Investor Site Visit 29 September, 2016 Agenda 11.00 Halma 11.30 - - PowerPoint PPT Presentation

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Investor Site Visit 29 September, 2016 Agenda 11.00 Halma 11.30 - - PowerPoint PPT Presentation

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Investor Site Visit 29 September, 2016 Agenda 11.00 Halma 11.30 Infrastructure Safety 12.15 Facility Tour part 1 13.00 Apollo Fire Detectors 13.30 Lunch 14.30 Facility Tour part 2 15.15 Close 15.30 Departures to station

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SLIDE 1

29 September, 2016

Investor Site Visit

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SLIDE 2

Agenda

11.00 Halma 11.30 Infrastructure Safety 12.15 Facility Tour – part 1 13.00 Apollo Fire Detectors 13.30 Lunch 14.30 Facility Tour – part 2 15.15 Close 15.30 Departures to station

Halma Investor Day, September 2016
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SLIDE 3 Halma Investor Day, September 2016

Disciplined market/product selection Enabling

  • rganisation

& culture Simple financial model

Consistent strategy, sustained success

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SLIDE 4

20 40 60 80 100 120 140 160 180 07 08 09 10 11 12 13 14 15 16 100 200 300 400 500 600 700 800 900 07 08 09 10 11 12 13 14 15 16

Sustained growth

Halma Investor Day, September 2016

Revenue Profit

£m £m

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SLIDE 5

4 8 12 16 20 07 08 09 10 11 12 13 14 15 16 10 12 14 16 18 20 22 24 07 08 09 10 11 12 13 14 15 16

Sustained strong returns

Halma Investor Day, September 2016

Return on Sales

% %

Return on Total Invested Capital*

* post-tax profit

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SLIDE 6

Sustained strong returns – dividend per share*

Halma Investor Day, September 2016

2 4 6 8 10 12 14

72/73 74/75 76/77 78/79 80/81 828/3 84/85 86/87 01/1 90/91 92/93 94/95 96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/01 12/13 14/15 * Adjusted for scrip issues

pence

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SLIDE 7

Balance between organic and acquisition revenue growth

Halma Investor Day, September 2016

4 8 12 16 20 07 08 09 10 11 12 13 14 15 16 acquisition

  • rganic

Revenue Growth (%)

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SLIDE 8

M&A activity since 2006/07

4 2 2 1 7 2 6 1 3 4 No.Acq’ns

  • 1

1

  • 1
  • No.Disp’ls

1

200 160 120 80 40 (40) (20) 4 14 42 21 105 143 22 (2) (5) (proceeds) / Spend £m

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

(20)

Year end

89 192 3 (3)

Halma Investor Day, September 2016
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SLIDE 9

20 40 60 80 100 20 40 60 80 100 120 140 160 180 200

A scalable growth model

Profit No Halma Companies

£m

Year 2007 2008 2009 2010 2011 2012 2013 2016 2014 2015

Halma Investor Day, September 2016
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SLIDE 10

Sustained organic growth

Halma Investor Day, September 2016
  • Relentless increased investment
  • innovation
  • international expansion
  • talent development
  • High quality portfolio
  • resilient market growth drivers
  • valuable product niches
  • active M&A
  • diversity
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SLIDE 11

Diversity provides resilience

Halma Investor Day, September 2016

100 200 300 400 500 600 700 800 900 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 E&A Medical Infrastructure Process

£m

Revenue

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SLIDE 12

Paul Simmons

Sector Chief Executive

INFRASTRUCTURE SAFETY SECTOR

29 September 2016

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SLIDE 13

Management

Group CEO

  • A. Williams

Sector FD

  • G. van der Pant

Sector CEO

  • P. Simmons

Sector VP

  • M. Zhang

Sector VP

Vacancy

Acquisition Executive

  • C. Liu

INFRASTRUCTURE SAFETY SECTOR

Photo needed
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SLIDE 14

Agenda

  • 1. Introduction to Infrastructure Safety
  • 2. Growth strategy: International growth
  • 3. Growth strategy: New products
  • 4. Growth strategy: Acquisitions
  • 5. Growth strategy: Talent

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 15

INFRASTRUCTURE SAFETY SECTOR

To protect commercially & publically

  • wned infrastructure assets and improve the

safety & mobility of people.

“ “

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SLIDE 16

per 2015/16 Final Results

INFRASTRUCTURE SAFETY SECTOR

Halma’s largest sector by contribution

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SLIDE 17

Security

10%

  • f sector revenue

What we make

INFRASTRUCTURE SAFETY SECTOR

Elevator safety

13%

  • f sector revenue

Fire suppression

10%

  • f sector revenue

Door safety

(People & vehicle flow)

20%

  • f sector revenue

Fire detection

47%

  • f sector revenue
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SLIDE 18

INFRASTRUCTURE SAFETY SECTOR

Strength & Resilience

Our products are often subject to non-discretionary spend: giving us unusual resilience to general market trends

~60% of revenue comes

from existing infrastructure, reducing cyclicality:

  • System upgrades
  • Refurbishments
  • Regulatory compliance

We benefit from construction investment as new buildings require our products

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SLIDE 19

INFRASTRUCTURE SAFETY SECTOR

Growth drivers

  • Increasingly demanding Health &

Safety regulations

  • Continuing trend of urbanisation
  • Growing and ageing population
  • Need for increased efficiency in

buildings and movement

  • Need for protection from

increasing threats to security

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SLIDE 20

Evolution:

INFRASTRUCTURE SAFETY SECTOR

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Revenue

£265m

£0m

Note: 3rd party revenue as reported in the Annual Report and Accounts. Growth from 1983-2000 averaged in graph.

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SLIDE 21

INFRASTRUCTURE SAFETY SECTOR

Evolution:

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Revenue

£265m

£0m

7.3% CAGR over last 10 years

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SLIDE 22

Worldwide

Fire Detection Fire Suppression Door Safety Elevator Safety Security

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 23

INFRASTRUCTURE SAFETY SECTOR

Revenue

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SLIDE 24

Agenda

  • 1. Introduction to Infrastructure Safety
  • 2. Growth strategy: International growth
  • 3. Growth strategy: New products
  • 4. Growth strategy: Acquisitions
  • 5. Growth strategy: Talent

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 25

INFRASTRUCTURE SAFETY SECTOR

  • China
  • Strong presence – five companies sales presence (3 full functions)
  • Significant investment underway in local products
  • India
  • Urbanisation/increasing middle class
  • Five companies have sales presence
  • R&D centre c. 30 people by 2017
  • Russia & Latin America – interest cooled
  • Southeast Asia - area of opportunity & investment

Growth strategy – emerging markets

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SLIDE 26

Agenda

  • 1. Introduction to Infrastructure Safety
  • 2. Growth strategy: International growth
  • 3. Growth strategy: New products
  • 4. Growth strategy: Acquisitions
  • 5. Growth strategy: Talent

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 27

INFRASTRUCTURE SAFETY SECTOR

  • Strengthen core
  • e.g. Panachrome +, Fireray…
  • Low cost R&D: Texecom & Apollo in Bangalore
  • Geographical expansion
  • Local R&D (Avire/BEA/Apollo in China)
  • e.g. Apollo China
  • Adjacent markets
  • e.g. Texecom connect

R&D spend is 5.3% of revenue

Growth strategy – new products

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SLIDE 28

Agenda

  • 1. Introduction to Infrastructure Safety
  • 2. Growth strategy: International growth
  • 3. Growth strategy: New products
  • 4. Growth strategy: Acquisitions
  • 5. Growth strategy: Talent

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 29

Growth strategy – acquisitions

INFRASTRUCTURE SAFETY SECTOR

  • Advanced joined in 2014:
  • added fire control panels and systems
  • Firetrace joined in 2015:
  • our entry into suppression – specialised area of micro environments
  • Seeking companies in core, adjacent or new markets:
  • Share IS’ growth drivers
  • Strong record of growth and potential
  • Strong management & financials
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SLIDE 30

Access to New Markets Expansion into Adjacencies Strengthen the Core

  • Natural hazards: Earthquake, floods, pollution detection
  • Manmade threats: Identity management & biometrics, border security,
counter terrorism
  • User comfort, efficiency & safety: smart traffic/parking, waste
management
  • Natural hazards: fire systems, leaks
  • Manmade threats: access control, CO
  • User comfort, efficiency & safety: people counting, lift monitoring, smart
buildings, disabled & elderly assistance, IoT gateways
  • Natural hazards: fire detection components, niche fire
suppression
  • Manmade threats: Intruder detection
  • User comfort, efficiency & safety: elevator doors, displays &
phones, commercial doors

Growth strategy – acquisitions

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SLIDE 31

Sector strategy – potential new applications

INFRASTRUCTURE SAFETY SECTOR

Fire detection Fire suppression Elevator safety People & vehicle flow Security Public buildings & spaces

  

+

Commercial buildings

    

Air, sea, road & rail

 

+ +

Transport infrastructure

+

+

Industrial buildings

   

Utilities

+

Defence

Residential

 

 Existing markets

+ New & Adjacent mkts (Acq)

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SLIDE 32

Introduction to Firetrace

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 33

Agenda

  • 1. Introduction to Infrastructure Safety
  • 2. Growth strategy: International growth
  • 3. Growth strategy: New products
  • 4. Growth strategy: Acquisitions
  • 5. Growth strategy: Talent

INFRASTRUCTURE SAFETY SECTOR

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SLIDE 34

Growth strategy – talent

INFRASTRUCTURE SAFETY SECTOR

  • Recruit more than our fair share of talent
  • The “Halma story”
  • Top Grading (A players lead recruitment) & assessment tools
  • Build “Digital capability”
  • Talent mind-set
  • 9 box: expectations on development investment & performance improvement
  • Development
  • Halma development programmes
  • Coaching
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SLIDE 35

Strategy summary

INFRASTRUCTURE SAFETY SECTOR

New products Acquisitions New applications Geographic expansion Talent development

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SLIDE 36

Q&A…

  • Positioned as a key player in its market
  • A model for all of our Process Safety companies
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SLIDE 37

APOLLO FIRE DETECTORS

Halma Investor Day

29th September 2016 Havant, UK

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SLIDE 38

PROTECTING LIVES & ASSETS GLOBALLY

  • Apollo supplies fire detection and notification devices into

commercial buildings

Windsor Castle, London UK Kremlin, Moscow, Russia The Shard & Tower Bridge, London UK Statue of Liberty New York, USA Q1 Residential Skyscraper Surfer’s Paradise, Australia Emirates Palace, Abu Dhabi Emirates Palace, Dubai, UAE
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SLIDE 39

APOLLO VALUE PROPOSITION

  • High quality product
  • Exceptional brand equity
  • Extensive range of approvals
  • Rigorous testing to exceed standards
  • Depth of product range for specific applications
  • Open protocol
  • Open distribution model with strong, historic channel partners
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SLIDE 40
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SLIDE 41
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SLIDE 42

SPECIALIST APPLICATIONS

Fire detection Fire suppressi

  • n

Elevator safety People & vehicle flow Security Public buildings & spaces

Commercial buildings

Air, sea, road & rail

Transport infrastructure

+

Industrial buildings

Utilities

+

Defence Residential

 Existing markets

+ New markets

Singapore Metro Trains, Singapore Dover Ferry Terminal Dover, UK Marine Lifting Vessels Various Cargo Ships, Merchant Vessels, Commercial Cruise Liners, Dockyards
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SLIDE 43

APOLLO GROWTH

2000 - 2016

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SLIDE 44

REVENUE BY REGION

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SLIDE 45

INNOVATION

  • Strong innovation pipeline
  • 10 new product launches in next 12 months

– next generation platform

  • Proprietary open protocol
  • 5.1% of revenue invested annually in R&D
  • 62 people in R&D, or 10% of total headcount
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SLIDE 46

FACILITIES

  • 7 labs with significant investment in equipment – ability to replicate

exactly conditions in test houses

  • 3 manufacturing facilities across 3 continents covering a total of

110,000 square feet

  • Automated assembly line (currently undergoing acceptance tests)

capable of producing a detector every 4 seconds

Lorenz Tunnel Fire Test Room Hemi anechoic chamber
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SLIDE 47

REGULATORY ENVIRONMENT

  • Apollo holds 481 certificates with 44 different approval bodies
  • 44 different tests to approve a detector
  • 7 figure annual spend on approvals
  • Stringent quality requirements:
  • End of line testing of 100% of devices
  • Full lab testing of 2 devices per shift
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SLIDE 48

TALENT DEVELOPMENT

  • Apollo has a strategic commitment to developing people
  • Extensive training
  • Formal Talent Management process
  • Company values deeply rooted in the organisation
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SLIDE 49

GROWTH OPPORTUNITIES

  • Strong growth in fire markets globally
  • Increasing safety awareness in developing world
  • Significant potential in China, South East Asia, India, Middle East
  • Complete new Soteria platform
  • New, open CoreProtocol as an enabler to leverage IoT
  • pportunities