IMI plc is a global engineering company listed on the London Stock Exchange and is a constituent of the FTSE100, the FTSE4Good Index and has a market capitalisation of £4.7bn.
Full year results to 31 December 2023 were published on 1 March and we were delighted to have Luke Grant, Head of Investor Relations and Group Financial Controller, and Edward Hann, Investor Relations Manager, give an introduction to the company, present the FY23 results and outline the prospects for 2024 at a Yellowstone Advisory webinar. A recording of the webinar is available here.
The first part of the webinar covered an introduction to IMI and the second part covered the FY23 results and the investment case. IMI is a £2.2bn revenue business with sites across the globe with a focus on valves and applications that control both motion and fluids. IMI products solve acute customer problems in niche applications in harsh environments with fine degrees of accuracy. They are generally made to order bespoke products controlling the flow of fluid, gas, liquid or air.
The new strategy was launched in 2019 based around the company purpose of “Breakthrough Engineering for a Better World” and this means helping companies reduce carbon emission, improve efficiency, operate more safely and improve productivity. Beneath the company purpose are three strategic pillars of customer satisfaction, market-led innovation and reducing complexity. The company has an excellent team of engineers with a customer focus who have worked hard on improving their net promoter score and customer engagement. The growth hub drives innovation and within this 40+ teams test ideas with the market. New innovative solutions from the growth hub have been a good source of incremental revenue. Finally, the complexity of the business has been reduced over a number of years with the manufacturing footprint consolidated. Sitting alongside this is a more recently launched financial framework of through cycle targets: organic growth of 5%; adjusted operating margin of 20%; cash conversion greater than 90% and return on invested capital greater than 12%.
The company creates value by providing great service and customer satisfaction, developing innovative products in niche markets that meet customer needs and by reducing operating complexity.
The organisation structure was restructured into 2 platforms this year. The Automative platform is split between Process Automation and Industrial Automation. Process Automation has applications in the energy market and to a lesser extent marine. It is…
