2016_Halma_ARA_160610_2

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Business Model and Strategy Creating long-term sustainable value Business model objective Our objective is to double every five years. We aim to achieve this through a mix of acquisitions and organic growth. Return on Sales in excess of 18% and Return on Capital Employed over 45% ensure that cash generation is strong enough to sustain investment for growth and increase dividends without the need for high levels of external funding. Financial Our strongly cash generative businesses support investment for growth Product Innovation Developing and delivering the right products across our markets What resources our business model relies on Human Capital Investing in our people to enable talent leadership throughout our businesses Intellectual Assets Building competitive advantage through investment in R&D and new product development Relationships Empowering our businesses to work closely with customers, suppliers and each other Sustainability Minimising the impact that our operations have on the environment What we do Through innovation and acquisition, we have a portfolio of market-leading companies within our four sectors. Demand for our products is underpinned by resilient, long-term growth drivers. Process Safety Infrastructure Safety Medical Environmental & Analysis Competitive advantage Each business builds strong application knowledge and technology by focusing on its specific market niche where there are often barriers to entry. We place our operational resources close to our customers through autonomous locally managed businesses. We reinvest cash into acquiring high performance businesses in, or close to, our existing markets. Our strategy To acquire and grow businesses in relatively non-cyclical, specialised global niche markets. The technology and application know-how in each company delivers strong competitive advantage to sustain growth and high returns. A sustainable strategy Grow Innovate Sustainable growth Acquire Empower Our values Achievement Innovation Empowerment Customer satisfaction Our investment priorities Innovation International expansion Talent development Driving value creation Key beneficiaries of our value creation Customers Communities Employees Shareholders Suppliers Governments KPIs See p24 Measuring and protecting value creation Risks and uncertainties See p30 Sustainability See p48 Governance See p54 12 Halma plc Annual Report and Accounts 2016
Acquisition focus Insight Our market insight enables us to select businesses in industries with long-term growth drivers. These ensure that the need for our products is sustained, through periods of significant macro-economic change. Opportunity We recognise the growth opportunities in the businesses we acquire and give business owners the opportunity to sell their business and retain all the good things that have made them successful. We then give them the opportunity to collaborate with other Halma businesses to accelerate and sustain growth. Value The combination of this vibrant acquisition activity and our organic investment enables us to deliver sustained dividend returns over a long period of time.
Page 1 and 2: Halma plc Annual Report and Account
Page 3 and 4: Highlights Another record year of r
Page 5 and 6: Infrastructure Safety Products whic
Page 7 and 8: Revenue from outside the USA, UK an
Page 9 and 10: Our decentralised organisational st
Page 11 and 12: INCREASING HEALTH AND SAFETY REGULA
Page 13: INCREASING DEMAND FOR LIFE-CRITICAL
Page 17 and 18: Insight Trapped key interlocking is
Page 19 and 20: Insight Regulations around the worl
Page 21 and 22: Insight People are living longer th
Page 23 and 24: Insight Many processes rely on prec
Page 25 and 26: Resources and relationships Committ
Page 27 and 28: GROW INNOVATE ACQUIRE EMPOWER STRAT
Page 29 and 30: INNOVATE GROW ACQUIRE EMPOWER STRAT
Page 31 and 32: process and one which is subject to
Page 33 and 34: Mitigation Increased risk No change
Page 35 and 36: Mitigation Increased risk No change
Page 37 and 38: a considerable impact on the oil an
Page 39 and 40: towards the use of more sensors, no
Page 41 and 42: A third of American adults suffer f
Page 43 and 44: Today 1.8 billion people drink faec
Page 45 and 46: Adjusted profit bridge £m 160 155
Page 47 and 48: fell from 21% to 20% this year, and
Page 49 and 50: The Group accounts for post-retirem
Page 51 and 52: ENVIRONMENTAL MANAGEMENT SYSTEM (EM
Page 53 and 54: In return, we offer: • The opport
Page 55 and 56: Our intention is to create effectiv
Page 57 and 58: PEOPLE AND CULTURE I reported in la
Page 59 and 60: CAROLE CRAN NON-EXECUTIVE DIRECTOR
Page 61 and 62: Corporate Governance Report Leaders
Page 63 and 64: Board governance structure Board Pr
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October 2015 • Group strategic pe
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The Board and Committee evaluations
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Jane Aikman is in her final term, h
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Audit Committee COMMITTEE CHAIRMAN
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POLICY ON AUDITOR INDEPENDENCE AND
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Remuneration Committee COMMITTEE CH
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REMUNERATION POLICY The remuneratio
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Opportunity Maximum opportunity: 15
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EXECUTIVE DIRECTOR SERVICE CONTRACT
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NON-EXECUTIVE DIRECTORS Unless othe
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SINGLE FIGURE OF TOTAL REMUNERATION
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The three-year period over which th
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PERCENTAGE CHANGE IN CEO REMUNERATI
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Date of grant As at 28 March 2015 G
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Other Statutory Information ACTIVIT
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The Companies Act 2006 also require
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Directors’ Responsibilities The D
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Risk Impairment of the carrying val
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AN OVERVIEW OF THE SCOPE OF OUR AUD
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Respective responsibilities of dire
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Consolidated Statement of Comprehen
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Consolidated Statement of Changes i
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Consolidated Cash Flow Statement Co
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Accounting Policies continued KEY A
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Critical accounting judgements Good
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Segmental reporting An operating se
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Accounting Policies continued Cash
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Cash and cash equivalents Cash and
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Notes to the Accounts continued 1 S
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Notes to the Accounts continued 1 S
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Notes to the Accounts continued 3 N
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Notes to the Accounts continued 6 P
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Notes to the Accounts continued 9 T
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Notes to the Accounts continued 11
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26 FINANCIAL INSTRUMENTS continued
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26 FINANCIAL INSTRUMENTS continued
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Company Statement of Changes in Equ
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Notes to the Company Accounts conti
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C12 RESERVES The Capital redemption
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C14 EXPLANATION OF TRANSITION TO FR
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2009/10 £000 2010/11 £000 2011/12
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Principal locations Telephone E-mai
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Principal locations Telephone E-mai
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DIVIDEND REINVESTMENT PLAN The Comp
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2016_Halma_ARA_160610_2

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