Press Releases - Half Year Results 2023/24

Half Year Results 2023/24

16 November 2023

Record first half results and continued dividend growth

Halma, the global group of life-saving technology companies focused on growing a safer, cleaner, healthier future for everyone, every day, today announces results for the 6 months to 30 September 2023.

Highlights

“Halma made good progress in the first half. The Group performance reflects the strength we derive from our Sustainable Growth Model and the long-term growth drivers that underpin our diverse portfolio. These enabled us to deliver record revenue, profit and dividends, while further enhancing our growth opportunities through increased strategic investment, supported by a strong cash flow performance and continued balance sheet strength. We remain on track to make further progress in the second half of the year.” Marc Ronchetti, Group Chief Executive.

• Record revenue and profit:
  • Revenue +9%; organic constant currency⁶ (OCCY) revenue +5%;
  • Adjusted¹ Profit before Taxation +3%; OCCY⁶ in line with first half of last year;
  • Statutory Profit before Taxation +3%.
• Healthy contribution from recent acquisitions⁷, adding over 5% to revenue and profit growth.
• Adjusted¹ EBIT margin resilient at 20.0% (2022/23: 20.3%).
• Return on Sales⁴ of 18.7% (2022/23: 19.6%): principally reflecting higher net finance expense; compares to strong performance, above pre-COVID level, in 2022/23 first half.
• Continued strategic investment to support future growth:
  • R&D investment up 5% to £52m, representing 5.5% of revenue;
  • Five acquisitions completed in financial year to date (three in first half) for £126m maximum total consideration; healthy pipeline of potential acquisitions.
• Strong cash performance; continued balance sheet strength: cash conversion⁹ of 96% (2022/23: 63%), above 90% target; net debt/EBITDA 1.4 times, within operating range of up to 2 times.
• Revenue growth in all sectors:
  • Safety: continued strong progress including good OCCY⁶ growth and healthy acquisition contribution;
  • Environmental & Analysis: good reported and OCCY⁶ growth; includes very strong growth in photonics and water, partly offset by weaker trends in spectroscopy;
  • Healthcare: modest reported growth; flat OCCY⁶ revenue reflects strong growth in sensors & analytics and ophthalmology therapeutics, offset by continuing OEM customer destocking, especially in Life Sciences, and budgetary caution at healthcare providers.
• Adjusted¹ EBIT margin increase in Safety and Healthcare sectors; lower Environmental & Analysis margin mainly reflects reduction in higher margin spectroscopy revenue.
• Revenue growth in all regions except Asia Pacific: strong growth in largest regions of USA and Mainland Europe; Asia Pacific mainly reflects weaker China trends.
• Interim dividend +7%: reflects the Board’s continued confidence in the Group’s growth prospects in a continued uncertain environment.

1. Adjusted to remove the amortisation of acquired intangible assets; acquisition items; significant restructuring costs; and profit or (loss) on disposal of operations, totalling £27.3m (2022/23: £26.2m). See note 2 to the Condensed Interim Financial Statements for details.
2. Adjusted to remove the amortisation of acquired intangible assets, acquisition items, significant restructuring costs, profit or (loss) on disposal of operations and the associated taxation thereon. See note 2 to the Condensed Interim Financial Statements for details.
3. Interim dividend declared per share.
4. Return on Sales is defined as Adjusted¹ Profit before Taxation from continuing operations expressed as a percentage of revenue from continuing operations.
5. Return on Total Invested Capital (ROTIC) is defined as post-tax Adjusted1 Profit as a percentage of average Total Invested Capital. See note 9 to the Condensed Interim Financial Statements for details.
6. Organic constant currency (OCCY) measures exclude the effect of movements in foreign exchange rates on the translation of revenue and Adjusted¹ Profit into Sterling, as well as acquisitions in the year following completion and disposals. See note 9 to the Condensed Interim Financial Statements for details.
7. Net of disposals. The contribution to revenue or profit (as appropriate) from acquisitions made in the 12 months to 30 September 2023, less the effect on these measures from disposals made in the same period.
8. Adjusted¹ Earnings before Interest and Taxation, Adjusted¹ Profit before Taxation, Adjusted² Earnings per Share, organic growth rates, Return on Sales, ROTIC and net debt are alternative performance measures used by management. See notes 2, 6 and 9 to the Condensed Interim Financial Statements for details.
9. Cash conversion is defined as adjusted operating cash flow as a percentage of adjusted operating profit. See note 9 to the Condensed Interim Financial Statements for details.
10. Consensus available at www.halma.com, based on an aggregation of publicly available forecasts, collated from eleven research analysts in the period 4 October 2023 to 11 October 2023 is for Adjusted¹ Profit before Taxation of £389.0m in the full year to end March 2024, with a range of £377.4m to £396.2m.

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A copy of this announcement, together with other information about Halma, may be viewed on its website: www.halma.com. The webcast of the results presentation will be available on the Halma website later today: www.halma.com

NOTE TO EDITORS

Halma is a global group of life-saving technology companies, focused on growing a safer, cleaner, healthier future for everyone, every day. Its purpose defines the three broad markets it operates in:

• Safety - Protecting people's safety and the environment as populations grow, and enhancing worker safety.
• Environment - Addressing the impacts of climate change, pollution and waste, protecting life-critical resources and supporting scientific research.
• Health - Meeting the increasing demand for better healthcare as chronic illness rises, driven by growing and ageing populations and lifestyle changes.

It employs over 8,000 people in more than 20 countries, with major operations in the UK, Mainland Europe, the USA and Asia Pacific. Halma is listed on the London Stock Exchange (LON: HLMA) and is a constituent of the FTSE 100 index.

Halma has been named one of Britain's Most Admired Companies for the past five years.