Halma plc · LSE:HLMA
Halma — H1 2012/13 Earnings Presentation
38 slides from Halma's earnings presentation, November 2012
Slide 1: Half Year results 2012/13
Half Year results 2012/13 Andrew Williams – Chief Executive Halma Half Year results – November 2012
Slide 2: Strategy: sustainable growth, high returns
Strategy : sustainable growth, high returns ¾ Long-term growth drivers ¾ Competitive advantage in niche markets ¾ Agile operating structure ¾ Strategic investment for growth ¾ Active portfolio management Halma Half Year results – November 2012
Slide 3: Half year highlights: Record revenue and profits
Half year highlights: Record revenue and profits Growth & Revenue Profit ROS High +6% +6% +20.4% Returns £298m £60.8m (LY: 20.5%) R&D spend China growth Acquisitions Strategic investment +11% +32% £66m £15m spend Cash flow Disposals Dividend Good cash performance 99% £19m +7% of profit inflow interi
Slide 4: Group Trading & Financial Review
Group Trading & Financial Review Halma Half Year results – November 2012
Slide 5: Record results
Record results Continuing operations H1, 2012/13 £m Revenue Profit* £298m 70 300 £60.8m 60 250 50 200 40 150 30 100 20 50 10 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 * Profit before amortisation of acquired intangibles, acquisition costs and profit on disposal of operations Halma Half Y
Slide 6: Revenue growth
Revenue growth Continuing operations H1, 2012/13 £m Total Organic Organic: Constant Currency Revenue 298 6% 2% 3% Halma Half Year results – November 2012
Slide 7: Evolution of Geographic Revenue
Evolution of Geographic Revenue H1 07/08 H1 12/13 RoW UK RoW UK 19% 19% 25% 28% £186m £298m 27% 25% 26% 31% USA Europe Europe USA Halma Half Year results – November 2012
Slide 8: Revenue by destination
Revenue by destination Revenue and revenue growth, H1, 2012/13 (excluding disposals) Other 6% UK 2% Far East & A’asia 9% 9% 19% 21% 17% 15% 16% 25% 28% Europe 27% USA 31% 2% 19% Halma Half Year results – November 2012
Slide 9: Revenue by destination: organic constant currency
Revenue by destination: organic constant currency Revenue and revenue growth, H1, 2012/13 Other 4% UK Far East & A’asia 2% 14% Europe USA 0% 2% Halma Half Year results – November 2012
Slide 10: Profit Bridge
Profit* Bridge £m Organic Profit* Profit* Currency Disposal Acquisitions** ccy 1.8 (1.0) 2.8 (0.3) 57.5 60.8 H1 11/12 H1 12/13 * Profit before amortisation of acquired intangibles, acquisition costs and profit on disposal of operations ** Net of financing costs Halma Half Year results – November 201
Slide 11: Strong Returns
Strong Returns Return on Sales ¾ Range 18-22% ¾ H1 2012/13 20.4% (2011/12: 20.5%) ROCE* 71.6% (2011/12: 68.8%) ROTIC** 16.4% (2011/12: 16.9%) * Return on Capital Employed ** Return on Total Invested Capital Halma Half Year results – November 2012
Slide 12: Cash flow H1 2012/13
Cash flow H1 2012/13 Working capital: outflow £9m (2011/12: £14m) Capex: £60m £8.1m – 116% of depreciation Profit Working capital Effective tax rate: £40m Capex > Tax Depn 23.4% (2011/12 full year: 23.5%) Pensions: Pensions Acquisitions & Associate Inv. £3m extra contributions £20m Deficit £41m (Mar
Slide 13: Sector Trading Review
Sector Trading Review Halma Half Year results – November 2012
Slide 14: Sector revenue and profit
Sector revenue and profit HY 2012/13 Industrial H&A Industrial H&A +8% +12% +13% +10% 21% 24% 45% 47% 34% 29% Infrastructure Infrastructure (1)% (2)% Revenue Profit Halma Half Year results – November 2012
Slide 15: Health & Analysis: Trading performance
Health & Analysis: Trading performance HY 2012/13 Revenue: +12% Profit: +10% Organic ccy: +1% £135m Organic ccy: 2% 140 40 120 £30.9m 30 100 80 20 60 40 10 20 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Return on Sales: 22.9% Halma Half Year results – November 2012
Slide 16: Health & Analysis: Sub-sector revenue
Health & Analysis: Sub-sector revenue HY 2012/13: % of sector & % growth Photonics Health Optics (2)% +41% 27% 34% £135m 22% Water 17% +10% Fluid Tech +4% Halma Half Year results – November 2012
Slide 17: Health & Analysis: Revenue by destination
Health & Analysis: Revenue by destination HY 2012/13: % of sector & % growth (excluding disposals) Other UK +4% (9)% 9% 10% Far East & A’asia +21% 17% 20% Europe +9% USA +23% 44% Halma Half Year results – November 2012
Slide 18: Infrastructure Sensors: Trading performance
Infrastructure Sensors: Trading performance HY 2012/13 Revenue: (1)% Profit: (2)% Organic ccy: +0% Organic ccy: (1)% 120 30 £101m 100 80 20 £18.9m 60 40 10 20 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Return on Sales: 18.8% Halma Half Year results – November 2012
Slide 19: Infrastructure Sensors: Sub-sector revenue
Infrastructure Sensors: Sub-sector revenue HY 2012/13: % of sector & % growth Security +3% 13% Fire +1% Elevators 0% 21% 41% £101m 25% Auto Doors (6)% Halma Half Year results – November 2012
Slide 20: Infrastructure Sensors: Revenue by destination
Infrastructure Sensors: Revenue by destination HY 2012/13: % of sector & % growth Other (4)% Far East & A’asia 7% UK +2% +7% 27% 16% USA 21% +14% 29% Europe (13)% Halma Half Year results – November 2012
Slide 21: Industrial Safety: Trading performance
Industrial Safety: Trading performance HY 2012/13 [includes Asset Monitoring, divested in August 2012] Revenue: +8% Profit: +13% 70 Organic ccy: +10% 20 Organic ccy: 15% £63m 60 £15.3m 50 40 10 30 20 10 0 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Return on Sales: 24.5% Halma Half Year resu
Slide 22: Industrial Safety: Sub-sector revenue
Industrial Safety: Sub-sector revenue HY 2012/13: % of sector & % growth* Bursting Discs +13% 21% Interlocks +10% 50% £57m Gas 29% +8% *Excludes disposal – Asset Monitoring Halma Half Year results – November 2012
Slide 23: Industrial Safety: Revenue by destination
Industrial Safety: Revenue by destination HY 2012/13: % of sector & % growth* Other +26% UK Far East & 11% (1)% A’asia 24% +30% 16% USA 22% 27% Europe +10% +5% *Excludes disposal – Asset Monitoring Halma Half Year results – November 2012
Slide 24: Strategic investment
Strategic investment ¾ International Expansion ¾ Portfolio Management ¾ People Development ¾ Innovation Halma Half Year results – November 2012
Slide 25: International expansion: increased collaboration
International expansion: increased collaboration Fluid Technology Health Optics Industrial Safety Halma Half Year results – November 2012
Slide 26: Portfolio management: SunTech acquisition
Portfolio management: SunTech acquisition “clinical-grade, non-invasive blood pressure (NIBP) products and technology” Halma Half Year results – November 2012
Slide 27: People Development
People Development Halma Half Year results – November 2012
Slide 28: Innovation: New products for Asia, from Asia
Innovation: New products for Asia, from Asia Photonics Water Accuman SD Pharmaline Halma Half Year results – November 2012
Slide 29: Investor Events 2013
Investor Events 2013 Capital Markets event – organic and M&A growth Location: London Date: 14th February 2013 Location: Orlando, Florida Date: 30th April, 2013 Halma Half Year results – November 2012
Slide 30: Summary & outlook
Summary & outlook ¾ Proven strategy ¾ Increased investment for growth ¾ Stronger portfolio ¾ H2 order intake in line with expectations ¾ Slightly ahead of revenue “remain on track to make further progress in the second half year” Halma Half Year results – November 2012
Slide 31: Questions
Questions Halma Half Year results – November 2012
Slide 32: Appendices
Appendices Halma Half Year results – November 2012
Slide 33: Currency impacts
Currency impacts $ % € % change change Average rates 12/13 11/12 12/13 11/12 • H1 v £ 1.58 1.62 2.5% 1.25 1.14 (9.6%) • Full Year v £ N/A 1.60 N/A 1.16 • 1% change* (Annual $ (~ 40% of total) € (~20% of total) impact) Revenue +/- £2.3m +/- £0.8m Profit +/- £0.45m +/- £0.2m • At $1.60/€1.25 Average r
Slide 34: Acquisitions and Investment in Associate
Acquisitions and Investment in Associate Consideration Initial Maximum Earn out 2012/13 Acquisitions Acquired EBIT* £m £m £m Sensorex April 12 24 - 2.4 Accutome April 12 13 ** 3 1.3 SunTech May 12 29 4 3.5 66 7 7.2 Earn-outs re prior year acquisitions - Cash 16 - Loan notes issued 2 84 Increased inv
Slide 35: Disposal – Tritech Holdings (Asset Monitoring)
Disposal – Tritech Holdings (Asset Monitoring) ¾ Sold August 2012 £m ¾ Proceeds Cash 19.7 Escrow 2.1 21.8 ¾ Net assets/costs (5.6) ¾ Goodwill (8.0) Gain on disposal 8.2 ¾ Annual Revenue: £12.3m, Profit: £2.4m Halma Half Year results – November 2012
Slide 36: Impact of M&A
Impact of M&A Revenue * Actual Expected Expected H1 12/13 H2 12/13 Full Year 12/13 Acquisitions/Disposal 11/12 (1) (2) (3) Acquisitions/Disposal 12/13 14 11 25 13 9 22 Profit after financing costs * Actual Expected Expected H1 12/13 H2 12/13 Full Year 12/13 Acquisitions/Disposal 11/12 0.1 (0.1) - Ac
Slide 37: Pensions
Pensions DB plans Deficit Sept 12 March 12 Assets 158.4 153.0 Liabilities (199.0) (186.0) Deficit (40.6) (33.0) ¾ Closed DB plans to new members in 2003 ¾ Contributions to pay off deficit : £7m/year ¾ Extra £1m in 2012/13 due to Volumatic disposal in March 2012 ¾ IAS 19 impact 2013/14*: £1m/year * C
Slide 38: 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