IMI plc overview – 2015 - imiinterativa.com

1 IMI plc overview 2015 IMI plc introduction 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, cleanly, efficiently and cost effectively. The Group works with industrial customers across a range of high growth sectors, including energy, transportation and infrastructure, all of which are benefiting from the impact of long-term global trends including climate change, urbanisation, resource scarcity and an ageing population. IMI employs over 12,000 people, has manufacturing facilities in more than 20 countries and operates a global service network.

2 The Company is listed on the London Stock Exchange. Further information is available at Financial summary 31 December 2014 *On an organic basis, after adjusting for the impact of acquisitions, disposals and movements in exchange rates. Group overview Our purpose is to deliver great solutions that tackle the most demanding engineering challenges. We help some of the world s biggest industrial companies operate their processes safely, cleanly, efficiently and cost effectively. We operate through three divisions IMI Critical Engineering, imi precision Engineering and IMI Hydronic Engineering and employ over 12,000 people in over 50 countries around the world. IMI Critical Engineering overview 31 December 2014 IMI Critical Engineering is a world-leading provider of critical flow control solutions that enable vital energy and process industries to operate safely, cleanly, reliably and more efficiently.

3 Main Markets Belgium, Brazil, China, Czech Republic, Germany, India, Italy, Japan, South Korea, Sweden, Switzerland, UK and USA Major Operational Locations Key Brands imi precision Engineering overview 31 December 2014 imi precision Engineering specialises in developing motion and fluid control technologies for applications where precision , speed and reliability are essential. Main Markets Key Brands Brazil, China, Czech Republic, Germany, Mexico, Switzerland, UK and USA Major Operational Locations IMI Hydronic Engineering designs and manufactures technologies which deliver optimal and energy efficient heating and cooling systems to the residential and commercial building sectors. Main Markets Germany, Poland, Slovenia, Sweden, Switzerland and USA Major operational locations IMI Hydronic Engineering overview 31 December 2014 Key Brands IMI Global footprint 31 December 2014 IMI Divisional revenue by geography 31 December 2014 Engineering GREAT the IMI Way 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.

4 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 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, IMI plc The Engineering GREAT theme signals the start of the next phase of the Group s development: harnessing our engineering heritage to take what is seen as a good business and turning it into a great business.

5 A business that is growing profitably and sustainably. A business that fosters its long term prospects and delivers results for shareholders. Doing it in our way: core processes, a positive culture and a code of conduct that together is uniquely IMI. The challenge is taking a good company and turning it into a great company. A Group that thinks long-term, always delivers on its commitments to produce results and profitable sustainable growth, invests in its future and is preferred by employees, customers, partners and investors. Strategic timeline Strategy in action 1. Capitalising on significant organic growth opportunities Market position Attractive high growth markets with good competitive position Goal Over the life of our five year strategic plan our goal is for an average organic growth rate of around 6 to 8%.

6 Market position Attractive high growth markets with good competitive position Goal Significantly improving operational performance and driving organic growth are our first priorities. As we focus on these priorities, during the first two years of our plan the goal is to grow at a rate in line with GDP. Thereafter the goal is to grow at an organic rate in the range of 6 to 8%. Market position Attractive high growth markets with good competitive position Goal Our goal is to deliver compound organic growth in excess of 5% over the life of our five year plan. The benefits of moving towards and achieving best in class operational performance are very 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.

7 By doing this, we will also improve services for our customers. Our ambition is to progressively self-fund our organic growth initiatives using the benefits generated from our operational improvements. We are on a self-help lean journey, underpinned by the engagement of management and employees at all levels as we believe this is the best way to sustain our achievements. The operational performance of every site in the Group is now being benchmarked every six months against the ten areas of lean and significant progress has already been achieved. Each of our businesses now have detailed plans in place to achieve world-class performance by 2018. Strategy in action 2. Improving operational performance 31 December 2014 Significant excess installed capacity Increased efficiencies will improve competitiveness Supply chain efficiencies will improve working capital utilisation Ambition to put basics right in 2014 and achieve world-class levels by 2018 We maximise to the full the additional investment we are making in new products we are standardising a number of processes and systems across the Group.

8 At the beginning of 2015 we launched a new Group-wide Advance Product Quality Planning process and a more standardised approach to the Computer Assisted Design (CAD) systems and procedures that we use across the Group. Strategy in action 3. Increasing investment in new product development We will supplement this organic growth by continuing to target bolt-on acquisitions to expand our product range and our geographic footprint within our existing markets and to extend our Oil & Gas presence into adjacent attractive markets including subsea. We will also consider expanding our product range to include semi-severe and configured opportunities in each of our key sectors. Our precision Engineering division offers significant potential for accelerated growth.

9 However, harnessing this potential will take time. In the first phase of our plan we will address the existing infrastructure, including simplifying the organisation, implementing robust systems and improving operational performance. Once the division is operating optimally we will look to supplement growth by targeting larger scale acquisitions. The growth plan in our Hydronic Engineering division is predominantly organically focused. However, there is potential to grow the division through acquisition. Any addition would need to satisfy stringent criteria including, in particular, building critical mass in the North American market. Strategy in action 4. Expanding our addressable markets through targeted acquisitions Market drivers The on-going demand for innovative products and engineering expertise plays to our core strengths and is creating increased growth opportunities across the Group.

10 The IMI Way The IMI Way is established as central to the way IMI operates. It embraces the way we act, look, behave, impact and continuously improve. Our Code of Conduct is a crucial component of the IMI Way and is detailed in this document. We have updated and rebranded it, but the principles remain unchanged: we must always behave responsibly and ethically. Mark Selway Chief Executive, IMI plc IMI Way, our Values, our Code Corporate Responsibility Our approach Our ambition is for IMI to become a world-class business and the leader in its chosen sectors a truly great company that we can all be proud of both for its business and the way we conduct our business. And by great we mean a company that thinks long-term, delivers profitable sustainable growth, invests in its future, is preferred by all stakeholders including employees, customers and investors and at all times behaves responsibly.