Half Year results 2018/19 20 November 2018 Andrew Williams - Group Chief Executive Marc Ronchetti - Chief Financial Officer
Half Year 2018/19: Record results Revenue Profit ROS Growth & +16% +19% 19.3% High returns £585m £113m (H1,18: 18.7%) R&D spend ROW revenue Acquisitions Increased +14% +10% 5* strategic investment £31m £149m £32m spend Cash flow Dividend Net Debt Strong cash 86% +7% £195m performance of adjusted profit 6.11p FY18: £220m * Includes Limotec and Navtech completed after period end Halma Half Year results – 20 November 2018 2
Financial Review Marc Ronchetti – Chief Financial Officer
Record results H1, 2018/19 Revenue Profit* £m £113m 120 £585m 600 100 500 80 400 60 300 40 200 20 100 0 0 14/15 15/16 16/17 17/18 18/19 14/15 15/16 16/17 17/18 18/19 * Profit before amortisation and impairment of acquired intangibles, acquisition items, significant restructuring costs and profit or loss on disposal of operations Halma Half Year results – 20 November 2018 4
Revenue growth H1, 2018/19 £m (0.6)% (1.9)% +3.9% 585.5 (+15.6% ) +14.2% 506.3 H1 17/18 Organic Acquisitions Disposals Currency H1 18/19 Halma Half Year results – 20 November 2018 5
Revenue by destination Revenue and revenue growth, H1 2018/19 Reported Organic constant currency UK UK USA USA +13% +21% +23% 17% +19% 37% £585m 46% 21% Europe Europe +8% +14% 10% 15% Other Other Asia Pacific Asia Pacific +14% +17% +5% +5% Halma Half Year results – 20 November 2018 6
Profit* growth H1, 2018/19 £m (2.2)% 112.9 +0.4% +5.1% (+19.4% ) +16.1% 94.5 H1 17/18 Organic Acquisitions Disposals Currency H1 18/19 *Profit before amortisation and impairment of acquired intangibles, acquisition items, restructuring and other costs and profit or loss on disposal of operations Halma Half Year results – 20 November 2018 7
Cash flow H1 2018/19 0 Pensions: Working capital: £(20)m Deficit £20.7m (FY 2017/18: Outflow £11m £53.9m) (H1, 2017/18: £13m) £(40)m Annual contributions: £12m Effective tax rate: £(60)m Dividend: 20.5% (FY 2017/18: 19.7%) 7% increase £(80)m Debt: £195m net debt £(100)m Working (FY 2018: £220m net debt). capital £(120)m Capex £(140)m Tax Pensions Acquisitions £(160)m net of disposals £(180)m Dividend £(200)m Other Debt c/f £(220)m incl. FX (net) HY 18 Debt b/f EBITDA YE 18 Cash conversion: 86% Halma Half Year results – 20 November 2018 8
Substantial financial capacity Ø Revolving Credit Facility Ø £550m (from November 2016) Ø Extended to November 2023 Ø In addition to existing $250m USPP Ø Capacity for medium term growth Ø Half year gearing 0.7x, comfortable up to 2x Halma Half Year results – 20 November 2018 9
Financial KPI summary 2018/19 Half Year Target Achieved Organic revenue growth* > 5% 14% Organic profit growth* > 5% 16% Acquisition profit growth ** > 5% - Revenue growth outside UK/Europe/USA > 10% 10.4% Return on Sales 18% - 22% 19.3% Return on Total Invested Capital >12% 14.9% Cash conversion > 85% 86% R&D investment (% of revenue) > 4% 5.3% * at constant currency ** annualised profit of acquisitions made in the year (net of finance cost) as % of prior year adjusted profit Halma Half Year results – 20 November 2018 10
Trading Review Andrew Williams – Group Chief Executive
Sector performances Revenue Profit* Infrastructure Infrastructure Medical Medical Safety Safety +10% +22% +18% +17% 25% 27% 34% 33% £585m 46% £128m 23% 24% 17% 17% Env & Env & Process Process Analysis Analysis Safety Safety +23% +33% +10% +9% * Profit before amortisation and impairment of acquired intangibles, acquisition items, significant restructuring costs and profit or loss on disposal of operations Halma Half Year results – 20 November 2018 12
Sector performances: Organic growth constant currency Revenue Profit* Infrastructure Infrastructure Medical Medical Safety Safety +14% +22% +13% +12% +14% 46% +16% Env & Env & Process Process Analysis Analysis Safety Safety +19% +21% +12% +11% * Profit before amortisation and impairment of acquired intangibles, acquisition items, significant restructuring costs and profit or loss on disposal of operations Halma Half Year results – 20 November 2018 13
Infrastructure Safety : Trading performance Revenue: +18% Profit: +17% £m £m Organic ccy: +13% Organic ccy: +12% £42m £198m 200 40 150 30 100 20 50 10 0 0 14/15 15/16 16/17 17/18 18/19 14/15 15/16 16/17 17/18 18/19 Return on Sales: 21.1% R&D Spend (ccy): +31% Halma Half Year results – 20 November 2018 14
Infrastructure Safety : Revenue by destination % of sector & % growth 15% USA USA 24% +20% UK UK 20% +21% +14% 26% As Other Other 11% Organic ccy reported +34% +30% 12% 31% Asia Asia Pacific Europe Europe Pacific +1% +5% +1% +16% Halma Half Year results – 20 November 2018 15
Process Safety : Trading performance Revenue: +10% Profit: +9% £m £m Organic ccy: +12% Organic ccy: +11% £98m 100 25 £22m 80 20 60 15 40 10 20 5 0 0 14/15 15/16 16/17 17/18 18/19 14/15 15/16 16/17 17/18 18/19 Return on Sales: 22.6% R&D Spend (ccy): +12% Halma Half Year results – 20 November 2018 16
Process Safety : Revenue by destination % of sector & % growth UK UK USA USA +6% +6% +23% +26% 16% 33% As Organic ccy 20% reported Europe Europe +3% +3% 17% 14% Other Other +7% +5% Asia Pacific Asia Pacific +6% +8% Halma Half Year results – 20 November 2018 17
Medical : Trading performance Revenue: +10% Profit: +22% £m £m Organic ccy: +14% Organic ccy: +22% £147m 150 40 £35m 30 100 20 50 10 0 0 14/15 15/16 16/17 17/18 18/19 14/15 15/16 16/17 17/18 18/19 Return on Sales: 23.8% R&D Spend (ccy): (2)% Halma Half Year results – 20 November 2018 18
Medical : Revenue by destination % of sector & % growth UK UK 3% 2% Europe Europe 4% +14% 17% +11% As 53% Organic ccy Asia Asia reported 15% Pacific Pacific +6% +7% USA 11% USA +11% Other Other +18% +7% +19% Halma Half Year results – 20 November 2018 19
Environmental & Analysis : Trading performance Revenue: +23% Profit: +33% £m £m Organic ccy: +19% Organic ccy: +21% £143m 150 £29m 30 100 20 50 10 0 0 14/15 15/16 16/17 17/18 18/19 14/15 15/16 16/17 17/18 18/19 Return on Sales: 20.3% R&D Spend (ccy): +11% Halma Half Year results – 20 November 2018 20
Environmental & Analysis : Revenue by destination % of sector & % growth UK UK USA USA +21% +39% +27% +27% 17% Europe Europe 12% +18% As +26% 46% Organic ccy reported 20% Asia Pacific Asia Pacific 5% +8% +6% Other Other +1% 0% Halma Half Year results – 20 November 2018 21
Strategy update Andrew Williams – Chief Executive
Halma’s Strategic Growth Enablers M&A Talent & Culture Innovation Network International Expansion Strategic Comms Digital Growth Engines Finance & Risk Halma Half Year results – 20 November 2018 23
Halma’s Strategic Growth Enablers M&A Talent & Culture Innovation Network International Expansion Strategic Comms Digital Growth Engines Finance & Risk Halma Half Year results – 20 November 2018 24
Halma Half Year results – 20 November 2018
Halma’s Strategic Growth Enablers M&A Talent & Culture Innovation Network International Expansion Strategic Comms Digital Growth Engines Finance & Risk Halma Half Year results – 20 November 2018 24
Halma’s Strategic Growth Enablers M&A M&A Talent & Culture Innovation Network International Expansion Strategic Comms Digital Growth Engines Finance & Risk Halma Half Year results – 20 November 2018 24
M&A Update: 5 acquisitions completed AWP/Elpas (Jul 18) LAN Controls (Sept 18) Limotec (Oct 18) Navtech (Nov 18) Halma Half Year results – 20 November 2018 26
Summary & Outlook Ø Very strong H1; on track for a strong Full Year Ø Growth in all sectors and regions Ø Order intake ahead of revenue and order intake last year Ø Continued investment supported by Growth Enablers Ø Recent acquisitions, healthy acquisition pipeline Ø Investor event early February 2019 Ø Focus on Medical sector Halma Half Year results – 20 November 2018 28
Questions Halma Half Year results – 20 November 2018
Appendices Halma Half Year results – 20 November 2018
Currency effects Ø Translation effect H1 18/19 v H1 17/18 Ø US$/£: D 3.0% weaker US$ Ø Euro/£: D 0.4% stronger € Ø Net negative effect: 2% revenue and profit Ø At current FX rates Ø FY: broadly neutral Halma Half Year results – 20 November 2018
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