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Hydronic Engineering

IMI Hydronic Engineering is the leading global provider and recognised expert in hydronic distribution systems and room temperature control, with experience in more than 100,000 construction projects world-wide.

IMI Hydronic Engineering

To support our significant new product offering and our strengthened over-thecounter sales strategy, we have revitalised our sales and marketing activities within the division.

At the heart of our new approach is our sales team, who have dedicated roles and responsibilities tailored to meet the specific needs of our wholesale and project based customers to ensure that at all times an optimum customer experience is delivered. Feedback to date has been very positive, as evidenced by improved Net Promoter Scores ('NPS') which measure customers' satisfaction. In particular, NPS feedback indicates that 86% of our customers rank Hydronic Engineering as a 'true innovator'.

In addition to creating a dedicated specialist sales force to drive our new over-the-counter sales strategy, we have reviewed how best our products should be merchandised within wholesalers and new and attractive packaging has been created to maximise the profile of the product in crowded retail environments. To coincide with the development of our new product pipeline we have also significantly increased our digital marketing activities. Today, every new product launch has its own bespoke digital campaign which delivers far greater exposure for less cost and provides a more effective platform to showcase our product technologies and engage with our customers.

2016 Performance

Revenue
£290m (2015: £264m)

Operating profit
£51.9m (2015: £51.8m)


Key Achievements

  • 19% of revenue from products launched in the last three years
  • Two substantial over-the-counter sales contracts signed
  • Successful Product Development momentum building sustainable competitive advantage
  • Refurbishment of foundry in Germany significantly reduces scrap
  • Lean score increased to 76%

Performance

Revenues on a reported basis of £290m (2015: £264m) were 10% higher than 2015 and after adjusting for £30m of exchange rate benefit, were 1% lower on an organic basis. While warmer weather impacted the heating season in the division's largest European markets, revenues in that region were marginally higher than the previous year. Due to project delays, sales in China were significantly reduced in the first half before recovering with positive momentum in the final quarter of the year. North American sales reflected an overall increase of 6% in the year.

Segmental operating profit of £52m (2015: £52m) was equivalent on a reported basis and, after adjusting for £6m of exchange rate benefit, 10% lower on an organic basis. As expected, operating margins showed a second half seasonal improvement to 19.4% while full year margins at 17.9% (2015: 19.6%) were lower than the prior year reflecting the impact of lower volumes and the on-going investment in great new products and operational excellence.

New products launched in the last three years continued to have an important, positive impact on the results and generated £55m of sales in the year. Included in the 2016 product launches were a number of products specifically targeted at the development of the division's over-the-counter sales strategy, which resulted in two significant new agreements being signed in Europe.

These agreements, while having relatively modest impact on the 2016 results, are expected to underpin increased trading in future years. The previously announced entry into the actuator market, with TA-Slider, has received an excellent market reception and 2017 plans include further product launches.

The division's lean scores continued to improve and increased to 76% against 72% at year-end 2015. In the year, Hydronic Engineering's Polish operations, the Group's highest lean scoring plant, successfully launched the division's standard J D Edwards ERP system. This system is now providing increased efficiencies and forms the foundations for future ERP roll-outs across the division. Also in 2016, the division's largest manufacturing plant, in Germany, undertook a total refurbishment of its foundry facilities resulting in a significant reduction in scrap and work in progress.


Outlook

While the European construction markets are forecast to remain subdued, the success of new products and over-thecounter sales are expected to result in organic revenue growth in the year, albeit weighted to the second half. Operating margins are also expected to show their normal second half improvement and will include the benefits of restructuring.

Main markets

Balancing and Control Our hydronic balancing and control solutions enable buildings to keep comfort at the right level while increasing HVAC efficiency by up to 30%. Our expertise covers constant and variable flow and both static and dynamic balancing.

2016 Revenue: £145m

Thermostatic Control We design and manufacture thermostatic control systems which guarantee direct or automatic control of radiators and underfloor heating systems to precisely control individual room temperatures.

2016 Revenue: £102m

Pressurisation Reliable pressurisation is a basic requirement for a trouble-free operation of heating, cooling and solar systems. Our robust range of pressure maintenance systems with compressors or pumps and expansion vessels maintains the right pressure in the system at all times.

2016 Revenue: £31m

Water qualityThe single most important component in any hydronic system is the water itself. When compromised, the effects can significantly impact the efficiency of the system. Our dirt and air separators and pressure step degassers protect the installation by keeping water free of microbubbles and sludge.

2016 Revenue: £12m

Our product brands

IMI PNEUMATEX

Reliable pressurisation is a basic requirement for a trouble-free operation of heating, cooling and solar systems. Our robust range of pressure maintenance systems with compressors or pumps and expansion vessels maintains the right pressure in the system at all times.

Water is the most important component in any hydronic system. When compromised, the effects can be felt throughout the system. Our dirt and air separators and pressure-step degassers protect the installation by keeping water free of micro-bubbles and sludge.

IMI TA

World leader in hydronic control and balancing solutions in heating and cooling systems. Our products and services take control over whole system to achieve desired comfort with minimal energy consumption. The wide innovative range of control valves, actuators, balancing valves and differential pressure controllers enable you to achieve high energy efficiency, quiet operation and high longevity with fast payback of investment.

IMI FLOW DESIGN

Leading manufacturer of automatic flow control devices for the hydronic flow balancing industry, based on the unique and patented Autoflow cartridge. Offering precise flow control solutions for terminal units, fan coils, air handlers, system pumps, chillers, boiler and cooling towers in HVAC systems. We also offer manual balancing valve products, hook-up components, pressure controller products, and hose accessories.

IMI HEIMEIER

Market leader in thermostatic control. Our thermostatic valve bodies and thermostatic heads, along with an extensive assortment of actuators, room thermostats and control valves, allow direct or automatic control of radiators and underfloor heating systems to perfectly control individual room temperatures according to different user needs.