignment of global footprint

▶ New Product Development

▶ Impact of future energy mix on New Construction orders▶ Gas is the most important transition fuel

▶ Growth in LNG demand

▶ Nuclear outlook remains attractive

▶ Installed base delivering high quality profits stream4

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Delivering against IMI Group strategy

▶ Korea localisation▶ IMI Bopp & Reuther▶ Website & Intranet▶ Obeya & Project

Management Process

▶ Branding and website

▶ Houston facility▶ IMI STI relocation▶ Quarter turn actuators▶ Oil & Gas ball valves

▶ Launch 10 new products▶ Sales acceleration▶ China localisation▶ Implement dedicated

Middle East business unit.▶ Internal Control

Declaration 75%▶ ERP implemented in 9

sites▶ CRM implemented in 40%

of the Division

▶ ERP implemented in 6 sites▶ CRM blue-print designed▶ Organisational Upgrade▶ Consolidated Nuclear

manufacturing in IMI Bopp & Reuther

▶ Internal Control Declaration 73%▶ Launch 15 new products▶ IMI Th Jansen manufacturing

consolidated into IMI Z&J▶ China sites consolidated▶ Implement VA/VE and competitor

strip down

▶ Launch 10 new products▶ Lean score at 85%▶ Internal Control Declaration 78%▶ Bolt-on acquisition▶ ERP implemented in 80% of the

division▶ CRM implemented in 80% of the

Division

▶ Bolt-on acquisition▶ Launch 10 new products▶ CRM and ERP

implementations complete

▶ Internal Control Declaration 80%

Year 0:The hard work begins

2014

Year 1:Increased investment

2015

Year 2:Benefits starting to show

2016

Year 3:Nearly firing on all cylinders

2017

Year 4:Up to full speed

2018

Ambition:Double operating profits

IMI Critical Engineering Deliverables

Supported by value enhancing acquisitions 5

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Footprint for growth

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IMI Critical Engineering footprint for growth

▶ People footprint from 2013 to 2017:▶ Increased by 15% in the East

▶ Decreased by 16% in the West

▶ Consolidated or sold 12 plants

7Before Now

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IMI Critical Engineering footprint for growth

IMI CCI Korea: 80% Lean Score

IMI Critical Engineering China: 70% Lean Score

IMI CCI SriCity: 71% Lean Score

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ERP programme

▶ £19m capex approved▶ 8 sites live, 8 to go

▶ Improved financial control▶ Faster management decision making▶ Driving overhead efficiencies

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Czech Republic

AustriaIndia

Sweden

Korea

Japan

IFS SingaporeMalaysia

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CRM programme

▶ £3m capex approved▶ 40% of revenue this year, 80% by 2018, 100% by 2019

▶ Supporting top line growth▶ Enabling global project capture▶ Proactively serving our global installed base

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Energy transition

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2014-2040 energy demand forecast

Future energy growth from South-East Asia, Middle East and India (Source IEA World Energy Outlook)

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India 3.3%

Southeast Asia 2.2%

Middle East 2.2%Energy Demand by Region in the New Policies Scenario China 0.9%

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Gas power growth

Gas: 1.5%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2000 2005 2010 2015 2020 2025 2030 2035 2040

Ener

gy D

eman

d (M

toe)

World Primary Energy Demand (CAGR) by Fuel in the New Policies Scenario

Coal Oil Gas Nuclear Renewables

(Source: Based on IEA data from World Energy Outlook © OECD/IEA 2016, www.iea.org/statistics, Licence: www.iea.org/t&c; as modified by IMI)

Nuclear: 2.3%

Coal: 0.2%

Oil: 0.4%

Renewables: 2.3%

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LNG demand

▶ LNG demand to grow at 4% - 5% annually between 2015 and 2030 (Source: Shell LNG Outlook 2017)

▶ Capacity additions need to come on line by 2024 to meet demand▶ IMI orders possible in 2019 / 2020

14(Source: BP Energy Outlook 2017)

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Nuclear new construction

0

5

10

15

20

25

30

35

40

45

China Russia India UAE Korea UK

Num

ber o

f Rea

ctor

s

Top Nuclear New Construction Projects 2017-2022Under Construction Planned

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IMI Critical Engineering New Construction

▶ 2016 New Construction orders:▶ 9% Gas Power

▶ 9% LNG

▶ 2% Nuclear

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Other Oil & Gas34%

Coal Power15%

Petrochemical14%

Other11%

LNG9%

Gas Power

9%

Other Power

6%

Nuclear2%

New Construction Orders in 2016

0

50

100

150

200

EmergingMarkets

MiddleEast &Africa

NorthAmerica

WesternEurope

Book

ings

(£m

)

New Construction Orders By Destination Region in 2016

Other includes Biomass, CSP, CHP for Oil and Gas

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IMI Critical Engineering Aftermarket

▶ 2016 Aftermarket orders:▶ 16% Gas Power

▶ 5% LNG

▶ 15% Nuclear

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0

20

40

60

80

100

120

EmergingMarkets

NorthAmerica

WesternEurope

MiddleEast &Africa

Book

ings

(£m

)

Aftermarket Orders By Destination Region in 2016

LNG5%

Petrochemical8%

Other Power10%

Other Oil & Gas12%

Nuclear15%

Gas Power16%

Other16%

Coal Power18%

Aftermarket Orders in 2016

Other includes Biomass, CSP, CHP for Oil and Gas

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IMI Critical Engineering footprintControl valves installed base

▶ 750,000 valves in the installed base

▶ c.£300m in aftermarket revenue

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Are we ready for the 2040 electric vehicle target?

61GWper year

British energy capacityCurrent electricity usage at peak times

30GWper year

Extra energy needed to power electric cars by 2040

The electric driving revolution

To produce the extra 30GW per year we would need to build an extra:

10,000New wind turbines

9.6Hinkley nuclear power station

Build time6 months per wind turbine

or

Costing£1.3 millionper wind turbine

Costing£20 billionfor each nuclear power station

Build time20 yearsper nuclear plant

Electric vehicle uptakeVehicles (millions)

How key electric cars compareTesla Model STop of the range

Nissan LeafBest seller

Range 381 miles

Range 124 miles

Charge time 9 hours Charge time 12-15 hours

Cost £126,900 Cost £16,680

Electricity generation sourcesGeneration (Terawatt-hour)

Source: The Telegraph 25th Jul 2017 19

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Electricity generation sources

▶ Generation (Terawatt-hour)

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▶ China gears up to ban diesel and petrol cars in coming decades

▶ Aim to implement before the UK

▶ Ford estimate demand would be 6m electric vehicles per year by 2025

Are we ready for the 2040 electric vehicle target?

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Leading the market

▶ Supporting the customer▶ Successful adoption of Value Engineering tools

▶ Realignment of global footprint

▶ New Product Development

▶ Impact of future energy mix on New Construction orders▶ Gas is the most important transition fuel

▶ Growth in LNG demand

▶ Nuclear outlook remains attractive

▶ Installed base delivering high quality profits stream22

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DisclaimerThis 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 these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward-looking statement which could cause actual results to differ materially from those currently anticipated. Any forward-looking statement is made in good faith and based on information available to IMI plc as of the date of the statement. All written or oral forward-looking statements attributable to IMI plc are qualified by this caution. IMI plc does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in IMI plc’s expectations.