Post on 28-Sep-2018
IMI Fl id PIMI Fluid PowerRoy TwiteRoy TwitePresident and IMI Executive Director
Gordon ScottGlobal Sector Head - Commercial Vehicles
Richard EdwardsUK Technical DirectorUK Technical Director
Kelvin AustinGlobal Sector Head – Rail
F k GFrank GeversTechnical Director – Rail Sector
Agenda
• Norgren Overview Roy Twite– Strategy– Strategy– Growth Drivers
M i D i– Margin Drivers
• Sector Presentations – Commercial Vehicles Gordon ScottCommercial Vehicles Gordon Scott– Life Sciences Richard Edwards
R il K l i A ti– Rail Kelvin Austin
Norgren Strategic FocusNorgren Strategic Focus• Sectors
– Aggressively grow through Engineering Advantage– Strong growth in sales and marginsg g g– KAM / customer insight / engineer solution
• AftermarketSectors
42%Factory Automation• Aftermarket– Grow through Norgren Express
Attractive margins and more resilient end market
42%Factory Automation 25%
– Attractive margins and more resilient end market– Availability is the key sales driver
Aftermarket 33%
• General market / factory automation– Selectively grow– Growing end market: labour productivity, consistent quality– Focus on niche areas of higher margin business
Norgren Sector Sales
Other7%
Commercial Vehicles16%
7%Rail2%
Energy 4%
Food & Beverage Lif S i
4%
Food & Beverage6% Life Sciences
7%
F d tFocused sectorsS t Market Market H1 th C titiSector Market
growthMarket Share* H1 growth Competition
CommercialParker, Voss,
W b R fCommercialVehicles ++ 20-25% 50% Wabco, Raufoss,
Bosch
T H iltLife Sciences +++ 10-15% 25%
Tecan, Hamilton, Parker, Burkert
A F t B hFood & Beverage + 10-15% 50%
Asco, Festo, Bosch,SMC
Energy ++ 10-15% 7% Asco, Parker
P k B hRail + 10-15% 30%
Parker, Bosch Rexroth, Festo, SMC
* IMI management estimates - market share within addressable market.
Norgren Strategy: Engineering Advantage
SalesCustomer
valueIMImargin
Sales Uplift
value margin
Life Cost
Acquisition Cost
Engineering Advantage: Commercial VehicleEngineering Advantage: Commercial Vehicle
Sales
Life Costs
Sales Uplift
Acquisition Cost
Norgren Express Growth ChannelNorgren Express – Growth Channel Focused on the Aftermarket
General Market /
Aftermarket Buying Behaviour
Sectors 42%
General Market / Factory Automation
25% » Key customer requirements» Part identificationPart identification
» Easy to order
» Reliable and rapid delivery
Aftermarket
p y
Aftermarket 33%
2010 YTD Sales
N E G th PNorgren Express: Growth Programs
N C t• New Customers:– Web based lead generation activities e.g. email, catalogues
• Attractive margins, not price sensitive
Fl id P M i D iFluid Power Margin Drivers
• Increased new product sales, engineering advantage– From 12% to 20%
• Further expansion of low cost manufacturing– From 35% to 50%
• Increased low cost procurementp– From 20% to 45%
I i d t i• Improving product margins
Sales Growth and Margin DevelopmentSales Growth and Margin Development
31%40% Organic Growth
-9% -5% 5% 8% 4% 6% 2% 3% -31%
31%
20%
40% g
9% 5% 2% 3% 31%
-20%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1
-40%
Operating Margin
12.2% 13.0% 13.2% 13.7%15.0%
13 0%
15.0%
17.0%
6.7% 6.7%7.6%
10.1%
6.3%7.0%
9.0%
11.0%
13.0%
5.0%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1
Fl id P F t P tFluid Power Future Prospects
Cl t t f Fl id P i h k t• Clear strategy for Fluid Power in each market area
• Growth Drivers– Emissions control, healthcare, rail infrastructure, automation
• Margin Driversg– Increased new product sales, engineering advantage– Further expansion of LCM/LCPp– Improving product margins
Long Term DriversLong Term Drivers
• Legislation driving industry globally.
• Engineering Advantage - differentiated product solutions, using proven core building blocks
• Globalisation of industry – Norgren well positioned
• Commercial Vehicle sector outlook improving
K i d t d i i di ti t th» Key industry drivers indicating strong growth
Short Term Drivers
• Key industry drivers indicating strong growth
- Freight requirements increasing- Freight requirements increasing
- Over capacity reducingp y g
- Age of fleet
- Truck inventory 6 year low
Norgren Commercial Vehicle Sector
Powertrain Chassis & CabNorgren Commercial Vehicle Sector …
Chassis & CabFluid Management & Transmission Controls Air Management & Vehicle Dynamics
IMPROVE F l E» IMPROVE Fuel Economy » IMPROVE Fuel Economy
» REDUCE Air Wastage
» IMPROVE Total Cost Ownership
» IMPROVE Fuel Economy
» REDUCE Emissions
» IMPROVE Reliability
Other Drivers – Minimal Cost, Minimal Engineering Impact to Customer
Powertrain» IMPROVE Fuel Economy
» REDUCE Emissions» IMPROVE Reliability
Fuel Efficiency & PerformanceAir and Gas Management
CustomizedAft T t t P Charge Air F ll I t t dCustomized Solenoid ValveApplication
After TreatmentComponents
Pressure Control Valves
Charge AirManagementSubsystem
Fully Integrated Control System
Chassis / Cab» IMPROVE Fuel Economy
REDUCE Ai W t» REDUCE Air Wastage» IMPROVE Total Cost Ownership
Vehicle DynamicsAir Management
Suspension Tire InflationSystem ControlsControl Valves Valve ArraysConnectors &
Accessories
Differentiated solutions - Building Blocks
T tTemperature range-40°...+130°C
Vibration2,500 Hz
A l ti 50Voltage
ToleranceAcceleration 50 g Tolerance-10% / +20%
Transmission Solutions
Engine Solutions
Legislation – Transformed IndustryE 1Euro 1
Euro 2
ollu
tion
Wh Euro 1
Wh Euro 1
Po
Soot
PM
g/k
WSo
ot P
M g
/kW
Euro 3Euro 2
E 3
Euro 2
E 3Euro 3
Euro 4 NOx g/kWh1 2 3 4 5 6 7 8
0
Euro 3Euro 4Euro 5Euro 6
NOx g/kWh1 2 3 4 5 6 7 8
0
Euro 3Euro 4Euro 5Euro 6
Euro 4
E 5
NOx g/kWhNOx g/kWh
Euro 5
E 6
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Euro 6
Engineering Advantageg g g
Existing Customer Solution
ValveValve V lV l • Multiple Individual Valves
Existing Customer Solution
ValveValve ValveValve • Multiple Individual Valves• Remote Sensing• Complex Electrical Installation• Complex Pneumatic Installation• Multiple Mounting• Difficult Diagnostics
ValveValve
• Difficult Diagnostics• Multiple Suppliers• High Warranty cost
ValveValve RegulatorRegulator
SensingSensing
Engineering Advantageg g g
Norgren - New Solution• Single Unit • Improved Reliability• Better Performance• Smaller Footprint
R d d I t ll ti Ti• Reduced Installation Time• Single Mounting
Sales Uplift
Life Cost
Acquisition Cost
Engineering AdvantageMulti-Function Control Valve
• Engine 11L and 13L - 3 Valve solution– Timing: In production
WasteWaste--gategate
• Engine 15L – 2 valve solution– Timing: February 2011
gategate
E i 24 V (Gl b l E l W ld T k)
SensorsSensors Exhaust Exhaust BrakeBrake
WasteWaste--tt
WasteWaste--Sales • Engine 24 V (Global Eagle World Truck)– Timing: April 2012
gategate gategateSales Uplift
Life Cost
SensorsSensors Exhaust Exhaust BrakeBrake
AmplificationAcquisition Cost
AsiaAsia
• Asia Truck technology / requirement developing quickly• Asia – Truck technology / requirement developing quickly- Legislation following Europe / USA
A i P t ti l 900k T k l th EU d USA- Asia Potential 900k Trucks – larger than EU and USA- Government Investment – Road Infrastructure- Significant Efforts Global Truck OEM (World Truck)- Norgren – Well positioned
Global Truck ProductionEurope 391k trucks
Asia 894k trucksAsia 894k trucks
America 358k trucks
Asia Region – IndiaAsia Region India
Customer Ashok LeylandCustomer - Ashok Leyland • Project – New Neptune Euro IV Engines.Customer unable to find reliable, accurate control for EGR system. High vibration and difficult environment. Timing, ready for 2010 launch
SolutionSolution• Norgren Proportional Technology. Used proven western technology.P “ hi l ” li bilit f d l “t k il ”Proven “on vehicle” reliability, performance and real “truck mileage”
Significant Amplification Potential - TechnologySales Uplift
Life Cost
Acquisition Cost
Life Cost
SummarySummary
• Legislation driving industry globally• Asia – Significant potential – Norgren well positioned• Asia – Significant potential – Norgren well positioned.• Economic outlook improving
A lifi ti• Amplification • Engineering Advantage
– Technology, differentiation
Why is Life Science Attractive?Why is Life Science Attractive?
• Long term global growth g g g
• Long program life (Instrument life & MRO)• Long program life (Instrument life & MRO)
Si ifi t b i t t• Significant barriers to entry
• High margin
Life Science Sector - Markets
A l ti l & Di ti
Life Science Sector Markets
Analytical & Diagnostic Instrumentation Medical
DevicesDevices
AnaesthesialVentilation
RespirationInfusionDialysis
Drug DiscoveryPatient Diagnosis
G iGenomicsBio Detection
35
Market Size• National healthcare spending:
Market SizeNational healthcare spending:– North America: 14% of GDP (@ 1.2 times GDP)– Europe: 9% of GDP (@ 1.4 times GDP)Europe: 9% of GDP ( @ 1.4 times GDP)– BRIC: 5% of GDP (@ 2 times GDP)
• Respiratory disease accounts for 10% of the total healthcare burden
Norgren Available Market - £500M
• 80 ventilator manufacturers worldwideworldwide
• 250,000 new machines produced heach year
Source: growth statements are IMI management estimates based on various external sources
Growth Drivers• Emerging Markets
Growth DriversEmerging Markets– Large population centers entering healthcare
• Technology/targeted therapies– Innovation, genomics, and drug discovery, g , g y
• Point of care/point of use
• Increase in chronic diseases worldwideIncrease in chronic diseases worldwide
• Aging populationg g p p– 65 and older (500m to 1bn in next 20 years)
Market Growth
• Global Respiratory Markets: 12% p a to 2016
Market Growth
• Global Respiratory Markets: 12% p.a. to 2016
Gl b l A l ti l/Di ti M k t 9% t 2020• Global Analytical/Diagnostic Markets: 9% p.a. to 2020
Emerging markets will lead growth
China 18% over the last 15 years, increasing to 25% through to 2015
India growing at 16% p.a. (85% of devices are imported)
Source: growth statements are IMI management estimates based on various external sources
Respiratory Disease• Chronic Obstructive Pulmonary Disease (COPD)
Respiratory DiseaseChronic Obstructive Pulmonary Disease (COPD)– Currently the 6th leading cause of death– Predicted to be the 3rd leading cause of death by 2030Predicted to be the 3 leading cause of death by 2030
• 500M people affected globally, 25M require advanced treatment– Mechanical Ventilation– Oxygen Therapy– Drug intervention
• COPD is incurable– Patients require treatment for life
Engineering Advantage
S l i iti l li ti h ll ith
Engineering Advantage
• Solving critical application challenges with engineered solutions
Sales Uplift
• Value proposition - making our customers more successful
Life Costs
Acquisition costs
• Foundations
Acquisition costs
– Customer intimacy– Differentiation– Strong regional technical centres– Expertise– Rapid response
Proportional Valve• The Norgren “Flatprop” – A world beater…
Proportional Valve
• Design optimised for critical ventilation and life support applicationspp pp
• Highest flow, lowest power, lightest weight, most accurate proportional valve in themost accurate proportional valve in the world
• Enabling technology that has allowed the• Enabling technology that has allowed the development of truly portable ventilators
R l d i 2004• Released in 2004
• 200,000 valves sold since launch
• The heart of many integrated solutions
44
Genome SequencingGenome Sequencing• Completed in 2003, the human genome p , g
mapping project took almost 13 years and cost $3B
• It is now possible to have individual whole genome profiling within a week for less than $10,000
• Both leading manufactures of this gtechnology use integrated fluidic manifolds and syringe pump arrays developed by NNorgren
45
Anaesthesia & Ventilator ManifoldsAnaesthesia & Ventilator Manifolds• There are three main ventilator manufacturers
in China and Norgren has developed solutions for each of them
• In 2007, we started supplying an anaesthesia gas control module for Mindray, manufacturedgas control module for Mindray, manufactured locally at our Shanghai facility
• The success of the project and the close working relationship between the engineering t l d thi t d l tteams lead this year, to a development partnership for Mindray’s new flagship intensive care ventilator
46
Infusion PumpInfusion Pump• In-Patient care in US/European hospitals can
often exceed £1,000 per day
• Early de-hospitalisation is therefore a y psignificant driver for both national services and private healthcare providers
• Astra Tech (a subsidiary of Astra Zeneca), have developed a portable, disposable, infusion pump which helps to achieve this aim
• At the core of this solution is a bespokeAt the core of this solution is a bespoke pressure regulator developed and manufactured by Norgren
47
Life Science Sector SummaryLife Science Sector Summary
• Consistent double-digit annual growth
• Fragmented and innovative market
• True supply partnerships
E i i Ad t l ti• Engineering Advantage solutions
Re arding• Rewarding
Global Megatrends – shaping g gtomorrow's markets
Urbanization
» Today: 280 million people in megacities (>10 million)
» 2007: First time in human history more people living in cities than in rural areas
» 2015: 350 million people in megacities
Challenges for Transportation
Energy Consumption
Rail is on average 2 – 5 times more energy efficient than road, shipping and aviation
Final Energy Consumption in Europe
efficient than road, shipping and aviation
Railways’ share of transport energy 14%
2.5% 0.1%1.4%
consumption is less than 3%,
hil it k twhile its market share is between 6% ( )6% (passenger) and 10% (freight).
82%82%
Road Air Railways Inland Water Other
Climate change and CO2 emissions
GHG Output in Europe
12%
2% 1%
15%
70%
Road Sea Air Railways Other
Due to its use of electricity, rail is the only motorised mode of transport which is capable of shifting from fossil fuels to renewable energy without any separate investment in the propulsion units, simply by changing the energy sources in the electric energy production. Electric traction accounts for 80% of rail production in Europe.
Climate change and CO2 emissions
With 6-10% market share, rail still ib l h 2% f h EUcontributes less than 2% of the EU
transport sector’s CO2 emissions.
Travelling by rail is on average 3Travelling by rail is on average 3-10 times less CO2 intensive compared to road or air transport
-74%
Is it Safe to Travel?Fatality Risk as a Multiple of Rail
571600
400
500 Rail travel i 15 ti
201 189300
400 is 15 times safer than 189
15 1 8 1 5 1100
200 a car!15 1.8 1.5 1
0
ycle
rian
ycle Car ach Air
way
Motorcyc
Pedes
tria
Cyc CBus
/coac A
Railwa
per km basis
Siemens - Deutsche Bahn ICE3Energy consumption is 0 33 litres per 100 km per seat 75% less emissions than an aircraft
To this….
Energy consumption is 0.33 litres per 100 km per seat, 75% less emissions than an aircraft
Tangshan (CNR) China Railways CRH3Norgren components in Brakes, Doors and Pantographsg p , g p
Velaro – Germany, Spain, China, Russia
Global Rail Market ShareGlobal Rail Market Share15%
10%Parker
3%
NorgrenFestoSMC
8%53% SMC
BoschOthers
8%
6%
Source: IMI management estimates
Average Growth ’08 – ’13 = 5%g
Rail Market Forecast (sci Verkehr / IRJ Oct 08)
100 0120.0140.0 122.5100
40 060.080.0
100.0
£ bn
0.020.040.0
2007 2008 2009 2010 2011 2012 2013
Year
Openness of a country’s markets to foreign goods and services. Market access reflects the government’s economic policies regarding import substitution and free competition.
Study commissioned by the European Railway Industry Association - UNIFE
W ld R il A ibl M k t K S tRolling Stock pne matic potential £200m
World Rail - Accessible Market - Key Segments
World Rail Market = £74bn
Rolling Stock pneumatic potential = £200m
World Rail Market £74bn9 Rolling Stock Pneumatics Market = £200m
7.6 2.6
27
15
20.5
22.6
23 146.7Rolling Stock Services Infrastructure Train Control
Coaches Wagons Multiple Units Others Locomotives
Global Top Ten Vehicle OEMsGlobal Top Ten Vehicle OEMs
BombardierAlstomCNRCNRCSRSiemensSiemensTransmashGETrinityEMDKawasaki
CNR = China Northern Locomotive & Rolling Stock Industry
Electro-Motive Diesel, Inc
Our strategy is to deliver value to vehicle OEMs and end-users
REGIONAL RAIL SALES ENGINEERSTactics – Top 30Engineering AdvantageTechnical solutionsService differentiation
REGIONAL RAIL SALES ENGINEERS
Se ce d e e a oGlobal support = Sales Uplift
Tactics Top 20Products which are:More reliableMore durableMore efficientIntegrated supply partners= Life Cost Advantage GLOBAL RAIL KAM’s
BRECKNELL WILLIS
Rail Sector Strategy
KEY ATTRIBUTES
References Experience Reliable
KEY APPLICATIONS
Brakes Couplers References Experience Reliable
Durable Proven Global Reach
Brakes Couplers
Doors Pantographs
Opportunity: Reduce Complexitypp y p y
The ProblemThe Problem
• The customer wants to build Coupling Systems not pneumatic circuits• The customer wants to build Coupling Systems, not pneumatic circuits.
– Increase his capacity
– Retain flexibility
Solution: Customised ManifoldApplication: » Manifold to control the nose cone door system
Customer: » Coupler OEM
Advantage: » Compact unit easy to installAdvantage: » Compact unit, easy to install» Modular system - flexibility» Reduced installation time» Reduced re-work time» Reduced re-work time» Less inventory handling» Less purchasing & accounting administration
Key: » The customer had confidence in Norgren from ourexisting relationshipD i d th i it t it diff t i t» Designed the circuit to suit different variants
» -40°C capability = global standardisation Sales uplift
Acquisition cost
Life Cost
Opportunity: Ergonomic Access SystemsOpportunity: Ergonomic Access Systems
Designed for maximum comfort, efficiency, safety, and ease of use
• Automatic compartment and body p yend door systems
• Fire protection options• Fire protection options
• Automatic openingp g
• Entrapment protection
• Programmable motion
Opportunity: Ergonomic Access SystemsChallenges on Automatic Rail Door System Applications
Opportunity: Ergonomic Access Systems
ISO 16750EN 45545
• Rigorous safety and quality standardsVDE 0435DIN - EN60529EN 16509
• Low temperatures, down to –50°C IEC 61508EN 12015 und EN 12016DIN 5510• Demanding voltage ranges and high tolerances
– 24 – 110 VDC +/- 30%
DIN 5510EN 14752EN 50125 -1DIN EN 5015524 – 110 VDC +/- 30%
• Low lifecycle costs
DIN EN 50155DIN EN 50126DIN EN 50128DIN EN 50129DIN EN 50129
Solution: Engineering AdvantageSolution: Engineering Advantage
Differentiation on Automatic Door Systemsy
• Obstruction detection with memory function
• Robust guiding system capacity 150kg• Robust guiding system – capacity 150kg
• Plug and play actuator – no cabling workPlug and play actuator no cabling work
• Proven lifecycles >2.5 million
• Modular, flexible component layout
Opportunity: Ergonomic Access SystemsOpportunity: Ergonomic Access Systems
Designed for maximum comfort efficiency safety and ease of useDesigned for maximum comfort, efficiency, safety, and ease of use
• Some markets require less complex systems
• Maintenance is problematic
• Long refurbishment intervals are required• Long refurbishment intervals are required
• Manual door systems are sufficient for some applicationsManual door systems are sufficient for some applications
Opportunity: Ergonomic Access SystemsOpportunity: Ergonomic Access SystemsChallenges on Manual Rail Door System Applications
Can we bring Engineering Advantage to manual doors?
Solution: Engineering Advantageg g gDifferentiation on Manual Door Systems
Yes!!S i i i !
Yes!!• Stops in any open position – no entrapment!
• Adjustable dwellAdjustable dwell
• Closes automatically y
• Integrated speed control
Engineering Advantage in Action!Engineering Advantage in Action!
In Norgren Brno, we have set up:
• A demonstration of 3 Door Systems
– Automatic
– Manual
– Smart Manual
• We will give you an opportunity to try them!• We will give you an opportunity to try them!
• We have excellent references and global reach
• The sector is resilient
• The sector is growing
• Th k t h• There are market share opportunities for Norgren
• Our target is to double our business every 3 – 4 years
• Engineering Advantage is delivering attractive marginsg g
Fl id P SFluid Power Summary
• Attractive long term growth drivers– Emissions legislation for trucksg
– Engineering solutions in growing healthcare segment
Increased government investment in rail– Increased government investment in rail
• Opportunities to improve margins further– New Products, growing proportion added value sector businessg g p p
– Increasing aftermarket through development of Norgren Express
Further expansion of low cost manufacturing capacity / LCP– Further expansion of low cost manufacturing capacity / LCP
– Product margin optimisation