Energy tops IMI's growth drivers
IMI is on track to deliver a fourth consecutive year of mid-single-digit organic revenue growth in 2026, it announced in a recent trading update.
Speaking at RBC Capital Markets' UK Focus Conference in London, the engineering group's CFO, Luke Grant, explained the rationale behind that confidence.
IMI has aligned its business around three megatrends: energy, automation, and healthcare. Energy is by far the group's biggest growth driver, Grant told Mark Fielding, Head, European Capital Goods Research.
IMI is benefiting from investment in technologies such as AI and electric vehicles. Its advanced flow control solutions deliver efficiency and resilience to the energy sector, while its climate control business sees opportunities in cooling for datacenters.
Revenue becomes less cyclical, more structural
The other two trends are automation and healthcare. Process automation, which makes up 40% of IMI's business, is being accelerated by labor shortages.
Meanwhile, an ageing population is driving demand for diagnostics and therapies that make use of the group's precision flow technologies.
"Put together, all three trends position us for more structural growth," says Grant.
At the same time, IMI has put increasing focus on aftermarket orders, which now account for over 45% of revenue: "A lot more of our business is now aligned to a less cyclical revenue stream."
"A lot more of our business is now aligned to a less cyclical revenue stream."
Luke Grant, CFO, IMI
Group sets sights on higher margins
In the seven years since Roy Twite took over as the group's CEO, operating margins have risen close to the 20% goal.
In response, IMI recently raised the target, with the aim of touching 22% as growth continues. "We see a pathway to tick up those margins year on year," Grant says.
Underpinned by a healthy process automation order book, and the continuing strength of the energy markets, the group expects to sustain its growth momentum.
"We see a pathway to tick up those margins year on year."
Luke Grant, CFO, IMI
