Halma Plc · LSE:HLMA
Halma — H1 2022/23 Earnings Presentation
37 slides from Halma's earnings presentation, Nov 17, 2022
Slide 1: Half Year Results 2022/23
Half Year Results 2022/23 17 November 2022 Andrew Williams -— Group Chief Executive Marc Ronchetti — Chief Financial Officer and Group Chief Executive Designate Halma
Slide 2: Andrew Williams, Group Chief Executive
Halma Andrew Williams Group Chief Executive Growing a safer, cleaner, healthier future for everyone, every day
Slide 3: Strong results enabled by our Sustainable Growth Model
Strong results enabled by our Sustainable Growth Model Record revenue, profit and dividends Growth in all sectors and regions Continued strong returns with increased strategic investment Exceptionally strong order book; promising M&A pipeline On track for further H2 progress and good full year perfo
Slide 4: Video
Video Halma
Slide 5: Half year 2022/23: Record first half results
Half year 2022/23: Record first half results Strong growth and returns Increased strategic investment Continued balance sheet strength and dividend growth © Halma ( Revenue YY Profit! aA Return on Sales!:2 ») +19% +11% 19.6% £875m £172m (H1 21/22: 21.0%) \_ (121/22: 737m) ) \__(H1.21/22: £155m) —_)
Slide 6: Marc Ronchetti, Chief Financial Officer
Halma Marc Ronchetti Chief Financial Officer and Group Chief Executive Designate Growing a safer, cleaner, healthier future for everyone, every day
Slide 7: First half results - strong and sustainable growth
First half results - strong and sustainable growth C Halma Revenue (£m) £875m 900 5 800 11% CAGR 700 600 500 400 300 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 Halma Half Year Results 2022/23 - 17 November 2022 Adjusted Profit before Tax (£m) £172m 180 160 140 120 100 80 60 40 20 11
Slide 8: Strong organic revenue growth
Strong organic revenue growth ©Halma £875.5m 8.3% +18.8% 43.4% (2.4) % || | | £737.2m Of which price c.4% H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 Halma Half Year Results 2022/23 - 17 November 2022
Slide 9: Organic constant currency growth by region
Organic Constant H1 H1 Currency 2021/22 2022/23 Group +23% +9% USA +19% +11% Europe +18% +12% UK +46% +6% Asia Pacific +30% +4% Other +6% +15%
Slide 10: Profit growth and strong Return on Sales
Profit! growth and strong Return on Sales £171.7m 9.2% +10.9% 41.9% 41.2% (1.4)% er H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 1. Profit is profit before amortisation of acquired intangibles, acquisition items, significant restructuring costs, and profit or loss on disposal of ope
Slide 11: Net debt and cash flow
Net debt and cash flow _ Cash conversion 63% H1 21/22: 85% YY ( Working capital >) outflow £70m H1 21/22: \__£26m outflow _/ rC.t~‘CSN Capex £16m H1 21/22: £14m YY Net acquisition spend! £180m H1 21/22: £58m © Halma £(100)m £(200)m £(300)m £(400)m £(500)m £275m net debt YE 21/22 EBITDA Working capit
Slide 12: Strong working capital control
Strong working capital control Working capital increase Trade debtors . Other debtors Inventories Trade creditors Other creditors Halma Half Year Results 2022/23 - 17 November 2022 © Halma Inventories increase Cost inflation Strategic & supply purchases New product development & other 12
Slide 13: Safety sector
Safety sector Va Revenue +) £355m: +11% L Organic ccy! +10% ) ( Profit? ) £75m: +3% L Organic ccy!' +1% (~ >) Return on Sales 21.2% H1 21/22: 23.0% Revenue by destination USA UK 38° (2)% +28% +8% occy +14% occy Other 15% +14% occy Europe +10% Asia Pacific +13% occy +6% +1% occy © Halma R&D spend +)
Slide 14: Environmental & Analysis sector
Environmental & Analysis sector (- > Revenue £264m: +26% Organic ccy' +9% ) ( Profit? ) £65m: +23% Organic ccy! +8% J ( Return on Sales +) 24.8% H1 21/22 : 25.4% ) Revenue by destination UK (3)% (4)% occy USA +33% Europe +12% occy +20% +0% occy Asia Pacific Other +36% +46% +19% occy +10% occy © Halm
Slide 15: Healthcare sector
Healthcare sector ( Revenue +) £257m: +23% Organic ccy' +9% ( Profit? ) £56m: +22% Organic ccy'+9% J ( Return on Sales +) 22.0% H1 21/22 : 22.3% ) USA +28% +10% occy Revenue by destination UK +20% +17% occy Europe +30% +17% occy Asia Pacific +3% (7)% occy Other +30% +18% occy © Halma ( » R&D spend £
Slide 16: Performance against financial KPIs
Performance against financial KPls © Halma (~ >» Organic revenue* +9.5% Threshold 5% Va Organic profit* +1.9% Threshold 5% Ne (~ ») Acquisition profit kk +2.4% Threshold 5% ya Revenue outside UK/USA/Europe +17. 3% Threshold 10% ~ NX J (— » R&D investment (% of revenue) 5.7% Threshold 4% N vy, Va Cas
Slide 17: Strategy Update
Halma Strategy Update Andrew Williams Group Chief Executive Growing a safer, cleaner, healthier future for everyone, every day
Slide 18: Enabling opportunities in sustainability and digital
Enabling opportunities in sustainability and digital Sustainability
Slide 19: New digital sustainability growth opportunities
New digital sustainability growth opportunities BFA Thermotool - models energy efficiency savings SAVEENEROY X Halma Half Year Results 2022/23 - 17 November 2022 CLK VistaView-enables remote access to quality eyecare ~\ © Halma (©) minicam group Partnered with VAPAR’s Al for faster and more accurate
Slide 20: Video
Video Halma
Slide 21: Purpose-aligned M&A
Purpose-aligned M&A © Halma 4&& DEEP TREKKER “ 1Z1 Medical BWec TECH Can$60m (£37m) US$168m (£151m) €57.5m (£50m) Financial data indicates the maximum total consideration, on a cash- and debt-free basis Halma Half Year Results 2022/23 - 17 November 2022 2
Slide 22: Video
Video Halma
Slide 23: Halma Half Year Results 2022/23 - 17 November 2022 23
Halma Half Year Results 2022/23 - 17 November 2022 23
Slide 24: Outlook: a strong platform for sustainable growth
Outlook: a strong platform for sustainable growth Strong growth, returns, and financial position Increased strategic investment Sustainable Growth Model gives agility and resilience On track for further H2 progress and good full year performance XN Halma Half Year Results 2022/23 - 17 November 2022
Slide 25: Growing a safer, cleaner, healthier future
Halma Growing a safer, cleaner, healthier future for everyone, every day
Slide 26: Appendices
© Halma Appendices
Slide 27: Sector performances
Sector performances Revenue Environmental & Analysis +25.9% Safety +11.0% Healthcare +23.4% © Halma Profit* Safety Environmental 2.6% & Analysis “ee +23.1% Healthcare +21.9% * For the sectors, profit represents adjusted operating profit before central administration costs, after share of associate.
Slide 28: Sector performances: Organic constant currency
Sector performances: Organic constant currency Revenue Safety & Analysis +10.1% 18.7% Healthcare +9.3% Environmental © Halma Profit* Environmental & Analysis +7.6% Safety +0.8% Healthcare +9.3% * For the sectors, profit represents adjusted operating profit before central administration costs, after
Slide 29: Safety sector
Safety sector 5 £355.4m +10.1% +1.1% (5.2)% +5.0% +11.0% | 4 Revenue £320.2m | H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 £75.4m +4.5% +2.6% 10.8% +0.2% (2.9)% H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 1: See notes on slide 32 Halma Half Year Results 2022/23 -
Slide 30: Environmental & Analysis sector
Environmental & Analysis sector © Halma £263.8m +9.7% +25.9% i Revenue £209.5m || | H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 £65.4m +9.9% +23.1% 7 | | H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 1: See notes on slide 32 Halma Half Year Results 2022/23 - 17 Nove
Slide 31: Healthcare sector
Healthcare sector £256.7m +11.7% +23.4% 19.3% 124% % | Revenue — 2208.0 H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 £56.4m +12.5% +21.9% 19.3% 40.1% -% | | css H1 2021/22 Organic Acquisitions Disposals Currency H1 2022/23 1: See notes on slide 32 Halma Half Year Results 2022/23 - 1
Slide 32: Sector History
Sector History ©Halma es ee ee FY wry {oui | ry | at | ry | oa | ory | nt Revenue Safety 276.0 564.8 314.1 620.8 268.6 587.0 320.2 641.4 355.4 Environmental & Analysis? 153.9 S2iro) 173.2 370.7 178.0 361.1 209.5 442.9 263.8 Healthcare* 155.8 325.2 166.5 347.2 172.4 371.3. 208.0 442.3 256.7 Inter-seg
Slide 33: Currency Effects
Currency Effects ©Halma poss | change | Euro | Se change | P| 2022/23] H12021/22| =| H1.2022/23 | H12021/22| = Average rates 1.22 1,39 (12.4) % 1.17 1.17 0.8% versus Sterling 9 SCT var every 1 se USS (~50% of total) | Euro (~11% of total) change Revenue £4.3m £1.0m Profit £0.9m £0.2m * Based on H1 2
Slide 34: Profit Adjustments
Profit Adjustments* ©Halma H1 2022/23 H1 2021/22 Intangible amortisation (24.1) (20.8) Acquisition items** (2.1) (0.6) Disposal of operations - 34.0 (26.2) 12.6 * items (charged)/credited in arriving at statutory profit. + including acquisition costs, adjustment to acquisition contingent considerati
Slide 35: Pensions
Pensions © Halma en) pene Rene Tiles 30 September 2022 31 March 2022 * Discount rate 5.35% (March 2022: 2.80%) * Closed DB to future accrual December 2014 * Contributions to pay off deficit expected for 2022/23: £14.9m! 1: Excludes a £1.3m contribution relating to the disposal of Texecom. Halma Half
Slide 36: 2022/23 Full Year Forecasts
2022/23 Full Year Forecasts Current 2022/23 Previous 2022/23 | | Notes Full Year Forecasts | Full Year Forecasts AE Vs Capex c.£34m Effective tax rate 1 c.21.5% Central costs c.£43m Net finance expense 2 c.£17m* Pension contributions 5) £14.6m Notes: 1. 2022/23 based on expected mix of profit. Assum
Slide 37: 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