IMI Precision EngineeringMassimo Grassi, Divisional Managing Director

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13%

29%58%Asia Pacific

Americas

Europe

Key brands

Revenue

£708m% of Group revenue

43%Operating profit

£118.5mReturn on Sales

16.7%Number of employees

5,300

Our performance in 2016 Our product categories

Pneumatic valves

Fluid control valves

Pneumatic actuators

Air preparation

Industrial Automation

£396mOr 56% of total

Commercial Vehicle

£161mOr 23% of total

Energy

£63mOr 9% of total

Life Sciences

£57mOr 8% of total

Rail

£31mOr 4% of total

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Product PhotoPneumatic fittings

IMI Precision Engineering at-a-glance

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We specialise in developing motion and fluid control technologies for applications where precision, speed and reliability are essential. Our integrated solutions improve the productivity and efficiency of customers’ equipment

We operate in attractive markets with strong long term growth drivers, and where we have strong competitive positions that underpin our ambition to lead. Our strategy seeks to leverage this, and catapult us into the market leadership group.

Revenue split by geography

Industrial Automation

Commercial Vehicle

Energy Life Sciences Rail

Over 80 years experience supporting production lines worldwide in automotive, food and beverage, printing, and electronics.

Covering every major commercial vehicle system, from the front bumper to the rear.

Production, transportation, refining, petrochemical, chemical, power generation, waste to energy.

Supporting advances in medical devices, diagnostic equipment and biopharm and analytical instruments.

Innovation for air preparation, dryers, brake components, door controls, coupling control, pantograph control and toilet applications.

Our verticalsA business structured around its customers

3

44%

26%

19%

7% 4%

Western Europe

North America

Emerging Markets

UK

RoW

IMI Precision Engineering footprintGlobal manufacturing and technical development

5 Global Technical Centres: USA, Germany, China, Switzerland and UK

26 Manufacturing Centres: USA, Germany, China, UK, Switzerland, Czech Republic, Mexico, and Brazil

2016 Revenue split by geography

Global technical, sales, manufacturing centre

Manufacturing, sales & technical centre

Sales office

Noida, IND

Querétaro MEX

Alpen, GERFellbach GERBad Oeynhausen, GERMerklingen, GER

Shanghai, CN

Sao Paulo, BR

Littleton, USA

Brookville US

UKFradley Bristol,

Leeds & Poole

Las Vegas, USA

Seattle, USAGeneva, CH

Brno, CZ

Singapore

Melbourne, Aus

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▶ Product rationalisation

▶ Global quality system▶ Ongoing lean

implementation▶ Development of

regional IT strategies

▶ Aligned organisation to regional primacy

▶ Introduced lean initiatives

▶ Re-branding to IMI Precision Engineering

▶ 15+ new products introduced

▶ On time delivery improved

▶ Above market organic growth

▶ Factory utilisation improved

▶ Supply chain organisation now in place

▶ NPD New Product Development process in place

▶ New core product ranges introduced

▶ Organisation fully aligned with growth strategy

▶ Organic expansion yielding results in all regions▶ Net Promoter Score (NPS) improved▶ Growth targets achieved

Delivering against IMI Group strategy

Growth phase strategy 2017+Fix & Focus phase strategies up to 20165

✓

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 Precision Engineering Deliverables

IMI Precision Engineering: strategic roadmapKey strategic initiatives

Key Initiatives

Our

pur

pose

Our

dre

am

True North

Our

Str

ateg

y CustomerSatisfaction

Profitable Growth

Operational Excellence

Delight our customers providing a world-class service.

Grow the top line, targeting verticals that offer opportunity to win.

Enhance business delivery with common and efficient processes and systems, and fully utilise our talents.

Strategic Objectives

Mission

Vision

Be your preferred partner in developing motion and control solutions where precision, speed & reliability are essential.

Be a world leader and your preferred partner in delivering world-class solutions supported by industry leading services.

Our

Prio

ritie

s

Products

Go To Market

Operations

Organisation

M & A6

GROW

Fix – Focus – GrowMoving to growth phase, focusing on our customers

FIX

FOCUS

Continue Lean journey and continuous improvement initiatives

FIX8 to drive operational excellence.

Improve execution (Policy Deployment).

Transform our supply chain through projectJanus to optimise our global business model.

Develop and launch great new products supported by new marketing campaign (M5).

Build an agile vertical organisation focused on customers.

Leverage & expand IMI Norgren Express channel to market, with a new website and app (digital transformation).

Create a growth culture &passion for IMI Precision Engineering.

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Fundamental change is being successfully executedGreat achievements in ‘Fix, Focus and Grow’

Significant progress on ‘Fix’ activities

Organisation Transformation

New vertical structure

▶ New vertical structure to reflect the go-to market strategy in Americas

▶ Continental and Western Europe merged

▶ Vertical organisational structure in Europe implemented early 2017

Lean and Health & SafetyBusiness Improvement

Organisational structure reflects customers needs

33%In 2014

67.2% In H1 2017

Great Progress in ‘FIX’

▶ Infrastructure investments▶ New ERP system in Americas▶ New global NPD process▶ New global Quality System▶ Improved sales forecasting▶ Product portfolio rationalised

All units continue to improve

▶ 83% Lean score in Seattle (USA)

▶ 7 sites with a combined score over 70%

▶ Majority of sites have Health, Safety & Environment scores above 8.5/10

Transformation of global footprint ▶ Machining insourcing driving

improved utilisation▶ Localising production closer to

customer, reducing supply chain complexity, cost and inventory

▶ Increasing leverage of our low cost European manufacturing operations

▶ Tactical cost reduction programme

Project Janus

On-time, on budget

Combined Score, H1 2017 (%)

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Increasing focus on growthThe penultimate phase of the plan

Great new platform products

Digital Transformation

Driving IMI Norgren Express forward, with a unique mobile app and a new integrated global website.

New CampaignNew Products

Market leading digital channel to market

Putting the emotion into motion

The first major platform products for many years, launched at Hannover Messe April 2017.

A differentiating campaign that helps us show what we do, how we do it and why we do what we do.

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Large market with strong growth drivers

Commercial Vehicle£1.2bn (addressable)2016 sales: £161m

Life Science£1.0bn (addressable)2016 sales: £57m

Ageing population

Global increase of middle class

Increase of chronic diseases

Fuel efficiency

Emissions legislation

Reduced total cost of ownership

Industrial Automation£5.7bn (addressable)2016 sales: £396m

Reduced energy consumption

Reduced total cost of ownership

Increased demand for smart solutions

Safety legislation

Resource scarcity

× Increasing use of renewables

× Oil price uncertainty

Energy£0.7bn (addressable)2016 sales: £63m

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£13.8bn total market£8.6bn addressable

New Product DevelopmentChris Prince, Global Engineering and New Product Development Director

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New Product DevelopmentCustomer–focused process = significant pipeline

Time to develop new products was years, now it’s months12

Plan Prepare Execute▶ 5-year strategy▶ Voice of Customer▶ Voice of Sales▶ Innovation events

▶ NPD process▶ PPM – Planned

Procedures Manual▶ Weekly reviews▶ APQP – Advanced

Product Quality Planning

The Internet of Things (IoT)

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The Internet of Things (IoT) and Industry 4.0A clear strategy for maximum commercial benefit

Act

Create Data

CommunicateAggregate

Analyse

What is IoT in Industrial Automation (IA) MarketsIoT / 4.0 Information Value Chain

Our strategy takes us to this pointNo plans to move beyond this

IoT/Industry 4.0 is an environment of connected devices sharing data to allow local analysis and decision making – a “cyber physical” system.

The goal is to optimise processes and the supply chain with “cyber physical” systems able to communicate and co-operate with each other in real time.

Potential applications in IA are:

▶ Integration of sensors into individual products, machines or entire factories

▶ Linking of sensors via software and controls to allow proactive monitoring of a

component, machine or factory

▶ Use of the cloud to hold this data to allow multiple users to access this and

control machine or factory performance in real time

The benefits to the operator include:

▶ Proactive replacement of worn parts before a breakdown

▶ Predictive maintenance

▶ Machine performance optimisation

▶ Cost reduction

▶ Supply chain optimisation

Sensors

Actuators

Network

Standards

Augmented Intelligence

AugmentedBehaviours

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The Internet of Things (IoT) and Industry 4.0A clear strategy for maximum commercial benefit

Our strategyISOLine cylinder with IoT/4.0 connectivity

Meet current customer demandAs a component supplier, we focus on delivering products to customer demand; they require sensor technology for condition monitoring and machine optimisation, and potentially the ability to link into their current or future connected systemsAll NPD activity includes use of sensor technology to allow condition or monitoring of performance and basic communication capability.

Develop connectivity platform technology to a position where we have the option to move rapidly if and when customer demand becomes a reality e.g. ▶ Valve Islands to be capable of enhanced connectivity for phase 2

development if required

Monitor customer demand and market as customer requirements change

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2

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Modern platforms with sensingValve Island – Phase 1 Electric ActuatorsAir Preparation – Excelon Plus FRLPneumatic Actuators – ISOLineCylinder

Communication capabilityValve Island Phase 2Valve Island I/O module

Solid state sensor switch with IO-Link

capability on ISOLineTM cylinder

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Example of productsUpgrading products with enhanced connectivity

Added to our proven platform, the best available Industrial Ethernet.

▶ These were the first. More will follow…

Valve Islands with Industrial Ethernet M/50 IO-Link Switch

IO-Link capable magnetically operated switchAble to remotely sensor the operating mode and condition of the actuator, using a IO-link

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Industrial Automation

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Industrial Automation at-a-glanceSignificant opportunity: focused strategy for success

Key brandsSegments

Revenue split by geography

With over 90 years experience in fluid & motion control technologies, we develop solutions for our customers in the machinery, food & beverage, printing and factory automation industries.

Key competitors

Factory AutomationAuto In-PlantPackagingMaterialsMechanicalFood & BeverageProcess AutomationRail

Products

2016 Global revenue of £396m

Pneumatic valves

Fluid control valves

Pneumatic actuators

Air preparation

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Product PhotoPneumatic fittings

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10%

29%

61%Asia Pacific

Americas

Europe

Applications at-a-glanceFactory Automation: Compressed air system In-Plant Automation: Tri-axis press

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Air PreparationFilters, regulates and lubricates air

ValvesDirect or control the flow of air by opening, closing, or partially obstructing various passageways.

ActuatorsUses the air to move a piston, which in turn moves a mechanism or system

Applications at-a-glance – Food & Beverage

Air preparation equipment

Valve islands

Pressure switch & sensors

Stainless steel products

Cooling valves40 bar blowing blocks

Air recovery products Cylinders for

filling valves

Pneumatic stretch actuators

Rotary stretch blow moulding Filling

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Valves

IMI Norgren Express is growing in all regionsDigital marketing is at the centre

21 21

Energy

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Energy at-a-glanceReliability in the harshest environments

Applications

Solenoid Valves

Pressure & Flow Control

Partial Stroke Testing

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Setting the standard for safety and reliability, we offer a comprehensive range of world-class products which deliver precision control in even the harshest environments.

Upstream

Midstream

Downstream & Chemical

Other (inc. PowerGen)

Products

Key brands

Key competitors

IMI Maxseal ICO4-PST(Smart

Solenoid)

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Revenue split by geography2016 Global revenue of £63m

25%

7%

68% Asia Pacific

Americas

Europe

Pressure & flow control

ICO4-PST

Solenoid valves

Applications at-a-glanceProducts for extreme environments

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Hydraulic valvesCustom solutions

Redundant valve manifolds

Deluge systems

Three stage filtration

Pilot operatedvalves

Rail

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Rail at-a-glanceRising urban populations will drive rail investment

Sectors

Air dryer

Mirror control

Water management

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For over 30 years, we have delivered robust, reliable and bespoke solutions to the rail sector, improving safety, reliability and life cycle costs across the world’s most challenging physical environments.

Urban transportation

Regional & high speed

Freight

Products

Key brands

Key Competitors

Pantograph control

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37%

7%

56%Asia Pacific

Americas

Europe

Revenue split by geography2016 Global Revenue of £31m

Applications at-a-glanceRegional rail & high speed transport solutions

Mirror control systems

Horn control valves

Fire & smoke retardant tubing Pantograph

controls

Lightweight compression fitting

Pressure switches

Brass push-in fittings

Toilet and water control systems

Door systemsMain line compressor filtration & dryers

Step systems

Points control -Actuators & Control

Auto coupling controls & actuators

Pressure regulators

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Life Sciences

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Life Sciences at-a-glanceStrong competitive position in a growth market

Applications

Precision pumps

Precision solenoid valves

Precision integration

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Leveraging 35 years of application expertise, a global range of precision products and integration capabilities, we help OEM increase performance of their systems, enabling cutting edge devices that improve health and the environment.

ProductsKey brands

Key competitors

Precision regulators

Medical DevicesDiagnostic Instruments

Analytical Instruments

Biotechnology

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Revenue split by geography2016 Global revenue of £57m

12%

50%

38%

Asia Pacific

Americas

Europe

Life Sciences at-a-glanceA world of diverse applications

Medical DevicesDevices used for diagnosis, prevention, monitoring, treatment or alleviation of disease, injury or handicap.

Diagnostic Instrumentation Instrumentation providing laboratory tests demonstrating presence of physiologically significant substances in blood, urine, tissue, or body fluids, with application to the diagnosis or therapy of disease with results reported to the patient.

Analytical InstrumentationInstrumentation providing qualitative tests or quantitative measurements (for research, process control or commercial applications) of substances in industrial, academic, environmental monitoring or medical contexts.

BiotechnologyInstrumentation designed to understand and manipulate the building blocks of biology (DNA, RNA, proteins, lipids, metabolic components etc.).

16%

30%49%

5% 35%

31%

19%

15%DiagnosticAnalyticalMedicalBiotechnology

Addressable Market - £1bn

IMI Precision Engineering sales-£57m

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Typical diagnostic application Typical medical application

Applications at-a-glanceHelping optimise OEM system performance

Washing stationlaminated manifold

3-way media separated valves

Liquid dispenseNX3 syringe

pump

Liquid selection rotary valve

3-way media separated valves

Micro-litre dispenseneedle

Syringe

Anaesthetic agent vaporisation

FLATPROP/ MICROSOL

NIST/DISS portsNIST/DISS connection

Fresh gas mixingFLATPROP DA

Sensor calibrationFLEXISOL

PEEP controlCHIPPROP

High pressure regulation

HP regulator

Low pressure regulation

RM1

Anaesthesia gas flow control

FLATPROP DA

Drive gas control

FLATPROP EQP

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Outrunning the competitionWe give Precision Engineering a whole new meaning

Global collaboration wins leading analytical account▶ New product launch outperformed competition ▶ Americas, Europe and APAC global account management▶ Success leveraged to five opportunities

OEM co-development wins in Biotechnology▶ Integration capability with laminated manifolds key to success▶ Collaboration between USA and Switzerland technical centers▶ New win in high growth Biotech market

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Commercial Vehicle

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Commercial Vehicle at-a-glancePutting growth into high gear

Applications

Engine control

Transmission automation

Air suspension

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Safety and comfort

Our range of cab, chassis and powertrain solutions deliver fuel efficiency, emissions reduction and faster assembly times for the world’s leading commercial vehicle manufacturers.

Fuel efficiency, and emissions

Comfort, automation and reliability

Truck & Bus

ProductsKey brands

Key competitors

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Revenue split by geography2016 Global revenue of £161m

9%

36%55%

Asia Pacific

Americas

Europe

Commercial Vehicles at-a-glanceA world of diverse applications

Powertrain EngineHigh performance pneumatic and electric control using innovative valve and actuation technology for all current and future engine control requirements.

Powertrain TransmissionModular or standard version, our transmission products are built to be reliable, robust and reduce weight.Solutions providing pneumatic assistance on manual transmissions and high performance solenoid valve technology for automated manual transmission (AMT).

Chassis / CABBoth standard and customised pneumatic control solutions that comply with all regulatory requirements for use in primary and auxiliary applications. High performance, stackable solenoid valves have a single air supply when mounted in multi array, whilemanifolds reduce the overall weight and footprint.

41%

34%

6%5%

2%3%

9%

23%

25%

10%

12%

8%

3%

19%

Heavy Duty PowertrainHeavy Duty ChassisMedium Duty PowertrainMedium Duty ChassisOff-HighwaySUVMobile Pneumatics

Addressable Market - £1,178bn

IMI Precision Engineering sales-£179m

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Applications at-a-glanceRegional development, global technology

IMI Norgren CV35

Natural gas and diesel electric inlet throttle

Integrated cartridge UTHV

Compact trailer hand brake valve

Americas/Europe

Seat controls

Powertrain Chassis

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GROW

Fix – Focus – GrowMoving to growth phase, focusing on our customers

FIX

FOCUS

Continue Lean journey and continuous improvement initiatives

FIX8 to drive operational excellence.

Improve execution (Policy Deployment).

Transform our supply chain through projectJanus to optimise our global business model.

Develop and launch great new products supported by new marketing campaign (M5).

Build an agile vertical organisation focused on customers.

Leverage & expand IMI Norgren Express channel to market, with a new website and app (digital transformation).

Create a growth culture &passion for IMI Precision Engineering.

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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.