Final results 2016/17 Andrew Williams Chief Executive Kevin - PowerPoint PPT Presentation

Final results 2016/17 Andrew Williams – Chief Executive Kevin Thompson – Finance Director Halma Final results – June 2017

Sustainable value creation Halma Final results – June 2017

Sustainable value creation Revenue (£m) Profit (£m) 1000 200 800 150 600 100 400 50 200 0 0 ROTIC (%) Annual Dividend (£m) 20% 60 15% 40 10% WACC 20 5% 0% 0 TSR since 2007: Halma 536% (FTSE-250 119%) Halma Final results – June 2017

Financial Review Halma Final results – June 2017

Record results Revenue Profit* £m £m £194m £962m 1000 200 900 180 800 160 700 140 120 600 100 500 80 400 60 300 40 200 20 100 0 0 12/13 16/17 12/13 16/17 * Profit before amortisation and impairment of acquired intangibles, acquisition items, restructuring costs and profit or loss on disposal of operations Halma Final results – June 2017

Revenue growth FY 2016/17 % growth*  Organic constant currency growth 4%  Acquisitions 5% 9%  Currency 10%  Headline growth 19% * 2016/17 52 weeks vs 2015/16 53 weeks Halma Final results – June 2017

Revenue growth FY 2016/17 Organic: Constant Currency £m Headline* growth* H1 442 16% 2% H2 520 21% 6% Total 962 19% 4% * 2016/17 52 weeks vs 2015/16 53 weeks Halma Final results – June 2017

Revenue by destination Revenue and revenue growth*, 2016/17 USA UK 7% 27% 16% 9% 21% 36% 15% Europe £962m 22% 17% Outside US/Europe/UK 28% 27% = 19% growth 10% 16% Other Asia Pacific 2006/07: £35m Asia Pacific 2016/17: £152m 16% 21% * 2016/17 52 weeks vs 2015/16 53 weeks Halma Final results – June 2017

Revenue by destination: organic constant currency Revenue and revenue growth*, 2016/17 UK USA 5% 1% 9% 21% 15% Europe 28% 27% 6% Other 2% Asia Pacific 9% * 2016/17 52 weeks vs 2015/16 53 weeks Halma Final results – June 2017

Profit* growth FY 2016/17 % growth**  Organic constant currency growth 4%  Acquisitions 3% 7%  Currency 10%  Headline growth 17% * Profit before amortisation and impairment of acquired intangibles, acquisition items, restructuring costs and profit or loss on disposal of operations ** 2016/17 52 weeks vs 2015/16 53 weeks Halma Final results – June 2017

Profit* growth Organic: Constant Currency £m Headline** growth** H1 83.6 12% 2% H2 110.4 21% 5% Total 194.0 17% 4% * Profit before amortisation and impairment of acquired intangibles, acquisition items, restructuring costs and profit or loss on disposal of operations ** 2016/17 52 weeks vs 2015/16 53 weeks Halma Final results – June 2017

Currency  Translation impact in 16/17  H1 net benefit: revenue and profit 8%  Full year net benefit: revenue and profit 10%  At recent Fx rates 17/18 profit impact*:-  H1: ~ 4% benefit  FY: ~ 1% benefit  Impact varying by sector  More information in Appendix * Based on 16/17 results, assuming £/$ 1.30, £/€ 1.15 Halma Final results – June 2017

Cash flow 2016/17 0 86% cash conversion Dividend: £(25)m 7% increase £(50)m Debt: £196.4m net debt (2016: £246.7m £(75)m Working net debt) capital Capex > £(100)m Depn £(125)m Tax Pensions £(150)m Acquisition Working capital: £(175)m outflow £14m (2016: £6m) Dividend £(200)m Effective tax rate: 21.5% (2016:21.9%) Other Debt c/f £(225)m incl. FX (net) YE 17 Pensions: Deficit £75m (2016: £52m) £(250)m Debt b/f Profit YE 16 Halma Final results – June 2017

Increased financial capacity  Revolving Credit Facility  increased to £550m (previously £360m)  to November 2021  5 existing plus 3 new banks  In addition to existing $250m USPP  Capacity for medium term growth  Year end gearing 0.86x, comfortable up to 2x Halma Final results – June 2017

ROTIC* 2013 2014 2015 2016 2017 ROTIC 16.9% 16.7% 16.3% 15.6% 15.3% WACC** 8.1% 8.1% 7.6% 8.1% 7.1% ROTIC> WACC 8.8% 8.6% 8.7% 7.5% 8.2%  ROTIC continues above 12% target  Achieving a good premium above WACC**  Driving growth, maintaining good returns * Return on Total Invested Capital ** Weighted Average Cost of Capital Halma Final results – June 2017

Financial KPI Summary 2016/17 Target Achieved Organic revenue growth* > 5% 4% Organic profit growth* > 5% 4% Acquisition profit growth ** > 5% 1% Revenue growth outside UK/Europe/USA > 10% 19% Return on Sales 18% - 22% 20.2% Return on Total Invested Capital >12% 15.3% Cash conversion > 85% 86% R&D investment (% of revenue) > 4% 5.3% * at constant currency. 2016/17 52 weeks vs 2015/16 53 weeks ** annualised profit of acquisitions made in the year (net of finance cost) as % of prior year adjusted profit Halma Final results – June 2017

Trading Review Halma Final results – June 2017

Sector performances* Revenue Profit** Infrastructure Infrastructure Safety Safety Medical Medical +17% +19% +31% +29% 27% 30% 31% 33% 46% £214m £962m 23% 19% 20% 17% Process Process Safety Safety Environmental Environmental +2% +7% & Analysis & Analysis +21% +16% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading **Profit before amortisation and impairment of acquired intangible assets, acquisition items, restructuring costs and profit or loss on disposal of operations and excluding finance and central administration costs Halma Final results – June 2017

Sector performances: Organic constant currency growth* Revenue Profit** Infrastructure Infrastructure Safety Safety Medical Medical +7% +7% +4% +6% 46% +4% +4% Process Process Safety Safety Environmental Environmental (4)% +1% & Analysis & Analysis +6% +4% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading **Profit before amortisation and impairment of acquired intangible assets, acquisition items, restructuring costs and profit or loss on disposal of operations and excluding finance and central administration costs Halma Final results – June 2017

Group revenue by end-market* Revenue Organic ccy Others Others +12% (5)% Energy/Res Energy/Res +10% +2% Buildings Buildings 6% +18% +8% 8% Process Ind Process Ind +13% +5% 7% 32% 46% Utilities Utilities 9% +13% +5% 11% Science/Env Science/Env 27% +16% +1% Health/Med Health/Med +31% +5% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Process Safety : Trading performance* Revenue: +7% Profit: +2% £m £m Organic ccy: +1% Organic ccy: (4)% 200 50 £167m £40m 40 150 30 100 20 50 10 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Sales: 24.1% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Process Safety : Revenue by destination % of sector & % growth* USA USA UK UK +0% (2)% +12% (2)% 17% 28% As Organic reported 22% ccy Other Europe 17% Europe +22% +3% Other 15% +7% +12% Asia Pacific Asia Pacific (2)% (8)% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Infrastructure Safety : Trading performance* Revenue: +19% Profit: +17% Organic ccy: +7% Organic ccy: +7% £m £m 350 80 £315m £65m 70 300 60 250 50 200 40 150 30 100 20 50 10 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Sales: 20.7% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Infrastructure Safety : Revenue by destination % of sector & % growth* 15% USA USA UK UK +16% (7)% +11% +10% 22% 25% As Organic Other Other reported 10% ccy +19% +2% 13% 30% Europe Asia Pacific Europe Asia Pacific +29% +9% +16% +21% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Medical : Trading performance* Revenue: +31% Profit: +29% Organic ccy: +4% Organic ccy: +6% £m £m 300 80 £261m £67m 70 250 60 200 50 150 40 30 100 20 50 10 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Sales: 25.6% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Medical : Revenue by destination % of sector & % growth* UK UK +2% +13% USA USA 5% +3% Europe +43% Europe (2)% 19% +13% As Organic 52% reported ccy Asia 16% Asia Pacific Pacific +36% 9% +18% Other Other +2% +19% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Environmental & Analysis : Trading performance* Revenue: +16% Profit: +21% Organic ccy: +4% Organic ccy: +6% £m £m 250 50 £219m £42m 200 40 150 30 100 20 50 10 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Return on Sales: 19.0% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Environmental & Analysis : Revenue by destination % of sector & % growth* UK UK USA USA +2% +5% +23% +6% 15% Europe Europe As Organic 14% 43% +7% (4)% reported ccy 21% 7% Asia Pacific Asia Pacific +26% +13% Other Other (0)% (11)% * 2016/17 52 weeks trading vs 2015/16 53 weeks trading Halma Final results – June 2017

Strategy update  Sustainable competitive strengths  Innovation through collaboration  Structured for growth Halma Final results – June 2017