Investor Site Visit. 29 September, 2016

Transcription

1 Investor Site Visit 29 September, 2016

2 Agenda Halma Infrastructure Safety Facility Tour part Apollo Fire Detectors Lunch Facility Tour part Close Departures to station Halma Investor Day, September 2016

3 Consistent strategy, sustained success Disciplined market/product selection Enabling organisation & culture Simple financial model Halma Investor Day, September 2016

4 Sustained growth m Revenue m Halma Investor Day, September Profit

5 Sustained strong returns % Halma Investor Day, September 2016 Return on Sales % Return on Total Invested Capital* * post-tax profit

6 Sustained strong returns dividend per share* pence /73 74/75 76/77 78/79 80/81 828/3 84/85 86/87 01/1 90/91 92/93 94/95 96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/01 12/13 14/15 * Adjusted for scrip issues Halma Investor Day, September 2016

7 Balance between organic and acquisition revenue growth Revenue Growth (%) acquisition organic Halma Investor Day, September 2016

8 M&A activity since 2006/07 (proceeds) / Spend m Year end (20) (40) No.Acq ns (2) (5) No.Disp ls Halma Investor Day, September (20) 3 89 (3) 192

9 A scalable growth model m Profit Year Halma Investor Day, September N o Halma Companies

10 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 Halma Investor Day, September 2016

11 Diversity provides resilience m Revenue E&A Medical Infrastructure Process Halma Investor Day, September 2016

12 INFRASTRUCTURE SAFETY SECTOR Paul Simmons Sector Chief Executive 29 September 2016

13 Management INFRASTRUCTURE SAFETY SECTOR Group CEO A. Williams Sector FD G. van der Pant Sector CEO P. Simmons Photo needed Acquisition Executive C. Liu Sector VP M. Zhang Sector VP Vacancy

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

15 INFRASTRUCTURE SAFETY SECTOR To protect commercially & publically owned infrastructure assets and improve the safety & mobility of people.

16 INFRASTRUCTURE SAFETY SECTOR Halma s largest sector by contribution per 2015/16 Final Results

17 What we make Fire detection Fire suppression INFRASTRUCTURE SAFETY SECTOR Elevator safety Door safety (People & vehicle flow) Security 47% of sector revenue 10% of sector revenue 13% of sector revenue 20% of sector revenue 10% of sector revenue

18 INFRASTRUCTURE SAFETY SECTOR Strength & Resilience Our products are often subject to non-discretionary spend: giving us unusual resilience to general market trends We benefit from construction investment as new buildings require our products ~60% of revenue comes from existing infrastructure, reducing cyclicality: System upgrades Refurbishments Regulatory compliance

19 Growth drivers INFRASTRUCTURE SAFETY SECTOR 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

20 Evolution: INFRASTRUCTURE SAFETY SECTOR Revenue 265m 0m Note: 3rd party revenue as reported in the Annual Report and Accounts. Growth from averaged in graph.

21 Evolution: INFRASTRUCTURE SAFETY SECTOR Revenue 265m 7.3% CAGR over last 10 years 0m

22 Worldwide INFRASTRUCTURE SAFETY SECTOR Fire Detection Fire Suppression Elevator Safety Door Safety Security

23 Revenue INFRASTRUCTURE SAFETY SECTOR

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

25 INFRASTRUCTURE SAFETY SECTOR Growth strategy emerging markets 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

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

27 Growth strategy new products 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 INFRASTRUCTURE SAFETY SECTOR

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

29 Growth strategy acquisitions INFRASTRUCTURE SAFETY SECTOR 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

30 Growth strategy acquisitions Access to New Markets Natural hazards: Earthquake, floods, pollution detection Manmade threats: Identity management & biometrics, border security, counter terrorism User comfort, efficiency & safety: smart traffic/parking, waste management Expansion into Adjacencies 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 Strengthen the Core Natural hazards: fire detection components, niche fire suppression Manmade threats: Intruder detection User comfort, efficiency & safety: elevator doors, displays & phones, commercial doors

31 Sector strategy potential new applications INFRASTRUCTURE SAFETY SECTOR Existing markets + New & Adjacent mkts (Acq) Fire detection Fire suppression Elevator safety People & vehicle flow Public buildings & spaces + Commercial buildings Security Air, sea, road & rail + + Transport infrastructure + + Industrial buildings Utilities + Defence Residential

32 Introduction to Firetrace INFRASTRUCTURE SAFETY SECTOR

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

34 Growth strategy talent INFRASTRUCTURE SAFETY SECTOR 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

35 Strategy summary New products INFRASTRUCTURE SAFETY SECTOR Acquisitions New applications Geographic expansion Talent development

36 Q&A Positioned as a key player in its market A model for all of our Process Safety companies

37 APOLLO FIRE DETECTORS Halma Investor Day 29 th September 2016 Havant, UK

38 PROTECTING LIVES & ASSETS GLOBALLY Emirates Palace, Abu Dhabi Apollo supplies fire detection and notification devices into commercial buildings Kremlin, Moscow, Russia Emirates Palace, Dubai, UAE Q1 Residential Skyscraper Surfer s Paradise, Australia The Shard & Tower Bridge, London UK Statue of Liberty New York, USA Windsor Castle, London UK

39 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

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42 SPECIALIST APPLICATIONS Existing markets + New markets Fire detection Fire suppressi on Elevator safety People & vehicle flow Security Singapore Metro Trains, Singapore Public buildings & spaces Commercial buildings Air, sea, road & rail Transport infrastructure + Marine Lifting Vessels Dover Ferry Terminal Dover, UK Industrial buildings Utilities + Defence Residential Various Cargo Ships, Merchant Vessels, Commercial Cruise Liners, Dockyards

43 APOLLO GROWTH

44 REVENUE BY REGION

45 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

46 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

47 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

48 TALENT DEVELOPMENT Apollo has a strategic commitment to developing people Extensive training Formal Talent Management process Company values deeply rooted in the organisation

49 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