IMI (IMI) Q3 2024 TU earnings summary

Executive summary

• Third quarter performance met expectations, with organic revenue up 1% and full-year EPS guidance reaffirmed at 120-126p, representing an 11% CAGR since 2019 and around 10% adjusted organic operating profit growth.

• Margins improved across both Automation and Life Technology platforms, supported by aftermarket strength, high value-added solutions, and efficiency gains.

• Process automation saw strong momentum, with 14% order growth and a book-to-bill ratio of 1.15 over the last 12 months.

• Acquisition of TWTG Group B.V. for €25m completed, enhancing IoT and aftermarket capabilities in process automation.

• Leadership transition announced: Luke Grant to become CFO in July, succeeding Dan Shook.

Financial highlights

• Organic growth in Q3 was 1%, with full-year organic growth expected around 4%.

• Statutory revenue in Q3 was 3% lower year-over-year due to adverse foreign currency movements.

• Free cash flow projected to reach approximately £300 million next year.

• Margins have risen from 14% in 2019 to nearly 20% this year.

• £100m share buyback completed in October 2024.

Outlook and guidance

• Full-year EPS guidance reaffirmed at 120-126p, with double-digit EPS growth expected to continue, driven by organic growth, margin expansion, and disciplined capital deployment.

• Organic profit growth targeted at 5%+, with margin improvement to 20% in sight.

• Exchange rates as of 1 November 2024 projected to negatively impact revenue and adjusted operating profit by ~3% for the full year.

• Free cash flow to be used for acquisitions or returned to shareholders via buybacks if M&A opportunities are not realized.

• Preliminary results for the year ending 31 December 2024 to be announced on 28 February 2025.