skip to main content .

Strategic Framework

IMI has many strengths which provide us with an excellent foundation on which to build the next phase of the Group’s development and growth. Today all our specialist flow control businesses are concentrated on industrial end markets. We have a strong balance sheet, which provides headroom and flexibility to support a range of both organic and acquisitive growth opportunities, great people, market-leading engineering expertise and strong long-term relationships with world-class customers.

Our Goal

IMI - To become a world class business and the leader in our chosen sectors.
Our strategic plan will ensure that this potential is harnessed and fully exploited to deliver sustainable accelerated top and bottom line growth. The opportunities are significant and that is reflected in our ambition to double the Group’s 2014 operating profits by 2019, while retaining our financial discipline.

Mark Selway
Chief Executive


Our organisation structure

IMI Critical Engineering, IMI Precision Engineering, IMI Hydronic Engineering


How we generate revenue

Manufacturing and selling innovative products and services to our chosen markets. Which implies to Capturing aftermarket opportunities for spares, support and service

Strategic growth priorities

Capitalising on significant organic growth opportunities

We already operate in a number of attractive end markets and we intend to focus on those that offer the greatest potential in terms of delivering top and bottom line growth. These end markets include those where we already are, or have the potential to be, in a leading position, markets where we can grow and where there are significant higher margin aftermarket opportunities.

Improving operational performance

The benefits of moving towards and achieving best in class operational performance are significant. As we improve how our businesses operate we will better utilise capacity, enhance our competitiveness, reduce working capital and generate cost savings by operating more efficiently. Our ambition is to progressively self-fund our organic growth initiatives using the benefits generated from our operational improvements.

Increased investment in product development

We are increasing our investment in product development, a key enabler of our growth plan, which is to build sustainable competitive advantage. Progressively we will increase R&D spend from around 3% of revenue in 2014 to 5% over the next few years. To ensure that we maximise the benefits of this increased investment, we are improving our product development processes and systems.

Expand addressable markets through targeted acquisitions

We plan to supplement our organic growth opportunities with targeted acquisitions capable of producing returns in excess of the Group’s weighted average cost of capital within three years. Beyond our existing business portfolio, our review has identified the potential to double the Group’s addressable market by making acquisitions in adjacent non-valve product markets.

Strategic enablers

Maintain financial discipline

As we execute our strategy to deliver accelerated growth, we will continue to maintain financial discipline. Capital will be allocated to drive organic growth, maintain a progressive dividend policy in line with earnings and fund acquisitions. Whilst retaining flexibility to develop IMI’s full potential, we will continue to focus on maintaining an efficient balance sheet and, in the event of us having cash in excess of the Group’s current needs, we will return this excess capital to shareholders. Through the life of our five year plan we will work to maintain net debt to EBITDA of no more than two times through the cycle.

Net debt to adjusted EBITDA - 2015 - 0.9, 2014 - 0.6

Invest in Group–wide IT and infrastructure

The programme to equip our businesses with effective IT has begun with the first sites either launched or on track to do so across all three of the Group’s operating divisions. This commitment, alongside selective investment to upgrade or replace our manufacturing facilities, and our on-going initiatives, is a pre-requisite to achieving our strategic goals.

IT implementations are being phased on a site by site basis to minimise risk and deliver an optimal solution. Overall capital spending is progressively increasing to closer to two times depreciation where it will remain for the first few years of the plan.

Work together as one simplified IMI

To harness the Group’s full potential we remain determined to channel and maximise our scale to act as one IMI. Establishing core processes has provided a strong platform that underpins a framework for creating consistent Group–wide standards and behaviours. The global intranet, that all employees regardless of location, are able to access, was established last year and enjoys substantial and growing usage as our businesses share best practice and establish rigorous processes that improve competitiveness and profitability.

In 2015, all Group businesses adopted a standard IMI branding enabling a coherent go to market approach under a single IMI umbrella.

Business priorities

For each of the divisions we initially developed and have now fine-tuned our five year plans to be closely aligned to the ambitions of the Group. These plans are now fully embedded within each division and are already beginning to deliver real progress. The key strategic priorities for each division are as follows:

IMI Critical Engineering

Focus and grow

Capitalise on attractive growth in existing markets

  • Our goal is 6-8% organic compound average growth rate over five years

Invest to support growth markets

  • New larger sites in Houston, Italy and Korea now complete
  • Commenced the refurbishment of IMI Z&J site in Germany
  • Investing in additional service locations to support aftermarket

Enhance systems and processes

  • New product development
  • Project execution benchmarking and implementation of Obeya methodology
  • ERP system launched in Czech Republic and progressing well at IMI CCI

Acquisitions to support growth

  • Add strategically aligned bolt-ons such as Bopp & Reuther acquired in January 2015
  • Extend into adjacent markets
  • Expand product portfolio - semi-severe and configured valves
IMI Precision Engineering

Fix, focus and grow

Fix the basics in the next two years

  • Simplify organisational structure
  • Introduced standard costing

New ERP launched in Brazil and first USA site with the balance of USA underway and on track

Grow emerging market local manufacturing content

  • Address supply chain complexity
  • Manufacture closer to end customers

Increase plant utilisation

  • Significantly improve operational performance

Revitalise industrial automation and grow organically

  • New product development
  • Our goal is growth in line with market in years one and two and 6-8% organic CAGR thereafter

Acquisitions

  • Future opportunity for larger acquisitions to accelerate growth
IMI Hydronic Engineering

Focus and grow

Capitalise on attractive growth in existing markets

  • Our goal is >5% organic CAGR over five years

Increase new product development

  • 15 new products launched in 2015
  • Double investment in new product development over five years
  • 15 new products planned for 2016

Optimise organisational structure

  • Introduce core processes
  • Project underway to implement new divisional ERP system

Acquisitions

  • Potential bolt-on acquisitions in Europe and larger targets in North America

IMI business model

Our business model is built around our core strategic priorities of capitalising on growth opportunities, operational excellence, investment in product development and targeted acquisitions. Continuous investment in these areas will deliver improved, more innovative products and services to our customers and help us increase our competitive advantage. By meeting our customers’ needs and investing in our leading market positions, we are well placed to grow profitably to the benefit of all stakeholders including our shareholders.