Half Year results 2012/13 Andrew Williams – Chief Executive Halma Half Year results – November 2012
Strategy : sustainable growth, high returns � Long-term growth drivers � Competitive advantage in niche markets � Agile operating structure � Strategic investment for growth � Active portfolio management Halma Half Year results – November 2012
Half year highlights: Record revenue and profits Revenue Profit ROS Growth & +6% +6% +20.4% High Returns £298m £60.8m (LY: 20.5%) R&D spend China growth Acquisitions Strategic +11% +32% £66m investment £15m spend Cash flow Disposals Dividend Good cash 99% £19m +7% performance of profit inflow interim dps Halma Half Year results – November 2012
Group Trading & Financial Review Halma Half Year results – November 2012
Record results Continuing operations H1, 2012/13 Revenue Profit* £m 70 £298m 300 £60.8m 60 250 50 200 40 150 30 100 20 50 10 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 * Profit before amortisation of acquired intangibles, acquisition costs and profit on disposal of operations Halma Half Year results – November 2012
Revenue growth Continuing operations H1, 2012/13 £m Total Organic Organic: Constant Currency Revenue 298 6% 2% 3% Halma Half Year results – November 2012
Evolution of Geographic Revenue H1 07/08 H1 12/13 RoW UK RoW UK 19% 25% 19% 28% £298m £186m 27% 25% 26% 31% USA Europe Europe USA Halma Half Year results – November 2012
Revenue by destination Revenue and revenue growth, H1, 2012/13 (excluding disposals) Other 6% UK 2% 9% Far East & A’asia 9% 19% 21% 17% 15% 16% Europe 25% 28% 27% USA 2% 31% 19% Halma Half Year results – November 2012
Revenue by destination: organic constant currency Revenue and revenue growth, H1, 2012/13 Other 4% UK Far East & A’asia 2% 14% Europe USA 0% 2% Halma Half Year results – November 2012
Profit* Bridge Organic £m Profit* Acquisitions** Profit* Currency Disposal ccy 1.8 2.8 (1.0) (0.3) 60.8 57.5 H1 11/12 H1 12/13 * Profit before amortisation of acquired intangibles, acquisition costs and profit on disposal of operations ** Net of financing costs Halma Half Year results – November 2012
Strong Returns Return on Sales � Range 18-22% � H1 2012/13 20.4% (2011/12: 20.5%) ROCE* 71.6% (2011/12: 68.8%) ROTIC** 16.4% (2011/12: 16.9%) * Return on Capital Employed ** Return on Total Invested Capital Halma Half Year results – November 2012
Cash flow H1 2012/13 Working capital: outflow £9m (2011/12: £14m) Capex: £60m £8.1m – 116% of depreciation Working Profit capital Effective tax rate: Capex > £40m Tax 23.4% (2011/12 full year: 23.5%) Depn Pensions: Pensions Acquisitions & £3m extra contributions Associate Inv. Deficit £41m (March 2012: £33m) £20m Debt b/f 0 £(20)m Acquisitions + Associates: £87m spend including £16m earn-outs, £2m loan notes and £3m increase £(40)m in Associate investment Disposal Dividend Disposal: £19m proceeds: £8m gain £(60)m Other Dividend: (net) 7% increase Debt: Debt c/f £(80)m £74m net debt (March 2012: £19m net debt) Halma Half Year results – November 2012
Sector Trading Review Halma Half Year results – November 2012
Sector revenue and profit HY 2012/13 Industrial Industrial H&A H&A +8% +13% +12% +10% 21% 24% 45% 47% 34% 29% Infrastructure Infrastructure (1)% (2)% Revenue Profit Halma Half Year results – November 2012
Health & Analysis : Trading performance HY 2012/13 Revenue: +12% Profit: +10% Organic ccy: +1% Organic ccy: 2% £135m 140 40 120 £30.9m 30 100 80 20 60 40 10 20 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Return on Sales: 22.9% Halma Half Year results – November 2012
Health & Analysis : Sub-sector revenue HY 2012/13: % of sector & % growth Photonics Health Optics (2)% +41% 27% 34% £135m 22% Water 17% +10% Fluid Tech +4% Halma Half Year results – November 2012
Health & Analysis : Revenue by destination HY 2012/13: % of sector & % growth (excluding disposals) Other UK +4% (9)% 9% 10% Far East & A’asia +21% 17% 20% Europe +9% USA 44% +23% Halma Half Year results – November 2012
Infrastructure Sensors : Trading performance HY 2012/13 Revenue: (1)% Profit: (2)% Organic ccy: +0% Organic ccy: (1)% 120 30 £101m 100 £18.9m 80 20 60 40 10 20 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Return on Sales: 18.8% Halma Half Year results – November 2012
Infrastructure Sensors : Sub-sector revenue HY 2012/13: % of sector & % growth Security +3% 13% Fire +1% Elevators 41% 0% 21% £101m 25% Auto Doors (6)% Halma Half Year results – November 2012
Infrastructure Sensors : Revenue by destination HY 2012/13: % of sector & % growth Other (4)% Far East & UK 7% A’asia +2% +7% 27% 16% USA 21% +14% Europe 29% (13)% Halma Half Year results – November 2012
Industrial Safety : Trading performance HY 2012/13 [includes Asset Monitoring, divested in August 2012] Revenue: +8% Profit: +13% 70 Organic ccy: +10% 20 Organic ccy: 15% £63m 60 £15.3m 50 40 10 30 20 10 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Return on Sales: 24.5% Halma Half Year results – November 2012
Industrial Safety : Sub-sector revenue HY 2012/13: % of sector & % growth* Bursting Discs +13% 21% Interlocks +10% 50% £57m Gas 29% +8% *Excludes disposal – Asset Monitoring Halma Half Year results – November 2012
Industrial Safety : Revenue by destination HY 2012/13: % of sector & % growth* Other +26% UK 11% Far East & (1)% 24% A’asia +30% 16% USA 22% Europe 27% +10% +5% *Excludes disposal – Asset Monitoring Halma Half Year results – November 2012
Strategic investment � International Expansion � Portfolio Management � People Development � Innovation Halma Half Year results – November 2012
International expansion: increased collaboration Fluid Fluid Technology Technology Health Health Optics Optics Industrial Safety Halma Half Year results – November 2012
Portfolio management: SunTech acquisition “clinical-grade, non-invasive blood pressure (NIBP) products and technology” Halma Half Year results – November 2012
People Development Halma Half Year results – November 2012
Innovation: New products for Asia, from Asia Photonics Water Accuman SD Pharmaline Halma Half Year results – November 2012
Investor Events 2013 Capital Markets event – organic and M&A growth Date: 14 th February 2013 Location: London Date: 30 th April, 2013 Location: Orlando, Florida Halma Half Year results – November 2012
Summary & outlook � Proven strategy � Increased investment for growth � Stronger portfolio � H2 order intake in line with expectations � Slightly ahead of revenue “remain on track to make further progress in the second half year” Halma Half Year results – November 2012
Questions Halma Half Year results – November 2012
Appendices Halma Half Year results – November 2012
Currency impacts % % $ € change change Average rates 12/13 11/12 12/13 11/12 • H1 v £ 1.58 1.62 2.5% 1.25 1.14 (9.6%) • Full Year v £ N/A 1.60 N/A 1.16 • 1% change* (Annual $ (~ 40% of total) € (~20% of total) impact) Revenue +/- £2.3m +/- £0.8m Profit +/- £0.45m +/- £0.2m • At $1.60/€1.25 Average rates for the year 2012/13 profit would reduce by a net amount of £2.6m (2%)* compared with using 2011/12 Fx rates**. * Based on 2012/13 Half year results ** Based on consensus 2012/13 results Halma Half Year results – November 2012
Acquisitions and Investment in Associate Consideration Initial Maximum Earn out 2012/13 Acquisitions Acquired EBIT* £m £m £m Sensorex April 12 24 - 2.4 Accutome April 12 13 ** 3 1.3 SunTech May 12 29 4 3.5 66 7 7.2 Earn-outs re prior year acquisitions - Cash 16 - Loan notes issued 2 84 Increased investment in 3 Associate 87 * at acquisition/disposal run-rate ** includes £1m debt acquired Halma Half Year results – November 2012
Disposal – Tritech Holdings (Asset Monitoring) � Sold August 2012 £m � Proceeds Cash 19.7 Escrow 2.1 21.8 � Net assets/costs (5.6) � Goodwill (8.0) Gain on disposal 8.2 � Annual Revenue: £12.3m, Profit: £2.4m Halma Half Year results – November 2012
Impact of M&A Revenue * Actual Expected Expected H1 12/13 H2 12/13 Full Year 12/13 Acquisitions/Disposal 11/12 (1) (2) (3) Acquisitions/Disposal 12/13 14 11 25 13 9 22 Profit after financing costs * Actual Expected Expected H1 12/13 H2 12/13 Full Year 12/13 Acquisitions/Disposal 11/12 0.1 (0.1) - Acquisitions/Disposal 12/13 2.4 1.9 4.3 2.5 1.8 4.3 * at acquisition/disposal run-rate Halma Half Year results – November 2012
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