Halma Plc · LSE:HLMA
Halma — Investor Day (October 2019)
31 slides from Halma's investor day presentation, Oct 1, 2019
Slide 1: Halma: Site Visit to HWM
Halma: Site Visit to HWM Tuesday 1 October 2019 1
Slide 2: Welcome
Welcome Andrew Williams Group Chief Executive 2
Slide 3: Agenda
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
Slide 4: Introduction
Introduction Constance Baroudel Divisional Chief Executive 4
Slide 5: HWM: a Halma Environmental Monitoring company
HWM: a Halma Environmental Monitoring company HWM leveraging Halma HWM core to Growth Enablers Environmental & Analysis Talent & Culture For a cleaner world C E M&A Convergence opportunities C Strategic Peer support Communications Digital Growth Engines Halma like financials 5
Slide 6: Rob Fish, Managing Director, HWM
Rob Fish Managing Director, HWM 6
Slide 7: Market Leaders in Digital Water and Digital Waste Water
Market Leaders in Digital Water and Digital Waste Water 7
Slide 8: Mission
Mission Save natural resources and reduce CO2 emissions 8
Slide 9: Long-term growth drivers
Long-term growth drivers Limited and Increased stressed water expectations of resources service Growing Increased populations and environmental water usage legislation Ageing Higher regulatory infrastructure standards 9
Slide 10: Markets Served
Markets Served Digital connectivity for global utility networks Monitoring assets, delivering data, bringing control (Multi-utility) ~70% <5% >20% Note: percentages shown are % of FY 2019 revenue 10
Slide 11: 1993 1994 2003 2005 2013 2019
1993 1994 2003 2005 2013 2019 11
Slide 12: Business Model Progression
Business Model Progression Phase 1: Phase 2: Phase 3: Phase 4: Tools To Site Remote Fixed Network Data Delivery Deployment 12
Slide 13: Technology
Technology Rugged, battery powered products and GSM connectivity solutions monitor critical customer infrastructure 13
Slide 14: Case Studies
Case Studies Calculate Minimum Night Monitor Level and Flow Flow to identify distribution in sewers to prevent network leakage blockage and spills 14
Slide 15: Customers
Customers HWM has grown through strong customer focus, innovative product development, a complete user service and our digital data model 15
Slide 16: Financials
Financials Revenue Revenue by geography USA UK Europe Asia Other 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenue by activity Revenue by customer type Hardware UK water Air Time & Data Svs UK Electricity Installation Export water Other Repairs Note: Pie charts show revenue split for FY2019
Slide 17: Operations
Operations Manufacturing • Cwmbran and Northampton 209 employees • Box build, test, configuration 5 locations • Medium volume, low capital intensity Install and maintain model Supply Chain spend • Recurrent revenues PCBs • HWM responsible for logger fleet Cable harnesses performance Batteries • Anal
Slide 18: Digital data
Digital data HWM process over 10 million HWM Products HWM Customers data connections daily. A major business focus is to ensure high connectivity rates for our devices, to maintain this key competitive advantage. ISO 27001 accreditation 18
Slide 19: Future Growth
Future Growth • Broaden range of solutions Maximise potential in • Increase digital insights clean water solutions • Water quality • Launching new products Build waste water • Further geographic expansion segment • Acquire new capabilities Apply remote • Gas network monitoring monitoring solutions •
Slide 20: Business Growth Drivers and the Regulatory Environment
Business Growth Drivers and the Regulatory Environment Mike Tennant Director of Sales and Business Development, HWM 20
Slide 21: Market/Business drivers
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
Slide 22: OFWAT and the AMP
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 22
Slide 23: Regulation Principles and HWM
Regulation Principles and HWM Customer Outcomes, PR19 Principles Resilience and Innovation drive targets and opportunities for HWM, specifically: Leakage – overall reduction of 15%, 170 Billion Litres per year Pollution Incidents – 37% reduction, and 80% for the worst offenders 23
Slide 24: Leakage Reduction Targets
Leakage Reduction Targets OFWAT delivers toughest Initial target New target ever targets Anglian Water Dwr Cymru Welsh 17% 17% 15% 15% Water Requires innovation and Hafren Dyfrdwy 15% 15% technology Northumbrian 16% 15% Water Severn Trent 15% 15% Cannot simply do the South West Water 15% South
Slide 25: 37%-80% reduction in pollution incidents
37%- 80% reduction in pollution incidents Reduction in Pollution is key to Environmental and customer service targets; Can no longer monitor only treatment and spill Need to monitor the network for early identification and prevention Needs lower cost, battery powered telemetry - SpillGuard 2
Slide 26: Summary
Summary Strong regulation in our main market continues to drive opportunity 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
Slide 27: Any questions?
Any questions? Saving natural resources and reducing CO2 emissions 27 27
Slide 28: Appendices
HWM, Appendices HWM, ¥Halma
Slide 29: HWM management team
Rob Fish Divisional Managing Director Rob Kitchen Steve Tooms Stuart Trow Managing Director Executive Executive Simon Fisher Mick Bolton Mike Tennant Gavin Orr Davide Di Palma Director Director Innovation Operations Sales & Business Finance Engineering Project Director Director Development Director
Slide 30: Key dates
• Palmer & Radcom merge to form Key dates HWM-Water Ltd 2010 • First high volume digital water solutions provided to UU/STW/YW Launch of world first leak noise • Radio Tech merged with HWM 1979 correlator 2013 ASL added to extend electricity metering solutions – now multi utility AMR Palmer and Rete
Slide 31: Disclaimer
Disclaimer 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 condition, div