Peter Spencer
Divisional Managing Director
“2014 represented a year of significant development for the Hydronic division. We put in
place a new management structure, launched a number of great new products and introduced
operational improvements. All of these initiatives will drive significant future growth.”
Case studies online
A-exact:
Thermostatic radiator
valve with automatic flow limitation
During the year we continued to invest in new product
development and successfully launched 14 new products
which delivered annualised revenues of around £13m. A good
pipeline of additional launches is scheduled for 2015 and is
expected to underpin our growth ambitions for the division.
During the second half of the year good progress was also
made on a number of other key strategic initiatives including
the implementation of lean and the commencement of a
project to replace the ERP systems within the division.
Key Achievements
• Launched 14 new products including the TA Compact,
a pressure independent balancing and control valve range
• Completed withdrawal from 20 low margin emerging markets
to focus on those offering stronger growth prospects
• Good progress on lean implementation resulting in an
improved lean assessment score of 59%, a 10% reduction
in inventory levels and over 90% on time deliveries.
Market Review
Improving energy efficiency in buildings is an on-going global
trend and in November 2014, the US and China announced an
agreement to reduce greenhouse gas emissions and increase
energy efficiency over the next 20 years. This agreement builds
on similar international initiatives, such as the Kyoto protocol,
and will be a key driver for IMI Hydronic Engineering.
While building construction in our core European markets has
remained subdued in 2014, the global ambition to improve
energy efficiency will continue to drive demand for the division’s
new and world leading products.
Outlook
While European construction markets are expected to remain
at the subdued levels experienced in the second half of 2014,
the new products which were launched in 2014 are expected
to compensate and result in organic revenues being broadly
flat in the first half on a constant currency basis. In the second
half we expect to deliver good organic revenue growth as we
benefit from a number of exciting new products which will
be launched at the ISH trade show in Germany at the end
of March. Operating margins, while expected to show their
normal seasonal improvement in the second half, are likely
to be slightly below last year reflecting the ongoing investment
in additional new products for long-term growth.
CASE STUDY
A-exact the latest product with Automatic Flow Control (AFC)
technology has been independently tested and proven to
save energy.
The challenge:
The new A-exact which provides energy savings
in heating systems was put to the test on a housing complex in the
Netherlands where the homes were heated using geothermal energy.
Geothermal energy requires a low return water temperature in order
to be efficient.
Solution:
The results of the test were two fold. Firstly no complex
measurements were required before installing the new valves
making the balancing of the installation easier and quicker. Secondly
the return water temperature was controlled very effectively and
generated up to 50% savings on pump energy.
Automatic
hydronic
balancing
Time saving
in mounting
and balancing
Optimal
for renovation
Pre-setting
directly
at the valve
41
Strategic Review
Performance Review
Corporate Governance
Financial Statements
Introduction
Annual Report and Accounts 2014
