Slide 1: Full Year Results 2018/19
Full Year Results 2018/ | 11 June 2019 ms — Group Chief Executive tti —- Chief Financial Officer Halma
Slide 2: Introduction
Introduction Andrew Williams Group Chief Executive
Slide 3: Full year 2018/19: Record results
Full year 2018/19: Record results Record revenue and profit and higher returns Increased strategic investment Strong cash performance © Halma ( Revenue Ye Profit* \V Return on Sales ) +13% +15% 20.3% £1,211m £246m 2017/18: 19.9% Ne J J y, ( R&D spend \) Capex YY Acquisitions +) +11% +31% 4 £63m £29m
Slide 4: Sustainable value creation
Sustainable value creation © Halma Revenue (£m) Adjusted Profit before Tax (£m) £1,211m £246m 1200 4 250 100 J 10% CAGR 200 12% CAGR 800 4 150 600 4 100 400 4 200 | 50 0+ 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 R&D expenditure £
Slide 5: Sustainable value creation
Sustainable value creation © Halma A strong purpose Robust Aclear organisation and culture © strategy Halma Setting A simple financial model challenging targets Halma Full Year Results 2018/19- 11 June 2019
Slide 6: Financial Review
Financial Review Marc Ronchetti Chief Financial Officer
Slide 7: Record results
Record results © Halma Revenue Profit* £246 £1,211m 260 m 240 220 200 180 160 140 120 100 £m £m 2015 2016 = 2017S 2018 =. 2019 2015 2016 = 2017,— 2018 ~—.2019 * Profit before amortisation and impairment of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on di
Slide 8: Revenue growth
Revenue growth © Halma £1,210.9m +3.1% (1.0) % +0.4% +12.5% +10.0% | | | —<—<— £1,076.2m 2017/18 Organic Acquisitions Disposals Currency 2018/19 Halma Full Year Results 2018/19- 11 June 2019
Slide 9: Revenue by destination
Revenue by destination Revenue and revenue growth, 2018/19 Reported +16% USA +18% Europe +12% Other +0% +5% Asia Pacific Halma Full Year Results 2018/19- 11 June 2019 © Halma Organic constant currency UK +11% USA +18% Europe +6% Other (3)% +4% Asia Pacific
Slide 10: Profit growth
Profit* growth © Halma £245.7m 40.4% +0.3% +15.0% —— —— +11.1% £213.7m 2017/18 Organic Acquisitions Disposals Currency 2018/19 * Profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, profit or loss on disposal of operations and the effect of equalisa
Slide 11: Process Safety
Process Safety Revenue £198m: +7% Organic ccy +7% Profit* £46m: +5% Organic ccy +5% © Halma Revenue by destination UK Return on sales 1% 23.0% +11% occy 2017/18: 23.5% USA +18% +17% occy Europe +4% +4% occy Other R&D spend (7)% Asia Pacific £7.0m: +10% (7)% ocey soeecey 3.5% of revenue * Profit befo
Slide 12: Infrastructure Safety
Infrastructure Safety Revenue by destination Revenue . 9 £409m: +17% Usa UK Organic ccy +11% +32% +16% +27% occy +11% occy Other +9% +5% occy Profit* Asia Pacific Europe £89m: +21% +6% +17% Organic ccy +16% +4% occy +6% occy © Halma Return on sales 21.8% 2017/18: 21.0% R&D spend £24.9m: +22% 6.1% of
Slide 13: Environmental & Analysis
Environmental & Analysis © Halma Revenue by destination Revenue Return on sales £299m: +15% vn 22.2% 24% Organic ccy +11% 115% ocey 2017/18: 21.2% USA +22% Europe +20% occy +13% +8% occy Profit* Asia Pacific R&D spend 9 £66m: +21% +3% £19.2m: +8% Other +1% occy Organic ccy +13% (12)% 6.4% of revenue
Slide 14: Medical
Medical C Halma Revenue by destination Revenue UK Return on sales £306m: +8% +3% 25.1% Organic ccy +10% +7% occy Europe 2017/18: 23.6% +7% +8% occy USA +10% Asia Pacific +14% occy +8% +8% occy Profit* £77m: +15% Organic ccy +13% R&D spend £11.3m: +1.7%** 3.7%** of revenue Other +3% (2)% occy * Profi
Slide 15: Cash flow
Cash flow C_.~ Cash conversion 88% 2017/18: 85% £40m | (Werking capital ) Working capital outflow £(40)m £16m 2017/18: £24m e(@0)mn _ Capex £(120)m £29m 2017/18: £22m £(140)m NY (—- ) £(180)m ‘ffective tax rate 9 18.6% £(220)m 2017/18: 19.7% £220m epitpa net debt YE 17/18 * Includes asset purchase s
Slide 16: Performance against financial KPIs
Performance against financial KPls © Halma Organic revenue (— >) Organic profit Va Acquisition profit Revenue growth Return on sales 20.3% Target 18-22% Ne y, Return on Total Invested Capital 16.1% Target =12% Ne y Cash conversion 88% Target =85% Ne y, growth* growth* growth** outside UK/USA/Europe
Slide 17: Strategy update
Strategy update Andrew Williams Group Chief Executive
Slide 18: Halma's DNA: our organisational genes
Halma’s DNA: our organisational genes (— ~~ Purpose drives us (- > Agility is everything (— >) We bet on talent \ y, Halma Full Year Results 2018/19- 11 June 2019 © Halma We are global niche specialists Va ~ We invest for the future ~ We are structured for growth J 18
Slide 19: Halma Strategy: Our Growth Enablers
Halma Strategy: Our Growth Enablers © Halma International Finance Strategic Expansion & Risk Communications Digital Growth Innovation Talent & Engines Network Culture Halma Full Year Results 2018/19- 11 June 2019 19
Slide 20: M&A
Halma Full Year Results 2018/19- 11 June 2019 M&A »Halma 20
Slide 21: Further developing Digital Growth and Innovation
Further developing Digital Growth and Innovation C Halma Digital Growth Engines Innovation Network la Core Digital Accelerator Convergence Accelerator Edge Accelerator ( Innovation Hot ) Spots Strategic Partnerships XY JS Halma Full Year Results 2018/19- 11 June 2019 Twelve projects in 2018/19 e.g.
Slide 22: Talent and culture
Talent and culture © Halma * Executive Board development Talent Ahead of * Divisional Chief Executive and Managing Director the Curve talent strengthened * Halma Future Leaders now on Company Boards Talent & Culture * Articulation of Halma’s DNA * Accelerate Halma leadership conference and training
Slide 23: Summary and Outlook
Summary and Outlook © Halma > Strong financial performance, and sustained value creation > Increased investment in purpose, culture and growth enablers > New financial year started well, order intake ahead > Expect to make good progress in the year ahead Halma Full Year Results 2018/19- 11 June 2019
Slide 24: Questions?
Questions?
Slide 25: Appendices
Appendices
Slide 26: Revenue and profit: First and second half performance
Revenue and profit: First and second half performance Reported revenue Organic revenue** Reported profit* Organic profit* ** First half 2018/19 £585m (+16%) +14% £113m (+19%) Second half 2018/19 £625m (+10%) +6% £133m (+11%) © Halma Full year 2018/19 +13% +10% +15% +11% * Profit before amortisation
Slide 27: Sector performances
Sector performances Revenue Infrastructure Environmental Safety & Analysis +17% +15% Medical +8% Process Safety +7% © Halma Profit* Infrastructure Environmental Safety & Analysis +21% +21% 8% Medical +15% Process Safety +5% * Profit before amortisation of acquired intangibles, acquisition items, sig
Slide 28: Sector performances: Organic constant currency
Sector performa nces: Organic constant currency Revenue Environmental Infrastructure & Analysis Safety +11% +11% Medical +10% Process Safety +7% © Halma Profit* Environmental Infrastructure & Analysis Safety +13% +16% Medical +13% Process Safety +5% * Profit before amortisation of acquired intangibl
Slide 29: Sector History
Sector History a 2014/15 2015/16 2016/17 2017/18 2018/19 Revenue Sector profit* Process Safety 158.4 Infrastructure Safety 234.1 Environmental & Analysis 164.4 Medical 169.3 Inter-segment sales (0.1) Group revenue 726.1 Process Safety 44.8 Infrastructure Safety 50.0 Environmental & Analysis 27.4 Med
Slide 30: Process Safety: new subsector names
Process Safety: new subsector names ~_ freer | Halma Full Year Results 2018/19- 11 June 2019 © Halma 30
Slide 31: Currency Effects
Currency Effects © Halma Puss | sechange | Euro | echange | Average rates 1.31 1.33 (0.1)% 1.14 1.13 versus Sterling 1% change* USS (~45% of total) Euro (~13% of total) Revenue £5.5m £1.5m Profit £1.1m £0.3m * Based on 2018/19 results Halma Full Year Results 2018/19- 11 June 2019 31
Slide 32: Profit Adjustments
Profit Adjustments* © Halma Intangible amortisation (35.6) (34.7) Acquisition items** (0.3) (7.7) Disposal of operations (1.0) 0.6 Defined benefit pension charge (2.1) - (39.0) (41.8) * items (charged)/credited in arriving at statutory profit ** including acquisition costs and adjustment to acquisit
Slide 33: Pensions
Pensions Defined Benefit Pension Scheme (£m) + Discount rate 2.4% (March 2018: 2.5%). * Closed DB to future accrual December 2014 * Contributions to pay off deficit : 2018/19: £11.7m; agreed for 2019/20: £12.7m Halma Full Year Results 2018/19- 11 June 2019 33
Slide 34: Acquisition Contribution
Acquisition Contribution ©Halma Ri acqui Revenue V2.{0) 17.6 Operating profit 8.0 8.4 5.4 Profit (net of financing cost) 6.5 6.9 4.5 Return on Sales** 26.1 26.2 30.7 The table above gives the results for Cardios, CasMed, Mini-Cam, Setco and Argus acquired in 2017/18, and LAN Controls, Limotec, Navte
Slide 35: Substantial financial capacity
Substantial financial capacity © Halma Available liquidity £831m £(263)m £568m Cash Revolving Credit Net debt/EBITDA £81m Facility extended to 0.63x 2023 (2017/18: 0.87x) Revolving Credit . . . Facility Funding maturity profile £550m 400 600 500 US Private 400 Placement 300 US$250m 200 Other " | USS
Slide 36: IFRS 16: estimated effects
IFRS 16: estimated effects C Halma The effects of IFRS 16, once implemented, are estimated to be as follows: ° A small reduction in net assets (c.£4m), comprising: o Anincrease in assets of c.£45m o Anincrease in liabilities of c.£49m ° An immaterial net effect on the Group’s profit and loss account
Slide 37: 2019/20 Full Year Forecasts
2019/20 Full Year Forecasts C Halma P| Notes recast S Forecast Capex Effective tax rate Central costs Net finance expense Pension contributions 2018/19 Actual 1 £35m £31.3m 2 c.20% 18.6% 3 £28m £22.0m 4 £10.5mé £10.0m 5 £12.7m £11.7m Notes: 1. 2. oop 2018/19 includes several business expansion proje
Slide 38: Disclaimer
Disclaimer © Halma This document contains statements about Halma plc that are or may be forward-looking statements. Forward-looking statements include statements relating to (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condit