capital markets presentation accelerating growth the...
TRANSCRIPT
Capital Markets Presentation
Accelerating Growth
The long term drivers
2 October 2013
These capital markets day materials include forward-looking content with
respect to the markets in which the Group operates. Such content may be
affected by a number of risks and uncertainties that can cause results and
developments to differ materially from those currently anticipated. IMI
undertakes no obligation to update forward-looking content. Market share
information is approximate and based on certain market niches and
applications where IMI is active.
Disclaimer
2
Welcome and Introduction
Martin Lamb
Chief Executive, IMI plc
Strategic convergence
Focusing on the ‘sweetspot’
• Shared progress through
Capital Markets series
over three years
• Drive ‘sweetspot’
convergence to 75% by
2017
October 2011 – Fluid Technologies
October 2012 – Niche Leadership
Commercial Vehicle
Life Sciences Food & Beverage
Rail Sector Energy
Sector
LNG
Nuclear
Fossil
Petrochem & Refin
Iron & Steel
Hydronic Conditioning
Hydronic Balancing
TRV's
Variety, Health & Wellness
CDD Opps Efficiency
Frozen
Aftermarket Foodservice
0%
5%
10%
15%
October 2013 – Growth Drivers
• Opportunities arising from mega-
trends
• Understanding of engineering
‘need’
• Derivation of technology roadmap
Key messages
• Mega-trends will have a profound impact on our
customers and end markets
• Prime position to benefit based on market
positioning and technologies
• Technology roadmaps in place
…… and brimming!
• Pathway to higher returns clear cut
……execution is key
Welcome & Introduction Martin Lamb
Long term growth drivers Roy Twite
Mega-trend driven growth opportunities
- LNG: New growth opportunities Rob Campbell
- Petrochemical: Positive impact of shale gas Metin Gerceker
- Commercial Vehicles: Tomorrow’s truck Mark Sealy
Break for refreshments
Mega-trend driven growth opportunities
- Life Sciences: Healthcare of the future Robert Guerra
- Indoor Climate: Smart buildings Stefan Seitz
- Beverage: Restaurant of the future Mike Coombes
Sweetspot development conclusions Martin Lamb
Questions and Answers Executive Directors
Refreshments
Agenda
Long Term Growth Drivers
Roy Twite
Executive Director
Growth drivers – agenda
1. Major global trends
2. Creating engineering requirements
3. Driving IMI’s technology road map
Growth drivers – mega-trends
long term sustainable global
Climate change
Resource scarcity
Urbanisation
Ageing population
Climate change
“From 1990 to 2030 greenhouse
gases are expected to increase
by between 25% to 90%”
Source: Frost & Sullivan
Climate change
“Markets for low-carbon energy
products are likely to be worth
at least $500bn per year by 2050”
Source: Frost & Sullivan
Resource scarcity
“A 40% increase in energy
demand is forecast by 2030”
Source: Frost & Sullivan
Resource scarcity
“An additional $26trn of investment
required to support
increasing energy demands”
Source: Frost & Sullivan
+ 50 GW
Resource scarcity
“Shale gas reserves are expected
to make the US energy independent
by 2020”
Source: Frost & Sullivan
Urbanisation
“Between 2009 & 2050, urban population
will double to 6.4 billion people”
Source: Frost & Sullivan
Ageing population
“Between 2000 and 2050
the proportion of people over 60
will double from 11% to 22%”
Source: Frost & Sullivan
Ageing population
“Two-thirds of healthcare
spending goes on people
over 65 years old”
Source: Frost & Sullivan
Mega-trends to IMI technology roadmap
Understand the
mega-trends and
sub-trends they
drive
Understand the
customer‘s
engineering
requirements
Understand how
that translates into
new technology
developments
Our niches
Commercial Vehicle
Life Sciences Food &
Beverage
Rail Sector Energy
Sector
LNG
Nuclear
Fossil
Petrochem & Refin
Iron & Steel
Hydronic Conditioning
Hydronic Balancing
TRV's
Variety, Health & Wellness
CDD Opps Efficiency
Frozen
Aftermarket Foodservice
0%
5%
10%
15%
Future CAGR
Leadership Threshold
Leadership position
Niche leadership – LNG
The Niche : Severe Service application
valves & actuation into LNG plants
Growth CAGR 2012-2017
Industry growth
Source: IEA, Douglas
Westwood
6 - 8%
Niche growth 6 - 8%
Incremental revenue
growth opportunities 0 - 2%
Niche Size c.£210m
IMI Share % <10 10-20 20-30 >30
Market
Position 1
Key
Competitors
Koso, PBVS, Severn Glocon,
Vanessa (Tyco)
Key
Customers
Bechtel, Chevron, JGC,
Petronas, Shell, Woodside
Source: IMI estimates
Backing winners
KAM – Choosing winning :-
• End market drivers
• Customers
• Projects
Smart Choices……
• Dragons Den/Shark Tank
• Fit with strategy
• Value proposition
• Competitive position
Fluid Power
Dragons Den
Prioritising projects
Climate change
Climate change – implications
Climate change
Move to combined cycle
gas in powergen
Nuclear still important to
China and India
Power plant efficiency
Less flaring
Commercial Vehicle fuel
efficiency legislation
Energy efficiency in
buildings
TRENDS ENGINEERING
REQUIREMENTS
Control of huge
pressure drops
Higher temperature
materials
Safety retrofits required
Waste Heat Recovery
New refrigerants
More precise flow
control
Pressure protection
systems
Move away from harmful
refrigerants
Climate change – technology roadmap
Commercial
Vehicle valve –
Euro VI
New TRV with
Flow Control
Launched Year 1 Year 2 Year 3 +
Commercial
Vehicle – waste
heat recovery
Range of energy
efficient beverage
coolers
Nuclear steam
control valves
and actuators
Terminal unit
balancing &
control valves
Optimised
nuclear strainers
Nuclear
containment
venting systems
Analytical
chromatography
valves for gas
analysis
Valves for small
nuclear reactors
Zero leakage
seals / fugitive
emissions
monitoring
Smart Valve and
Actuator
District Energy
Products
Commercial
Vehicles - CNG
Beverage Indoor Climate Fluid Power Severe Service
2018 engine (US) 2006 engine (Eu3)
Climate change – truck engines
€50 per truck €900 per truck IMI opportunity:
Resource Scarcity
Resource scarcity – implications
Floating platforms –
FPSOs and FLNG
Fuel & energy efficiency
legislation
Peak load → cycling
Gas transportation / LNG
More extreme extraction
e.g. deep sub sea
TRENDS
Higher pressure valve
sealing
Lower power
requirements
Smaller envelope,
lighter weight
cryogenic valves
Faster response
compressor
control valves
Lower noise
requirements
Better control
Resource scarcity
Remote locations
ENGINEERING
REQUIREMENTS
Resource scarcity – technology roadmap
Redundant Valve
Manifold for ESD
Ball valves for oil
& gas 1000 bar
Low power valves
for shale gas
Launched Year 1 Year 2 Year 3 +
Partial stroke
solenoid valves
¼ turn actuators
for oil & gas
Valves optimised
for floating
platforms
Small nuclear
reactors
CV – Waste Heat
Recovery
Commercial
Vehicles - CNG
TA Fusion Control
Valve range
Automated
manual
transmissions
Sub-sea solenoid
valves
Customised
valves for Catofin
HIPPS control
system for
upstream Oil &
Gas
Optimised nuclear
strainers
Rapid response
positioner
technology
Optimised valves
for Catofin and
FCC processes
Sub-sea valves
Localised control
capability
Sub-sea actuators
Terminal unit
balancing &
control valves
Smart Valve and
Actuator
District Energy
Products
Beverage Indoor Climate Fluid Power Severe Service
Dehydrogenation Cracking
Resource scarcity – polymers
IMI opportunity: £3m per install Up to £18m per install
Urbanisation
Urbanisation
Urbanisation – implications
Increasing consumer
demands
Increased demand for
power, energy efficient
buildings
Increasing freight
transportation
Increased pollution from
transportation
Increased demand for
materials
Pressure on space
TRENDS
More precise flow
control
Lower weights
& energy efficiency
More dispense variety
More compact solutions
Increased demand for
mass transit
EGR and SCR
Gas to chemicals
Microdosing
More reliability,
faster access
ENGINEERING
REQUIREMENTS
Urbanisation - technology roadmap
Launched Year 1 Year 2 Year 3 +
Blend in cup
smoothie
dispenser
Batch carbonator
for organic sodas
Tea dispensers
Automated
Beverage
Dispenser
Residential
carbonated water
dispenser
CV– Bus HVAC
valves
Train door control
systems
Rail air dryer
systems
CNG valves and
regulators
Emissions control
for off-highway
vehicles
Balancing &
control calve
range
New TRV with
flow control
Terminal unit
balancing &
control valves
Smart valves and
actuators
District energy
products
Batch carbonator
for organic sodas
Tea dispensers Residential
carbonated water
dispenser
Beverage Indoor Climate Fluid Power Severe Service
Urbanisation – evolving buildings
HVAC System 2005 • Balancing and differential pressure control valves
• Basic terminal valves
Smart HVAC System 2017 • Balancing & control valves
• Smart valves & actuators
• Full terminal valve offer
• Pressurisation and water quality portfolio
• Connectivity and measurement solution
£350k
£1.5m
Ageing population
Ageing population – implications
Out of hospital
treatment
More frequent and
sophisticated testing
Healthier lifestyles,
drinks
Prevention vs treatment
Increased demand for
healthcare
Ever greater regulatory
burdens
Shortages of skilled
clinical staff
TRENDS
Ease of use, robustness
Smaller, lighter
Reduce sample and reagent
size, micro dosing
Reduced testing cycle time
Increased safety &
redundancy in systems
Increased automation
Ageing population
Increasing patient
expectations
Freshness, pulp dispense
Lower Power
ENGINEERING
REQUIREMENTS
Ageing population - technology roadmap
High flow
proportional valve
Miniature inline
syringe / piston
pumps
Miniature media
separated valves
Launched Year 1 Year 2 Year 3 +
Nanoliter (nl)
dispense/dosing
technologies
Electronic
pressure & flow
Controllers
Chromatography
multiport valves &
fittings
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Configurable
syringe pump
technology
DC & closed- looped
intelligent pumps
Laminated
manifold
technology
Micro
proportional
valves
Separation
technology (gas
& liquid)
Proportional
valves for liquids
Condition
monitoring &
dispense
confirmation
Disposables &
consumables
Beverage Indoor Climate Fluid Power Severe Service
2013 portable ventilator 2003 portable ventilator
Ageing population – respiratory care
IMI opportunity = £250/device
IMI opportunity = £200/device
.
Weight:
0.5KG
Weight:
6.5 KG
IMI Group technology roadmap
Launched Year 1 Year 2 Year 3 +
Commercial
Vehicle valve –
Euro VI
New TRV with
Flow Control
Commercial
Vehicle – waste
heat recovery
Range of energy
efficient beverage
coolers
Nuclear steam
control valves
and actuators
Terminal unit
balancing &
control valves
Optimised
nuclear strainers
Nuclear
containment
venting systems
Analytical
chromatography
valves for gas
analysis
Valves for small
nuclear reactors
Zero leakage
seals / fugitive
emissions
monitoring
Smart Valve and
Actuator
District Energy
Products
Commercial
Vehicles - CNG
Redundant Valve
Manifold for ESD
Ball valves for oil
& gas 1000 bar
Low power valves
for shale gas
Partial stroke
solenoid valves
¼ turn actuators
for oil & gas
Valves optimised
for floating
platforms
Small nuclear
reactors
CV – Waste Heat
Recovery
Commercial
Vehicles - CNG
TA Fusion Control
Valve range
Automated
manual
transmissions
Subsea solenoid
valves
Customised
valves for Catofin
HIPPS control
system for
upstream Oil &
Gas
Optimised nuclear
strainers
Rapid response
positioner
technology
Optimised valves
for Catofin and
FCC processes
Sub-sea valves
Localised control
capability
Sub-sea actuators
Terminal unit
balancing &
control valves
Smart Valve and
Actuator
District Energy
Products
Blend in cup
smoothie
dispenser
Batch carbonator
for organic sodas
Tea dispensers
Automated
Beverage
Dispenser
Residential
carbonated water
dispenser
CV– Bus HVAC
valves
Train door control
systems
Rail air dryer
systems
CNG valves and
regulators
Emissions control
for off-highway
vehicles
Balancing &
Control Valve
range
New TRV with
Flow Control
Terminal unit
balancing &
control valves
Smart Valves
and Actuators
District Energy
Products
Laminated
manifold
technology
High flow
proportional valve
Miniature inline
syringe / piston
pumps
Miniature media
separated valves
Nanoliter (nl)
dispense/dosing
technologies
Electronic
pressure & flow
Controllers
Chromatography
multiport valves &
fittings
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Configurable
syringe pump
technology
DC & closed- looped
intelligent pumps
Laminated
manifold
technology
Micro
proportional
valves
Separation
technology (gas
& liquid)
Proportional
valves for liquids
Condition
monitoring &
dispense
confirmation
Disposables &
consumables
Beverage Indoor Climate Fluid Power Severe Service
Filling the technology gaps
• Some technology needs will be met via:
• Acquisition, licencing, joint ventures
• Potential adjacent markets include:
- Sub-sea valves and actuation
- Complex controls and electronics
- Sensors
- Specialist filtration
LNG
Nuclear
Fossil
Petrochem
Iron & Steel
Commercial Vehicle
Life Sciences
Food & Beverage
Rail
Energy
Hydronic Balancing
Hydronic Conditioning
TRVs
Variety, Engagement,Health & WellnessOperator Efficiency
Frozen
Aftermarket Parts
Group technology roadmap impact
Adjacencies
2012
17 Niches
2017
c.20 Niches
• Underlying growth in niche
markets 5-7%
• c.£400m of revenue coming
from new products in 2017
• Incremental growth from
new products 2-3%
• Opportunities to develop
leadership positions in
adjacent niches through
acquisition
Mega-trend driven growth opportunities
• LNG
New growth opportunities
• Petrochemical
Positive impact of shale gas
• Commercial Vehicles
Tomorrow’s truck
Mark Sealy
Metin
Gerceker
Rob Campbell
• Life Sciences
Healthcare of the future
• Indoor Climate
Smart buildings
• Beverage
Restaurant of the future
Mike Coombes
Robert Guerra
Stefan Seitz
Mega-trend driven growth opportunities
LNG
New growth opportunities Rob Campbell
Sales Director, Northern Europe
Niche leadership – LNG
The Niche : Severe Service application
valves & actuation into LNG plants
Growth CAGR 2012-2017
Industry growth
Source: IEA, Douglas
Westwood
6 - 8%
Niche growth 6 - 8%
Incremental revenue
growth opportunities 0 - 2%
Niche Size c.£210m
IMI Share % <10 10-20 20-30 >30
Market
Position 1
Key
Competitors
Koso, PBVS, Severn Glocon,
Vanessa (Tyco)
Key
Customers
Bechtel, Chevron, JGC,
Petronas, Shell, Woodside
Source: IMI estimates
Ageing population
Urbanisation
Climate change
Resource scarcity
Mega-trends – driving growth in LNG
Massive
exploration – e.g.
Mozambique
Increased safety
standards
More economical
and flexible →
Floating LNG
Abundant US shale
gas
Economic fuel
switch
Nuclear → Gas
New solenoid
valves for ESD
Electric & sub sea
actuation
More compact, light
weight valves for
FLNG
Sub sea anti surge
Actuation control
and precision
HIPPS
Process expertise to
support EPC’s
Mega-trends IMI opportunity Sub-trends
Environmental
legislation
Increased demand
Coal → Gas
powergen
Increased vendor
collaboration
Ball valves for oil
& gas <1000bar
Launched Year 1 Year 2 Year 3 +
Partial stroke
solenoid valves
¼ turn actuators
for oil & gas Floating LNG
valves
Commercial
Vehicles - CNG
Harnessing the growth opportunity
Fast Trak / Quick
Trak
Redundant Valve
Manifold for ESD
Safety Integrity
Level 2 & 3
LNG valves for
marine engines
Fugitive
emissions
monitoring
Optimised valves
for Catofin & FCC
Subsea LNG
valves
Optimised valves
for Floating
Platforms
Support global
engineering for
O&G Majors
Recent successes in LNG
Recent LNG projects awarded:
Australia Pacific LNG 9mtpa
Gladstone LNG 3.5mtpa
Ichthys LNG 10mtpa
Sabine Pass 1 & 2 LNG 10mtpa
Prelude (Shell) FLNG 3.6mtpa
PNG Papua New Guinea 6.9mtpa
Approx. £85m in value
Forthcoming LNG projects
LNG projects pipeline
Gorgon 4 (Australia) 2014
Yuedong LNG (China) 2014
Mozambique LNG 2014
LNG Carriers S1015-S1017 2014
Petronas (Malaysia) – FLNG 2014
Browse (Australia) now FLNG 2015
India H-Gas LNG gateway 2015
Yamal (Russia) 2015
Cove Point (US) 2013
Sabine Pass 2 (US) 2014
Kitimat (Canada) 2014
Freeport (US) 2015
Lake Charles (US) 2017
The opportunity
is c.£160m
Floating LNG
Why Floating LNG?
• Addresses environmental
constraints
• More economical
• Can be relocated
• More suitable for small gas
fields
Floating LNG Projects
• Shell Prelude
• Browse, Australia
• Petronas (Malaysia)
New FLNG designs – meeting needs
Design for
• lightweight
• streamlined castings
• DRAG for low noise characteristic
Designs validated by our Valve Doctors and flow capacity and stress analysis
using CFD and FEA
Original design New design CFD studies
Floating example – Prelude
Prelude – world’s first FLNG
• Many valve packages (to date, design not
finalised)
• Need to be approved/certified by Shell &
Technip
• IMI has won 75% of all packages for ball and
butterfly isolations valves
GAS TREATMENT
(Sweetening; De-Watering
etc.)
Tri Eccentric Butterfly
Trunnion Mounted Ball
Valves
LIQUEFACTION
(Cryogenic Process)
Tri Eccentric Butterfly
Trunnion Mounted Ball
Anti surge compressor valves COOLING SYSTEM
Butterfly
FIRE FIGHTING
Butterfly UL 1091
PROCESS VALVE
Top Entry Ball Valve
STEAM PACKAGE
Unique to FLNG
Other growth opportunities in LNG
• Noise – manned floating platforms
• Lightweight but maintain CV (capacity)
• Fast response, precise control
Summary
• The mega-trends are driving growth in LNG of 6-8%
• Sub-trend towards Floating
• Terminal process reversal in US
• Niche leadership in Severe Service valves in LNG is captured through
• Valve Doctor & engineering expertise
• Design Partnership – Key LNG & EPC players
• Surge protection
• Delivered by developing technology
• Actuation – speed of response, precise control
• Noise attenuation
• Lightweight maintaining capacity
LNG Opportunity
Petrochemical
Positive impact of shale gas Metin Gerceker
Managing Director, Zimmermann & Jansen
Niche Leadership – Petrochemical
The Niche: Severe service in several key applications;
Delayed Coking (DC), Fluid Catalytic Cracking (FCC),
Ethylene/Propylene (Catofin) and Purified Terephthalic Acid
(PTA)
Niche Size c.£180m
IMI Share % <10 10-
20 20-30 >30
Market Position 1
Key
Competitors
Delta Valve (both Curtiss
Wright), Poyam,
Tapco/Enpro
Key Customers
ExxonMobil, Lukoil,
Petrobras, Sinopec,
Statoil, UOP
Growth CAGR 2012-2017
Industry growth
Source; Global Data
12, Oil & Gas
Journal
2 - 4%
Niche growth 2 - 4%
Incremental revenue
growth opportunities 3 - 5%
Source: IMI estimates
Ageing population
Urbanisation
Climate change
Resource scarcity
Mega-trends – driving growth in Petrochemical
OPEC countries
– aim to add
more value to
resources
Shale & LNG
demand reduced
gas costs
Requirement for
new catofin
plants
High temperatures
FCC
Duplicated safety
valve systems
Fracking -
injection
New generation
plants in ME
Highly corrosive
materials
DC
Mega-trends IMI opportunity Sub-trends
Increased
demand for
plastics
US investing in
new petrochem
plant
Increased vendor
collaboration
Launched Year 1 Year 2 Year 3 +
Slide gate valves
Harnessing the growth opportunity
Butterfly valves
Goggle valves
Through conduit
valves
Double disc
through conduit
Variable orifice
valves
Hydraulic control
for DC valves
Hydraulic
actuation for
Catofin valves
Combined
control/isolation
valves for FCC
New ball valves
for processes
Partial stroking
solenoid valves
Fugitive
emissions
monitoring
Support global
engineering for
O&G majors
Every product is
engineered to order
Recent successes in Petrochemical
Recent Petrochemical projects awarded:
Enterprise Catofin® (US)
Reliance PTA (India)
PDVSA (Venezuela)
TANEKO (Russia)
Wood River (US)
TongYi (China)
Hengli Petrochemical (Dalian, China – PTA)
Project value
c.£55m
Forthcoming Petrochemical projects
Selected Petrochem projects pipeline
Catofin® is the process license owned by Lumus (CB&I)
Atyrau Kazakhstan Refinery PetroPeru Talara Coking
EIL – BPCL Kochi Refinery, India FCC & Coker
SK Gas S. Korea Catofin®
KPI Kazakhstan Catofin®
GS Trakreer Refinery, India FCC
Petrologistics/JGC Catofin®
Shangdong II China Catofin®
PDVSA Venezuela FCC
Project value c.£90m
Winning in Petrochemical
Catofin dehydrogenation
• Converts feedstock (propane) into plastic
(propylene) for commercial use
• Severe service valves:
− Air inlet and outlet
− Steam purge
− Hydrocarbon inlet/outlet
− Evacuating
• Up to £18m per plant
Delayed Coker Units
• Thermal cracking to produce hydrocarbon coke
• Severe service valves:
− Butterfly isolation
− Slide valves for unheading
− Goggle valves
• Up to £5m per plant
Winning in Petrochemical
Fluid Catalytic Cracking
• Converts heavy gas oil into gasoline and
diesel
• Severe service valves:
− Sliding gate valves around the
fractionator (c50-60 tonnes)
− Goggle valves around precipitator
− Turbo expander butterfly valves
• Up to £3.5m per plant
Meeting the Severe Service valve needs
Unique needs of FCC & Delayed Coker
• Very high temperature – 750 to 1,650°C
• Extremely corrosive environment
• Maximum reliability – install for 25 year life
Delayed Coker – Severe Service
GDP growth leads to demand – e.g. Rosneft, Russia
Typical Coking plant
Double Disc Through Conduit
slide gate valves
& goggle valves
Catofin plant – Severe Service
• Air inlet & outlet valves
• Hydrocarbon inlet & outlet
valves
• Hydraulic actuators, control
system
Summary
• The mega-trends and sub-trends are driving growth in
Petrochemical of 2 – 4%%
• Niche leadership in Severe Service valves in
Petrochemical are captured through:
• Engineering know-how & expertise
• Bespoke solutions
• Proven track record of reliability over a large install
base
• Delivered by developing technology
• Optimised slide valves
• Design to feedstock requirements
Petrochemical Opportunity
Commercial Vehicles
Tomorrow’s truck
Mark Sealy
Global Technical Director CV Sector
Niche Leadership – Commercial Vehicle
The Niche; robust, precise pneumatic and fluids
control for heavy duty commercial vehicles –
engine valve control, transmission automation
and chassis cab applications
Niche Size c.£580m
IMI Share % <10 10-20 20-30 >30
Market Position 1 or 2
Key
Competitors
Bendix, Bosch, Pierburg,
Wabco
Key Customers
Scania, Volvo, ZF, MAN,
Cummins, Paccar, Daimler,
Ford, Eaton, Caterpillar
Growth CAGR 2012-2017
Industry growth
Source: LMC, Stark,
ATC
3 - 5%
Niche growth 4 - 6%
Incremental revenue
growth opportunities 1 - 2%
Source: IMI estimates
Ageing population
Urbanisation
Climate change
Resource scarcity
Mega-trends – driving growth in Commercial Vehicles
Freight efficiency
Abundant cheap
shale gas
Hybrid drives
Increased
mobility
Emissions
control legislation
Environmental
control <CO2
Improved fuel
consumption
Clean engine
development
Reduce rolling
resistance
CNG engines
Waste Heat
Recovery
Secondary
braking
After treatment
Battery cooling
Mega-trends IMI opportunity Sub-trends
Harnessing the growth opportunity
Effort / risk
Str
ate
gic
va
lue
Growth
Sustain
Amplify
Evaluate
New throttle
ISIS UTHV 2
Asia Trans
CNG/LNG
Water valves
Electric AIT
ZF, Eaton
Tyre inflate
Wastegate
Digital pair
Seat FormFit
Manifolds
ERHC
Prop
pneumatic
Axle mgmt Cab switches
Fuel
Mechanical
pneumatic
Air prep
Waste Heat
Recent successes
Norgren emissions technologies to address pollution and climate change
Electric
Throttle
Wastegate
Proportional
pneumatic
Purge air
Urea tank
heating
Increasing vehicle sophistication = more potential
74
2018 engine 2006 engine
Extending our technology into emerging markets
75
e.g. Level 4 emissions & secondary braking legislation in BRIC
Wastegate
control
Retarder & shift
assist
Gearbox
Interlock EGR control
The road to 2020 – CO2 reduction imperative
• US 2012 legislation requires 17% less CO2 for Class 8
trucks (for a freight-ton-mile) by 2018
• Europe to reduce greenhouse gases from the transport
sector by 20% between 2008 and 2030
Typical CO2 output
s
CO2 reduction – every aspect of fuel usage is examined
Every facet will
be improved
Exhaust
22%
Over 50% of the fuel is
wasted directly as heat
CO2 reduction – what it means by 2020
• 10 - 30% of commercial vehicles will have converted to natural gas
• Rankine cycle waste heat recovery will be deployed
• Advanced & active aerodynamics will be common
• Super single tyres will pervade with inflation management
• Auxiliary Power Units will be utilised to avoid idle time
• Automated Manual Transmissions with retarders will be prevalent
• Most city trucks will have some level of hybrid drive
• Fully electric vehicles will continue to slowly penetrate
• Fuel cells will remain a niche
Conversion from diesel to natural gas is accelerating
Natural gas presents several fluid control opportunities
Typical operating conditions • 350Kw engine > 100Kw waste heat > 30Kw can be recovered > 5% real life fuel saving
• 200g/sec flow rate, -40ºC to 300°C, 30 Bar Ethanol (vacuum sealed for life)
Waste Heat Recovery – a strategic new opportunity
We have made good progress in 12 months
• Market potential for valves in Europe and US > £100M
• 100% sweet spot convergence
• 4 OEM customer programmes > strategic co-developments
• 4 differentiated valve solutions > 3 significant patents
• Deep collaboration between Fluid Power & Severe Service
• Presently leading the valve field
Ethanol turbine by-pass
with de-superheating
Summary
• The mega-trends will continue to drive growth in the CV niche by 4 to 6%
• Niche leadership in CV is captured through
• Proven range of products that operate in extreme environments
(temperature & vibration, long life expectancy)
• Proven track record creating solutions for new applications
• Extension of products within global OEMs
• Technology development includes
• Electric inlet throttles
• Next generation digital pneumatics
• Natural gas
• Waste heat recovery
Commercial Vehicle opportunity
Life Sciences
Healthcare of the Future
Robert Guerra
President, Norgren Americas
Niche Leadership – Life Sciences
The Niche: providing application specific
solutions for the most critical precision fluidic
applications in medical devices, diagnostics
and analytical equipment.
Niche Size c.£520m
IMI Share % <10 10-20 20-30 >30
Market
Position 2-3 (market dependant)
Key
Competitors
Bürkert, Hamilton, Parker
Idex, Tecan
Key
Customers
GE Healthcare, Philips,
Abbott, Danaher, Illumina,
Mindray, Waters
Growth CAGR 2012-2017
Industry growth
Source: AMR
International
4 - 6%
Niche growth 4 - 6%
Incremental revenue
growth opportunities 2 - 4%
Source: IMI estimates
Mega-trends – driving growth in Life Sciences
Ageing population
Urbanisation
Climate change
Resource scarcity
Personalised
medicine
Prevention &
detection vs.
treatment
Rising costs of
healthcare
Point of care /
fast results
Food / drug /
environmental
concerns
Sub-trends Mega-trends
High flow
proportional
valves
Laminated
manifold
technology
Chromatography
multiport valves
Configurable
syringe pump
technology
Inline syringe
pumps
Electronic
pressure & flow
control
Gas & liquid
detectors
IMI opportunity
Analytical Flow Products (AFP) acquisition
Analytical Flow Products (AFP) acquisition
-A strategic fit for Life Sciences
Life Sciences technology roadmap
High flow
proportional valve
Miniature inline
syringe / piston
pumps
Miniature media
separated valves
Launched Year 1 Year 2 Year 3 +
Nanoliter (nl)
dispense/dosing
technologies
Electronic
pressure & flow
Controllers
Chromatography
multiport valves &
fittings
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Configurable
syringe pump
technology
DC & closed-
looped intelligent
pumps
Laminated
manifold
technology
Micro 6mm
solenoid valves
Analytical technologies’ impact on healthcare
Analytical technologies will impact the future of healthcare
• Drug discovery
• Pre-Symptomatic diagnostics
• Personalised therapy
• Pharmacogenomics
• Personalised medicine
Norgren opportunity
• Genomics-Microarray equipment
• Genomics-DNA amplification equipment
• Genomics-DNA sequencing equipment
• Chromatography
• Mass spectrometry
• Automated sample preparation
Life Sciences technology roadmap
High flow
proportional valve
Miniature inline
syringe / piston
pumps
Miniature media
separated valves
Launched Year 1 Year 2 Year 3 +
Nanoliter (nl)
dispense/dosing
technologies
Electronic
pressure & flow
Controllers
Chromatography
multiport valves &
fittings
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Configurable
syringe pump
technology
DC & closed-
looped intelligent
pumps
Laminated
manifold
technology
Micro 6mm
solenoid valves
Analytical technologies’ impact on healthcare
Norgren LMT for Genomic OEMs
Laminated Manifold Technology
(LMT) enables Genomic OEMs
the ability to accurately move
small samples and multiple
reagents at high speeds.
Benefits
• Ability to create complex fluid paths reduces
overall footprint/size
• Fewer leak paths increase reliability
• Fully assembled/tested sub assembly from
a single supplier mitigates OEM’s risk
Genomics /
Microarray
Ageing population
Laminated
Manifold
Technology
Life Sciences technology roadmap
High flow
proportional valve
Miniature inline
syringe / piston
pumps
Miniature media
separated valves
Launched Year 1 Year 2 Year 3 +
Nanoliter (nl)
dispense/dosing
technologies
Electronic
pressure & flow
Controllers
Chromatography
multiport valves &
fittings
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Configurable
syringe pump
technology
DC & closed-
looped intelligent
pumps
Laminated
manifold
technology
Micro 6mm
solenoid valves
Analytical technologies’ impact on healthcare
Norgren FAS solenoid valve technology for Genomic OEMs
Miniature Media Separated Solenoid
Valves. FAS solenoid valves help the
OEM reduce the overall footprint of their
instrument, use less reagents, and
improve the reliability and repeatability of
their analysis.
Benefits:
• Cartridge & manifold-mount valve designs
reduces the overall footprint
• Low power consumption reduces heat so
the components can be mounted close
together
• Highly repeatable valve performance is
required to control low flow liquids & gasses
Genomics /
Microarray
Ageing population
Miniature media
separated
valves
Case study – single cell genomics
Customer: » Leading single cell genomics manufacturer Trend: » Prevention vs. treatment, personalised medicine Opportunity: » Precision fluidic assembly for single cell genomics Competition: » SMC, Burkert, Idex Solution: » Multi-module pneumatic assembly to include multi-
layered manifold, ultra high accuracy electronic pressure controls, valves, actuators & FRLs
Advantage: » Core competency of delivering integrated and tested
solutions with pneumatic, design, engineering expertise
Key: » Product mix/speed of integration/co-collaborate on
solution/international product/KAM support
Genomics /
Microarray
Ageing population
Laminated
Manifold
Technology
Miniature Media
Separated
Valves
Case study – digital Polymerase Chain Reaction
Customer: » Leading digital Polymerase Chain Reaction manufacturer Trend: » Prevention vs. treatment, personalised medicine Opportunity: » Air-over liquid Multilayered manifold for Digital
Polymerase Chain Reaction (dPCR) Competition: » Parker, LEE, SMC Solution: » 5-layer acrylic manifold with 11-FAS Chipsol valves, 1
FAS MS valve, 1 FAS Flatprop and an array of sensors Advantage: » Core competency of delivering integrated and tested
solutions with precision valves and layered plastic manifolds
Key: » Large percentage of the bill of material, manifold
capabilities, assembly and testing capabilities
Genomics /
Microarray
Ageing population
Laminated
Manifold
Technology
Miniature Media
Separated
Valves
Summary
• The mega & sub-trends are driving growth in Life Sciences
of 4 - 6%
• Niche leadership in Life Sciences is captured through
• Providing application-specific solutions for the most
critical precision fluidic applications in medical,
analytical, and diagnostic markets
• Delivered by developing technology
• For precisely filtering, regulating, sensing, pumping
and controlling gasses and fluids
Life Sciences opportunity
Smart Buildings
Stefan Seitz
VP Business Development, TA Hydronics
Niche Leadership – Indoor Climate
European Balancing c.£170m
IMI Share % <10 10-20 20-30 >30
Market Position 1
Key Competitors Danfoss, Oventrop,
Key Customers
Ahlsell, Arup, Cordes &
Graefe, GDF Suez, Saint
Gobain, Skanska
GLOBAL CAGR 2012-2017
Industry growth Source: Comparable Heating &
Cooling Equipment,
Freedonia World HVAC
Equipment Study
2 – 4%
Niche growth 4 – 5%
Incremental
revenue growth
opportunities
5 – 6%
Hydronics
Hydronic Balancing, Hydronic Conditioning & Thermostatic Control
• Critical to the overall performance and energy consumption of HVAC system
• We are unique in our combined offer
Source: IMI estimates
Building’s evolution
Building
envelope
Building
controls
Building
performance
Smarter Building,
Eco-District
1st/2nd oil crisis, 1st Gulf War:
•Investment in Insulation
•Investment in nuclear Power Plants
1980 1990 2000 2010 2020
2nd Gulf War:
•Improvement of component efficiencies
•Efficient system management with BMS
End of Asia crisis => strong econ. growth
•Improvement of system efficiencies with integrated components
•Performance based Facility management
•Performance contracting
•Life cycle costs
“final” Oil crisis???
•Sustainable buildings and eco-cities
•De-central, regenerative energy generation
•“Plus” energy, 0 CO2 emission buildings
• all E-supply, E-storage, E-distribution and dissipation systems communicate via “smart grid”
Ageing population
Urbanisation
Climate change
Resource scarcity
Mega-trends – driving growth in Hydronics
From eco-efficient
buildings to eco-
districts
Flexible Buildings
District Energy to
grow 25%+
Comfort &
productivity
Focus shift to
“greening” existing
buildings
Emerging Markets
North America
HVAC System
communication
De-centralised
apartment sub-
systems
Hydronic conditioning
Measurement &
Diagnostics
Mega-trends IMI opportunity Sub-trends
“Smart Grids”
”Smart Buildings”
Flexibility in home
energy usage
(matching lifestyle)
Water Quality &
Saving
Home Automation
Potable Water
Pre Fab Systems
Speedier & easier
system install
“Fit & Forget” products
Indoor Climate technology roadmap
TA FUS1ON
Balancing &
Control Valve
range
Launched Year 1 Year 2 Year 3 +
District Energy
Portfolio
Next Generation
Braincube for
Pressurisation
(water quality)
USA Potable
Water Valve
Next Gen Air &
Dirt Separator
(Water Quality)
EcoEfficient De-
Gassing Unit
(water quality)
Equalizer Control
Valve (USA)
Terminal Unit
Balancing &
Control Valve
(heating &
cooling/emerging)
Potable Water
Portfolio
Water Quality
Portfolio
Home Automation
Next Generation
Thermostatic
Radiator Valve
Smart Valve &
Actuator
Apartment
prefab stations
(Heating &
Cooling)
TA SCOPE
upgrade
(measuring
device) Terminal Unit valve for
Emerging markets
“Fit & Forget”
TRV with Flow
Control
At the heart of what we do
When comparing a non balanced with a balanced system,
electrical pumping and energy costs can be significantly
reduced whilst enhancing comfort:
Indoor Climate projects proven energy savings:
• Hammarplast Consumer factory, Sweden (61%)
• Tianjin Saixiang Hotel, China (31%)
• Pfizer, France (31%)
• Citate Administrativa, Brazil (21%)
Energy Insights
At the heart of what we do
• In heating systems, the room temperature being
1°C too high costs 6% to 11% of the annual plant
energy consumption
• ICG Renovation Project: MOL, Hungary (27%
Energy saving)
• In cooling systems, the room temperature being
1°C too low costs 12% to 18% of the annual
cooling plant energy consumption
Energy Insights
Driving energy efficiency in buildings
• Small things can make a BIG difference
The use of accurate thermostatic radiator valves can provide energy savings of up to 28% compared to the use of
manual valves*
• Consideration of a single Thermostatic control valve (vs manual valve)
• Saving on consumption – oil (gas) 70 litres (m³) /yr
• Cost reduction 53 EUR /yr
• Payback 1 year
• CO2 reduction 168 kg /yr
(*) Source: University of Dresden Independent Study
Driving energy efficiency in buildings
• There are an estimated 600 million manual valves still used in Europe today.
• Example Europe: converting all manual to thermostatic control valves • Saving on consumption – oil (gas) 42 billion litres (m³) /yr
• Cost reduction 32 billion EUR /yr
• Payback 1 year
• CO2 reduction 100 million tons /yr
• This is an equivalent of 50 million cars with an annual mileage of 15,000 km with CO2 emissions in average of 133 g/km.
Winning in the Niche
• Occupancy from Sept 2013 (multi phase development)
• 6000 employees
• 7 buildings (inc a 22 storey tower)
• £1m opportunity for ICG
• Energy saving target of 30%
• LEED accreditation sought
• Proven results
BBVA HQ
Summary
• The Mega Trends are driving growth in Hydronics with the sub
trends creating specific opportunities
• Niche leadership in Hydronics is captured through
• Translating trends into customer value
• Global infrastructure
• Our Technology development delivers:
• Energy efficiency
• Comfort & reliability
• Building value
Hydronics Opportunity
Beverage Dispense
Restaurant of the Future
Mike Coombes
Commercial Director, North West Europe
IMI Cornelius
Niche leadership – Beverage
The Niche:
Foodservice operators are investing in new BEVERAGE dispensers that
will drive both incremental sales through variety; better for you choices
and increase profitability from store efficiencies
Niche V,E, H&W Opp Eff
Growth CAGR 2012-2017
Industry growth
1 - 3%
Niche growth 5 - 7% 9-11%
Incremental revenue growth opportunities
1 - 3% 4-6%
Niche V,E, H&W Op Eff
Niche Size c.£130m c.£40m
IMI Share % <10 10-20 20-30 >30
Market
Position 1
Key
Competitors Manitowoc, Lancer, Bunn
Key
Customers
McDonalds, YUM!,
Starbucks, Subway,
Coca-Cola, Pepsi,
Brita Vivreau, Grohe Source: IMI estimates
Ageing
population
Urbanisation
Climate change
Resource scarcity
Sub-trends
Life style Variety & Choices
Right sized Equipment
Energy Efficiency
Labour Savings
Wage increases
expected in emerging
markets by end of 2013
10.5%
$1,500 Annual cost of one square foot
of retail real estate in major
urban markets
$2bn Annual Energy bill for
McDonald's Restaurants globally
170,000 Ways to create the perfect
Starbucks drink
Impact Mega-trends
Mega-trends are impacting restaurants
Global restaurant market
Global restaurant industry will generate
$1.8 trillion revenue by end of 2015
Source: Euromonitor International
‒ Fast-food sector $240b in 2014, a 19% increase during
last 5 years
‒ QSR’s represent largest segment, with 71% of global
market value
‒ Competing for consumer footfall and up selling
opportunities
‒ QSR’s are creating a ‘destination’ for beverage
‒ McDonald’s beverage sales 22% of revenue
‒ Beverage represents a significant revenue and profit
opportunity
Beverages generate high profit potential
Source: Technomic
Gross margins 20% - 40% higher than food
Source: Euromonitor International
Beverages are central to
successful strategy
Beverages drive consumer
traffic throughout the day
Specialty beverages provide
incremental day part
opportunities
Variety above all
Refreshing over sweet driven by
healthier beverage choices
Tea is the next wave
hot and cold
0
50
100
150
200
250
300
350
400
450
500
Bre
akfa
st
Mo
rnin
g S
na
ck
Lun
ch
Afte
rnoo
n S
nack
Din
ner
Even
ing
Late
Nig
ht S
na
ck
Beverage day part growth opportunity
Global foodservice market trends for Beverage
Opportunities for IMI to grow in the Beverage niche
Mega-trends IMI opportunities Sub-trends
HFC-free gases
Health & Wellness
Miniaturisation
Emerging Markets
Fit for purpose
Automation
Social Media
Hot & cold combinations
Indulgence
Frozen
Variety
Fresh
Hand-crafted
Life style Variety &
Choice
Right sized Equipment
Energy Efficiency
Labour Savings
Ageing population
Urbanisation
Climate change
Resource scarcity
HFC free gases
Health & Wellness
Miniaturization
Emerging Markets
Fit for purpose
Automation
Social Media
Hot & cold combinations
Indulgence
Frozen
Variety
Fresh
Hand-crafted
Carbonating Variable
Carbonating In-Line
Merchandising LED
Merchandising Touch Screen
Cooling HFC-free
Cooling Remote Cooling Cooling
Rack Refrigeration
Valves Multi-flavor Valves
Valves Self Cleaning
Valves Miniature
Valves Microdosing
Merchandising Modular
Launched Year 1 Year 2 Year 3 +
Carbonating Batch Carbonation
Driving IMI’s beverage technology development
IMI opportunities Technology roadmap
Blending Ice Drink Blending
Creating new product development opportunities
Product roadmap
Launched Year 1 Year 2 Year 3 +
Blend in Cup smoothie dispenser
Batch Carbonator for organic sodas
Coffee Dispensers
High Density Tower Dispenser
Automated Beverage System Residential carbonated
water dispenser
Range of energy efficient beverage HFC
free coolers
Fountain Touch Screen
Digital Display Towers
Hot/Cold Tea Dispensers
Emerging Markets all in one Systems
Enhanced Water Dispensing
Multiple Beverage Fountain Dispense
Station
Self Serve Towers – Consumer Engagement
Key projects
Opportunity | A fully automated blend-in-cup blended ice drinks system for QSR
Technology Result Sub Trends to Customer Value
Rat io & b lending
t echno logy
Opt im ized va lves , pumps
and ac tua to rs f o r d i spense
accuracy
Rea l t ime, PC Con t ro l
sys tem
HFC- f ree re f r igera t ion
Clean- in -p lace [C IP ]
Helix blended ice drinks system
Right-sized equipment
~10% sma l le r i n f oo tp r in t
~50% more i ce capac i t y
Energy saving
~15% less energy consumpt ion ~20% reduct ion in p roduct was te ~50% reduct ion in r i nse wa te r
Labor savings
Crew touch sc reen ope ra t ion Speed o f se rv i ce – 3 d r inks pe r m inu te Clean- in -P lace sys tem f o r i ce maker
Life-style choice
Up to 14 con f igurab le i ced f ru i t & yogu r t smooth ies and f rappe ’s
Operator Value
Sign i f i cant p ro f i t oppor tun i t y – l ess than 1 yea r payback
Right-sized equipment
Dr ive th ru and f ron t coun te r
I nc reased b rand cho ice
Labor savings
I n tegra t ion wi th POS sys tem
6sec p rocess pe r d r ink
12 d r inks a t any one t ime
Labor sav ing o f $15 ,000 p rov ides po ten t ia l one yea r pay back
Operator Value
Sa les Up l i f t – f ewer ‘d r i ve o f f s ’
I nc reased va r ie ty and cho ice
Technology Result
Automated Cup F i l l
Pat te rn Recogn i t ion & Vis ion Sys tem
Sp lash P roo f S ink Des ign wi th mo t ion /Ac tuat ion mechan isms and p ro tec t ion
Automated Beverage System (ABS)
Sub Trends to Customer Value
Opportunity |Next generation fully automated beverage delivery system that can specifically for drive through QSR’s... in US markets drive through sales account for up to 70% of revenue
Right-sized equipment
Com pac t and l i g h t -we igh t
Eq u ipment des ig n c om p l imen ta ry t o c us t omer ope r a t i ng env i r onmen t
Labor savings
Con t ro l l ed ba t c h c a r bona t i on one d r i nk a t a t im e – c us t om ised
Easy access and c l ean
Life Style Choices
Un iq ue Beve r age m enu w i t h ab i l i t y t o c us tom ize t o c ons umer c ho i c e
T hea t re o f d i s pens e t o add c ons umer eng agement
Operator Value
Cr ea tes h i g he r va lue & h ig he r p r i c e po in t s
S ig n i f i c an t p r o f i t oppo r tun i t y – l e s s t han 1 yea r paybac k
Opportunity | To enable an operator to uniquely hand-craft and batch carbonate a variety of soda’s on a
compact footprint
Technology Result
Batch Carbonat ion
Paten ted ag i ta t ion
ca rbonat ion
techno logy
Ant i - f oaming
s i l i cone sea l /gaske t
des ign
Fas t p rocess ing
cyc les
– Ba t c h c a r bona ted
w i t h i n 36s ec s
Batch carbonator for hand-crafted sodas
Sub Trends to Customer Value
Summary
• The mega trends are driving growth in Beverage Dispense of
5% - 7%
• Sub trends creating specific growth opportunities with global
chains as well as with beverage brand owners.
• Niche leadership in Beverage Dispense is captured through
• Customer intimacy with beverage brand owners & key retailers
• Market leading position & extensive knowledge base
• Global and local presence support network
• Technology development includes
• Energy efficient equipment – HFC free
• Next generation valve technology – multi flavour
• Dispense solutions to enable beverage menu extension
Beverage Opportunity
Summary and
Conclusions
Martin Lamb
Driving sweetspot convergence
Disposal of Merchandising
2013 H1 sweetspot
Illustrative 2017 sweetspot
Supported by favourable mega-trends and
strong emerging markets growth
EM sales to increase from 24% to 35%
M&A • Strengthening of existing positions • Adoption of new adjacencies
60%
+3%
+4%
+4%
+4%
75%
Higher underlying market growth
sweetspot niches
Growth and market share gains
from new product development
Directed by technology roadmaps Supported by strong balance sheet On track
Directed by detailed technology roadmaps Supported by accelerated investment in new product development % NPD sales less than 3 years old to increase from 15% to 20%
Organic revenue growth 2 x GDP
Operating margins 20%
Post tax ROIC 20%
Key messages
• Mega-trends will have a profound impact on our
customers and end markets
• Prime position to benefit based on market
positioning and technologies
• Technology roadmaps in place
…… and brimming!
• Pathway to higher returns clear cut
……execution is key
Questions and Answers
Executive Directors