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Annual Report and Accounts 2014
What you will find in this section
This section focuses on the results and performance of the Group. On the following pages you will find disclosures
explaining the Group’s results for the year, including segmental information, exceptional items, taxation and earnings
per share.
SECTION 2 – RESULTS FOR THE YEAR
2.1
Segmental operating profit
Organic revenue growth and operating profit are the two short-term key performance indicators or measures that reflect the way the performance of the
Group is managed and monitored by the Executive Committee. In this section the key constituents of these two KPI’s, being the Group’s revenues and
segmental operating profits, are analysed by reference to the performance and activities of the Group’s segments and their operating costs.
Organic revenue growth is the growth in segmental revenues on a like-for-like basis excluding the effects of acquisitions, disposals and exchange
rate movements.
2.1.1
Segmental information
Segmental information is presented in the consolidated financial statements for each of the Group’s operating segments. The operating segment reporting format
reflects the Group’s management and internal reporting structures and represents the information that was presented to the chief operating decision-maker, being
the Executive Committee. Inter-segment revenue is insignificant. The Group did comprise the following five operating segments and activities, but as discussed
earlier in these financial statements, the Retail Dispense businesses were disposed of on 1 January 2014 and consequently their comparative results are shown
as discontinued operations in the income statement, while their comparative assets and liabilities are presented as held for sale in the balance sheet.
Continuing operations
IMI Critical Engineering
IMI Critical Engineering provides flow control solutions that enable vital energy
and process industries to operate safely, cleanly, reliably and more efficiently.
Our products control the flow of steam, gas and liquids in harsh environments
and are designed to withstand temperature, and pressure extremes, as well
as intensely abrasive or corrosive cyclical operations.
IMI Precision Engineering
IMI Precision Engineering specialises in the design and manufacture of motion
and fluid control technologies wherever precision, speed and reliability are
essential to the processes in which they are involved.
IMI Hydronic Engineering
IMI Hydronic Engineering is a leading provider of technologies that deliver
operational and energy efficient water-based heating and cooling systems for
the residential and commercial building sectors.
Retail Dispense – discontinued operations
Beverage Dispense
Design, manufacture and supply of still and carbonated beverage dispense
systems and associated merchandising equipment for brand owners
and retailers.
Merchandising
Design, manufacture and supply of permanent point of purchase display
systems for brand owners and retailers.
Performance is measured based on segmental operating profit which is the
profit reported by the business, stated before exceptional items and other
restructuring costs (see section 2.2).
Businesses enter into forward currency and metal contracts to provide
economic hedges against the impact on profitability of swings in rates and
values in accordance with the Group’s policy to minimise the risk of volatility
in revenues, costs and margins. Segmental operating profits are therefore
charged/credited with the impact of these contracts. In accordance with
IAS39, these contracts do not meet the technical provisions required for hedge
accounting and gains and losses are reversed out of segmental revenue and
profit and are recorded in net financial income and expense for the purposes
of the consolidated income statement.
Corporate costs
In 2014 and prior years corporate costs have been allocated to each of the
divisions to arrive at segmental operating profit. Whilst our corporate costs
do not meet the definition of an operating segment under IFRS8 ‘Operating
Segments’, for 2015 reporting and onwards we will separately disclose
corporate costs before arriving at segmental operating profit so that reporting
is consistent with the format that will be used for review by the chief operating
decision-maker from 1 January 2015. A table to illustrate how the Group’s 2014
segmental operating profit would have been presented on the new basis has
been included on the next page.
