Interim Management Statement

RNS Number : 3704K

IMI PLC

05 May 2022

 

5 May 2022

Accelerating growth and strategic execution

Group margin target increased to 20%

IMI, the specialist engineering company, issues the following Interim Management Statement which covers results for the first quarter from 1 January to 31 March 2022.

Strong first quarter performance

IMI has delivered another strong performance with first quarter Group revenue growth of 9% compared to the same period last year and 5% higher organically. First quarter margins also slightly improved.

Our teams continue to remain focused on our accelerated growth strategy through increasing customer intimacy, market-led innovation and reducing complexity. These actions have allowed us to generate strong growth in the order book and revenues as well as improving margins, helping to mitigate the ongoing supply chain and inflationary pressures as well as Russian sanctions currently impacting global markets.

Good momentum in our Growth Hub and Sprint Teams continue to drive cultural changes through the business. We remain on track to deliver £40m of orders from these projects in 2022.

IMI Precision's revenue growth was 16% in the first quarter, including a strong performance from Adaptas, our recent acquisition in the attractive Life Sciences sector. Organic revenue growth was 7% versus the same period in 2021, led by Industrial Automation which grew 16%. Precision Fluid OEM organic revenue was in line with the prior year despite an additional £8m contribution from ventilator surge sales in the comparator. Transportation revenue was in line with the prior year despite the ongoing supply chain disruptions impacting the sector.

IMI Critical's order book at the end of March was broadly flat compared to a year ago on a like for like basis, now that we have removed the orders affected by our decision to exit the Russian market. IMI Critical organic order intake in the first three months of 2022 was down 4% versus the same period in 2021 due largely to timing of New Construction orders. Aftermarket orders increased 5% in the period with good spare parts growth in LNG and Gas Power.  IMI Critical organic revenue in the three months to the end of March was flat compared to the first quarter of 2021.

IMI Hydronic revenues in the first quarter were 7% higher on an organic basis, when compared to last year. There continues to be strong demand for our energy saving solutions.

Group margin target increased to 20%

Following accelerated progress of our unifying purpose-led strategy [Breakthrough Engineering for a better world], our continued strong trading performance and further opportunities identified for sustained profitable growth, we are pleased to again increase our margin target for the Group to 20% through the cycle.

Our footprint optimisation programme continues to reduce complexity and deliver sustainable margin improvement. This restructuring programme will be expanded by £35m of one-off costs to support the delivery of faster growth and our increased margin target.

Divestment of Russia subsidiary

IMI strongly opposes the invasion of Ukraine. We are deeply concerned for its people and are supporting humanitarian efforts to provide aid for the unfolding refugee crisis.

IMI fully supports all sanctions, and on 4 March 2022 announced its decision to end all new business in and international deliveries to Russia. IMI today announces that it is in the process of divesting its Russian subsidiary to local management, which it expects to complete within the next weeks.

Russia accounted for 2% of Group revenue in 2021 and represented less than 1% of revenue for IMI Precision, 4% for IMI Critical and 2% for IMI Hydronic.

Exchange rates

If exchange rates as at 15 April 2022 of US$1.31 and €1.21 were projected for the full year and applied to our 2021 results, it is estimated that there would be minimal impact to both revenue and operating profit.

Outlook

Based on current market conditions , we continue to  expect that 2022 full year adjusted EPS will exceed 100p.

IMI Precision and IMI Hydronic organic revenues are expected to be higher, with margins higher in IMI Precision and slightly higher in IMI Hydronic, consistent with our preliminary results announcement. IMI Critical revenue and operating margin are both expected to be in line with last year, despite the 4% revenue impact from the exit of Russia.

Interim results

IMI will issue its interim results announcement in respect of the six months ending 30 June 2022 on 29 July 2022.

Enquiries

Luke Grant	IMI	Tel: [phone]
Stephen Malthouse	Headland PR	Tel: [phone]

A conference call for analysts and investors will be held at 08:00 BST today to discuss this statement.  To access the call, please register using the link:

https://www.incommglobalevents.com/registration/client/10691/imi-plc-interim-management-statement-/

Notes

IMI plc, the specialist engineering company, designs, manufactures and services highly engineered products that control the precise movement of fluids.  Its innovative technologies, built around valves and actuators, enable vital processes to operate safely, sustainably, cleanly, efficiently and cost effectively. IMI employs around 10,000 people, has manufacturing facilities in 19 countries and operates a global service network. The Company is listed on the London Stock Exchange and is a constituent of the FTSE4Good Index.  Further information is available at www.imiplc.com .

References to adjusted figures reflect figures as reported to management and do not include the impact of adjusting items. References to organic changes are on a constant currency basis and exclude disposals and acquisitions.

IMI plc is registered in England No. 714275. Its legal entity identifier ('LEI') number is 2138002W9Q21PF751R30.

 

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