IMI H1 2025 Earnings Report

IMI EPS Results

• Actual EPS: GBX 56.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

IMI Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

IMI Announcement Details

• Quarter: H1 2025
• Date: 8/1/2025
• Time: Before Market Opens
• Conference Call Date: Friday, August 1, 2025
• Conference Call Time: 3:00AM ET

IMI (LON:IMI) is a specialist engineering company operating in fluid and motion control markets. We combine our deep engineering knowledge with strong applications expertise to develop solutions for the most acute industry problems. We help our customers become safer, more sustainable and more productive. IMI employs around 10,000 people, has manufacturing facilities in 19 countries and operates a global service network. The Company is listed on the London Stock Exchange and is a constituent of the FTSE4Good Index.

IMI H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: IMI delivered 2% organic sales growth, 5% organic adjusted operating profit growth and expanded adjusted operating margin by 30 basis points, while securing £64 million of orders through its Growth Hub.
• Positive Sentiment: The £200 million share buyback is complete, the interim dividend was raised by 10%, and >£1 billion has now been returned to shareholders since 2019.
• Positive Sentiment: IMI confirmed guidance for a fourth consecutive year of mid-single-digit organic revenue growth and full-year adjusted EPS of 129p–136p, underpinned by record order books in process automation and strong climate demand.
• Negative Sentiment: A serious cyber attack led to a one-off £25.4 million charge for IT recovery and infrastructure upgrades, although operations rebounded with 6% organic revenue growth in Q2.
• Neutral Sentiment: Transport revenue declined 9% organically in H1; a strategic review is in progress to accelerate financial returns and assess all strategic options.

Presentation

[Roy Twite, CEO & Director at IMI]

Good morning, everybody, and welcome to IMI's twenty twenty five Interim Results Presentation. I am joined here as usual, but sadly for the last time, by Dan Shook. I'd also like to extend a very warm welcome to Luke Grant, who many of you already know and is joining the presentation for the very first time. This slide covers the key messages in the presentation, and the first thing to say is that it was another good performance in the first half. We delivered 2% organic sales growth and 5% organic adjusted operating profit growth.

[Roy Twite, CEO & Director at IMI]

Adjusted operating margins were up another 30 basis points, and we delivered an outstanding £64,000,000 of orders through our innovative growth hub. And I would like to express a personal thank you to everyone across IMI for their hard work and dedication during the first half. To deliver this performance amid the market uncertainty and to recover so quickly from the cyber incident reflects a tremendous effort from all of our people. I'm also pleased to report that the £200,000,000 share buyback announced in February is now complete and that we are once again raising the interim dividend by 10%, reflecting the continued confidence that we have in the business. With the completion of the buyback, we have now returned over £1,000,000,000 to shareholders since the start of 2019.

[Roy Twite, CEO & Director at IMI]

The strategic review of Transport is progressing. Our sector team is developing a detailed plan to accelerate improved financial returns, and we continue to assess all strategic options. There is strong momentum in IMI heading into the second half, underpinned by a record order book in process automation, continued strong demand in climate and improving trends and catch up shipments in industrial automation as well as supportive order books in both transport and life sciences and fluid control. I'm therefore pleased to reconfirm our guidance for 2025. We are on track to deliver our fourth consecutive year of mid single digit organic revenue growth, and we continue to expect that full year adjusted basic earnings per share will be between 129p and 136p.

[Roy Twite, CEO & Director at IMI]

With that, I'm going to hand over to Dan to talk through the first half results in more detail.

[Daniel Shook, Former CFO at IMI]

Thanks, Roy, and good morning, everyone. I'm pleased to be able to take you through our first half results today one more time. Here we go. As Roy mentioned, another good performance in the first half. Revenue increased by 2% organically, adjusted operating profit was up 5% and our adjusted operating margin increased another 30 basis points.

[Daniel Shook, Former CFO at IMI]

Adjusted basic EPS was 3% higher than the prior period as adverse currency and tax rate movements were offset by the reduction in outstanding shares. Operating cash conversion was very strong and we are pleased to be increasing our proposed interim dividend by another 10%. So firstly, some more detail around our revenue and profit performance. We delivered two percent organic revenue growth, but due largely to a weaker U. S.

[Daniel Shook, Former CFO at IMI]

Dollar, our statutory revenue was slightly lower. Adjusted operating profit increased to £198,000,000 Organic profits increased by 5%, which was again offset by FX. Looking at the income statement, as mentioned, we saw good growth in revenue and operating profit in the year. The net interest charge was broadly in line with last year at £8,600,000 despite the share buyback and the adjusted tax rate increased from around 24% to roughly 25%, in line with our guidance for the full year. Now, as I'm sure you are aware, IMI was subject to a very serious cyber attack in the first quarter.

[Daniel Shook, Former CFO at IMI]

Thanks to the incredible efforts of our people, supported by industry experts, we were able to limit the impact to temporary operational disruption. The second quarter organic revenue growth of 6% reflects the catch up on sales that we expect to complete in H2. As expected, we have recognized a one off exceptional charge of $25,400,000 in the first half that covers IT system recovery, risk management, upgraded IT infrastructure and advisory costs. Now looking at the performance of the platforms and sectors, which was very much in line with our expectations. Starting with automation, automation delivered good growth with revenue up 3% organically and margins in line with the prior period at 18.4.

[Daniel Shook, Former CFO at IMI]

Process automation had an excellent first half, delivering strong order intake as shown at the bottom of the slide. Adjusting for the one off multi boat marine order last year, orders were up 7% organically with particular strength in power and nuclear. We made further progress in the high margin aftermarket where organic orders were 10% higher than last year. Organic revenue was 8% higher than the prior period, and the order book was up another 5%. Industrial Automation organic revenue was 4% lower than the same period in the prior year, reflecting the one off impact from the cyber incident and softer industrial activity in Europe and The Americas.

[Daniel Shook, Former CFO at IMI]

The business is rebuilding momentum. It was flat organically in Q2 and will benefit in the second half from further catch up of shipments impacted by the cyber incident. And turning to Life Technology, as expected organic revenue was 1% lower than the prior year. However, margins improved by 80 basis points to 17.8% supported by the final benefits from our footprint optimization initiatives. Climate Control delivered another strong performance in the first half as we saw continued demand for our products that reduce energy consumption in buildings, including the benefit from our growing portfolio of smart connected products.

[Daniel Shook, Former CFO at IMI]

Organic revenue was 5% higher than the prior year period. Life Science and Fluid Control organic revenue was 5% lower than the prior period. Now the Life Science sales were only slightly down in the first half with good order intake with a book to bill in H1 was was 1.1 time. The fluid control sales were more impacted by the cyber incident, but it is recovering well and also has a strong order book heading into the second half. Transport revenue was down 9% organically in the first half.

[Daniel Shook, Former CFO at IMI]

This was in line with expectation given the 13% organic growth delivered in the 2024. So continuing to cash flow, our adjusted operating cash flow was 21% higher than the prior period, supported by the strong profit performance and good working capital management. Inventory levels rose in the first half, but this is due to our normal seasonality plus investment to support the Process Automation order book growth.

[Roy Twite, CEO & Director at IMI]

The

[Daniel Shook, Former CFO at IMI]

inventory position reduced by $21,000,000 versus the same point last year despite the Process Automation order book increasing by over £45,000,000 We are actively managing the position to ensure we reduce stocks in the second half while maintaining customer service levels. Free cash flow was lower than the prior period largely due to the one off exceptional costs associated with the cyber incident and a £26,000,000 loan we have made to our UK pension scheme to support the final wind up process. The loan is providing flexibility to the scheme as it manages its remaining illiquid investments. We expect it to be partially repaid in the second half. Now when I joined IMI in 2015, our UK scheme had roughly £1,300,000,000 in liabilities.

[Daniel Shook, Former CFO at IMI]

So to now be in the final wind up stage is a is really great, and it reflects a tremendous effort from our team over the last ten years. Our net debt has increased from $548,000,000 at the beginning of the year to $738,000,000 at the half year. This principally reflects the successful execution of our $200,000,000 share buyback and the 54,000,000 dividend payment. Net debt to trailing twelve month EBITDA was 1.4 times, which continues to give us the capacity to invest in both organic and inorganic growth opportunities. So with that, let me hand over to Luke, who will be covering the outlook today. Thanks, everyone.

[Luke Grant, Executive Director & CFO at IMI]

Thanks, Dan. As Roy mentioned, with the completion of our $200,000,000 share buyback, I am very pleased to report that we have now returned over $1,000,000,000 to shareholders since the start of 2019. This has been supported by significant improvements in our free cash flow. And you can see on the slide that we see a clear pathway to delivering further improvements. We expect to deliver over $1,000,000,000 of free cash flow over the next three years, supported by further growth and the normalization of working capital.

[Luke Grant, Executive Director & CFO at IMI]

We have an extremely disciplined approach to deploying this capital, prioritizing investments in our people, processes and operations that accelerate organic growth. We will also pursue bolt on acquisitions that enhance our position in attractive long term growth markets and that deliver results in line with our strict financial criteria. Finally, we will continue to deliver returns to shareholders. We are committed to maintaining a progressive dividend and we will look to return capital to shareholders should leverage fall sustainably below our one to two times net debt to EBITDA target range. At the end of the first half, net debt to EBITDA was 1.4 times towards the midpoint of that range.

[Luke Grant, Executive Director & CFO at IMI]

We are on track to deliver our fourth consecutive year of mid single digit organic growth in 2025. We continue to expect that full year adjusted basic EPS will be between 129p and 136p. Our guidance assumes that the full year adjusted operating margin will be around 20% and that our interest charge will be slightly higher than our previous guidance. The tax rate is still expected to increase to around 25% and we expect that the weighted average number of shares will reduce to $249,000,000 at the year end. Exchange rates have been volatile in recent weeks, but as things stand, we see a 1.5% headwind to profits in the full year.

[Luke Grant, Executive Director & CFO at IMI]

We'll be keeping a close eye on how this develops in the second half. With that, I'm going to hand over to Roy, who will talk you through the strategy update.

[Roy Twite, CEO & Director at IMI]

IMI is a global leader in fluid and motion control with a compelling value proposition. Our solutions typically represent a small part of the total system cost but have a significant positive impact on end customer outcomes. This drives growth, customer loyalty, and strong pricing power. We are well placed to support our customers in the attractive aftermarket. Our business is aligned to three long term structural growth trends: automation, energy efficiency and health care demand.

[Roy Twite, CEO & Director at IMI]

These powerful drivers support the delivery of sustainable, profitable growth. And all of this is underpinned by our One IMI operating model. The One IMI operator model is a proven platform for value creation and sustainable growth designed to deliver our financial framework. By applying a consistent approach rooted in commercial excellence, market led innovation and continuous improvement, we are creating significant value for shareholders. Commercial excellence remains at the heart of our growth strategy.

[Roy Twite, CEO & Director at IMI]

We are focused on creating ever more value for our customers through premium service, technical support, and disciplined sales execution. We have significantly improved customer satisfaction scores, and we leverage these relationships to cocreate high value ad solutions. All of this is supported by significant investments that we have made in our people, in our processes, and our operations, including in data and digital, which I will touch on later in this presentation. Our unique market led approach to innovation is creating real value, Grounded in deep customer insight and executed through our entrepreneurial growth hub model, we develop solutions that address industry wide problems. We leverage our strong customer relationships to gain a deep understanding of our customers' needs before moving at pace to validate solutions and full market potential.

[Roy Twite, CEO & Director at IMI]

Through this process, we minimize upfront investment before rapidly bringing validated solutions to market once our customers' endorsement has been fully secured. We delivered £64,000,000 of Growth Hub orders in the first half with a strong pipeline of opportunities across IMI. And as Luke mentioned, we also pursue attractive bolt on acquisitions. Since 2019, IMI has been strengthened by six complementary acquisitions, while our fully burdened return on invested capital has increased to 13.4%, significantly higher than our 12% underpin and our weighted average cost of capital. Finally, with our full multiyear restructuring program now complete, our focus is on continuous improvement.

[Roy Twite, CEO & Director at IMI]

Whilst IMI now operates from a leaner, stronger platform, we will continue to identify programs to improve efficiency, reduce complexity and better serve our customers. Restructuring costs associated with our current business are now being taken into underlying operating profit. I also wanted to spend some time sharing a few examples of how we are executing our One IMI operating model across the business. Firstly, our investments in data and digital are accelerating high margin aftermarket growth. Through the hard work from our process automation team, we have built a full database of over 200,000 valves in our installed base.

[Roy Twite, CEO & Director at IMI]

Using this database, we are able to identify key aftermarket opportunities and prioritize our sales efforts. We estimate that this has had at least a £70,000,000 positive impact from this initiative alone on our order intake over the last two years, with more to come. Secondly, the excellent progress we have made expanding our range of connected products. Smart connected products make up roughly 25% of climate control sales now, and there is a strong growing demand for the precision, the insight, and the convenience that these connected solutions offer. In March 2025, we launched a new electronic thermostatic radiator valve that leverages HeatMiser's technology and can be controlled via an app.

[Roy Twite, CEO & Director at IMI]

This is an incredibly exciting new opportunity and presents us with a significant opportunity to scale across our European markets and in over 200,000 homes in the HeatMizer ecosystem. Finally, we are focused on driving excellent customer service and productivity through continuous improvement. In industrial automation, we win in highly customized applications where fast response to customers is absolutely crucial. And there is lots of great work across the sector, and our Rockford facility is an excellent example. The team have built a digital twin of the site to facilitate layout simulations and optimizations in real time, drastically reducing lead time to customers and improving flow.

[Roy Twite, CEO & Director at IMI]

Our people and culture are the foundation of the One IMI operating model, and we have put a lot of effort into building a culture of ownership, culture of accountability and customer focus. And this has played a key role in IMI's transformation over the last six years. And as you can see on the screen, it's supported by a significant increase in productivity. We are focused on embedding a performance driven mindset and have made significant investments in our people to help them grow, develop, and continue creating significant value for customers. We are committed to targeted development at every level and have launched a range of new training programs in the first half.

[Roy Twite, CEO & Director at IMI]

We also ensure that our top talent regularly moves across the group, enabling us to leverage best practice and develop the next generation of leaders. Congratulations to Tarek on his appointment to the most senior position with industrial automation. Another key driver of significant productivity gains is our absolutely relentless focus on continuous improvement. A great example of this is in our Brno facility in Czech Republic where they identified over 600 improvement initiatives in the first half of this year alone as they continue to reduce complexity and improve customer service every single day. All of this is supported by employee engagement, and I'm very proud to report that 79% of all our employees would recommend IMI as a great place to work in our recent survey.

[Roy Twite, CEO & Director at IMI]

As you've seen on the previous slides, IMI has been fundamentally transformed over the last six years. We are executing the growth strategy, and we are on track to deliver our financial framework. As a reminder, we want to deliver 5% organic growth, operating margins of 20% plus, cash conversion above 90% and maintain our fully burdened return on invested capital above 12% as we continue to create significant value by deploying our capital both organically and into targeted bolt on acquisitions. It is clear that our growth strategy continues to deliver great results. And as you can see on this slide, we have built a track record of compounding profitable growth.

[Roy Twite, CEO & Director at IMI]

Adjusted EPS has grown at 11% CAGR since 2019, and we expect further progress in 2025. So to summarize then, the key takeaways from today are: first, that our growth strategy continues to deliver results, and I'm proud of our achievements during the first half. Organic revenue grew by 2%, adjusted operating margin was up another 30 basis points, and our organic adjusted operating profit grew by 5%. Second, that there is great momentum within our business as we head into the second half, and we are on track to deliver our fourth consecutive year of mid single digit organic revenue growth Third, and finally, as Luke said, we are reconfirming our EPS guidance range. We continue to expect that this year's full year adjusted EPS will be between 129p and 136p.

[Roy Twite, CEO & Director at IMI]

Okay. So I'm going to stop talking there and turn over to the moderator for the Q and A, please.

[Operator]

Our first question comes from Andrew Douglas from Jefferies. Your line is now open. Please go ahead.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

Good morning, gentlemen. Thank you for the presentation and welcome, Luke. I've got three questions, the standard three questions. But beforehand, I just want to say on behalf of all the analysts who've worked with you over the last ten years, Dan, thank you for everything that you've done for us. You've been a genuine pleasure to work with.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

So I think on behalf of everyone, I just want to wish you well for whatever comes next for both of you and the family. So thank you for that. Over the questions, can we just talk about process automation, please? You flagged the order book was going to be under a little bit of downward pressure on the OE side due to marine. So think that's all well understood.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

Can you talk about what you see over the next kind of twelve, eighteen months? I think hydrogen was a reasonably tough comp for you in the second half of last year. Can I just make sure that we're confident of process automation continuing to grow as a division next year and just how well that's underpinned by the order book? Secondly is on the slightly more cyclical bits. You've talked about order books improving in IA, in Fluid Control and Life Sciences.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

Can I just quadruple check that, that is over and above recovery post the cybersecurity incident? Just make sure that I understand that. And then last one, I is least, is on the share buyback. Share buyback is finished. You're going to be roundabout one times by year end.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

Was there a debate about whether we should just do another $200,000,000 now because you've got plenty of firepower? Or do you have a strong m and a pipeline? Thank you. Brilliant.

[Roy Twite, CEO & Director at IMI]

Well, thanks, Andy. Yeah. Totally agree on your comments on Dan. Yeah. It's been it's been fantastic working with Dan.

[Roy Twite, CEO & Director at IMI]

But, you know, Luke, we're in safe hands. So, you know, welcome to Luke's first first presentation. I'll take the first two, and then I suggest, Luke, you talk about the share buybacks. Yeah. So process automation, Andy, in short, you know, the order book's up 5% despite the multiyear marine contract that we called out, you know, over the last few calls.

[Roy Twite, CEO & Director at IMI]

So so we're pleased with the situation that's in. As you know, 60% of that division is aftermarket, and the gross margins in aftermarket are two and a half times what they are in new construction. So so the good news was that aftermarket orders up another 10% in the first half. Jackie, Robbie, and the team just driving the whole upgrade valve strategy, which, you know, we go in, we swap out either our old valves or increasingly the competition's valves that aren't working for the customer that are providing reliability issues or noise or vibration issues, and that strategy continues to to pay dividends. So, yeah, we we think we're gonna finish the year with the order book higher again, and that would lead us, you know, naturally into growth again for next year and a year.

[Roy Twite, CEO & Director at IMI]

So we feel very good about where process automation is. Second question was on on the sort of short cycle businesses. IA, yeah, I mean, the good news is, yes, we've got, a higher order book, which is partly catch up on IA because of the effects of the cyber incident. There's no doubt about that. But we're also seeing in the order run rate a pickup to what I would call growth now, Andy.

[Roy Twite, CEO & Director at IMI]

So, you know, it was slightly ahead. We're now seeing growth sort of consistent with our outlook for the second half, which is around, you know, 3%, 4% growth for the second half in IA. So so, you know, we we are encouraged by that. You know, we'll see whether it's a sustained recovery. As you know, there's still lots of moving parts in the global economy.

[Roy Twite, CEO & Director at IMI]

You know, there's still, you know, lots of settling down to do, isn't there, with things like the tariffs and stuff. But you know, the encouraging thing is we're making progress. And on the AA team, honestly, I haven't seen AA in better shape for as long as I can remember. I think what Jackie has done with with that sector of our business, as I said on the presentation, we brought Tarak now. He's been with IMI something like ten years.

[Roy Twite, CEO & Director at IMI]

He's very successful in process automation. He moved across into IA well over a year ago now. He's done very well there, and now he's gonna be sector head on. You know, I'm really pleased with that. Again, you know, a bit like Luke.

[Roy Twite, CEO & Director at IMI]

We've moved people through, developed them, and now, you know, where we are with the strategy and the team, you know, we're we're in a good position, Andy. Similar thing on on on particularly on the fluid control part of life science and fluid control, but we've got, you know, a good order backlog partly because of the effects of the side reins. So part of it is catch out. On the life science side though, Andy, customer order schedules are definitely showing growth for the second half. And, you know, I think we'll deliver growth in that segment in the second half.

[Roy Twite, CEO & Director at IMI]

Again, on the life sciences side, I'm not calling a sustained recovery. Again, we all look at the news. Right? There's been enough profit warnings over the last few weeks in that sector. Obviously, we've got the issue with with The US funding and stuff.

[Roy Twite, CEO & Director at IMI]

So I'm definitely not calling a sustained recovery. But at least in the second half, we think we're gonna show growth. And customers are talking about new product launches, and we are winning future platforms. So, again, the team there, Kevin's doing a, you know, really good job. We I think we're really focused in the right areas.

[Roy Twite, CEO & Director at IMI]

And, you know, I think over a period of time, we'll see that return to growth as, you know, the aging population, all of those dynamics and the propensity to spend more money on health. But, you know, certainly second half, we see growth. Luke, do you wanna cover share by hand?

[Luke Grant, Executive Director & CFO at IMI]

Of course. Yes. Morning, Andy. I think as you as you said, the leverage of the the half year is 1.4 times net debt to EBITDA, and I think we expect to delever to about 1.1 times come the year end and that would be sort of our normal rate of delevering. It's roughly about half a times a year.

[Luke Grant, Executive Director & CFO at IMI]

And I think we just completed our last tranche of $200,000,000 just this week. And we are going to continue to look at share buybacks as we get sustainably below the one times range. So that will probably happen sometime in the next twelve months. The other thing I would always say is that capital allocation, we take very seriously. We look at the M and A pipelines.

[Luke Grant, Executive Director & CFO at IMI]

They continue to be strong. We continue to review opportunities. So we're always looking at through that lens as well.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

Thank you very much.

[Roy Twite, CEO & Director at IMI]

Excellent. Great. Thanks, Andy.

[Luke Grant, Executive Director & CFO at IMI]

Thanks, Andy.

[Andrew Douglas, Managing Director at Jefferies Financial Group]

Appreciate it.

[Operator]

Thank you. Our next question comes from Christian Hinderaca from Goldman Sachs. Your line is now open. Please go ahead.

[Christian Hinderaker, Executive Director at Goldman Sachs]

Good morning, everyone. And I'll, of course, echo Andy's sentiments and thanks to Dan and welcome to Luke. If I can come back to the run rate growth comment in IA, 3% to 4%. I just want to clarify if that was in quarter or after the June. I guess interested as well within IA to understand relative growth dynamics across Europe and The Americas. I'll start there.

[Roy Twite, CEO & Director at IMI]

Yeah. Brilliant, Christian. Christian, sorry. I should have said, we use our standard sixty day moving average order income rate, and it's that sixty day moving average. Because over the years, we found that's been the best sort of, you know, smooth average predictor of what's happening at least in the next quarter or so.

[Roy Twite, CEO & Director at IMI]

The the the order book is about three months in IA, as you know. So it's not a process automation full twelve months, but it is is a pretty good indicator. And in terms of Europe, US, both have returned to growth actually, Christian, which is good news. It's not just one area, you know, taking all. It's actually growth across across both of the major regions. So, yeah, that's encouraging.

[Christian Hinderaker, Executive Director at Goldman Sachs]

Thank you, Roy. Maybe it's a bit early, but you touched on the strategic review in transport. I guess curious as to when we might receive sort of full context there. And then also in terms of the growth expectations for that segment as we enter the half that are built into your guidance.

[Roy Twite, CEO & Director at IMI]

Yes. So I'll start with that. So Transport second half will be down, I would say. Nowhere near as down as the first half. Remember, we grew at 13% in the first half of last year as all the OEMs caught up, you know, managed to get the components that they needed post COVID.

[Roy Twite, CEO & Director at IMI]

First half was against a very difficult comparator. Second half well, if we look at it consecutively, we see that first and second half sales will be about the same is the way we see it, Christian. In terms of the review, the review is progressing well, as I said. You know, we've the internal team, we've done a couple of reviews with them, and they're they're building their plan. We've got a very, very strong internal team now, and I'm they are absolutely committed to improving the financial returns.

[Roy Twite, CEO & Director at IMI]

I have absolutely no doubt about that. As I've said before, we bought in some real heavyweights from passenger car, and they really, you know, know exactly what they're doing. And that means increasing the amount of value engineering we're doing, really, you know, making sure that our new products are accretive to margins, and then, frankly, exiting some poorer business. And, you know, so that that really is the sort of three point game plan. They're doing the detailed, you know, all the detailed plans behind that, and we continue to, you know, look at external options.

[Roy Twite, CEO & Director at IMI]

As I said on the last call, though, Krishna, I don't expect this to be a quick thing. We're gonna optimize for value, not for speed, and I see this very much in the same way as we did the 20% to 30% of what was critical back then, you know, which is, as you know, been an incredibly effective driver of shareholder value for IMI. Does that answer your question okay?

[Christian Hinderaker, Executive Director at Goldman Sachs]

Thank you.

[Christian Hinderaker, Executive Director at Goldman Sachs]

Maybe just it it does. Very clear. Just a a quick final one then on on the tariff situation. Can you just clarify, have you put through price increases as part of your actions? And and if so, in what form?

[Roy Twite, CEO & Director at IMI]

Yeah, Christian. So, again, I mean, Jackie and all of the teams have done an incredible job with this, really, because, as you know, it's been a it's been a moving picture, you know, to say the least in the first half. They have managed to mitigate a lot of the effects of tariffs through things like exemptions, which is incredibly, intensive in terms of documentation and everything. But I've done that. We've rerouted some supply chains as well.

[Roy Twite, CEO & Director at IMI]

Do you know we've got our global footprint? We brought that into play. What remained, Christian, was about 4,000,000 pounds of impact that we couldn't avoid, and we have passed that through in the form of surcharges mainly to customers. And customers have understood why we've had to do that. So that's the the sort of extent of it in the first half.

[Roy Twite, CEO & Director at IMI]

Again, it's a moving picture, but at the moment, our base case is that in the second half, the effect will be just over twice that, just over twice the 4,000,000. And, again, we're in a good place to mitigate that effect as well.

[Christian Hinderaker, Executive Director at Goldman Sachs]

Thank you, and chemotax done.

[Luke Grant, Executive Director & CFO at IMI]

Excellent. Thanks, Christian.

[Roy Twite, CEO & Director at IMI]

Thanks, Christian.

[Operator]

Thank you. Our next question is from Lash Mahindra Raja from JPMorgan. Your line is now open. Please go ahead.

[Lushanthan Mahendrarajah, Capital Goods Equity Research Analyst at JP Morgan]

Good morning, guys. Thanks for taking my questions. And obviously, I just want to echo the views before. Welcome, Luke and Dan, best of luck on the next step in the great innings at IMI. I've really enjoyed getting to know you and working with you and look forward to staying in touch.

[Lushanthan Mahendrarajah, Capital Goods Equity Research Analyst at JP Morgan]

I've got three questions, think, if that's okay. The first is just on tariffs and obviously, it's helpful sort of quantifying the impact. I mean, is that lean into any specific business in particular? And I guess, have you seen anything in there, whether it's sort of pre buys ahead of tariffs? Or just given your cost base versus some of your peers, have you seen any sort of shifts in market share on the fringes?

[Lushanthan Mahendrarajah, Capital Goods Equity Research Analyst at JP Morgan]

So just interested in that. So that's the first question. Second question is just on process automation again and sort of orders and sort of helpful color earlier. But I guess, could you just give us a bit more sort of detail on some of the sort of moving parts in the market? Why don't you call that sort of power and the nuclear in particular, but just interested in sort of what you're seeing elsewhere, maybe oil and gas, etcetera, as well?

[Lushanthan Mahendrarajah, Capital Goods Equity Research Analyst at JP Morgan]

And then the third question is just on Life Sciences. I know you sort of touched on the sort of orders there. But as you said, there's been sort of mixed reporting so far from some of the big guys. I guess, is your sort of why do you think you're always been so good in the first half and, guess, give you that confidence into the second half?

[Roy Twite, CEO & Director at IMI]

Brilliant. Yeah. Thanks, Lush. Yeah. So tariffs first.

[Roy Twite, CEO & Director at IMI]

So tariffs, as I said, pounds 4,000,000 impact in the first half, completely offset through the actions that we took. The big impact for us are in industrial automation and in transport lush. They're they're really the two big ones. And the single biggest impact at the moment is Mexico. So our flows from Mexico into The US.

[Roy Twite, CEO & Director at IMI]

Some of that has been, you know, offset through exemptions, but it's still the biggest impact once we've got all the exemptions we can get. In terms of market share, you said as well on tariffs. Yeah, very interesting. So we are obviously taking any opportunity that we can to take market share from these changes in tariffs. And what's been interesting is Jackie told me last week that we've actually won some business in Asia from the reciprocal tariffs on the back of that.

[Roy Twite, CEO & Director at IMI]

So, yes, around the edges, I think because we've got a global footprint and some of our smaller competitors obviously haven't, you know, there will be opportunities, and we're alert to them. So, yeah, I'm really pleased with that. Process automation, orders, where we see real strength this year is nuclear, both on the new construction side and in the aftermarket, but interesting that we're winning some big new construction orders now in The UK, actually, Lush. LNG LNG, as I said on the last call, second quarter orders were really strong. And, actually, we see LNG obviously continuing, you know, through the second half and into the full year.

[Roy Twite, CEO & Director at IMI]

And then conventional power. Yeah. We're seeing a real surge in conventional power. And I think you probably know, Lush, that the order books of some of our customers are now at record levels on conventional power, particularly combined cycle gas. So, yeah, actually, that's been, you know, a real lift.

[Roy Twite, CEO & Director at IMI]

It shouldn't be a surprise, I suppose, because, you know, typically, you know, we see an order a couple of years, a year and a half, couple of years, you know, after final investment decision on a lot of these things. And if you think about it, you know, data centers, AI, EV, you know, what's driving this? We we talked about it a few years ago that this was gonna drive a resurgence, but definitely our customers got record order books now, and that bodes well both for new construction and then obviously for aftermarket that will generate in the longer term. And then the last one was about life sciences. You're right.

[Roy Twite, CEO & Director at IMI]

I mean, very mixed reporting. We have got some particular platforms that are recovering nicely. And if I think about sort of the the one that's moving the most, it's where our customer has been able to do the test in the doctor's surgery rather than in the laboratory. And this particular equipment can test for I think it's over 200 different pathogens and literally give you a result within, you know, less than an hour. It's that sort of thing, Lush.

[Roy Twite, CEO & Director at IMI]

And it really, you know, is recovering well into the second half. So so that's the that's the you know, if that helps at all, that's the, you know, single biggest thing. But I would say, generally, across the patch, you know, the destocking at least at least with our customers is less, and therefore, you know, we're starting to see a bit of a pickup. Remember, life sciences is only 7% of our business, and I'm not calling a sustained recovery. I I certainly think, Lashie, it's gonna continue to be bumpy, right, particularly with you know, you look at some of The US, you know, reductions in investment and so on.

[Roy Twite, CEO & Director at IMI]

But at least for the second half, we're seeing, yeah, a nice order book and good order patterns. Let's put it that way.

[Lushanthan Mahendrarajah, Capital Goods Equity Research Analyst at JP Morgan]

Okay. Thanks. Thanks, Roy. That's really helpful.

[Roy Twite, CEO & Director at IMI]

Thanks, Lush.

[Daniel Shook, Former CFO at IMI]

Cheers, Lush. Thanks.

[Operator]

Thank you. Our next question comes from Jonathan Han from Barclays. Your line is now open. Please go ahead.

[Jonathan Hurn, Analyst at Barclays]

Hey, guys. Good morning. Just a few questions for me, please. A couple of them sort of clarifying things that have been touched earlier. But firstly, just just coming back to to process, just looking out that to to '26.

[Jonathan Hurn, Analyst at Barclays]

Obviously, you talk about the order book, but that sort of sorry, the the growth of that business in in '26. If you look at the order book, obviously, it's plus five at at the first half. Is that the kind of level of growth we should expect for process in 2026? And also just Roy, if you could just give us how much book to ship you need to do in H2 to meet the forecast for 2025? That was the first question.

[Jonathan Hurn, Analyst at Barclays]

Second question was just coming back to IA. Obviously, you're saying sort of 3% to 4% growth coming through in the second half of that business. Just to understand, how much of that 3% to 4% is actually that order book catch up or delivery catch up to them, stuff that was delayed in the first half? Is that sort of half of that three to four? And then the third question was just on commercial sorry, it was on Hydronic or Climate.

[Jonathan Hurn, Analyst at Barclays]

If we look at that, obviously, great performance in the first half, plus five. If we look into the second half, that comp actually gets a lot tougher for that business in h two. Do you still think you can do 5% growth in h two? And if so, what's sort of really driving that that performance there? Thanks.

[Roy Twite, CEO & Director at IMI]

Brilliant. Jonathan, as usual, you know, we get we get through a lot of questions, and you asked three really good ones. You know? So that really appreciate that. On the on the process automation order book, I mean, you know, we're not gonna forecast next year yet, Jonathan.

[Roy Twite, CEO & Director at IMI]

I mean, you know, give us a chance. Try. But but, you know, it was up 5% at the half year despite, you know, that big marine order, which is multiyear. Aftermarket growing at 10%, we do think the order book will be higher at the end of this year. I mean, let's see how much higher, but good momentum in this in that business.

[Roy Twite, CEO & Director at IMI]

As I said, particularly on conventional power, you know, conventional power is about 25% of process automation. 5% is new construction, and 20% is aftermarket. Right? So so that that's nice that that sort of reasonably big part has got some nice momentum behind it. You got LNG going really well as well, Jonathan, so that's good.

[Roy Twite, CEO & Director at IMI]

And then, you know, nuclear, as I said, seems to be, you know, picking up. So, yeah, let's see. But, you know, right now, as I said, we think we'll finish the year with a better order book than we came into it, and that would, you know, mean that we'd grow a bit again next year. Book Book to ship. Yeah.

[Roy Twite, CEO & Director at IMI]

We got £15,000,000 more book to ship this year than at this point last year. So on book to ship, we feel good. Right? The the because book to ship, obviously, we got most of the new construction orders because they tend to be twelve month later. This is aftermarket.

[Roy Twite, CEO & Director at IMI]

And as you can see, the momentum in aftermarket is is great. So we feel fine about where book to ship is. IA yeah. So of the sort of three to 4% growth, let's say very, very roughly, Jonathan, about a quarter of it a quarter to a third of it is backlog catch up, and then the rest is order momentum. Yep.

[Roy Twite, CEO & Director at IMI]

So it could give you a rough idea of the breakdown of that. And then in terms of climate, yeah, I mean, climate, wow. Again, fantastic performance first half. Stefano and the team doing a doing a cracking job. You know?

[Roy Twite, CEO & Director at IMI]

And what's really growing there is the 25% of that business that's connected products, you know, is is really providing momentum. The TA smart valve, we've talked about it a lot. That's really taken off now. So so, yeah, that that's what we see. Jonathan, I would say, certainly within our guidance is about similar levels of growth as the first half.

[Roy Twite, CEO & Director at IMI]

As you know, the heating season, how strong that is can determine, you know, a bit of that growth. So, you know, we can't predict it exactly, but, you know, we would expect all things equal that because our products generate an energy saving. You know? And I think, you know, you've seen some of the peers that have had, you know, difficult results. Right?

[Roy Twite, CEO & Director at IMI]

But but because we're very focused on energy saving while providing a very comfortable indoor climate, making sure that we we nail that because we've got market leading brands, market leading shares, you know, I we do feel pretty good. That business continues to to grow and generate excellent returns, Jonathan. So, yeah, you know, that's why we feel even though as you said, it's a more difficult compared to second half. When we look at all of the component parts within there, we feel comfortable with that level of growth. Does that answer all your questions?

[Jonathan Hurn, Analyst at Barclays]

Very much. Yeah. Absolutely. That that's great.

[Jonathan Hurn, Analyst at Barclays]

Thanks very much, Roy. And likewise, I'd just like to say we or or expect the same sort of gratitude to to Dan for his time over the last ten years. Thanks very much, and good luck for the future.

[Daniel Shook, Former CFO at IMI]

Cheers, Jonathan. You're a star.

[Operator]

Thank you. Our next question comes from Kalwinder Rajpal from AlphaValue. Your line is now open. Please go ahead.

[Kulwinder Singh Rajpal, Equity Research Analyst at AlphaValue]

Yeah. Good morning, gentlemen. So just wanted to understand the extent of the data center business within your group. I would presume most of it falls under climate control and probably a small part of it, but just wanted to understand how has that business been growing, and are there any other divisions that could eventually cater to this segment?

[Roy Twite, CEO & Director at IMI]

Yes, Corinda. Yeah. So within Climate, I think last year, the orders, wanna say, were sort of £67,000,000, specifically around data centers. In the first half, we've done about the same number of orders, about amount of orders in climate on data centers. I think we did about 6,000,000 in the first half.

[Roy Twite, CEO & Director at IMI]

So we're probably double what we did last year. The interesting thing on climate actually, Corvinda, is that we typically get orders sort of three or four years after the data center is announced that it's gonna be built. So that's very encouraging, obviously, because that means that, you know, as all these data centers come through, we would expect that number to increase nicely. At the moment, Corvinda, though, by far the bigger effect is the effect it's having on process automation. Right?

[Roy Twite, CEO & Director at IMI]

Because energy demand, as I said earlier in the call, right, roughly 25% of process automation is conventional power. And, you know, we are seeing that our customers, particularly in combined cycle gas power stations, their order books are just at record levels. They could, you know, not make combined cycle gas power stations as fast as they need to. Right? So so that is obviously providing a nice pull through for us that the the power that's data using that secondary effect. Absolutely.

[Kulwinder Singh Rajpal, Equity Research Analyst at AlphaValue]

Right. And then, is there any aspiration to maybe grow the data center piece a little bit more through investments in Growth Hub or through innovation?

[Roy Twite, CEO & Director at IMI]

Yeah.

[Roy Twite, CEO & Director at IMI]

I mean, we absolutely. So within Climate, there's a focus team that's actually pulling on people outside of climate that are using, absolutely, Growth Hub teams, Growth Hub techniques to grow that business. Absolutely, Corvinda. So, yeah, we see it as a as a very strong area for years to come. And, yeah, absolutely.

[Kulwinder Singh Rajpal, Equity Research Analyst at AlphaValue]

And, lastly, just wanted to go back to slide 17 where we see the aftermarket, metrics. So is the aspiration there to go from bottom right to top right? Is that reading correct?

[Daniel Shook, Former CFO at IMI]

Oh, the aftermarket potential versus the aftermarket performance.

[Roy Twite, CEO & Director at IMI]

Yeah. I I I think the the so the aspiration with aftermarket, Corvinda, is that, as I said, we have mapped our own assets, and we continue to improve our ability to help customers identify earlier and earlier whether they're gonna have a problem with one of our installed valves, and that's 200,000 valves. Right? The other opportunity is obviously the 300,000 installed severe service valves from our competition, and we grew that. Upgrade valves were up 17% in the first half.

[Roy Twite, CEO & Director at IMI]

17%. Another 17%. Right? And competitor upgrade valves were up another 12% on volumes. Right?

[Roy Twite, CEO & Director at IMI]

So it's really you know, that strategy that that Jackie, Robbie, and the teams are driving, that means that we see a lot of runway for years to come in the aftermarket within in process automation. So, yeah, our ambition is just it's it's a highly technical sell. As you know, we've got valve doctors. They're the most advanced applications engineers in the industry. You know, when they come out of universities with an advanced degree, it typically takes them another seven years to qualify as a valve doctor, and that's through gaining lots and lots of application knowledge.

[Roy Twite, CEO & Director at IMI]

Most of these process plants and and power plants They're all unique. So requires a lot of engineering knowledge to go in and then actually do an upgrade valve cell. But but that that's our ambition to keep growing that very, very profitable space to obviously carry on generating huge, huge amounts of of cash out of that, which is now, let's face it, IMI's biggest profit pool, aftermarket process automation. Yeah.

[Kulwinder Singh Rajpal, Equity Research Analyst at AlphaValue]

Okay. Thank you very much. Super helpful comments.

[Roy Twite, CEO & Director at IMI]

Cheers. Thanks, Covenant.

[Operator]

Thank you. Our next question comes from Mark Davies Jones from Stifel. Your line is now open. Please go ahead.

[Mark Davies Jones, MD - Industrials at Stifel Financial]

Thanks very much. And of course, I join in the virtual round of applause for Dan. It's difficult to do when we're not in the room, but yeah, share those sentiments. A couple of slightly more niche questions, if I may. The latest bit of Trump tariff nonsense overnight, they seem to be slamming something extreme on Switzerland.

[Mark Davies Jones, MD - Industrials at Stifel Financial]

I remember from COVID days, there were some specialist miniature valves produced out of Switzerland. I know it's it's just breaking news, but I don't know if there is material manufacturing still there and that's anything you could comment on. But more broadly on tariffs, we are beginning to hear some companies suggesting there is more resistance to simply passing through cost. Are you beginning to see any signs of that? And is that a concern through the back end of the year?

[Roy Twite, CEO & Director at IMI]

Thanks, Mark. I'll I'll start with passing through cost, So passing through cost, we obviously do everything else first, Mark. Right? You know, we try and get exemptions. We try and reroute supply chains.

[Roy Twite, CEO & Director at IMI]

But in the end, you know, certain things I think I said on the last call, Mark. Right? Manufacturing costs outside The US in some of our factories are so competitive that they can be, you know, even after tariffs, literally half, you know, what we can make it for in The US. Right? So so you get to the point where you know?

[Roy Twite, CEO & Director at IMI]

And and I have to say in our case, yes, of course, customers question it. Of course. I mean but, you know, when you go through the logic and in the end, you know, in you're you're typically talking about a mid single digit increase for a lot of people on a product or component or system that is, you know, normally, in our case, very, very small part of the overall cost of their system, but obviously a vital part of the cost, you know, of their overall system and the way it performs for for their customers. So so, you know, I think in the end, you know, we have to do our absolute best. But, you know, as I said in the first half, we completely offset the 4,000,000 that we couldn't do anything about.

[Roy Twite, CEO & Director at IMI]

And then on on Switzerland, well, yeah, that is breaking news, isn't it? Yeah. We will

[Mark Davies Jones, MD - Industrials at Stifel Financial]

That's unfair, I know.

[Roy Twite, CEO & Director at IMI]

Yeah. You know, I'll just try I'll try I'll try and frame it for you, Mark. The so those are, again, tiny valves where the tolerances I mean, we are one of only, I would say, two or three companies globally as as you saw in COVID, right, that can make these valves. I I could tell you a story about that. Won't won't tell you.

[Roy Twite, CEO & Director at IMI]

Because during during COVID, obviously, some other people thought they could make those valves. Yeah. Even some of the most advanced manufacturing companies in the world thought they could make them, but they obviously could. Right?

[Roy Twite, CEO & Director at IMI]

Because you're literally dealing with micron level tolerances. You know? So so, literally, you know, one fiftieth of your of a human hair and stack tolerances, typically, you know, six to 10 tolerances that go inside a proportional valve that has tens of thousands of settings to go inside of a ventilator that will keep you alive when you're in a coma. I mean, either the technology is quite frankly amazing. So, yes, I and, again, this is gonna be a bit of a guess, to be honest with you, Mark.

[Roy Twite, CEO & Director at IMI]

We might have five to 10,000,000 pounds of that sort of product that would flow out of Switzerland into The US. So, you know, we will obviously, you know, look at it. If it if if that becomes an enduring thing, we we have got we did build extra capacity, obviously, during COVID to, obviously, mainly to sell lives save lives. So, you know, we will have options as usual, and we will be agile around it if that becomes an enduring thing. But, you know, in the scheme of things, I don't I don't think it's gonna be a a massive thing for us.

[Mark Davies Jones, MD - Industrials at Stifel Financial]

Thank you very much. And if I can ask a slightly odd question, was there anything positive to come out of the cyber attack in terms of what you've learned from that process and where your systems are now?

[Roy Twite, CEO & Director at IMI]

Wow. That's a really good question. Because at the time, it it felt, you know, not positive, Mark. But I I do what? Do you know what?

[Roy Twite, CEO & Director at IMI]

The recovery, the 6% growth in q two from our teams and I was out visiting three of our German sites in the last couple of weeks, and the response was frankly absolutely fantastic. So we have this sort of saying around one big team. The the amount of teams that pull together, Mark. So our French sales team I met the leader of the French sales team. He was there in Germany with us.

[Roy Twite, CEO & Director at IMI]

And the the whole French sales team, 20 of them, moved in to manually put orders in with the German team. Just to give you one example of what happened globally. And so that feeling of spirit, team spirit to overcome adversity like COVID or like, you know you know, the inflation that we had, you know, with the sort of cost of living crisis and all that. Those things just bring us together and, you know, ultimately make you stronger. Right?

[Roy Twite, CEO & Director at IMI]

If you survive it, you know, you become stronger. Of course, we are investing in the second half in more IT security and more IT infrastructure. There is no doubt about that. We've done a fundamental external review, and and, you know, there's a lots of things. In fact, I'll let Luke just touch on on two or three of them.

[Roy Twite, CEO & Director at IMI]

But there's lots of things that we're gonna do because, ultimately, you know, I read the other day, Mark, that there's about a billion phishing emails a year now. The average number of people clicking on them still is about 5%. We're actually at 3% now, so we're training, training, training, obviously. But if you click on that phishing email, it's obviously a risk. Right?

[Roy Twite, CEO & Director at IMI]

That that's what that's the main way people tend to get into your systems. And then it's what you do to make yourself the place where the attackers, you know, the hardest door to knock on. Right? Because they're they're obviously improving every day, and it's a race. But, Luke, do you wanna just touch on the sort of things we're doing?

[Luke Grant, Executive Director & CFO at IMI]

Yeah. And I I think maybe just to add, you know, there's probably three things I call out. I think Roy touched upon one, which was just all the work we did on phishing and and the efforts around training in the business. I think the second one is the IT security team itself. We're more than doubling in size, and most of those people are joining in the coming weeks.

[Luke Grant, Executive Director & CFO at IMI]

And then the last one is just investing in more tools. So we'll have more multilayered tools than we've ever had before and really just going for the top end tools at every single stage of our IT security setup. Thanks, Mark.

[Roy Twite, CEO & Director at IMI]

Yeah.

[Roy Twite, CEO & Director at IMI]

Excellent. Yeah. I agree. Yeah. So so lots of stuff, Mark, that we've learned.

[Roy Twite, CEO & Director at IMI]

You know? Luke Luke is now, you know, a fantastic IT security expert already, you know, and and, you know, we're still we're still learning. Right? This is only gonna get more difficult. You know?

[Roy Twite, CEO & Director at IMI]

AI is gonna make this more difficult. But, yeah, it's a race, we, you know, we wanna try and stay ahead in the race. Yeah.

[Mark Davies Jones, MD - Industrials at Stifel Financial]

Fantastic. Many thanks.

[Daniel Shook, Former CFO at IMI]

Thanks, Mark. Cheers.

[Operator]

Thank you. Our next question comes from Richard Page from Deutsche Numis. Your line is now open.

[Richard Paige, Equity Research Analyst at Numis Securities Ltd]

And obviously, echoing again for Dan if it's getting boring. Fantastic legacy to have left behind. But before you put your feet up in Dubai, my leaving present to you is a question on the pension. Obviously, a great legacy to reduce those liabilities to GBP 1,300,000,000.0. But can you just explain what's going on in terms of that loan in what future cash costs and obviously, the ultimate buyout of that scheme, please.

[Richard Paige, Equity Research Analyst at Numis Securities Ltd]

And then just a second one, process automation. Just some clarity. I I noticed it's a small thing, but but on the sales as a service, it's dropped from 40,000,000 to 25,000,000. I assume that relates to process automation. Just explain, those moving parts as well, please. Thank you.

[Daniel Shook, Former CFO at IMI]

Richard, thanks for the, the parting gift here. Pensions. Yes. Yeah. No.

[Daniel Shook, Former CFO at IMI]

Really, really great journey. And as you'd expect, when we had 1,300,000,000.0, we had a number of asset classes, some of these longer dated private equity investments. Most of that we've been able to turn into cash. There's just this final tail. And as we're going through the buy in and the buyout, we don't want to, you know, we don't want to leave money on the table by trying to accelerate the, the liquidation of those.

[Daniel Shook, Former CFO at IMI]

And given the balance sheet we've got, it was just an easy decision. We'll put some capital into the trust. That'll give them the time over the next twelve plus months to wind the whole thing down. We'll we'll likely get some of that cash back already in the second half of this year, and then we'll watch how it all all winds down. But but, yeah, very pleased.

[Daniel Shook, Former CFO at IMI]

I told Adrian who's in charge of it. Get it done. Otherwise, I'm showing up at the AGM and asking tough questions of Luke next May.

[Roy Twite, CEO & Director at IMI]

So so that's pensions. Field service, basically, it's reverted to the mean, Richard. So field service, we won a big contract. It was in Texas, last year in the half year last year, and we reverted pretty much back to our normal sort of run rate of field service. Field service is important because some customers require us to do more work around things, you know, like start up of the plant and things like that.

[Roy Twite, CEO & Director at IMI]

It's also important because we get insight on valves that could cause problems. Right? But it tends to sort of, you know, revert to the main, Richard, whereas it's the upgrade valve part of process automation. And then the very, you know, good margin parts business on the back of that, that's obviously where the growth strategy is.

[Richard Paige, Equity Research Analyst at Numis Securities Ltd]

Brilliant. Thank you.

[Daniel Shook, Former CFO at IMI]

Thanks, Richard. Thanks, Richard.

[Operator]

Thank you. Our next question is from Harry Phillips from Peel Hunt. Your line is now open. Please go ahead.

[Harry Philips, Research Analyst at Peel Hunt]

Yes. Hi, good morning, everyone. I think I'm going to use my standing as the oldest lag on the circuit to maybe just conclude with a few thoughts on Dan. Just really, what what an amazing ten years. This very quiet unassuming person he turned up all that time ago.

[Harry Philips, Research Analyst at Peel Hunt]

Yeah. Quite a quite an amazing innings. But I know people are busy. So just very simply, Dan, your contribution to where IMI is today is absolutely enormous, very hard to overstate your impact, and you've set an enormously high bar for Luke, which I'm sure he's going to appreciate greatly. Legacy is a much overused word, but I think it is extremely appropriate here.

[Harry Philips, Research Analyst at Peel Hunt]

And I think I could say on behalf of us all on the call and elsewhere that your help, support, guidance, wisdom have been huge and much appreciated over that period. And also, you've made it fun, which is particularly important. May you be may you enjoy your family life, may it be long and joyful, slap on a sun cream, improve the golf. The Giants might even have a winning season. But very simply, Dan, we're gonna miss you hugely, and very good luck for the future.

[Daniel Shook, Former CFO at IMI]

Wow. Wow. Okay. That that's not fair, Harry. Are we are we ready to finish up or any more questions, Harry?

[Daniel Shook, Former CFO at IMI]

Is that it? Yeah. Well alright. Thank you, Harry. Okay.

[Daniel Shook, Former CFO at IMI]

Firstly, I gotta even it up from February. Happy birthday, Katie, my daughter. She's got her birthday coming up in a couple of weeks. If I didn't do that, it could have been a very tough family event, going forward. Sentiment right back to everybody on the call.

[Daniel Shook, Former CFO at IMI]

You know, you all, the analysts have been have made it fun back. The investors, everybody, you've you've supported me. I've learned a tremendous amount, and you've challenged along the way, which has helped us deliver this great company to to the position it is today. I know there are employees and and on the call and they'll listen later. It's been just such a privilege to be a part of this great organization.

[Daniel Shook, Former CFO at IMI]

And it's yeah. Again, it's been fun to learn about these incredible products like these incredibly small valves that come out of Switzerland. Just brilliant. And, yeah, the exec, my friends right here, Roy, you've been an incredible boss. You've been an incredible colleague, and and, you know, you've been a great friend as well.

[Daniel Shook, Former CFO at IMI]

It's just been it's just been tremendous. Yeah, Luke. Bar's high, but, you know, you all know Luke, you know, almost as well as I. You're gonna smash it out of the park. So, and, yeah, I won't say goodbye.

[Daniel Shook, Former CFO at IMI]

Not sure what we'll do. Definitely, maybe a little bit more golf. Thank you, Harry. I don't think the Giants are gonna be doing any good anytime soon, but eventually. But I won't say goodbye.

[Daniel Shook, Former CFO at IMI]

I'll just say until until the next time. It's just been an absolute privilege. And for those of you who know, I'm gonna take a selfie right now to commemorate. So, yeah, many thanks. We'll we'll see you all soon.

[Roy Twite, CEO & Director at IMI]

Well said, Dan. No. Well, thanks to everybody on the call, but my main thanks are to Dan, and well done for holding it together. Yeah. Helps.

[Roy Twite, CEO & Director at IMI]

Yeah. Well said, Harry. Yeah. Totally. You know, we've had, as you can imagine, a couple of big leaving dues for Dan, including a Dan Fest, because that is that is the outpouring of love from this organization for you, Dan.

[Roy Twite, CEO & Director at IMI]

And it really has been a brilliant ten years, and you've been an amazing partner. And, yeah, we're gonna miss you. Thanks, everybody, and I'm sure we'll all catch up soon. Thank you.

Participants

Executives

• Roy Twite, CEO & Director
• Daniel Shook, Former CFO
• Luke Grant, Executive Director & CFO

Analysts

• Andrew Douglas, Managing Director at Jefferies Financial Group
• Christian Hinderaker, Executive Director at Goldman Sachs
• Lushanthan Mahendrarajah, Capital Goods Equity Research Analyst at JP Morgan
• Jonathan Hurn, Analyst at Barclays
• Kulwinder Singh Rajpal, Equity Research Analyst at AlphaValue
• Mark Davies Jones, MD - Industrials at Stifel Financial
• Richard Paige, Equity Research Analyst at Numis Securities Ltd
• Harry Philips, Research Analyst at Peel Hunt