Our business model delivers strong performance in both the near term, and sustainable, compounding growth and returns over the longer term.
It combines a scalable organisational model, which enables us to continue growing both organically and through acquisitions, with a simple and self-sustaining financial model, which supports investment in our growth strategy.
Our decentralised structure is simple and lean, with only three layers – companies, sectors and Group teams – all three of which are aligned and rewarded on driving sustainable growth and returns. This gives us agility, enabling faster decision-making and reduced bureaucracy.
- Our companies
Each company has autonomy to drive entrepreneurial growth strategies in its niche markets. It has its own board of directors which drives accountability for performance, good governance and compliance.
- Our sectors
Our sector teams are the vital connection between our companies and the Group teams. They drive our M&A, review organic growth and portfolio performance, and oversee the sector’s capital and talent allocation. They promote internal networks and collaboration between companies.
- Group teams
Group teams oversee the overallstrategy, including allocation of Groupcapital and talent. They set our riskappetite and ensure compliance andgood governance and provide ourcompanies with access to expertisethrough small central teams to helpthem grow and sustain high returns.
We look to acquire and invest in high-quality companies in global market niches that are aligned with our purpose and which have long-term growth drivers. We then ensure they have the best talent to enable their growth.
The qualities we look for when acquiring companies:
- Aligned with our purpose
- Underpinned by long-termgrowth drivers
- In a global niche withhigh barriers to entry
- Intimate knowledgeof their market
- Close to their customers
- High margins and returns
- Low capital intensity
- Ambition and capabilityto grow
- Strong cultural fit
Our small Group teams provide a range of expertise to supportour companies as and when they need it, helping to acceleratetheir growth strategies. This expertise includes:
- Providing access to world‑class talent
- Leadership development programmes
- Acquisition teams to source and execute deals
- Legal, risk and financial support
- Digital and technology expertise
- Brand and communications expertise
- Sustainability expertise
- Supply chain expertise
- Access to a network of peers
- Global employee benefits
- International hubs to expand market reach
We have a sustainable financial model. Strong organic growth and cash generation allows us to continuously reinvest in future growth and acquisitions as well as increasing dividends to investors each year.
We aim to deliver:
- Strong growth
- Healthy margins
- High returns
- Strong cash generations
- Continued investment
- Modest balance sheet leverage
- A growing dividend
We measure our achievements through financial and non-financial key performance indicators(KPIs), through customer satisfaction and the delivery of shareholder value.
- Setting challenging targets
We aspire to double our earnings every five yearswhile maintaining high returns, and set targetsfor our growth, returns, cash generation andinvestment KPIs. We work hard to ensure that wehave the right culture, talent and diversity and setchallenging targets for employee engagement,health and safety, training and sustainability.
- Closely monitoring performance
We closely monitor our companies’ performance, strategic plans and forecasts. Once a year, each company certifies its compliance with minimum controls for finance, legal and IT; this is complemented by independent peer reviews of financial performance, and internal and external audits.
- Rewarding our people
We reward our leaders for delivering superiorand sustainable growth and returns, also holdingthem accountable for delivering our strategy andcomplying with control frameworks. Short-termincentives based on Economic Value Added(EVA) (profit growth, adjusted for a charge forthe use of any capital) are balanced by longertermincentives in the form of Halma shares.
