Half Year Results 2020/21 19 November 2020 Andrew Williams Group - PowerPoint PPT Presentation

Half Year Results 2020/21 19 November 2020 Andrew Williams – Group Chief Executive Marc Ronchetti – Chief Financial Officer

Introduction Andrew Williams Group Chief Executive

Resilient by design 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 Half Year Results 2020/21 – 19 November 2020

Half Year 20/21 summary Revenue Return on sales Profit 1 Resilient trading -5% 19.7% -5% performance £618m (H1 FY20: 19.7%) £122m Available liquidity Net debt Interim dividend Strong cash £315.0m £493m +5% performance & YE 2020: £431m FY20: £375.3m 6.87p per share dividend growth Improving Sequential revenue R&D spend 2 M&A activity momentum & +11% 5.6% confidence in the (Q2 v Q1 growth) (H1 FY20: 5.3%) ‘active prospects’ future 1: Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations. 2: As a % of revenues. 4 Halma Half Year Results 2020/21 – 19 November 2020

Resilient by design: improving outlook Clear and positive purpose  Sustaining value creation for all stakeholders Focused and sustainable growth strategy  Better than expected H1 performance Long-term growth drivers  Improving momentum and strategic investment in H2 Robust, agile organisation and culture  Expect FY21 profit* around 5% below Diverse and high calibre people FY20 * Adjusted profit before tax. For further detail please refer to the Half Year results announcement. 5 Halma Half Year Results 2020/21 – 19 November 2020

Financial Review Marc Ronchetti Chief Financial Officer

Revenue performance £653.7m (11.0)% £618.4m +6.2% (0.2)% (0.4)% (5.4)% 201 2019/20 20 Organic Acquisitions Disposals Currency 2020/21 2020 21 7 Halma Half Year Results 2020/21 – 19 November 2020

Revenue by destination Reven evenue e and r reven evenue e grow owth th, H1 H1 2020 2020/21 21 Reported Organic constant currency UK UK (18)% (17)% 14% USA USA +2% 41% (7)% £618m Europe (11)% 21% Europe (9)% (5)% (6)% 16% 8% Other Other Asia Pacific Asia Pacific (16)% (15)% (14)% (6)% 8 Halma Half Year Results 2020/21 – 19 November 2020

Profit* performance £128.8m (11.1)% £122.0m +0.1% +6.0% (0.3)% (5.3)% 201 2019/20 20 Organic Acquisitions Disposals Currency 2020/21 2020 21 * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations. 9 Halma Half Year Results 2020/21 – 19 November 2020

Infrastructure Safety Revenue by destination Revenue Return on sales £201m: (13)% 22.8% UK USA (13)% (20)% Organic ccy (16)% 2019/20: 22.5% (12)% occy (19)% occy 21% 24% Other £201m 8% (19)% (18)% occy 31% 16% Europe Profit* R&D spend (13)% Asia Pacific £46m: (12)% £12.2m: (14)% (13)% occy (1)% Organic ccy (15)% 6.1% of revenue (22)% occy Expect further H2 progress towards resilient full year with continued strategic investment * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations. 10 Halma Half Year Results 2020/21 – 19 November 2020

Process Safety Revenue by destination Revenue Return on sales UK £91m: (10)% 18.2% (8)% (8)% occy Organic ccy (17)% 2019/20: 24.5% USA 14% (16)% 33% (34)% occy Europe 22% £91m 6% 4% occy 15% 16% Profit* R&D spend Other Asia Pacific £17m: (33)% £4.5m: +26% (11)% (17)% Organic ccy (37)% 4.9% of revenue (10)% occy (18)% occy Expect continued gradual H2 improvement * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations. 11 Halma Half Year Results 2020/21 – 19 November 2020

Environmental & Analysis Revenue by destination Revenue 1 Return on sales UK £154m: +1% 24.9% (14)% Organic ccy +1% 2019/20: 20.5% (15)% occy 17% Europe (8)% 10% USA £154m 53% (9)% occy +10% +11% occy 16% Asia Pacific 4 % Profit 1,2 (7)% R&D spend (6)% occy £38m: +22% £8.3m: (11)% Other +9% Organic ccy +23% 5.4% of revenue +9% occy Expect good full year performance with H2 Return on Sales returning to historic levels 1: Historic revenue and profit have been restated for the transfer of Perma Pure to the Medical sector. 2: Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs and profit or loss on disposal of operations. 12 Halma Half Year Results 2020/21 – 19 November 2020

Medical Revenue by destination UK Revenue 1 Return on sales (21)% £172m: +3% 22.1% (36)% occy Europe Organic ccy (11)% 2019/20: 23.7% 3 % +6% (6)% occy 17% USA 56% Asia Pacific +14% £172m 16% (6)% (8)% occy (10)% occy 8% Profit 1,2 R&D spend Other £38m: (3)% £9.4m: +22% (23)% (24)% occy Organic ccy (22)% 5.5% of revenue The sector is expected to deliver a resilient full year performance 1: Historic revenue and profit have been restated for the transfer of Perma Pure to the Medical sector. 2: Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs and profit or loss on disposal of operations. 13 Halma Half Year Results 2020/21 – 19 November 2020

Net debt and cash flow £100m Effective tax rate Net debt 20.6% £315m FY20: 18.5% FY20: £375m 0 Cash conversion Pension deficit Working £(200)m 111% £45m EBITDA capital Capex H1 FY20: 82% FY20: £5m Tax Lease Pensions additions Acquisitions Working capital £(300)m Acquisition inflow spend 1 £315m Dividend £6m FX Interest £8m net debt and H1 FY20: £(25)m HY21 other H1 FY20: £88m outflow £375m £(400)m net debt FY20 Capex Dividend spend £11m +4% Net debt to EBITDA ratio 1.0x; £493m available liquidity £37.7m H1 FY20: £14m 1: Includes fees, prior year earn-outs and cash acquired. 14 Halma Half Year Results 2020/21 – 19 November 2020

Performance against financial KPIs Organic revenue Organic profit Acquisition profit Revenue growth growth* growth* growth** outside UK/USA/Europe (11)% (11)% +3% (10)% Target ≥5% Target ≥5% Target ≥5% Target ≥10% Return on sales Return on Total Cash conversion R&D investment Invested Capital (% of revenue) 19.7% 111% 12.6% 5.6% Target 18-22% Target ≥12% Target ≥85% Target ≥4% * At constant currency ** annualised profit of acquisitions made in the last twelve months (net of finance cost) as a percentage of prior year adjusted profit 15 Halma Half Year Results 2020/21 – 19 November 2020

Strategy update • Structured for growth • Investing for the future: Technology • Living our purpose

Structured for growth: Safer, Cleaner, Healthier New organisational and financial reporting structure to apply from 1 April 2021 Environmental & Safety Medical Analysis Wendy McMillan Constance Baroudel Laura Stoltenberg Sector Chief Executive Sector Chief Executive Sector Chief Executive ~40% Group profit ~30% Group profit ~30% Group profit Re-balancing resources across sectors to drive growth 17 Halma Half Year Results 2020/21 – 19 November 2020

Investing for the future: Technology Enhanced Core IT Services Modernising our ways of working and doing HQ Digital Operational business in a more Transformation Programmes tech-enabled way Architecture CoE Enabling new digital IoT CoE business models in line Strategic with our Halma 4.0 Growth Strategy Software CoE 18 Halma Half Year Results 2020/21 – 19 November 2020

Living our purpose: Global water campaign SDG 3 SDG 6 • Aligned with our purpose and SDGs 3 & 6 • Providing clean water supply for 8,000+ people in India • Raising funds and contributing water testing technologies • Reducing operating companies’ water use Bringing our purpose to life, engaging our employees 19 Halma Half Year Results 2020/21 – 19 November 2020

Living our purpose: Focus on “social” in ESG External stakeholders Wellbeing & development Diversity & inclusion • • • Manufacturing PPE for our ‘Best practice’ workplace safety and New global parental leave communities legal support policy - 14 weeks for all parents • • Maintaining supplier Employee assistance and mental • payments health support ‘Accelerate Inclusion’ growth enabler roll-out • Expanded online/virtual employee • training Exceeding Hampton- Alexander Review gender • Continued investment in Halma targets Future Leaders 20 Halma Half Year Results 2020/21 – 19 November 2020

Confidence in the future Clear and positive purpose  Sustaining value creation for all stakeholders Focused and sustainable growth strategy  Better than expected H1 performance Long-term growth drivers  Improving momentum and strategic investment in H2 Robust, agile organisation and culture  Expect FY21 profit* around 5% below Diverse and high calibre people FY20 * Adjusted profit before tax. For further detail please refer to the Half Year results announcement. 21 Halma Half Year Results 2020/21 – 19 November 2020

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