Tuesday 1 October 2019
Halma: Site Visit to HWM
1
Andrew WilliamsGroup Chief Executive
Welcome
2
Agenda
11am - NoonPresentation and Q&A
Buffet lunch
12.45pmCoach to HWM
1pmHWM site tour/product breakout sessions
3pmClose
Coach departs for station
3
Constance BaroudelDivisional Chief Executive
Introduction
4
HWM: a Halma Environmental Monitoring company
HWM leveraging HalmaGrowth Enablers
HWM core to Environmental & Analysis
M&A
Talent & Culture
Digital Growth Engines
Strategic Communications
Convergence opportunities
Peer support
For a cleaner world
Halma like financials
5
C
C
E
Rob FishManaging Director, HWM
6
Market Leaders in Digital Water and Digital Waste Water
7
Mission
Save natural resources and reduce CO2 emissions
8
Long-term growth drivers
Limited and stressed water
resources
Growing populations and
water usage
Ageing infrastructure
Increased environmental
legislation
Higher regulatory standards
Increased expectations of
service
9
Markets ServedDigital connectivity for global utility networksMonitoring assets, delivering data, bringing control
~70% <5% >20%
10
Note: percentages shown are % of FY 2019 revenue
(Multi-utility)
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1993 1994 2003
2005 2013 2019
Business Model Progression
Phase 4:Data Delivery
Phase 3:Fixed Network
Phase 2:Remote
Deployment
12
Phase 1:Tools To Site
Technology
Rugged, battery powered products and GSM connectivity solutions monitor critical customer infrastructure
13
Case Studies
Calculate Minimum Night Flow to identify distribution
network leakage
Monitor Level and Flow in sewers to prevent blockage and spills
14
HWM has grown through
strong customer focus,
innovative product
development, a complete
user service and our
digital data model
Customers
15
Financials
USA
UK
Europe
Asia
Other
Hardware
Air Time & DataSvs
Installation
Repairs
UK water
UK Electricity
Export water
Other
Revenue by activity
Revenue by geography
Revenue by customer type
Revenue
Note: Pie charts show revenue split for FY2019
16
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Operations
Manufacturing
• Cwmbran and Northampton
• Box build, test, configuration
• Medium volume, low capital intensity
Install and maintain model
• Recurrent revenues
• HWM responsible for logger fleet performance
• Analysis and reporting teams monitor logger fleet behaviour
209 employees5 locations
Supply Chain spend
PCBs
Cable harnesses
Batteries
Enclosures
Factoredcomponents
17
HWM CustomersHWM ProductsHWM process over 10 million
data connections daily.
A major business focus is to ensure high connectivity rates for our devices, to
maintain this key competitive advantage.
Digital data
18
ISO 27001 accreditation
Future Growth
19
Maximise potential in clean water solutions
Build waste water segment
Apply remote monitoring solutions in adjacent markets
• Broaden range of solutions• Increase digital insights• Water quality
• Launching new products• Further geographic expansion • Acquire new capabilities
• Gas network monitoring• Air quality, smart agriculture
Business Growth Drivers and the Regulatory Environment
Mike TennantDirector of Sales and Business Development, HWM
20
Market/Business drivers
Our markets have a number of long term growth drivers: Limited and stressed water resources Increased population and water usage Increased standards of living, expectations of service in
water and sewerage Increased Environmental legislation Ageing Infrastructure Regulators
Looking specifically at regulation in our main market - UK
21
OFWAT and the AMP
The unique ‘monopolistic’ model of UK Privatisation necessitated a regulator to protect customers
OFWAT regulates through 5-year price reviews
Business plans submitted, investment plans and price proposals reviewed
Key targets established which have to be met
22
Regulation Principles and HWM
Customer Outcomes, Resilience and Innovation drive targets and opportunities for HWM, specifically:
Leakage – overall reduction of 15%, 170 Billion Litres per year
Pollution Incidents – 37% reduction, and 80% for the worst offenders
PR19 Principles
23
Leakage Reduction Targets
Initial target New targetAnglian Water 17% 17%Dwr Cymru Welsh Water 15% 15%
Hafren Dyfrdwy 15% 15%Northumbrian Water 16% 15%
Severn Trent 15% 15%South West Water 15% 15%Southern Water 15% 15%Thames Water 15% 25%United Utilities 15% 20%Wessex Water 15% 15%Yorkshire Water 25% 25%Affinity Water 15% 20%Bristol Water 15% 15%Portsmouth Water 15% 20%
South East Water 14% 15%South Staffs Water 23% 23%
SES Water 15% 15%
OFWAT delivers toughest ever targets
Requires innovation and technology
Cannot simply do the same as the last 30 years
Already driving a huge investment in Smart early leak detection systems = PermaNET
24
37%- 80% reduction in pollution incidents
Reduction in Pollution is key to Environmental and customer service targets;
Can no longer monitor only treatment and spill
Need to monitor the network for early identification and prevention
Needs lower cost, battery powered telemetry -SpillGuard
25
Summary Strong regulation in our main market continues to drive
opportunity and growth
Long term climate change, population growth and finite water availability ensure continued investment
Regulation is not matched world-wide but is increasing
Other long-term drivers will drive international investment and likely regulation
Many markets looking at a form of the UK model
26
Any questions?
Saving natural resources and reducing CO2 emissions
2727
Appendices
28
Rob KitchenManaging Director
Simon FisherInnovation
Director
Mike TennantSales & Business
Development Director
Mick BoltonOperations
Director
Gavin OrrFinance Director
Davide Di PalmaEngineering Project
Director
Rob FishDivisional Managing Director
Stuart TrowExecutive Director
Jim BurkeHead of FCS
Steve ToomsExecutive Director
29
Key dates
1979
1995
1999
2000
2010
2013
2015
2017
2019
Launch of world first leak noise correlator
Palmer and Reten merge on Cwmbran site
launches of world first permanently deployed ANL
• Palmer & Radcom merge to form HWM-Water Ltd
• First high volume digital water solutions provided to UU/STW/YW
• Radio Tech merged with HWM
Palmer integrates Wessex & FCS brands – FCS become USA re-seller
ASL added to extend electricity metering solutions – now multi utility AMR
Launch of first ATEX approved data logger targeting at waste water and gas
Largest ever deployment of fixed network leak sensors –Affinity Water
Invenio added to group to extend clean water solutions into customer side
30
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