Investor Site Visit/media/Files/H/Halma-V4/... · 9/29/2016 · Agenda 11.00 Halma 11.30...

29 September, 2016

Investor Site Visit

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


Disciplined market/product

selection

Enabling organisation

& culture

Simple financial model

Consistent strategy, sustained success

0

20

40

60

80

100

120

140

160

180

07 08 09 10 11 12 13 14 15 160

100

200

300

400

500

600

700

800

900

07 08 09 10 11 12 13 14 15 16

Sustained growth


Revenue Profit £m £m

0

4

8

12

16

20

07 08 09 10 11 12 13 14 15 1610

12

14

16

18

20

22

24

07 08 09 10 11 12 13 14 15 16

Sustained strong returns


Return on Sales %

% Return on Total Invested Capital*

* post-tax profit

Sustained strong returns – dividend per share*


0

2

4

6

8

10

12

14

72/7

3

74/7

5

76/7

7

78/7

9

80/8

1

828/

3

84/8

5

86/8

7

01/1

90/9

1

92/9

3

94/9

5

96/9

7

98/9

9

00/0

1

02/0

3

04/0

5

06/0

7

08/0

9

10/0

1

12/1

3

14/1

5

* Adjusted for scrip issues

penc

e

Balance between organic and acquisition revenue growth


0

4

8

12

16

20

07 08 09 10 11 12 13 14 15 16

acquisitionorganic

Reve

nue

Grow

th (%

)

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)

0 4 14 42

21

105

143

22

(2) (5)

(pro

ceed

s) /

Spen

d £m

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

(20)

Year end

89

192

3

(3)


0

20

40

60

80

100

020406080

100120140160180200

A scalable growth model

Profit No Halma Companies

£m

Year 2007 2008 2009 2010 2011 2012 2013 2016 2014 2015


Sustained organic growth


Relentless increased investment

innovation

international expansion

talent development

High quality portfolio

resilient market growth drivers

valuable product niches

active M&A

diversity

Diversity provides resilience


0100200300400500600700800900

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

E&A

Medical

Infrastructure

Process

£m

Reve

nue

Paul Simmons Sector Chief Executive

INFRASTRUCTURE SAFETY SECTOR

29 September 2016

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


Photo needed

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



To protect commercially & publically owned infrastructure assets and improve the safety & mobility of people. “ “

per 2015/16 Final Results


Halma’s largest sector by contribution

Security

10% of sector revenue

What we make INFRASTRUCTURE SAFETY SECTOR

Elevator safety


Fire suppression


Door safety (People &

vehicle flow)


Fire detection



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


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

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.


Evolution:

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

Revenue £265m

£0m

7.3% CAGR over last 10 years

Worldwide

Fire Detection Fire Suppression

Door Safety Elevator Safety

Security



Revenue


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


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

Growth strategy – acquisitions


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

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

Sector strategy – potential new applications


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)

Introduction to Firetrace INFRASTRUCTURE SAFETY SECTOR

https://www.youtube.com/watch?v=Oupb0e35el8

Growth strategy – talent


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

Strategy summary


New products Acquisitions

New applications

Geographic expansion Talent development

Q&A…

Positioned as a key player in its market

A model for all of our Process Safety companies

APOLLO FIRE DETECTORS

Halma Investor Day 29th September 2016 Havant, UK

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

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

SPECIALIST APPLICATIONS 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 markets

Singapore Metro Trains, Singapore

Dover Ferry Terminal Dover, UK

Marine Lifting Vessels

Various Cargo Ships, Merchant Vessels, Commercial Cruise Liners, Dockyards

APOLLO GROWTH

2000 - 2016

REVENUE BY REGION

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

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

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

TALENT DEVELOPMENT

Apollo has a strategic commitment to developing people

Extensive training

Formal Talent Management process

Company values deeply rooted in the organisation

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

opportunities

Investor Site Visit/media/Files/H/Halma-V4/... · 9/29/2016 · Agenda 11.00 Halma 11.30...

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