IMI Critical Engineering is a world-leading provider of flow control solutions that enable vital energy and process industries to operate safely, cleanly, reliably and more efficiently.
During 2016, we significantly enhanced our Value Engineering skills and capability and won new orders totalling £80m as a direct result of our new improved levels of competitiveness.
Despite the tough market conditions, these new orders were secured at margin levels in line with our historic average while still delivering, on average, a 15% cost reduction for our customers. Value Engineering, which covers all aspects of design and manufacture, systematically reviews every aspect of a product and its production process to make it more efficient and cost effective, without affecting product functionality. As a result, we are able to deliver cost competitive solutions to our customers while still preserving our margins. The use of Value Engineering has also enabled us to access a number of new lower-priced markets with our world-class valve technologies at now acceptable margins. The contract wins Value Engineering has helped us to secure include:
- a £5.6m order to supply valves and attemperators, which control heat and steam to NEM Energy B.V. – a world leading supplier of heat recovery steam generators to the power generation sector;
- a £15m contract for a semi-severe choke valve for installation in a large Middle East oil company's gas development, which will extract gas from one of the world's biggest sour carbonate gas reservoirs for use in power generation and the chemical industry; and
- a £15m contract to supply a High Integrity Pressure Protection System for installation in the Middle East which will be used to protect a pipeline and process plant from the danger of over pressure and also to reduce gas emissions into the atmosphere.
£651m (2015: £631m)
£81.8m (2015: £93.1m)
- Value Engineering initiative helped to secure £80m of new orders
- Introduced 23 new products
- Rationalisation programme delivered on-time and on-budget with £12m profit benefit
- On-time and on-budget ERP implementation at four sites
- Increased average lean score to 62%
- Successful consolidation of three sites into new world-class facility in China
- Sale of loss-making Italian service business
Full year order intake at £614m (2015: £619m) was 11% lower on an organic basis, after adjusting for disposals and exchange rate movements. In the second half, order intake was 7% below the same period in 2015. In the year, as predicted, new construction Oil & Gas intake was 13% lower resulting from reduced LNG orders, following the peak in new project activity in 2015. Significant improvements were evident in both midstream, where a large Kazakhstan order was booked in the year, and in HIPPS, where a £15m order was booked in the second half. New construction Fossil Power orders were 23% lower due to reduced activity levels, particularly in the Middle East and Asia. Significant orders were also awarded in Petrochemical where full year order input was 2% higher, including a strong performance in the first half of the year.
Aftermarket orders were 6% lower when compared to 2015 with a return to 2015 levels in the second half of the year. In the full year, Oil & Gas was 11% lower reflecting reduced parts activity in the upstream sector which offset good growth in our downstream activities.
Lower levels of spend, particularly in North America, resulted in a 13% reduction in Fossil Power while Nuclear Aftermarket increased 36%, reflecting a substantial Korean order in the fourth quarter.
After adjusting for £77m of exchange rate benefit and £6m from prior year disposals, revenues of £651m (2015: £631m) were 7% lower on an organic basis and 3% higher on a reported basis. Segmental operating profit of £82m (2015: £93m) was 12% lower on a reported basis and
24% lower on an organic basis. Reflecting the impact of lower volumes, margins were 12.6% against 14.8% in 2015.
The division's Value Engineering initiative continued to have a significant positive impact and contributed to £80m of new bookings in an increasingly competitive market environment. Value Engineering and improved project management activities helped deliver a year-end order
book of £486m at broadly equivalent margins to the prior year. Lean scores also improved significantly to 62% against 56% at the year-end in 2015.
Based on the current order book and market outlook, we expect first half organic revenues to reflect a similar percentage reduction to the first half of 2016 with margins broadly similar
to the first half of last year. Results for the full year are expected to include a second half bias reflecting the timing of restructuring benefits and normal trading seasonality.
PowerWe are the world leading supplier of engineered to order turbine bypass valves for critical applications in conventional and nuclear power plants – helping to provide the safest, most reliable and efficient power generation.
2016 Revenue: £280m
Oil & gas We supply anti-surge valve and actuator systems to the world's largest LNG compression facilities. Our systems are capable of ultrafast response to maximise LNG production while protecting the critical process equipment.
2016 Revenue: £187m
Petrochemical We design and manufacture integrated flow control systems for critical applications in Fluid Catalytic Cracking. We also supply bespoke valves into the ethylene, polypropylene and delayed coking production processes.
2016 Revenue: £98m
Actuation We focus on the design and production of complete actuation systems to operate industrial valves for the most demanding applications and processes in terms of forces, speed and accuracy.
2016 Revenue: £27m
Our product brands
Established over 135 years ago, based in Mannheim, Germany IMI Bopp & Reuther is a highly regarded control valve business designing a wide range of valves making plants and processes safer and more efficient.
Presenting an unrivalled portfolio of technologies, including Drag®, BTG, ABJ® and technology acquired from Sulzer®, to meet extreme pressure and temperature control needs.
Operating in the Nuclear sector for over 50 years, a dedicated supply chain provides control valve, isolation and other services to meet todays aggressive refuel outages.
One of the world’s leading designers and manufacturers of silencer technologies within custom-designed products, which are engineered for a lifetime of service.
A key supplier of butterfly isolation valves to the Oil & Gas, Sugar, Ethanol Production and Water Treatment process industries throughout Brazil and South America.
IMI Newman Hattersley has proven technologies spanning over 60 years, including bellows sealed globe, ball and butterfly valves, meeting the high demands of next-generation nuclear reactors.
An international leader in the design and manufacture of triple eccentric metal seated butterfly valves, specialising in refining processes and cryogenic valves for LNG.
A world leader in slide, gate, goggle and through conduit valves, actuation and control units, specialising in Fluid Catalytic Conversion (FCC) applications.
A manufacturer of high integrity special fasteners (bolts, set screws, stud bolts, nuts etc.) for critical applications in hostile environments such as offshore, subsea and nuclear.
Providing control solutions for actuation in critical applications, especially where reliability and performance are vital for process efficiency, plant safety and integrity.
100 years of experience in the design and manufacture of butterfly and gate valves and blast furnace valves for the Iron & Steel, Power, and Petrochemical industries.
High integrity valves for faultless performance in extreme applications, with technology developed in the Naval Marine industry for nuclear submarines.
A leader in the Oil & Gas, LNG, Petrochemical and shipbuilding industries, producing a range of gate, globe, top & side entry ball valves.
IMI Zimmermann & Jansen services very high temperature applications with slide, gate and goggle valves as well as heading and unheading devices for delayed coker processes.