AR PDF - IMI plc

Capital Markets Presentation
Accelerating Growth
The long term drivers
2 October 2013
Disclaimer
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.
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
Frozen
15% CDD Opps
Efficiency
Rail
HydronicEnergy
Sector Conditioning
Sector
10%
Aftermarket
Life Sciences
Foodservice
Variety,
Health
&
Food &
Petrochem
Wellness
Beverage
& Refin
Fossil Commercial
Vehicle
5%
TRV's
0%
Hydronic
Balancing
Nuclear
LNG
Iron &
Steel
October 2013 – Growth Drivers
• Opportunities arising from megatrends
• 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
Agenda
Welcome & Introduction
Martin Lamb
Long term growth drivers
Roy Twite
Mega-trend driven growth opportunities
- LNG: New growth opportunities
- Petrochemical: Positive impact of shale gas
- Commercial Vehicles: Tomorrow’s truck
Rob Campbell
Metin Gerceker
Mark Sealy
Break for refreshments
Mega-trend driven growth opportunities
- Life Sciences: Healthcare of the future
- Indoor Climate: Smart buildings
- Beverage: Restaurant of the future
Robert Guerra
Stefan Seitz
Mike Coombes
Sweetspot development conclusions
Martin Lamb
Questions and Answers
Executive Directors
Refreshments
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
Climate change
Urbanisation
Resource scarcity
Ageing population
long term
sustainable
global
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”
+ 50 GW
Source: Frost & Sullivan
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
Future CAGR
CDD Opps
Efficiency
15%
Frozen
Rail
Sector
Hydronic
Energy
Conditioning
Sector
Hydronic
Balancing
10%
Aftermarket
Foodservice
Life Sciences
Food &
Beverage
Variety,
Health &
Wellness
Fossil
Nuclear
Petrochem
& Refin
Commercial Vehicle
5%
LNG
Iron &
Steel
TRV's
Leadership position
Leadership
Threshold
0%
Niche leadership – LNG
The Niche : Severe Service application
valves & actuation into LNG plants
Niche Size
IMI Share %
Market
Position
Key
Competitors
Key
Customers
c.£210m
<10
10-20
20-30 >30
1
Growth
CAGR 2012-2017
Industry growth
Source: IEA, Douglas
Westwood
6 - 8%
Niche growth
6 - 8%
Incremental revenue
growth opportunities
0 - 2%
Koso, PBVS, Severn Glocon,
Vanessa (Tyco)
Bechtel, Chevron, JGC,
Petronas, Shell, Woodside
Source: IMI estimates
Prioritising projects
Smart Choices……
• Dragons Den/Shark Tank
KAM – Choosing
winning :• End market drivers
• Customers
• Projects
• Fit with strategy
• Value proposition
• Competitive position
Backing winners
Fluid Power
Dragons Den
Climate change
Climate change – implications
Climate
change
TRENDS
ENGINEERING
REQUIREMENTS
Move to combined cycle
gas in powergen
Control of huge
pressure drops
Power plant efficiency
Higher temperature
materials
Less flaring
Pressure protection
systems
Commercial Vehicle fuel
efficiency legislation
Waste Heat Recovery
Energy efficiency in
buildings
More precise flow
control
Move away from harmful
refrigerants
New refrigerants
Nuclear still important to
China and India
Safety retrofits required
Climate change – technology roadmap
Analytical
chromatography
valves for gas
analysis
District Energy
Products
Range of energy
efficient beverage
coolers
New TRV with
Flow Control
Terminal unit
balancing &
control valves
Nuclear steam
control valves
and actuators
Optimised
nuclear strainers
Commercial
Vehicle valve –
Euro VI
Launched
Zero leakage
seals / fugitive
emissions
monitoring
Year 1
Severe Service
Smart Valve and
Actuator
Nuclear
containment
venting systems
Valves for small
nuclear reactors
Commercial
Vehicles - CNG
Commercial
Vehicle – waste
heat recovery
Year 2
Fluid Power
Indoor Climate
Year 3 +
Beverage
Climate change – truck engines
2006 engine (Eu3)
IMI opportunity:
€50 per truck
2018 engine (US)
€900 per truck
Resource Scarcity
Resource scarcity – implications
TRENDS
ENGINEERING
REQUIREMENTS
More extreme extraction
e.g. deep sub sea
Higher pressure valve
sealing
Gas transportation / LNG
Faster response
compressor
control valves
Floating platforms –
FPSOs and FLNG
Smaller envelope,
lighter weight
cryogenic valves
Remote locations
Lower power
requirements
Fuel & energy efficiency
legislation
Better control
Peak load → cycling
Lower noise
requirements
Resource
scarcity
Resource scarcity – technology roadmap
District Energy
Products
Redundant Valve
Manifold for ESD
HIPPS control
system for
upstream Oil &
Gas
Smart Valve and
Actuator
Customised
valves for Catofin
Low power valves
for shale gas
Rapid response
positioner
technology
TA Fusion Control
Valve range
Terminal unit
balancing &
control valves
¼ turn actuators
for oil & gas
Optimised nuclear
strainers
Ball valves for oil
& gas 1000 bar
Partial stroke
solenoid valves
Launched
Year 1
Severe Service
Automated
manual
transmissions
CV – Waste Heat
Recovery
Optimised valves
for Catofin and
FCC processes
Localised control
capability
Valves optimised
for floating
platforms
Small nuclear
reactors
Commercial
Vehicles - CNG
Sub-sea actuators
Sub-sea valves
Sub-sea solenoid
valves
Year 2
Fluid Power
Indoor Climate
Year 3 +
Beverage
Resource scarcity – polymers
Cracking
IMI opportunity:
£3m per install
Dehydrogenation
Up to £18m per install
Urbanisation
Urbanisation – implications
Urbanisation
TRENDS
ENGINEERING
REQUIREMENTS
Increased demand for
power, energy efficient
buildings
More precise flow
control
Increasing freight
transportation
Lower weights
& energy efficiency
Increased demand for
mass transit
More reliability,
faster access
Increasing consumer
demands
More dispense variety
Increased demand for
materials
Gas to chemicals
Microdosing
Pressure on space
More compact solutions
Increased pollution from
transportation
EGR and SCR
Urbanisation - technology roadmap
CV– Bus HVAC
valves
Emissions control
for off-highway
vehicles
Rail air dryer
systems
Train door control
systems
Balancing &
control calve
range
Terminal unit
balancing &
control valves
CNG valves and
regulators
Automated
Beverage
Dispenser
New TRV with
flow control
Batch carbonator
carbonator
Batch
for
organic
sodas
for organic sodas
Residential
Residential
carbonated
water
carbonated water
dispenser
dispenser
Blend in cup
smoothie
dispenser
Launched
Smart valves and
actuators
Tea dispensers
dispensers
Tea
Year 1
Severe Service
District energy
products
Year 2
Fluid Power
Indoor Climate
Year 3 +
Beverage
Urbanisation – evolving buildings
HVAC System 2005
Smart HVAC System 2017
• Balancing and differential pressure control valves
• Basic terminal valves
• 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
TRENDS
Ageing
population
ENGINEERING
REQUIREMENTS
Increased demand for
healthcare
Smaller, lighter
Out of hospital
treatment
Lower Power
Increasing patient
expectations
Ease of use, robustness
Prevention vs treatment
Reduce sample and reagent
size, micro dosing
More frequent and
sophisticated testing
Reduced testing cycle time
Healthier lifestyles,
drinks
Freshness, pulp dispense
Ever greater regulatory
burdens
Increased safety &
redundancy in systems
Shortages of skilled
clinical staff
Increased automation
Ageing population - technology roadmap
Disposables &
consumables
Laminated
manifold
technology
Chromatography
multiport valves &
fittings
Micro
proportional
valves
Separation
technology (gas
& liquid)
Analytical
proportional
valves
Analytical
gas/liquid
detectors
Electronic
pressure & flow
Controllers
Miniature inline
syringe / piston
pumps
Launched
Proportional
valves for liquids
Configurable
syringe pump
technology
High flow
proportional valve
Miniature media
separated valves
Condition
monitoring &
dispense
confirmation
Year 1
Severe Service
Nanoliter (nl)
dispense/dosing
technologies
Year 2
Fluid Power
DC & closed- looped
intelligent pumps
Indoor Climate
Year 3 +
Beverage
Ageing population – respiratory care
2003 portable ventilator
Weight:
6.5 KG
IMI opportunity = £200/device
.
2013 portable ventilator
Weight:
0.5KG
IMI opportunity = £250/device
IMI Group technology roadmap
District Energy
Products
Redundant Valve
Manifold for ESD
HIPPS control
Disposables &
Smart ValveZero
and leakage
Analytical
system
forHVAC
CV– Bus
consumables
Actuator
seals / fugitive
chromatography
upstream
Oil &
valves
Laminated
emissions Condition
valves
for gascontrol
Emissions
Gas
Automated
manifold
monitoring
monitoring &
Rail air dryer
analysis
formanual
off-highway
CV – Wastedispense
Heat
technology
systems
Customised
vehicles
Recovery
transmissions
confirmation
valves
for CatofinChromatography
District Energy
Range
of
energy
Micro
Terminal
unit
Train door control
District
Energy
Optimised
valves
Products
CNG valves
and
Proportional
&response& proportional
efficient beverage
Rapidbalancing
systems multiport valves
Products
and
regulators
valves
for liquids
fittings positioner
coolers
valvesfor Catofin
control valves
Localised
control
Low
power valves
FCC processes
Balancing
capability
technology
for shale
gas &
Terminal
unit
Configurable Smart Valve and
Separation
Automated
Control
Valve
High
flow
New TRV
with
balancing &
syringe
Valvespump
optimisedActuator
technology (gas
Beverage
Terminal
unit
range
proportional
valve control
Flow Control
valves
Small
nuclear
technology
for
floating
& liquid)
Dispenser
TA Fusion Control
Smart Valves
balancing
&
reactors
platforms
Valve range
andAnalytical
Actuators
control valves
Analytical
Nuclear
Nuclear
steam
New
TRV with
Optimised
Valves for smallDC & closed- looped
Miniature
media
Batch carbonator
gas/liquid
proportional
containment
control
valves
Commercial
Flow
Control
nuclear
reactors
separated
valves nuclear
for strainers
organic
sodas
¼ turn
actuators
Sub-sea
actuators
intelligent pumps
Optimised
nuclear
detectors
valves
venting
systems
and for
actuators
Vehicles
CNG
oil & gas
strainers
Blend in cup Electronic
Commercial
Nanoliter (nl)
Miniature inline
Commercial
Residential
Subsea
solenoid
Tea
dispensers
Ball
valves
oil
Partial
stroke pressure & Commercial
flow
smoothie
Vehicle
–dispense/dosing
waste
syringe
piston
Vehicle
valve
–for/water
carbonated
Sub-sea
valves
Vehicles
CNG
valves
& gasVI
1000
bar
solenoid
valves Controllers
dispenser
heat recovery
technologies
pumps
Euro
dispenser
Launched
Year 1
Severe Service
Year 2
Fluid Power
Indoor Climate
Year 3 +
Beverage
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
Group technology roadmap impact
Adjacencies
LNG
Nuclear
Fossil
• Underlying growth in niche
markets 5-7%
Petrochem
Iron & Steel
Commercial Vehicle
Life Sciences
Food & Beverage
Rail
Energy
• c.£400m of revenue coming
from new products in 2017
• Incremental growth from
new products 2-3%
Hydronic Balancing
Hydronic Conditioning
TRVs
Variety, Engagement,
Health & Wellness
Operator Efficiency
Frozen
Aftermarket Parts
2012
17 Niches
2017
c.20 Niches
• Opportunities to develop
leadership positions in
adjacent niches through
acquisition
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
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
LNG
New growth opportunities
Rob Campbell
Sales Director, Northern Europe
Niche leadership – LNG
The Niche : Severe Service application
valves & actuation into LNG plants
Niche Size
IMI Share %
Market
Position
Key
Competitors
Key
Customers
c.£210m
<10
10-20
20-30 >30
1
Growth
CAGR 2012-2017
Industry growth
Source: IEA, Douglas
Westwood
6 - 8%
Niche growth
6 - 8%
Incremental revenue
growth opportunities
0 - 2%
Koso, PBVS, Severn Glocon,
Vanessa (Tyco)
Bechtel, Chevron, JGC,
Petronas, Shell, Woodside
Source: IMI estimates
Mega-trends – driving growth in LNG
Mega-trends
Sub-trends
Climate
change
Abundant US shale
gas
New solenoid
valves for ESD
Increased demand
Coal → Gas
powergen
HIPPS
Economic fuel
switch
Nuclear → Gas
More compact, light
weight valves for
FLNG
Massive
exploration – e.g.
Mozambique
Sub sea anti surge
Increased safety
standards
Actuation control
and precision
Environmental
legislation
Electric & sub sea
actuation
More economical
and flexible →
Floating LNG
Process expertise to
support EPC’s
Resource
scarcity
Urbanisation
Ageing
population
Increased vendor
collaboration
IMI opportunity
Harnessing the growth opportunity
Support global
engineering for
O&G Majors
Subsea LNG
valves
Redundant Valve
Manifold for ESD
Optimised valves
for Floating
Platforms
Fast Trak / Quick
Trak
Ball valves for oil
& gas <1000bar
Safety Integrity
Level 2 & 3
¼ turn actuators
for oil & gas
Partial stroke
solenoid valves
Launched
Year 1
Optimised valves
for Catofin & FCC
Fugitive
emissions
monitoring
Year 2
LNG valves for
marine engines
Commercial
Vehicles - CNG
Floating LNG
valves
Year 3 +
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)
Yuedong LNG (China)
Mozambique LNG
LNG Carriers S1015-S1017
Petronas (Malaysia) – FLNG
Browse (Australia) now FLNG
India H-Gas LNG gateway
Yamal (Russia)
2014
2014
2014
2014
2014
2015
2015
2015
Cove Point (US)
Sabine Pass 2 (US)
Kitimat (Canada)
Freeport (US)
Lake Charles (US)
2013
2014
2014
2015
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
LIQUEFACTION
(Cryogenic Process)
Tri Eccentric Butterfly
Trunnion Mounted Ball
Anti surge compressor valves
COOLING SYSTEM
Butterfly
STEAM PACKAGE
FIRE FIGHTING
Butterfly UL 1091
Unique to FLNG
PROCESS VALVE
Top Entry Ball Valve
GAS TREATMENT
(Sweetening; De-Watering
etc.)
Tri Eccentric Butterfly
Trunnion Mounted Ball
Valves
Other growth opportunities in LNG
• Noise – manned floating platforms
• Lightweight but maintain CV (capacity)
• Fast response, precise control
Summary
LNG Opportunity
• 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
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
IMI Share %
Market Position
Key
Competitors
Key Customers
Growth
c.£180m
<10
1020
20-30
>30
1
Delta Valve (both Curtiss
Wright), Poyam,
Tapco/Enpro
ExxonMobil, Lukoil,
Petrobras, Sinopec,
Statoil, UOP
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
Mega-trends – driving growth in Petrochemical
Mega-trends
Climate
change
Sub-trends
Shale & LNG
demand reduced
gas costs
US investing in
new petrochem
plant
Resource
scarcity
Urbanisation
Increased
demand for
plastics
OPEC countries
– aim to add
more value to
resources
Requirement for
new catofin
plants
Ageing
population
Increased vendor
collaboration
IMI opportunity
High temperatures
Highly corrosive
materials
Duplicated safety
valve systems
Fracking injection
New generation
plants in ME
FCC
DC
Harnessing the growth opportunity
Every product is
engineered to order
Variable orifice
valves
Butterfly valves
Double disc
through conduit
Partial stroking
solenoid valves
Through conduit
valves
New ball valves
for processes
Goggle valves
Hydraulic
actuation for
Catofin valves
Fugitive
emissions
monitoring
Slide gate valves
Hydraulic control
for DC valves
Combined
control/isolation
valves for FCC
Launched
Year 1
Year 2
Support global
engineering for
O&G majors
Year 3 +
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
Atyrau
PetroPeru
EIL – BPCL
SK Gas
KPI
GS
Petrologistics/JGC
Shangdong II
PDVSA
Kazakhstan
Talara
Kochi Refinery, India
S. Korea
Kazakhstan
Trakreer Refinery, India
China
Venezuela
Project value c.£90m
Catofin® is the process license owned by Lumus (CB&I)
Refinery
Coking
FCC & Coker
Catofin®
Catofin®
FCC
Catofin®
Catofin®
FCC
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
Petrochemical Opportunity
• 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
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
IMI Share %
Market Position
Key
Competitors
c.£580m
<10
10-20
20-30
Growth
>30
1 or 2
Bendix, Bosch, Pierburg,
Wabco
Scania, Volvo, ZF, MAN,
Key Customers Cummins, Paccar, Daimler,
Ford, Eaton, Caterpillar
CAGR 2012-2017
Industry growth
Source: LMC, Stark,
ATC
3 - 5%
Niche growth
4 - 6%
Incremental revenue
growth opportunities
1 - 2%
Source: IMI estimates
Mega-trends – driving growth in Commercial Vehicles
Mega-trends
Climate
change
Resource
scarcity
Urbanisation
Sub-trends
IMI opportunity
Emissions
control legislation
Clean engine
development
Environmental
control <CO2
After treatment
Improved fuel
consumption
Waste Heat
Recovery
Freight efficiency
Reduce rolling
resistance
Abundant cheap
shale gas
Battery cooling
Hybrid drives
CNG engines
Ageing
population
Increased
mobility
Secondary
braking
Strategic value
Harnessing the growth opportunity
Amplify
New throttle
Prop
pneumatic
ISIS
UTHV 2
Waste Heat
Electric AIT
Wastegate
Growth
Digital pair
FormFit
Seat
Water valves
Air prep
Asia Trans
Fuel
Mechanical
pneumatic
CNG/LNG
Tyre inflate
Axle mgmt
Cab switches
ERHC
Evaluate
ZF, Eaton
Sustain
Manifolds
Effort / risk
Recent successes
Norgren emissions technologies to address pollution and climate change
Electric
Throttle
Proportional
pneumatic
Wastegate
Purge air
Urea tank
heating
Increasing vehicle sophistication = more potential
2006 engine
2018 engine
74
Extending our technology into emerging markets
e.g. Level 4 emissions & secondary braking legislation in BRIC
Retarder & shift
assist
Wastegate
control
Gearbox
Interlock
EGR
control
75
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
CO2 reduction – every aspect of fuel usage is examined
Every facet will
be improved
Over 50% of the fuel is
wasted directly as heat
Exhaust
22%
s
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
Waste Heat Recovery – a strategic new opportunity
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)
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
Commercial Vehicle opportunity
• 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
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
IMI Share %
Growth
c.£520m
<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
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
Mega-trends
Climate
change
Sub-trends
Rising costs of
healthcare
Point of care /
fast results
Resource
scarcity
Food / drug /
environmental
concerns
Urbanisation
Ageing
population
Personalised
medicine
Prevention &
detection vs.
treatment
IMI opportunity
High flow
proportional
valves
Electronic
pressure & flow
control
Chromatography
multiport valves
Configurable
syringe pump
technology
Inline syringe
pumps
Laminated
manifold
technology
Gas & liquid
detectors
Analytical Flow Products (AFP) acquisition
Analytical Flow Products (AFP) acquisition
-A strategic fit for Life Sciences
Life Sciences technology roadmap
Laminated
manifold
technology
Chromatography
multiport valves &
fittings
Micro 6mm
solenoid valves
Configurable
syringe pump
technology
High flow
proportional valve
Miniature media
separated valves
Miniature inline
syringe / piston
pumps
Launched
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Electronic
pressure & flow
Controllers
Year 1
DC & closedlooped intelligent
pumps
Nanoliter (nl)
dispense/dosing
technologies
Year 2
Year 3 +
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
Analytical technologies’ impact on healthcare
Norgren LMT for Genomic OEMs
Ageing
population
Genomics /
Microarray
Laminated
Manifold
Technology
Laminated Manifold Technology
(LMT) enables Genomic OEMs
the ability to accurately move
small samples and multiple
reagents at high speeds.
Life Sciences technology roadmap
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
Laminated
manifold
technology
Chromatography
multiport valves &
fittings
Micro 6mm
solenoid valves
Configurable
syringe pump
technology
High flow
proportional valve
Miniature media
separated valves
Miniature inline
syringe / piston
pumps
Launched
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Electronic
pressure & flow
Controllers
Year 1
DC & closedlooped intelligent
pumps
Nanoliter (nl)
dispense/dosing
technologies
Year 2
Year 3 +
Analytical technologies’ impact on healthcare
Norgren FAS solenoid valve technology for Genomic OEMs
Ageing
population
Genomics /
Microarray
Miniature media
separated
valves
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.
Life Sciences technology roadmap
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
Laminated
manifold
technology
Chromatography
multiport valves &
fittings
Micro 6mm
solenoid valves
Configurable
syringe pump
technology
High flow
proportional valve
Miniature media
separated valves
Miniature inline
syringe / piston
pumps
Launched
Analytical
gas/liquid
detectors
Analytical
proportional
valves
Electronic
pressure & flow
Controllers
Year 1
DC & closedlooped intelligent
pumps
Nanoliter (nl)
dispense/dosing
technologies
Year 2
Year 3 +
Case study – single cell genomics
Ageing
population
Genomics /
Microarray
Laminated
Manifold
Technology
Miniature Media
Separated
Valves
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 multilayered 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
Case study – digital Polymerase Chain Reaction
Ageing
population
Genomics /
Microarray
Laminated
Manifold
Technology
Miniature Media
Separated
Valves
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
Summary
Life Sciences opportunity
• 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
Smart Buildings
Stefan Seitz
VP Business Development, TA Hydronics
Niche Leadership – Indoor Climate
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
c.£170m
European Balancing
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
Source: IMI estimates
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%
Building’s evolution
Building
performance
Building
controls
“final” Oil crisis???
•Sustainable buildings
End of Asia crisis => and eco-cities
strong econ. growth
•De-central,
•Improvement of
regenerative energy
system efficiencies
generation
with integrated
•“Plus” energy, 0 CO2
components
emission buildings
•Performance based
Facility management • all E-supply, Estorage, E•Performance
distribution and
contracting
dissipation systems
communicate via
•Life cycle costs
“smart grid”
Building
envelope
1st/2nd oil crisis, 1st
Gulf War:
•Investment in
Insulation
•Investment in nuclear
Power Plants
1980
2nd Gulf War:
•Improvement of
component
efficiencies
•Efficient system
management with
BMS
1990
Smarter Building,
Eco-District
2000
2010
2020
Mega-trends – driving growth in Hydronics
Mega-trends
Climate
change
Resource
scarcity
Sub-trends
District Energy to
grow 25%+
Focus shift to
“greening” existing
buildings
Speedier & easier
system install
Flexible Buildings
“Smart Grids”
”Smart Buildings”
Ageing
population
North America
Emerging Markets
Comfort &
productivity
From eco-efficient
buildings to ecodistricts
Urbanisation
IMI opportunity
Measurement &
Diagnostics
Pre Fab Systems
HVAC System
communication
De-centralised
apartment subsystems
Hydronic conditioning
“Fit & Forget” products
Flexibility in home
energy usage
(matching lifestyle)
Home Automation
Water Quality &
Saving
Potable Water
Indoor Climate technology roadmap
TA SCOPE
upgrade
(measuring
device)
Equalizer Control
Valve (USA)
Terminal Unit valve for
Emerging markets
USA Potable
Water Valve
EcoEfficient DeGassing Unit
(water quality)
Next Generation
Braincube for
Pressurisation
(water quality)
“Fit & Forget”
TRV with Flow
Control
Terminal Unit
Balancing &
Control Valve
(heating &
cooling/emerging)
TA FUS1ON
Balancing &
Control Valve
range
Next Gen Air &
Dirt Separator
(Water Quality)
Launched
Year 1
Apartment
prefab stations
(Heating &
Cooling)
Water Quality
Portfolio
District Energy
Portfolio
Potable Water
Portfolio
Year 2
Smart Valve &
Actuator
Next Generation
Thermostatic
Radiator Valve
Home Automation
Year 3 +
At the heart of what we do
Energy Insights
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%)
At the heart of what we do
Energy Insights
• 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
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)
Cost reduction
Payback
CO2 reduction
42 billion litres (m³) /yr
32 billion EUR /yr
1 year
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
BBVA HQ
• 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
Summary
Hydronics Opportunity
• 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
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
Niche Size
V,E, H&W
c.£130m
IMI Share %
<10
Market
Position
Key
Competitors
Key
Customers
Op Eff
c.£40m
10-20 20-30 >30
Niche
Growth
Industry growth
V,E, H&W
Opp Eff
CAGR 2012-2017
1 - 3%
1
Niche growth
5 - 7%
9-11%
Incremental
revenue growth
opportunities
1 - 3%
4-6%
Manitowoc, Lancer, Bunn
McDonalds, YUM!,
Starbucks, Subway,
Coca-Cola, Pepsi,
Brita Vivreau, Grohe
Source: IMI estimates
Mega-trends are impacting restaurants
Mega-trends
Sub-trends
Climate
change
Energy
Efficiency
Resource
scarcity
Labour
Savings
Urbanisation
Right sized
Equipment
Ageing
population
Life style
Variety &
Choices
Impact
$2bn
Annual Energy bill for
McDonald's Restaurants globally
10.5%
Wage increases
expected in emerging
markets by end of 2013
$1,500
Annual cost of one square foot
of retail real estate in major
urban markets
170,000
Ways to create the perfect
Starbucks drink
Global restaurant market
Global restaurant industry will generate
$1.8 trillion revenue by end of 2015
‒
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
Source: Euromonitor International
Beverages generate high profit potential
Gross margins 20% - 40% higher than food
Source: Technomic
Global foodservice market trends for Beverage
Beverages are central to
successful strategy
Beverage day part growth opportunity
500
450
Beverages drive consumer
traffic throughout the day
400
350
Specialty beverages provide
incremental day part
opportunities
300
250
200
150
Variety above all
100
50
Late Night Snack
Evening
Dinner
Afternoon Snack
Lunch
Source: Euromonitor International
Morning Snack
Tea is the next wave
hot and cold
0
Breakfast
Refreshing over sweet driven by
healthier beverage choices
Opportunities for IMI to grow in the Beverage niche
Mega-trends
Climate
change
Sub-trends
Energy
Efficiency
IMI opportunities
HFC-free gases
Automation
Miniaturisation
Resource
scarcity
Labour
Savings
Emerging Markets
Fit for purpose
Health & Wellness
Social Media
Urbanisation
Right sized
Equipment
Hot & cold combinations
Indulgence
Frozen
Ageing
population
Life style
Variety &
Choice
Variety
Fresh
Hand-crafted
Driving IMI’s beverage technology development
IMI opportunities
HFC free gases
Automation
Miniaturization
Technology roadmap
Cooling
Remote Cooling
Merchandising
Modular
Fit for purpose
Social Media
Hot & cold combinations
Indulgence
Frozen
Variety
Cooling
Rack Refrigeration
Cooling
HFC-free
Emerging Markets
Health & Wellness
Valves
Microdosing
Merchandising
LED
Carbonating
Variable
Valves
Self Cleaning
Valves
Multi-flavor Valves
Valves
Miniature
Merchandising
Touch Screen
Blending
Ice Drink Blending
Carbonating
In-Line
Carbonating
Batch Carbonation
Fresh
Hand-crafted
Launched
Year 1
Year 2
Year 3 +
Creating new product development opportunities
Product roadmap
Emerging Markets
all in one Systems
Digital Display Towers
Batch Carbonator for
organic sodas
Self Serve Towers –
Consumer Engagement
Fountain Touch Screen
Automated Beverage
System
Residential carbonated
water dispenser
Multiple Beverage
Fountain Dispense
Station
High Density Tower
Dispenser
Range of energy
efficient beverage HFC
free coolers
Launched
Enhanced Water
Dispensing
Blend in Cup smoothie
dispenser
Year 1
Hot/Cold Tea
Dispensers
Year 2
Coffee Dispensers
Year 3 +
Key projects
Helix blended ice drinks system
Opportunity | A fully automated blend-in-cup blended ice drinks system for QSR
Te c h no l ogy
 Ratio & blending
technology
 Optimized valves, pumps
and actuators for dispense
accuracy
 Real time, PC Control
system
 HFC-free refrigeration
 Clean-in-place [CIP]
Result
S u b Tr e n ds t o C u s t o me r Va l ue
R i ght -s ized e qui pm ent
 ~10% smaller in footprint
 ~50% more ice capacity
Ene r gy s a vi ng
 ~15% less energy consumption
 ~20% reduction in product waste
 ~50% reduction in rinse water
La bor s a vi ngs
 Crew touch screen operation
 Speed of service – 3 drinks per minute
 Clean-in-Place system for ice maker
Li f e -styl e c hoi ce
 Up to 14 configurable iced fruit &
yogurt smoothies and f rappe’s
O pe r a tor Va l ue
 Significant profit opportunity – less
than 1 year payback
Automated Beverage System (ABS)
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
Te c h no l ogy
 Automated Cup Fill
 Pattern Recognition
& Vision System
 Splash Proof Sink
Design with
motion/Actuation
mechanisms and
protection
Result
S u b Tr e n ds t o C u s t o m e r Va l ue
R i g h t - s i z e d e q u i pm e nt
 Drive thru and front
counter
 Increased brand choice
L a b o r s a v i n gs
 Integration with POS
system
 6sec process per drink
 12 drinks at any one time
 Labor saving of $15,000
provides potential one year
pay back
O p e r a t or Va l u e
 Sales Uplift – fewer ‘drive
offs’
 Increased variety and
choice
Batch carbonator for hand-crafted sodas
Opportunity | To enable an operator to uniquely hand-craft and batch carbonate a variety of soda’s on a
compact footprint
Te c h no l ogy
 Batch Carbonation
 Patented agitation
carbonation
technology
 Anti-foaming
silicone seal/gasket
design
 Fast processing
cycles
– Batch carbonated
within 36secs
Result
S u b Tr e n ds t o C u s t o m e r Va l ue
R i g h t - s i z e d e q u i pm e nt
 Compact and light -weight
 Equipment design complimentary to
customer operating environment
L a b o r s a v i n gs
 Controlled batch carbonation one
drink at a time – customised
 Easy access and clean
L i f e S t yl e C h o i c e s
 Unique Beverage menu with ability
to customize to consumer choice
 Theatre of dispense to add
consumer engagement
O p e r a t or Va l u e
 Creates higher value & higher price
points
 Significant profit opportunity – less
than 1 year payback
Summary
Beverage Opportunity
• 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
Summary and
Conclusions
Martin Lamb
Driving sweetspot convergence
2013 H1 sweetspot
60%
+3%
Supported by favourable mega-trends and
strong emerging markets growth
EM sales to increase from 24% to 35%
Growth and market share gains
from new product development
+4%
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%
M&A
• Strengthening of existing positions
• Adoption of new adjacencies
+4%
Directed by technology roadmaps
Supported by strong balance sheet
Disposal of Merchandising
+4%
On track
Higher underlying market growth
sweetspot niches
Illustrative 2017 sweetspot
75%
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