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Site visit to IMI Brno IMI Critical Engineering Strategic Refresh Roy Twite Divisional Managing Director IMI Critical Engineering

9 June 2015

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2014 Results 2014 order intake

£686m flat organically

Aftermarket up 9% £274m

Oil & Gas up 3% £143m

Fossil Power up 4% £97m

Petrochemical down 12% £76m

Nuclear down 27% £49m

Other up 7% £47m

Revenue by geography

18%

18%

52%

5% 7% Western Europe

North America

Emerging Markets

UK

RoW

£m 2014 FX Disposals Organic 2013

Revenue 692 (37) (3) 16 716

Organic growth % +2 +3

Operating profit 119.8 (6.9) (0.7) 10.6 116.8

Operating margin % 17.3 16.3

‣  Strong H2 bookings – order intake up 16% ‣  Good order growth in Aftermarket, Oil & Gas, Fossil Power ‣  New manufacturing sites in Houston, Korea and Italy ‣  Shipped record HIPPS order ‣  Improving project execution delivered margin growth

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07 May IMS: 2015 H1 Margins

Proportion of H1 Margin Impact

Volume

Acquisitions / disposals

Project mix / delays

Other

23% 2014 order intake profile and current market conditions

25% Bopp & Reuter and Eley portfolio change

47% H2 margins expected to show a significant improvement on H1

5% Improvements are paying for investments

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Book to Bill 2015

Q1 2015 Book-to-Bill

Oil & Gas 1.6 Strong orders in LNG

Fossil Power 1.4

Nuclear 0.4 Post-Fukushima, market continues to be slow

Petrochemical 1.3

Aftermarket 1.1

Total Critical 1.2

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Our vision

‣  £2 billion in revenues, strong margins

‣  Become a leader in all our chosen markets ‣  whilst extending into key adjacencies

‣  Be closer to customers, partnering at every stage of the product lifecycle ‣  Build world-class technical leadership & PM / operational efficiency ‣  Become the employer of choice

‣  #1 for culture, safety and talent development

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Strategy execution timeline

“The hard work begins”

“Increased investment”

“Benefits starting to show”

“Nearly firing on all cylinders”

Year 0 2014

Year 1 2015

Year 2 2016

Year 3 2017

Year 4 2018

“Up to full speed”

‣ Assess our markets and drivers for growth ‣ Benchmark performance and plan for improvement

‣ Invest in products and capital for growth ‣ Foundations established and benchmark improvements evident ‣ Sorting the basics in Precision Engineering complexities and structure

‣ Accelerated growth evident in results ‣ Working capital benefits visible in results ‣ Emerging markets ready for local full technology supply

‣ Growth outruns peers in every division ‣ Benchmark performance nearing world class standards ‣ Precision supply chain and capacity issues resolved

‣ Ambitions for growth fully realised ‣ Achievement of world class performance evident in results

✓

Year 5 2019

“Double operating profits”

‣ All divisions in attractive, high growth markets

Supported by value enhancing acquisitions

Organic initiatives

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5 year plans developed following review

Markets

Customers

Products

Peers

Competition

1. ✓

Manufacturing operations

Product development

Systems and controls

2. ✓

Collaboration

Synergies

Economies of scale

Brand

3. ✓

Investment for growth

Acquisitions

4. ✓

Reviewed existing competencies

and opportunities

5 year plans developed for

every company

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Expand in North

America, Korea,

China, India & the

Middle East

Globalisation of

all our businesses

Get closer to customers

Capitalise on attractive growth in existing markets ‣  Organic technology transfer to new locations ‣  Introduction of new products

Addressable Market = £7bn

Our goal for the division is to deliver 5 year compound

organic growth of 6 to 8%

Power Generation Petrochemical Oil & Gas

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New sites to support growth markets – getting closer to customer

New Korean Facility

New Italian Facility

New Houston Facility

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Operational improvement (LEAN journey) well embedded and improving

0

10

20

30

40

50

60

70

% S

core

No of sites

‣  All major sites 2nd assessments complete

‣  First assessment average score 26%

‣  Second assessment average score 40%

‣  6 month improvement target 51%

‣  World-class by 2018

1st assessment score 1st improvement target 2nd assessment score Next improvement target

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Continuing to invest to support growth

Enhancing systems and processes

‣  New Product Development process

‣  New Project Management process

‣  ERP implementation underway at IMI CCI (c.£10m)

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Acquisitions to

widen our market

opportunity

New acquisition targets identified to accelerate growth

‣  Add strategically aligned bolt-ons ‣  Extend into adjacent markets, potentially including subsea ‣  Expand product portfolio - semi-severe and configured valves

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5 year strategic plan Structured & efficient process

World-class integration process introduced – IMI Bopp + Reuther

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✓

Strategic checklist

✓

✓

✓

✓

Investment in world class manufacturing operations and new service facilities were delivered on time and to budget New ERP solution is progressing well against plan and we remain confident in our go live objective Impressive improvements in lean and new project management process will provide the foundations for sustainable competitive positioning Disposal of ELEY will assist in increasing focus on the core Critical Engineering businesses Acquisition of Bopp & Reuther adds significantly to the overall quality of the Critical Engineering portfolio