Interim Management Statement

RNS Number : 5954Q

IMI PLC

16 October 2013

 



IMI plc ("IMI" or "the Group")

Interim Management Statement

IMI, the international engineering group, issues the following Interim Management Statement, which covers the period from 1 July to 15 October 2013.  The announcement has been brought forward from its normal timing of early November to coincide with the separate announcement released today detailing the disposal of IMI's Beverage Dispense and Merchandising businesses.    

Current trading and outlook

Trading in the period is in line with management expectations as communicated at the time of our Interim Financial Report in August.  On an organic basis, after adjusting for acquisitions and exchange rate movements, revenues for the three months to the end of September are 3% ahead of last year and 1% lower year to date.  On a reported basis, revenues are 4% up for the three months to September and flat year to date.  Based on current market conditions, we remain confident that the Group will deliver full year results in line with current market expectations.

Severe Service

Revenues on an organic basis are 6% ahead of last year in the third quarter and flat year to date.  This reflects an improvement in shipments which were slightly down in the first half.  Bookings momentum has been encouraging with order intake up 11% in the three months to September and 16% year to date.  The strongest sector in the third quarter has been Petrochemical where we have won a number of good projects in China, Singapore and Russia.  Aftermarket bookings have also been strong. 

We continue to expect margins to show significant progress in the second half as we benefit from productivity improvements and the shipment of orders taken in the last 12 months at improved margins.    

Fluid Power

As anticipated, Fluid Power has returned to growth in the third quarter, with revenues for the three months to the end of September up 2% on an organic basis compared to the same period last year and 3% down year to date.  The sector businesses were up 4% in the third quarter with Rail and Energy particularly strong.  Our Commercial Vehicle revenues have been flat in the last three months, an improvement on the first half when revenues were 9% down on last year.  In the non-sector business, Norgren Express grew whilst the factory automation activity was flat. 

Good momentum in the order book supports our expectation of stronger growth in the fourth quarter.  We expect margins to benefit in the second half from increased volumes and ongoing initiatives on value engineering, supply chain consolidation and further transfers of production lines to lower cost sites.

Indoor Climate

Indoor Climate volumes have improved with revenues on an organic basis up 1% over the third quarter last year, and flat year to date.  During the period we have seen better growth in Europe with Germany, Poland and France particularly strong.  In the Emerging Markets performance has been more mixed with strong growth in Brazil and the Middle East and a weaker performance in China and Russia.  In North America performance has been impacted by some project delays. 

We expect the Indoor Climate business to show stronger growth in the fourth quarter, benefiting from a number of new products that were launched earlier in the year and improved momentum in order intake.  We expect Indoor Climate margins to exhibit their normal seasonal improvements in the second half.

Beverage Dispense

As expected, trading conditions in Beverage Dispense have been challenging in the period with major customers continuing to defer capital expenditure.  Revenues on an organic basis for the three months to the end of September are down 8% on last year and down 7% year to date.  The business has continued to make good progress on a number of new projects focused on meeting increased customer demand for greater variety of beverage choice and increased automation.

Merchandising

Merchandising has continued to perform strongly with revenues on an organic basis up 22% compared to the three months to September last year, and up 18% year to date.  We continue to deliver a strong performance in both our North American automotive business, where we have secured a number of good contracts this year, and in our European cosmetics business where we are benefiting from the two large multi-year contracts won last year.  We expect operating margins to show the normal seasonal improvement in the second half.   

Financial position

The Group retains a strong and flexible balance sheet with good cash generation in the year to date.  In the preliminary results in March the Group announced a share buyback programme of up to £175m with the aim of maintaining balance sheet efficiency.  As at the 15 October 2013, the Group had spent £85m on the repurchase of shares. 

IMI will issue its preliminary results announcement in respect of the year ending 31 December 2013 on 6 March 2014.

Enquiries to:

Will Shaw                    IMI                                                        Tel:      [phone]

Suzanne Bartch          StockWell Communications               Tel:      [phone]

Robert Morgan

Notes to editors:

Cautionary Statement:

This Interim Management Statement contains forward-looking statements which are made in good faith based on the information available at the time of its approval.  It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward-looking statement which could cause actual results to differ materially from those currently anticipated.

IMI plc

IMI plc, the international engineering company, designs, manufactures and services bespoke solutions that control the precise movement of fluids. Its innovative technologies, built around valves and actuators, enable vital processes to operate safely, cleanly, efficiently and cost-effectively.

It works with customers across a range of high growth sectors, including energy, oil and gas, energy efficient buildings, rail, commercial vehicles and beverage dispense all of which are benefiting from the impact of long term global trends including climate change, urbanisation, resource scarcity and ageing population.

IMI employs over 15,000 people, has manufacturing facilities in more than 20 countries worldwide and operates a global service network.  The Company is listed on the London Stock Exchange and is a member of the FTSE100. Further information is available at www.imiplc.com.

 

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