IMI Hydronic Engineering/media/Files/I/IMI/presentation/2017/imi-hydronic... · IMI Hydronic...
Transcript of IMI Hydronic Engineering/media/Files/I/IMI/presentation/2017/imi-hydronic... · IMI Hydronic...
IMI Hydronic EngineeringPeter Spencer – Divisional Managing Director
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IMI Hydronic Engineering at-a-glanceWe deliver Great Solutions for customers tackling the world's most demanding engineering challenges.
We provide customers with innovative, easy to use and energy efficient solutions for their hydronic heating and cooling distribution systems.
Balancing, Control & Actuation
£135m (47% total)
Thermostatic Control
£96m (33% total)
Pressurization &Water Quality
£40m (14% total)
Other
£19m (7% total)
Manualbalancing
ControlValves &Actuators
ThermostaticControls
Pressurization& Water Quality
Revenue split by geography
Revenue
£290m% of Group revenue
18%Operating profit
£52mReturn on Sales
17.9% Number of employees
1,900
Our performance in 2016 Our brands Our product categories
72%
6%
19%
2% 1%
Western Europe
North America
Emerging Markets
UK
RoW 2
Our products deliver energy savingsand improve comfort
OU
R P
RO
DU
CTS
& B
RA
ND
S
▶ Expansion system▶ Degasser, Dirt separators ▶ Balancing & Control Valves, Actuators
▶ Balancing & Control Valves, Actuators
▶ Thermostatic Valves, Heads & manifolds for radiator and underfloor heating
▶ Balancing & Control Valves, Actuators▶ Room Thermostats
DISSIPATIONDISTRIBUTIONPRODUCTION
Heating & Cooling generators▶ Boilers, Chillers, Heat pumps, Solar
panels, Heat exchangers, pumps
▶ Distribution pumpsTerminal Units▶ Radiators, Underfloor heating, Air
Handling Units, Convectors, Chilled beams, cooling Ceilings
Controls▶ Building Management Systems
APP
LIC
ATIO
NS
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Our manufacturing footprint
Erwitte, Germany1928
Ljung, Sweden1896
Füllinsdorf, Switzerland1909
Dallas, USA1970
Brezice, Slovenia1968
Olkusz, Poland2005
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✓
Year 0:The hard work begins
2014
✓
Year 1:Increased investment
2015
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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
Delivering against IMI Group strategy
▶ Outdated legacy product range, declining sales & share
▶ 14 new products developed, including TA-Compact, TA-Pilot and Connect ranges
▶ APQP process
▶ Swiss principal resolved
▶ New management team
▶ Market share gains globally
▶ Over-the-counter strategic agreements driving growth across Europe
▶ North America supplier insource program
▶ Development of in house electronic capabilities
▶ +2% growth in 2015, market share gain in Europe
▶ New products 11% of sales, offsetting legacy decline
▶ 15 new products developed
▶ 2 major European wholesalers signed
▶ Organization adjusted to evolving business model
▶ Improvements in working capital evident
▶ +1% growth in Europe
▶ 13 new products launched, legacy range refreshed
▶ TA-Slider linear actuator launched, moving into faster growing control valves
▶ Development of 2 major European wholesaler agreements, 3 additional wholesalers signed
▶ 2 factories reached world class lean scores
▶ Market share gains in Europe, outrun competition
▶ Product development focused on faster growing markets/ranges.
▶ ERP in place in 2 factories, 12 sales offices and Swiss Principal
▶ Factory investments to address growth strategy
▶ Internal control declaration reaches 70%
▶ Market share gains globally
▶ Strong sales in N. America and China
▶ Best in class operating margins & working capital
▶ ERP project implemented across the Division
▶ Average lean score of ca. world-class level
Supported by value enhancing acquisitions
IMI Hydronic Engineering Deliverables
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Our growth strategy
New Products
Europeover-the-counter
Focusedgeographic expansion
Key developments since 2013
▶ 26% of sales non-European▶ Grow in strategic, fast growing markets
focus on North America & China▶ No new markets expansion
▶ New agreements with key European wholesalers, reach extended
European Over-the-Counter agreements
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2
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▶ 42 product launches 2014-2016
▶ Refresh and growth investments
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Why invest in New Product Development?
2.0% 2.0% 1.9%2.2%
2.9%
4.0%3.7%
4.3%
£0.0
£0.0
£0.0
£0.0
£0.0
£0.0
£0.0
£0.0
£0.0
£0.0
£0.1
2010 2011 2012 2013 2014 2015 2016 2017
# New products launched
5 5 6 9 14 15 13 15
CAPEX investment in new products (2010-2017 estimate)
Note: Includes R&D capitalized and non-capitalised expense. All figures calculated on constant currency7
Refreshing the portfolio:Some examples (2014-2016)
Over engineered, over priced for some
applications
TBVC MPTA-Modulator
(2014)
TA-Compact P(2016)
Priced for purpose, differentiated technology:• Sales: x 2.5 vs legacy• % margin: +10 p.p. vs legacy
HEI-Eclipse(2015)
HEI-Calypso(2015)
Differentiated technologies for premium & mainstream markets across Europe:• Sales: x3 vs legacy• % margin: +2 p.p vs legacy
PNEU Connect(2014-5)
Upgraded to defend premium position in CH, expand in other European markets:• Sales: +8% vs legacy• % margin: +1 p.p. vs legacy
A Exact, V Exact II
Fit for Germany
Low pricecompetitiveness
Legacy New product (launch year)
Large size
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Refreshing the portfolio: customer benefitsEclipse & TA-Modulator
Benefits for Customers:▶ Quick & easy to install
▶ Just 10 sec to set the flow
▶ No complex calculations necessary
▶ No call backs (reliable, no noise/banging radiators)
▶ Can save up to 35% energy
Eclipse Benefits for Customers:▶ Modulating control: saves up to 30%
energy▶ Compact solution, cheaper
installation costs (no expensive actuator needed)
▶ Fast installation when combined with TA-Slider (50% faster digital configuration)
▶ Higher value: covers higher flows with smaller valve size vs competition
TA-Modulator
Benefits for IMI Hydronic:▶ Positioned as technology leader
▶ Patented technology
▶ Growing share across Europe
Benefits for IMI Hydronic:▶ Unique technology (patent pending)
▶ Improved margin vs legacy model
▶ Fit for both heating & cooling markets
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Eclipse AFC for underfloor heating
launched in 2016/17
Mid-price range (2017)
TA-Slider rangeexpansion
to be completed 2018
Refresh largely completed by 2016, focus on New Product Development for growth in 2017+
2014 2015 2016 2017 2018
TA-Slider
Drive growth of Control Valves &
offset manual balancing weakness
Dynacon Dynalux
Penetrate faster growing Underfloor
heating
Expand into mainstream market, grow share outside
CH
Refresh
Refresh
Refresh
Growth
Growth
Growth
TA-Sliderexpansion
Product upgrades & Value Engineering to defend competitive position & margin
SqueezeSimply
Compresso
Growth
Unique technology, mid-market range, fit across Europe
Defend premium range in CH, geographic
expansion
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Over-the-counter: business model
Manufacturer Distributor Customer
▶ Breadth of product range▶ Strong brands▶ Differentiation▶ Service levels
▶ HVAC focus▶ Point of sales capillarity▶ European-wide presence
▶ Advertising & Promotion▶ Brand awareness▶ Differentiation: technical,
ease of installation, reliability
Wholesaler InstallerIMI Hydronic Engineering salesforce
Demand creation
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Creating the demandFocus on over-the-counter to accelerate growth
Point of sales material& local campaigns Digital marketing
Strong focus on Germany + 5 target markets where IMI Hydronic Engineering has developed OTC relationships
Trade fairs
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Supporting growth across the organisation
Divisional Lean Scores (2014-2022E)▶ Increased manufacturing efficiency
& flexibility▶ OTD improvement▶ Inventory reduction
▶ 2 factories, Swiss principal in 2016▶ 12 sales offices by H2 2017▶ Project completed by 2018▶ Increased efficiency
Driving lean affords stronger investment to increase commercial & cost competitiveness
# World-class sites
Lean
ERP
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World-class
IMI Hydronic Engineering Global leader in hydronic solutions
▶ World leader in balancing▶ Control valve and actuator portfolio under expansion▶ Technically differentiated, strong benefits to customers
▶ Further drive European over-the-counter partnerships▶ Continue geographic expansion, use of our patented technologies to
expand portfolio (i.e. underfloor heating)
▶ Roll-out of price & cost competitive ranges▶ Increased commercial focus through technical support and cross selling
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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.