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Precision Engineering

IMI Precision Engineering is a world leader in motion and fluid control technologies wherever precision, speed and reliability of process are essential. We deliver integrated solutions which improve the productivity and efficiency of customers’ equipment.

IMI Precision Engineering

We operate sales and service networks in 75 countries and have manufacturing facilities in the US, Germany, China, UK, Czech Republic, Mexico, India and Brazil. Product support is provided through global centres of technical excellence, and facilities for computational fluid dynamics design, research and development and testing. We also employ a dedicated team of field engineers, sector specialists and key account managers – all committed to providing excellent service to customers.

2015 Performance

Revenue
£662m (2014: £710m)

Operating profit
£117.7m (2014: £126m)


Performance

After adjusting for the impact of adverse exchange rate movements of £23m and for acquisitions and disposals, revenues of £662m (2014: £710m) decreased 3% on an organic basis and were down 7% on a reported basis. Industrial Automation revenues were down 5%, driven by lower market demand in North America and the Asia Pacific region. Commercial Vehicle sales decreased 1% in the year through a combination of 9% growth in Europe, a good first half performance in North America and significantly lower truck production in Brazil. Rail was up 17%, while Oil & Gas declined 10% and Life Sciences was up 1%.

Segmental operating profit at £117.7m (2014: £138.5m) was 15% lower on a reported basis and, after adjusting for the impact of adverse exchange rate movements of £3m, 14% lower on an organic basis. Operating margins suffered from weaker market conditions in the second half (H1 2015: 18.6% v H2 2015: 16.9%) and in the full year operating margins of 17.8% were also lower reflecting an adverse sales mix and the increased investment to support long-term growth.

The application of lean made terrific progress right across the division with significantly improved productivity, nearly 50% reduction in warranty costs, a 23% reduction in scrap costs and 7.5% lower inventory when compared to 2014.

The division focused on a number of strategic activities during the year including simplifying the organisational structure, improving operational performance through the application of lean manufacturing, upgrading IT systems, addressing supply chain complexities and increasing investment in new product development.

Our review of the Industrial Automation market confirmed that we have excellent market positions, with a valuable installed base and access to a high margin aftermarket. We are now developing detailed product roadmaps in each of the key geographies which will underpin our plans for growth.


Key Achievements

  • New Divisional Managing Director, Massimo Grassi, appointed with effect from 1 June 2015
  • Successful adoption of lean with scores improving from a year 1 assessment of 32% to 59% at year end 2015
  • Division-wide adoption of new product introduction process, reducing lead time and improved ‘job 1 readiness’
  • New divisional ERP system launched successfully in Brazil and Farmington, Connecticut
  • New division-wide quality system implemented across all IMI Norgren global sites
  • Parts rationalisation completed in Europe, reducing 450,000 SKUs by 295,000 in the year

Market Review

The global industrial economic outlook for 2016 remains mixed with leading indicators, including the Purchasing Managers Index, weakening in the second half of 2015. While we expect the general industrial markets in Europe to remain broadly neutral, the US and Asian markets will remain challenging, particularly in China. In the truck sector we expect the European market to remain stable while North America class 8 volumes are expected to be lower in the year ahead.


Outlook

Based on current market conditions, we expect first half revenues to reflect a similar percentage reduction to the second half of 2015. Margins in the first half will be comparable to second half of 2015. While markets remain uncertain the benefits of restructuring activities in Brazil and the actions taken to lower our costs are expected to deliver improved margins in the second half of the year.

Main markets

Industrial automation Delivering benefits to global customers – including auto in-plant, machine tools and general industry – IMI Precision Engineering’s high performance products include valves, valve islands, proportional and pressure monitoring controls and air preparation products, as well as a comprehensive selection of pneumatic actuators – rodless, compact, roundline and rotary. These are quickly and easily selected and ordered via our Norgren Express activities globally and supported with high quality technical advice.

Commercial vehicle An extensive range of cab, chassis and powertrain solutions deliver fuel efficiency, emissions reduction and faster assembly times for the world’s leading commercial vehicle manufacturers. Acknowledged for their safe and reliable operation, Precision Engineering’s products have been proven in the harshest environments and over millions of miles of reliable service. We understand the market trends, environmental challenges, emissions standards and specifications that matter to truck manufacturers and Tier 1 suppliers.

Oil & Gas IMI Precision Engineering’s extensive range of products and expertise is acknowledged widely throughout the Oil & Gas industry. In addition to IMI’s customised solutions, Precision Engineering produce a comprehensive range of certified, world-class products which deliver precision control in even the harshest environments, including stainless steel valves and regulators, nuclear class valves and emergency shutdown controls.

Life sciences IMI Precision Engineering has a proven track-record of supporting the development of advances in medical devices, diagnostic equipment and biotech and analytical instruments. In particular, the division’s products and expertise have helped reduce the size of equipment, while enhancing accuracy, throughput and fluid control performance. The division is recognised for products which manage the precise control, repeatability and safety needs of the industry. Our solutions are found in equipment for anaesthetics and patient therapy through to molecular diagnostics and pathogen detection.

Our product brands

IMI NORGREN

With over 80 years of industry experience, the IMI Norgren brand includes a wide range of high quality pneumatic and fluid control products such as actuators, air preparation products, pressure switches, fittings and valves.

IMI BUSCHJOST

Successful in the market for over 60 years, IMI Buschjost is a market leading range of process and multimedia solenoid valve technology and system solutions.

IMI FAS

The IMI FAS range offers a comprehensive portfolio of globally acclaimed miniature fluid control solutions which provide successful, consistent performance at the heart of demanding applications. They specialise in miniature solenoid valve technology for 10mm and 15mm valve applications.

IMI HERION

For over 50 years the IMI Herion brand has specialised in solenoid valves and hydraulic solutions for mechanical and pneumatic press and press safety technology.

IMI MAXSEAL

Proven in the field for over 50 years, the IMI Maxseal brand offers extremely high quality stainless steel solenoid valves, for harsh environments such as offshore oil & gas and coastal applications.