REG - IMI PLC - Trading Update

IMIAnnouncement

07/11/2024 07:00

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RNS Number : 2337L  IMI PLC  07 November 2024

7 November 2024

 

Resilient quarterly sales with continued margin improvement

Full year adjusted EPS guidance reconfirmed

Acquisition of leading sensor technology business

 

IMI plc ("IMI" or the "Group"), the specialist engineering company, issues the
following trading update which covers results for the third quarter from 1
July to 30 September 2024.

 

Roy Twite, Chief Executive, commented:

 

"We continue to expect good organic growth in 2024, having delivered a
resilient performance in the third quarter. Organic revenue was up 1%, with
good growth in our Automation platform partly offset by a weaker performance
in Life Technology, as expected. Process Automation, our largest business
sector, had another excellent quarter with continued momentum across our
energy end markets and strong order intake.

 

Margins in both platforms were higher in the quarter, benefitting from our
significant aftermarket exposure, continued delivery of high value-added
solutions for our customers and further efficiency gains.

 

We are reconfirming guidance. We continue to expect that full year adjusted
basic earnings per share will be between 120p - 126p, despite seeing some
additional foreign exchange headwinds. This guidance represents another year
of around 10% adjusted organic operating profit growth."

 

Resilient third quarter performance

 

Third quarter organic revenue was 1% higher than the same period last year,
with the Group now 3% higher year to date. Statutory revenue in the quarter
was 3% lower than last year, reflecting the foreign currency movements seen in
the period.

 

Our complexity reduction initiatives remain on track to deliver £15m of
incremental benefits for the full year and £7m in 2025. The programme will
complete this year, although IMI will continue identify and execute
efficiencies within its operations.  Future restructuring costs within our
current business will be taken into underlying operating profit.

 

Sector performance in line with expectations

 

Automation

 

Automation (62% of 2023 sales) delivered a strong performance, with revenue in
the quarter up 4% organically, and 7% year to date.

 

·      Process Automation (37% of 2023 sales) had another excellent
quarter as we saw continued momentum across our energy end markets and further
progress in the Aftermarket. Order intake in the third quarter was 14% higher
organically and revenue was 9% higher than the same period last year on an
organic basis. Book-to-bill is now at 1.15 over the last twelve months.

 

·      Industrial Automation (25% of 2023 sales) third quarter organic
revenue was 2% lower than the same period last year, a resilient performance
despite mixed end markets.

 

Life Technology

 

As expected, Life Technology (38% of 2023 sales) revenue was down 5%
organically in the third quarter, and 2% lower year to date.

 

·      Climate Control (18% of 2023 sales) organic revenue in the third
quarter was 4% higher than the same period last year as we saw continued good
demand for our energy efficient products.

 

·      Life Science and Fluid Control (12% of 2023 sales) organic
revenue was down 10% in the third quarter reflecting the continued softness
seen across the global life sciences device market.

 

·      Transport (8% of 2023 sales) organic revenue was down 16% in the
third quarter, as expected given the 20% organic growth delivered in the third
quarter of 2023. Sector revenue is now 3% higher year to date.

 

Disciplined approach to capital allocation

 

IMI is a highly cash generative business with a clear and disciplined approach
to capital allocation, prioritising investment that accelerates organic
growth.

 

IMI will also pursue strategic acquisitions that strengthen its position in
attractive, better world markets and deliver returns in line with its strict
financial criteria. On 31 October 2024 IMI announced the acquisition of TWTG
Group B.V. ("TWTG") for an enterprise value of €25m. TWTG is a leading
innovator of smart connected asset monitoring solutions. The combination with
IMI will create a significant opportunity to accelerate aftermarket growth in
Process Automation.

 

In addition, reflecting its commitment to maintain an efficient balance sheet,
IMI announced a £100m share buyback at the interim results in July 2024. The
buyback was completed in October.

 

By deploying our growing free cash flow into organic growth opportunities,
attractive acquisitions and share buybacks, IMI can continue its track record
of compounding EPS growth.

 

Exchange rates

 

If exchange rates as at 1 November 2024 of US$1.29 and €1.19 remain constant
for the remainder of the year it would negatively impact both revenue and
adjusted operating profit by approximately 3% in the 2024 full year when
compared to 2023.

 

Outlook

 

Based on current market conditions, we are reiterating our guidance that 2024
full year adjusted basic EPS will be between 120p - 126p.

 

Interim results

 

IMI will present its preliminary results announcement for the year ending 31
December 2024 on 28 February 2025.

 

Enquiries

 

 Edward Hann  IMI       Tel: +44 (0)7977 354 810
 Matt Denham  Headland  Tel: +44 (0)7551 825 496

 

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

 

https://www.netroadshow.com/events/login?show=7c005d8a&confId=72097
(https://www.netroadshow.com/events/login?show=7c005d8a&confId=72097)

 

Notes

 

IMI plc is a FTSE100 global specialist engineering company that designs,
manufactures and services highly engineered products to control the precise
movement of fluids. Its innovative motion and flow control technologies, built
around valves and actuators, enable vital sectors to become safer, more
sustainable and more productive. IMI combines world class applications
engineering expertise with a continued focus on customer satisfaction,
market-led innovation and complexity reduction to solve its customers most
acute engineering problems. IMI employs approximately 10,000 people, has
manufacturing facilities in 18 countries and operates a global service
network. The Company is listed on the London Stock Exchange. Further
information is available at www.imiplc.com (http://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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