•
Accelerated growth evident in results
•
Working capital benefits visible in results
•
Emerging markets ready for local full
technology supply
Year 0:
The hard work
begins
Year 1:
Increased
investment
Year 2:
Benefits starting
to show
•
Assess our markets and drivers
for growth
•
Benchmark performance and
develop plans for improvement
•
Invest in products and capital for growth
•
Foundations established and early
benchmark improvements evident
•
Sorting the basics in Precision Engineering
complexities and structure
Strategic timeline
Organic initiatives
Supported by value enhancing acquisitions
2014
2015
2016
10
IMI plc
1
Capitalising on
significant organic
growth opportunities
We already operate in a
number of attractive end
markets and we intend to
focus on those that offer the
greatest potential in terms
of delivering top and bottom
line growth. These end
markets include those where
we already are, or have the
potential to be, in a leading
position, markets where we
can grow share and markets
where there are significant
higher margin aftermarket
opportunities. Our current
market positioning and the
growth targets we have set are
detailed on pages 14 and 15.
3
Increased investment
in product
development
We will increase our
investment in product
development, a key enabler
of our growth plan, which is to
build sustainable competitive
advantage. Progressively
we will increase R&D spend
from around 3% of revenues
in 2014 to 5% over the next
two to three years. To ensure
that we maximise to the full
the benefits of this increased
investment, we are improving
our product development
processes and systems and
further detail is contained
on pages 20 and 21.
Strategic growth priorities
Our strategic plan to accelerate growth is focused on the following
key growth priorities:
2
Improving operational
performance
The benefits of moving
towards and achieving best in
class operational performance
are 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.
Our ambition is to
progressively self-fund our
organic growth initiatives
using the benefits generated
from our operational
improvements. Details
about how we are improving
operational performance are
set out on pages 16 to 19.
4
Expand addressable
markets through
targeted acquisitions
We will supplement our
organic growth opportunities
with targeted acquisitions
capable of producing
returns in excess of the
Group’s weighted average
cost of capital within three
years. Beyond our existing
business portfolio, our
review has identified the
potential to double the
Group’s addressable market
by making acquisitions in
adjacent non-valve product
markets. Further details
of our acquisition strategy
are detailed on page 22.
