Halma: Site Visit to HWM Tuesday 1 October 2019 1 Welcome Andrew - - PowerPoint PPT Presentation

Tuesday 1 October 2019

Halma: Site Visit to HWM

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Andrew Williams Group Chief Executive

Welcome

2

Agenda

11am - Noon Presentation and Q&A Buffet lunch 12.45pm Coach to HWM 1pm HWM site tour/product breakout sessions 3pm Close Coach departs for station

3

Constance Baroudel Divisional Chief Executive

Introduction

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HWM: a Halma Environmental Monitoring company

HWM leveraging Halma Growth Enablers HWM core to Environmental & Analysis

M&A Talent & Culture Digital Growth Engines Strategic Communications Convergence opportunities Peer support For a cleaner world Halma like financials

5

C C E

Rob Fish Managing Director, HWM

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Market Leaders in Digital Water and Digital Waste Water

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Mission

Save natural resources and reduce CO2 emissions

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Long-term growth drivers

Limited and stressed water resources Growing populations and water usage Ageing infrastructure Increased environmental legislation Higher regulatory standards Increased expectations of service

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Markets Served

Digital connectivity for global utility networks Monitoring assets, delivering data, bringing control

~70% <5% >20%

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Note: percentages shown are % of FY 2019 revenue

(Multi-utility)

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1993 1994 2003 2005 2013 2019

Business Model Progression

Phase 4: Data Delivery Phase 3: Fixed Network Phase 2: Remote Deployment

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Phase 1: Tools To Site

Technology

Rugged, battery powered products and GSM connectivity solutions monitor critical customer infrastructure

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Case Studies

Calculate Minimum Night Flow to identify distribution network leakage Monitor Level and Flow in sewers to prevent blockage and spills

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HWM has grown through strong customer focus, innovative product development, a complete user service and our digital data model

Customers

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Financials

USA UK Europe Asia Other Hardware Air Time & Data Svs Installation Repairs UK water UK Electricity Export water Other

Revenue by activity Revenue by geography Revenue by customer type Revenue

Note: Pie charts show revenue split for FY2019

16 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Operations

Manufacturing

• Cwmbran and Northampton
• Box build, test, configuration
• Medium volume, low capital

intensity Install and maintain model

• Recurrent revenues
• HWM responsible for logger fleet

performance

• Analysis and reporting teams

monitor logger fleet behaviour 209 employees 5 locations

Supply Chain spend

PCBs Cable harnesses Batteries Enclosures Factored components 17

HWM Customers HWM Products

HWM process over 10 million data connections daily.

A major business focus is to ensure high connectivity rates for our devices, to maintain this key competitive advantage.

Digital data

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ISO 27001 accreditation

Future Growth

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Maximise potential in clean water solutions Build waste water segment Apply remote monitoring solutions in adjacent markets

• Broaden range of solutions
• Increase digital insights
• Water quality
• Launching new products
• Further geographic expansion
• Acquire new capabilities
• Gas network monitoring
• Air quality, smart agriculture

Business Growth Drivers and the Regulatory Environment

Mike Tennant Director of Sales and Business Development, HWM

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Market/Business drivers

• Our markets have a number of long term growth drivers:
• Limited and stressed water resources
• Increased population and water usage
• Increased standards of living, expectations of service in

water and sewerage

• Increased Environmental legislation
• Ageing Infrastructure
• Regulators
• Looking specifically at regulation in our main market - UK

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OFWAT and the AMP

• The unique ‘monopolistic’

model of UK Privatisation necessitated a regulator to protect customers

• OFWAT regulates through 5-

year price reviews

• Business plans submitted,

investment plans and price proposals reviewed

• Key targets established which

have to be met

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Regulation Principles and HWM

• Customer Outcomes,

Resilience and Innovation drive targets and

• pportunities for HWM,

specifically:

• Leakage – overall

reduction of 15%, 170 Billion Litres per year

• Pollution Incidents – 37%

reduction, and 80% for the worst offenders

PR19 Principles

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Leakage Reduction Targets

Initial target New target Anglian Water 17% 17% Dwr Cymru Welsh Water 15% 15% Hafren Dyfrdwy 15% 15% Northumbrian Water 16% 15% Severn Trent 15% 15% South West Water 15% 15% Southern Water 15% 15% Thames Water 15% 25% United Utilities 15% 20% Wessex Water 15% 15% Yorkshire Water 25% 25% Affinity Water 15% 20% Bristol Water 15% 15% Portsmouth Water 15% 20% South East Water 14% 15% South Staffs Water 23% 23% SES Water 15% 15%

• OFWAT delivers toughest

ever targets

• Requires innovation and

technology

• Cannot simply do the

same as the last 30 years

• Already driving a huge

investment in Smart early leak detection systems = PermaNET

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37%- 80% reduction in pollution incidents

• Reduction in Pollution is key

to Environmental and customer service targets;

• Can no longer monitor
• nly treatment and spill
• Need to monitor the

network for early identification and prevention

• Needs lower cost, battery

powered telemetry - SpillGuard

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Summary

• Strong regulation in our main market continues to drive
• pportunity and growth
• Long term climate change, population growth and finite

water availability ensure continued investment

• Regulation is not matched world-wide but is increasing
• Other long-term drivers will drive international

investment and likely regulation

• Many markets looking at a form of the UK model

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Any questions? Saving natural resources and reducing CO2 emissions

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Appendices

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Rob Kitchen

Managing Director

Simon Fisher

Innovation Director

Mike Tennant

Sales & Business Development Director

Mick Bolton

Operations Director

Gavin Orr

Finance Director

Davide Di Palma

Engineering Project Director

Rob Fish

Divisional Managing Director

Stuart Trow

Executive Director

Jim Burke

Head of FCS

Steve Tooms

Executive Director

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Key dates

1979 1995 1999 2000 2010 2013 2015 2017 2019

Launch of world first leak noise correlator Palmer and Reten merge on Cwmbran site launches of world first permanently deployed ANL

• Palmer & Radcom merge to form

HWM-Water Ltd

• First high volume digital water

solutions provided to UU/STW/YW

• Radio Tech merged with HWM

Palmer integrates Wessex & FCS brands – FCS become USA re-seller ASL added to extend electricity metering solutions – now multi utility AMR Launch of first ATEX approved data logger targeting at waste water and gas Largest ever deployment of fixed network leak sensors – Affinity Water Invenio added to group to extend clean water solutions into customer side

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• plc. They involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or

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