Final results 2014/15 Andrew Williams Chief Executive Kevin - PowerPoint PPT Presentation

Final results 2014/15 Andrew Williams – Chief Executive Kevin Thompson – Finance Director Halma Final results – June 2015

Summary 2014/15 Revenue Profit ROS Strong +7% +10% 21.2% growth & returns £726m £153.6m (LY: 20.7%) ROW revenue R&D spend Acquisitions Continued +16% +8% £84m strategic investment £197m £35m spend Cash flow ROTIC Dividend Good cash 87% 16.3% +7% performance of adjusted profit (LY: 16.7%*) 11.96p • Prior year restated Halma Final results – June 2015

Financial Review Halma Final results – June 2015

Record results Revenue Profit* £m £m £153.6m £726m 160 800 140 700 120 600 100 500 80 400 60 300 40 200 100 20 0 0 10/11 14/15 10/11 14/15 * Profit before amortisation of acquired intangibles, acquisition items, profit or loss on disposal of operations and curtailment gain on DB pension schemes (2013/14 only) Halma Final results – June 2015

Revenue growth FY 2014/15 % growth  Headline growth 7%  Disposal 1%  Currency 2%  Ongoing at Constant currency 10%  Acquisitions (5%)  Organic constant currency growth 5% Halma Final results – June 2015

Revenue growth FY 2014/15 Organic: Constant £m Total Currency H1 341 2% 4% H2 385 12% 6% Total 726 7% 5% Halma Final results – June 2015

Revenue by destination Revenue and revenue growth, 2014/15 UK USA 8% 19% 4% 9% 31% 21% 15% £726m Europe 23% 28% 27% 2% 16% 11% Asia Pacific 5% Other 36% Halma Final results – June 2015

Revenue by destination: organic constant currency Revenue and revenue growth, 2014/15 UK USA 2% 7% 9% 21% 15% Europe 28% 27% 2% Asia Pacific 1% Other 18% Halma Final results – June 2015

Profit* growth FY 2014/15 % growth  Headline growth 10%  Currency 2%  Ongoing at Constant currency 12%  Acquisitions (5%)  Organic constant currency growth 7% * Profit before amortisation of acquired intangibles, acquisition items, profit or loss on disposal of operations and curtailment gain on DB pension schemes (2013/14 only) Halma Final results – June 2015

Profit* growth Organic: Constant £m Total Currency H1 69.0 6% 7% H2 84.6 13% 7% Total 153.6 10% 7% * Profit before amortisation of acquired intangibles, acquisition items, profit or loss on disposal of operations and curtailment gain on DB pension schemes (2013/14 only) Halma Final results – June 2015

Currency  Translation impact in 14/15  H1 net adverse impact 5%  Full year net adverse impact 2%  At current Fx rates 15/16 impact*:-  H1: ~2% Benefit  FY: ~ 1% Benefit  Impact varying by sector  More information in Appendix * Based on 14/15 results Halma Final results – June 2015

Cash flow 2014/15 Working capital: outflow £6m (2014: £11m) Effective tax rate: 23.2% (2014:23.3%) £100m Working Capex > Pensions: Deficit £67m (2014: £37m) capital Profit Tax Depn £80m £60m Pensions £40m Acquisitions £20m Debt b/f Mar 14 0 £(20)m £(40)m £(60)m Acquisitions: Disposal £84m spend £(80)m plus £4m earn-outs £(100)m Dividend Dividend: Other Debt c/f £(120)m 7% increase (net) March 15 Debt: £100.9m net debt (2014: £74.5m net debt)

Funding  £360m facility – 5 years to November 2018  Comfortable with net debt of up to 1.25x EBITDA (March 15: 0.57x)  Strong balance sheet with significant capacity Halma Final results – June 2015

Financial KPI Summary 2014/15 Target Achieved Organic profit growth* > 5% 7% Organic revenue growth* > 5% 5% Revenue outside UK/Europe/USA 30% by 2015 27% Return on Sales > 18% 21.2% Returns on Total Invested Capital >12% 16.3% R&D investment (% of revenue) > 4% 4.8% Cash conversion > 85% 87% * at constant currency Halma Final results – June 2015

Trading Review Halma Final results – June 2015

Sector performances Revenue Profit* Process Process Infrastructure Infrastructure Safety Safety Safety Safety +6% +25% +28% +12% 22% 27% 32% 30% 46% 23% 16% 27% 23% Medical Medical Environmental +4% +9% Environmental & Analysis & Analysis (1)% (14)% • Profit before amortisation of acquired intangible assets, acquisition items and profit or loss on disposal of operations Halma Final results – June 2015

Sector performances: Organic constant currency growth Revenue Profit* Process Process Infrastructure Infrastructure Safety Safety Safety Safety +5% +9% +14% +12% 46% Medical Medical Environmental +6% +10% Environmental & Analysis & Analysis +0% (12)% • Profit before amortisation of acquired intangible assets, acquisition items and profit or loss on disposal of operations Halma Final results – June 2015

Process Safety : Trading performance Revenue: +25% Profit: +28% £m £m Organic ccy: +9% Organic ccy: +14% 200 50 £45m £159m 40 150 30 100 20 50 10 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Return on Sales: 28.3% Halma Final results – June 2015

Process Safety : Revenue by destination FY 2014/15: % of sector & % growth UK USA +2% +34% 18% 25% 22% Europe 17% Asia Pacific +8% +18% 18% Other +99% Halma Final results – June 2015

Process Safety : Revenue by end market % of sector Buildings 5% 6% Utilities 15% 1% Science/Env 49% Process 24% Energy/Res Others Halma Final results – June 2015

Infrastructure Safety : Trading performance Revenue: +6% Profit: +12% Organic ccy: +5% Organic ccy: +12% £m £m £50m 250 50 £234m 200 40 150 30 100 20 50 10 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Return on Sales: 21.4% Halma Final results – June 2015

Infrastructure Safety : Revenue by destination FY 2014/15: % of sector & % growth [excluding disposal] USA +5% UK +23% 18% 30% Asia Pacific 14% (1)% 8% Other 30% Europe +28% +3% Halma Final results – June 2015

Infrastructure Safety : Revenue by end market % of sector 3% Buildings Others 97% Halma Final results – June 2015

Medical : Trading performance Revenue: +4% Profit: +9% £m £m Organic ccy: +6% Organic ccy: +10% 200 50 £45m £169m 40 150 30 100 20 50 10 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Return on Sales: 26.8% Halma Final results – June 2015

Medical : Revenue by destination FY 2014/15: % of sector & % growth UK (2)% 6% Europe 21% (2)% USA 46% +8% 12% Other +10% 15% Asia Pacific (2)% Halma Final results – June 2015

Medical : Revenue by end market % of sector 1% 2% 6% Health/Medical Science/Env 91% Process Others Halma Final results – June 2015

Environmental & Analysis : Trading performance Revenue: (1)% Profit: (14)% £m £m Organic ccy: +0% Organic ccy: (12)% 200 40 £164m 150 30 £27m 100 20 50 10 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Return on Sales: 16.7% Halma Final results – June 2015

Environmental & Analysis : Revenue by destination FY 2014/15: % of sector & % growth UK (9)% 18% USA 39% (4)% 16% Europe +1% 8% 19% Other +11% Asia Pacific +7% Halma Final results – June 2015

Environmental & Analysis : Revenue by end market % of sector 1% Buildings 17% Utilities 2% 23% Health/Medical 7% Science/Env 9% Process Energy/Res 41% Others Halma Final results – June 2015

Strategy update  Innovation  International Expansion  Talent Development  M&A Halma Final results – June 2015

Innovation: HITE Film The HITE 2015 video can be viewed on the Halma website at: http://www.halma.com/news/video/corporate-videos.aspx Halma Final results – June 2015

International expansion: China R&D Sales to China 60 40 Ocean Optics Accuman PR-500 20 0 SunTech BP60 Halma Final results – June 2015

Talent Development: sector structures Group CEO Group FD Sector SECTOR CEO BOARD Sector FD Sector Sector VP VP Company Company Company Company Company Company

Acquisitions: past 10 years 160 Spend: £113m Spend: £360m 140 120 100 Spend £m 80 60 40 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 11 19 Acquisitions Halma Final results – June 2015

Summary and Outlook statement “….. through continued and disciplined execution of our well proven growth strategy. We expect to make further progress in the year ahead” Halma Final results – June 2015

Questions Halma Final results – June 2015

Appendices Halma Final results – June 2015

Currency impacts $ % € % change change 14/15 13/14 14/15 13/14 • Average 1.61 1.59 (1%) 1.27 1.19 (7%) rates v £ • 1% change* $ (~40% of total) € (~15% of total) Revenue +/- £2.9m +/- £0.9m Profit +/- £0.6m +/- £0.2m • At $1.55/€1.40 average rates full year profit would increase by a net amount of approximately £1m (<1%), and revenue by approximately £5m (<1%)*. Infrastructure Safety ~1% adverse impact. Process Safety ~1%, Medical and Environmental & Analysis 1-2% positive impact. • At $1.55/€1.40 average rates half year profit and revenue 2% positive impact.* * Based on 2014/15 results Halma Final results – June 2015