Full Year Results 2019/20 14 July 2020 Andrew Williams Group Chief - PowerPoint PPT Presentation

Full Year Results 2019/20 14 July 2020 Andrew Williams – Group Chief Executive Marc Ronchetti – Chief Financial Officer

Introduction Andrew Williams Group Chief Executive

Sustainable value creation Clear and positive purpose Focused and sustainable growth strategy Long-term growth drivers Robust, agile organisation and culture Diverse and high calibre people 3 Halma Full Year Results 2019/20 – 14 July 2020

Sustainable value creation Revenue (£m) Adjusted Profit before Tax (£m) £267m £1,338m 1400 250 1200 11% CAGR 10% CAGR 200 1000 800 150 600 100 400 50 200 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 R&D expenditure Return on Total Invested Capital (%) £72m 10 15.3% 70 8 60 15 50 % of sales 6 40 £m 10 % 4 WACC 30 20 5 2 10 0 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4 Halma Full Year Results 2019/20 – 14 July 2020

Sustainable value creation Clear and positive purpose Further progress in FY2020 Focused and sustainable growth strategy Agile response to COVID-19 Long-term growth drivers Expect FY21 profit* 5%-10% below FY20 Robust, agile organisation and culture Value creation for all stakeholders Diverse and high calibre people * Adjusted profit before tax. For further detail please refer to the Full Year results announcement. 5 Halma Full Year Results 2019/20 – 14 July 2020

Full year 2019/20: Record results Revenue Profit 1 Return on Sales Record revenue and +10.5% +8.7% 19.9% profit and higher £1,338m £267m 2018/19: 20.3% returns Capex R&D spend 2 Acquisitions Increased strategic +9% 5.4% 10 investment £34.1m (2019: 5.2%) £238m spend 3 Net debt 4 Cash flow Dividend for the year Strong cash 97% +5% £375m performance of adjusted 16.50p 2018/19: £232m operating profit 1: Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and in the prior year only the effect of pension benefits equalisation. 2: As a % of revenues. 3: Includes fees, prior year earn-outs and cash acquired. 4: On an IFRS16 basis. 6 Halma Full Year Results 2019/20 – 14 July 2020

Financial Review Marc Ronchetti Chief Financial Officer

Revenue growth £1,338m +10.5% +1.6% (0.7)% +4.8% +4.8% £1,210.9m 2018 18/19 19 Organic Acquisitions Disposals Currency 201 2019/20 20 8 Halma Full Year Results 2019/20 – 14 July 2020

Revenue by destination Reven evenue e and reven evenue e grow owth th, 201 2019/20 20 Reported Organic constant currency UK UK +10% +8% 16% USA USA +15% 38% +8% £1,338m Europe 21% Europe +1% +4% 9% 16% Other Other Asia Pacific Asia Pacific (1)% +1% +4% +16% 9 Halma Full Year Results 2019/20 – 14 July 2020

Profit* growth £267.0m +8.7% +1.8% (0.2%) +4.9% +2.2%** £245.7m 2018 18/19 19 Organic Acquisitions Disposals Currency 201 2019/20 20 * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and in the prior year only the effect of pension benefits equalisation. ** 4.2% excluding provisions of £5.0m for increased customer bad debt risk. 10 Halma Full Year Results 2019/20 – 14 July 2020

Infrastructure Safety Revenue by destination Revenue Return on sales £467m: +14% 23.1% USA UK Organic ccy +3% 2018/19: 21.8% +20% +8% +2% occy +6% occy 23% 24% Other £467m (6)% 8% (9)% occy 15% 30% Profit* R&D spend Europe Asia Pacific £108m: +21% +9% £28.3m: +14% +46% +4% occy +4% occy 6.1% of revenue Organic ccy +7% * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and in the prior year only the effect of pension benefits equalisation. 11 Halma Full Year Results 2019/20 – 14 July 2020

Process Safety Revenue by destination Revenue Return on sales UK £200m: +1% 21.9% (12)% (12)% occy Organic ccy (2)% 2018/19: 23.0% USA 14% +9% 33% +1% occy Europe 20% £200m (6)% (6) % occy 16% 17% Profit* R&D spend Other Asia Pacific £44m: (3)% £7.5m: +7% (2)% +12% 3.7% of revenue Organic ccy (6)% (3)% occy +12% occy * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and in the prior year only the effect of pension benefits equalisation. 12 Halma Full Year Results 2019/20 – 14 July 2020

Environmental & Analysis Revenue by destination Revenue 1 Return on sales UK £325m: +16% 21.4% +28% Organic ccy +14% 2018/19: 21.5% +26% occy 21% USA +24% Europe 48% +20% occy £325m (1)% 11% (1)% occy 16% 4 % Profit 1,2 R&D spend Asia Pacific £69m: +15% £19.3m: +9% (3)% Other (4)% occy Organic ccy +13% +16% 6.0% of revenue +15% occy 1: Historic revenue and profit have been restated for the transfer of Perma Pure to the Medical sector. See slides 31 and 32. 2: Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and in the prior year only the effect of pension benefits equalisation. 13 Halma Full Year Results 2019/20 – 14 July 2020

Medical Revenue by destination Revenue 1 Return on sales UK £347m: +7% 24.3% +7% +5% occy Organic ccy +3% 2018/19: 25.6% Europe 4 % +2% (2)% occy 17% USA +8% £347m Asia Pacific 52% 17% +9% +4% occy +6% occy 10% Profit 1,2 R&D spend £84m: +1% £16.5m: +28% Other +5% Organic ccy (3)% 4.8% of revenue +4% occy 1: Historic revenue and profit have been restated for the transfer of Perma Pure to the Medical sector. See slides 31 and 32. 2: Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and in the prior year only the effect of pension benefits equalisation. 14 Halma Full Year Results 2019/20 – 14 July 2020

Cash flow EBITDA Net debt £100m Effective tax £375m rate Lease (£314m ex 18.5% Working additions IFRS16) capital Capex 2018/19: 18.6% 0 2018/19: £182m Tax Pensions Cash conversion Pension deficit £(100)m 97% £5m 2018/19: 88% 2018/19: £39m £(200)m Acquisition Working capital IFRS16 spend 1 outflow effect £9m £238m Acquisitions £(50.3)m £(300)m 2018/19: £16m 2018/19: £68m Dividend Own Interest share FX Dividend spend Capex £(400)m purchase and £61.2m £32m £182m other £375m net debt 2019: £57.2m 2018/19: £29m net debt YE 18/19 YE 19/20 1: Includes fees, prior year earn-outs and cash acquired. 15 Halma Full Year Results 2019/20 – 14 July 2020

Substantial financial capacity Available liquidity (as at 4 July 2020) £913m £(424)m £489m Revolving Credit Net debt/EBITDA 2 Cash Facility matures in 1.1x £167m 2023 (2018/19: 0.85x) Revolving Credit Funding maturity profile Facility £550m 700 600 500 400 US Private 300 Placement 1 200 100 Other 0 US$15m 2020 2021 2022 2023 2024 2025 2026 Cash and Gross Liquidity funding debt 1: Comprises 3 tranches of £82m, US$64m and €56m. 2: As at 31 March 2020. 16 Halma Full Year Results 2019/20 – 14 July 2020

Performance against financial KPIs Organic revenue Organic profit Acquisition profit Revenue growth growth* growth* growth** outside UK/USA/Europe +5% +2% +6% +10% Target ≥5% Target ≥5% Target ≥5% Target ≥10% Return on sales Return on Total Cash conversion R&D investment Invested Capital (% of revenue) 20% 97% 15.3% 5.4% Target 18-22% Target ≥12% Target ≥85% Target ≥4% * At constant currency ** annualised profit of acquisitions made in the year (net of finance cost) as a percentage of prior year adjusted profit 17 Halma Full Year Results 2019/20 – 14 July 2020

Strategy update Andrew Williams Group Chief Executive

Our COVID-19 pandemic response Ensuring delivery of critical safety, health and environmental solutions Agility and diversity: Balancing impacts across key Rapid, decentralised stakeholder groups decision-making ‘Double-down’ on Created new central Prioritising Ensuring a strong key investment and regional safe working balance sheet and priorities support forums environments liquidity position 19 Halma Full Year Results 2019/20 – 14 July 2020

Halma Strategy: our Growth Enablers International Finance, Legal Strategic Expansion & Risk Communications Digital Growth Innovation Talent & M&A Engines Network Culture 20 Halma Full Year Results 2019/20 – 14 July 2020

Executive Board: strategic evolution Marc Ronchetti Laura Stoltenberg Adam Meyers Andrew Williams Sector Chief Executive, Chief Financial Officer Sector Chief Executive, Group Chief Executive Medical & Environmental Safety Talent & Culture Inken Braunschmidt Catherine Michel Jennifer Ward Funmi Adegoke Chief Innovation and Chief Technology Officer Group Talent and General Counsel Digital Officer Communications Director (joins Oct 2020) 21 Halma Half Year Results 2019/20 – 19 November 2019