Halma (HLMA) Investor Update summary

M&A strategy and approach

• Focus on acquiring small to medium-sized, privately owned companies in attractive niches with differentiated products and strong growth drivers.

• Preference for off-market deals, building long-term relationships with owners rather than participating in competitive sale processes.

• M&A is central to the growth model, aiming to double earnings every five years, with half of growth from organic initiatives and half from acquisitions.

• Decentralized business model grants autonomy to acquired companies, supporting agility and innovation.

• Dedicated M&A teams and divisional CEOs drive sourcing, evaluation, and execution, supported by group-level expertise.

Acquisition process and integration

• Market mapping and research identify attractive niches and potential targets, with a disciplined approach to capital allocation.

• Integration is intentionally light-touch; acquired companies retain brand, strategy, and operational independence, with support provided as needed.

• Growth enablers such as internationalization support are offered, but initiatives are company-driven.

• Financial controls and compliance are standardized, but day-to-day operations remain largely unchanged.

Performance, incentives, and returns

• Incentives are aligned across all management levels, focusing on EVA growth and profit acquired through M&A.

• Acquisitions are expected to be accretive, targeting high mid-teens post-tax ROIC by year five.

• Performance is reviewed regularly, with disposals considered if long-term growth drivers or strategic alignment are lost.

• Most acquisitions meet or exceed long-term targets, with volatility highest in early years and alignment improving over time.