Halma H2 2025 Earnings Report

Halma EPS Results

• Actual EPS: GBX 94.23
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Halma Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Halma Announcement Details

• Quarter: H2 2025
• Date: 6/12/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, June 12, 2025
• Conference Call Time: 3:30AM ET

Halma (LON:HLMA) 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. Halma 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 as one of Britain’s Most Admired Companies for the past six years.

Halma H2 2025 Earnings Call Transcript

Key Takeaways

• Halma delivered record revenue and profit with 20 consecutive years of profit growth, underpinned by 9.4% organic revenue growth and an 80 bp increase in EBIT margin to 21.6%.
• Cash conversion reached 112%, well above the 90% target, funding £108 m of R&D, £157 m of acquisitions and reducing net leverage to under 1x.
• The board approved a 7% dividend increase, extending the run to 46 years of 5%+ annual dividend growth, reflecting sustained cash generation and confidence in compounding returns.
• Photonics delivered exceptional premium growth within the Environmental & Analysis sector, though most of the uplift stems from a single customer and is based on purchase-order visibility rather than long-term contracts.
• For FY 26, Halma expects upper single-digit organic revenue growth and an adjusted EBIT margin modestly above the midpoint of its 19–23% target range, supported by a strong order book and increased M&A resources.

Presentation

[Marc Ronchetti, Group Chief Executive at Halma]

Good morning, and welcome to our full year twenty five results presentation. It's great to be here to present a really strong set of results. In fact, overall, I'd say some of the best results that I've seen in my nine years here at Halmar. These are results which clearly demonstrate both the benefits of our sustainable growth model and the value of having exceptional talent and teams across the group. And I'd like to start today by thanking everyone at Halmar for their continued commitment to delivering our purpose and their contributions to our success over the last year, something we should all be extremely proud of.

[Marc Ronchetti, Group Chief Executive at Halma]

I'd also like to take this opportunity to introduce Carol, who joined as our CFO at the April. And it's been great to work with Carol over the last nine years in her role as a nonexecutive director on our board, and it's absolutely fantastic that she's now part of my leadership team. And I know that we'll all see the benefit of her significant experience as a finance leader and her passion for purpose and culture as we work together to deliver Halma's growth strategy. In a few moments, Carol will give you some more insight into our financial performance in the last year. But let me start with some of the highlights.

[Marc Ronchetti, Group Chief Executive at Halma]

As I say, it's great to report another set of strong results with record revenue and profit. This now being our 20 consecutive year of profit growth. And I'm really pleased to see that these results are underpinned by strong organic growth above our long term average. We've also delivered increases to our margins and to returns on capital with both metrics now at the upper part of our target ranges. And once again, cash generation has been excellent, well above our KPI, enabling us to make continued substantial investments to support our future growth.

[Marc Ronchetti, Group Chief Executive at Halma]

Delivery of this financial performance in varied and fast changing market conditions further increases my confidence in our ability to continue to deliver strong and compounding growth and returns. And it's also a a financial performance that supports a further dividend increase, making this the forty sixth consecutive year of dividend growth of 5% or more. I'll share my thoughts on how we've delivered these excellent results later. However, before that, let me hand over to Carol for some more insights into our performance in the year.

[Carole Cran, CFO at Halma]

Thank you very much, Mark. Good morning, everyone. I'm really pleased to be here today to present my set of results as Halma's CFO. I'm now a couple of months into my new role after a successful handover period with Steve. This is the ideal opportunity to get out into the business and to spend time with my new colleagues.

[Carole Cran, CFO at Halma]

The last nine years as a non exec mean that I have an understanding of the sustainable growth model and the company's people and culture that have delivered many years of success, with revenues growing from 700,000,000 to 2,200,000,000.0 over that time. Five months spending time with my colleagues and visiting 11 of the companies have given me a fresh perspective. I'm looking forward to more trips planned in the summer and later this year. Two things have particularly struck me. One, the talent of our people and the inspiration and drive they get from our collective purpose.

[Carole Cran, CFO at Halma]

And two, that our people are passionate about what they do and solving problems for their customers. Today's results continue our track record of delivering long term compounding growth and strong returns. So let's look at the results in more detail. I'm pleased that we've delivered strong growth and increased our already strong margins and returns, with revenue up 11% and EBIT up 15% EBIT margin up 80 basis points to 21.6 and RoTEK up 60 basis points to 15%. Our strong growth and returns have enabled us to continue to invest for the long term.

[Carole Cran, CFO at Halma]

Our companies are well invested, pounds 108,000,000 on R and D, which is 4.8% of group revenues. We made seven acquisitions during the year, two standalones and five bolt ons with a consideration of £157,000,000 Acquisitions made in the year represented 3.5% of profit. This follows on from the eight businesses we acquired last year. We have a healthy pipeline across all three sectors, and we will continue to maintain our discipline in inquiring only the best businesses. Our strong growth and high returns are demonstrated by the strength of our cash conversion and balance sheet.

[Carole Cran, CFO at Halma]

This means we have the funding for future investment and growth. So let's look at the metrics. It's fantastic to see our cash conversion at a 112% and well ahead of our target of 90%. Even with combined investment of more than £300,000,000 in the year, our cash generative model means that our leverage reduced to just under one. This gives us the firepower and flexibility to deliver on our m and a strategy.

[Carole Cran, CFO at Halma]

Finally, as you heard from Mark, this supports a dividend increase of 7%. Now let's look at our revenue growth in more detail. This slide bridges the year on year revenue growth of 10.5%. Organic growth was strong at 9.4% and as Mark said, ahead of our long term trend. This reflected good growth across safety and E and A and includes a level of premium growth from photonics.

[Carole Cran, CFO at Halma]

The majority of the growth was volume driven with a typical price increase of 1% to 2%. Acquisitions including the most recent standalones MK Test and Lama de Nure contributed to revenue growth of 3.1%. This was partially offset by the Heidricka disposal completed in the first half of the year. Finally, there was a translational currency headwind of 1.6% due to the strengthening of sterling, primarily against the US dollar. It's worth noting that based on latest currency rates, we expect a headwind of around 4% in f y twenty six.

[Carole Cran, CFO at Halma]

Let's now move from revenue to profit and margins. EBIT was up 14.7% on a reported basis and a healthy 12.6% on an organic basis. This was ahead of revenue growth and reflects good operational delivery and mix with margin expansion across all three sectors, which I'll come back to. Acquisitions contributed 4.1% ahead of the revenue contribution, reflecting the quality of the businesses that we have acquired. The currency headwind was 1.9%.

[Carole Cran, CFO at Halma]

Overall, it was good to see the EBIT margin increase 80 basis points to 21.6%, which is modestly above the middle of our target range of 19 to 23%. Moving on to the sector commentaries. It is worth remembering that when we look at the sectors, while we show revenue by destination, the rate of growth in each region is driven by the strengths of demand in a particular company as opposed to the geography. I'll start with the safety sector. The safety sector delivered another strong performance building on the momentum of an excellent year in 2024 and good that it was broad based.

[Carole Cran, CFO at Halma]

Revenue and profit grew across all sub sectors. On an organic basis, revenue grew 8%. The sector delivered a double digit increase in profit, up 14% on a reported basis and 12% organically. The margin increased 90 basis points to 24.2%, which is around our historic highs for the sector. The performance was driven by strong revenue growth, favorable product and portfolio mix, and good operational delivery.

[Carole Cran, CFO at Halma]

Our safety companies are well invested to support their future growth with R and D spend increasing to 5.6% of revenue. Finally, there was a solid contribution from acquisitions of 3.9%. Turning next to the environmental and analysis sector. Fantastic to see the sector delivering strong revenue growth with reported growth of 18% and organic growth of 19%, which included very strong growth in the optical analysis subsector. The main driver for this was exceptional growth in photonics, which continued to benefit from increased customer demand for digital and data capabilities.

[Carole Cran, CFO at Halma]

Mark will come back to this later in the presentation. Growth in this subsector was also supported by recovery in a number of spectroscopy's markets. The exceptional growth in photonics and recovery in spectroscopy are reflected in the very strong growth in The USA, while this recovery is also coming through strongly in Asia Pacific. The environmental monitoring subsector also grew well. This reflected a strong performance in gas detection and analysis, which you can also see coming through in The US US and Asia Pacific numbers.

[Carole Cran, CFO at Halma]

The water analysis and treatment subsector had a mixed performance. We saw modest growth in water testing and disinfection, but this was more than offset by a decline in water infrastructure. Our companies experienced a slow start to utility companies capital projects at the beginning of The UK AMP cycle. Profit increased by 26% on an organic basis. The profit margin was up 140 basis points to 23.9% and was driven by the recovery in higher margin spectroscopy, good cost discipline and leveraging the top line growth.

[Carole Cran, CFO at Halma]

At the same time, it was pleasing to see continuing investment. R and D was up 4%, noting that R and D as a percentage of revenue is lower than for the other sectors with the growth in photonics having a lower r and d intensity. And finally, there was a solid contribution from acquisitions, partially offset by the disposal of Hydrica. Now let's turn to the healthcare sector. The healthcare sector delivered a resilient performance given the subdued backdrop.

[Carole Cran, CFO at Halma]

That said, it was good to see a substantial improvement as the year progressed. All three subsectors delivered organic revenue and profit growth in the half of the year. This reinforcing our confidence in our health care end markets and the long term trends that support their growth. By subsector, there was modest revenue growth in health care assessment and analytics and improved momentum in half two. Performance in therapeutic solutions was mixed, however, also improving in half two.

[Carole Cran, CFO at Halma]

There was strong growth in several of our surgical and respiratory devices companies. This was offset by a decline in eye health therapeutics in Europe coming off of two years of very strong growth. Life sciences delivered good growth following a significant slowdown in the prior year. Profit was 4% higher on a reported basis and marginally up on an organic basis. This reflected a decline in half one with strong recovery in half two coming through operating leverage from improved revenue growth.

[Carole Cran, CFO at Halma]

The margin increased 20 basis points in the year to 22.9%. Our healthcare companies are well invested with R and D up 5.2% of sales. Finally, there was a good contribution from acquisitions, reflecting the quality of businesses we recently acquired. I'll now talk about the strength of our cash flows and balance sheet and how we've allocated capital during the year. The cash generative nature of our companies is represented by the dark green bar.

[Carole Cran, CFO at Halma]

With strong organic growth self funding more than £300,000,000 of investment that I mentioned for future growth. Within this, it's also great to see the impact of strong working capital management from our companies with inventory returned to pre COVID levels. And as always, we have the flexibility to support our companies to invest in working capital where it makes strategic sense to do so. Simply put, our capital allocation priorities are firstly, organic investment to support our long term growth represented here by the organic investments through R and D and CapEx of £154,000,000 continued value enhancing acquisitions, which as you can see through our net acquisition spend of £162,000,000 and finally, a progressive return to shareholders through the dividend with £84,000,000 returned this year. Our continued balance sheet strength gives us the flexibility and firepower to support our healthy pipeline.

[Carole Cran, CFO at Halma]

Now let's turn to our financial KPIs and how we performed against them. This is a really strong set of results across the board, and credit to everyone in Halma for delivering this. We are well within range or have exceeded all our KPI targets except one. We delivered strong growth and increased our already strong EBIT margins. This while we continued to invest for sustainable long term growth, both organically and through acquisitions.

[Carole Cran, CFO at Halma]

While the end year spend was below our KPI this year at 3.5%, over the last five years, our acquisition profit KPI has averaged 6% above our 5% target. This reflecting the timing and nature of the acquisitions we make. Cash conversion was very strong and well ahead of our KPI target. Noting that with the unwind of inventory to more normal levels, we would expect cash conversion to be more in line with our target of 90% going forward. Fantastic to see RoTIC improving to 15% now in the upper half of our target range, reflecting strong revenue growth and margin progression.

[Carole Cran, CFO at Halma]

Our performance across our KPI shows that we continue to create significant value for our shareholders. Turning to my next slide, which I think speaks for itself. The consistency of growth we have delivered over the last ten years at the revenue and EBIT level, both compounding at 12%, a performance that we have delivered through economic cycles and the global events of our time. Our track record demonstrates the benefits of the diversity and agility that we derive from our sustainable growth model and reinforces our confidence to continue to deliver strong growth and returns. Moving now to my last slide, which is on guidance for FY '26.

[Carole Cran, CFO at Halma]

We've made a positive start to 2026 financial year with a strong order book and the order intake ahead of revenue and last year. While the geopolitical and economic environment remain uncertain, we currently expect to deliver upper single digit percentage organic revenue growth in this financial year. This includes a premium from further very strong growth in photonics within the environmental analysis sector. Adjusted EBIT margin is expected to be modestly above the middle of our target range of 19 to 23%. I will now hand you back to Mark.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Carol. And great to see that growth in revenue and profit further extending our strong track record of compounding growth and returns. This time last year, I spoke about how our growth over the last fifty years has been underpinned by the principles which form our sustainable growth model. This is a model that's being tested and proven to be resilient. And whilst it continues to evolve, the fundamentals have remained.

[Marc Ronchetti, Group Chief Executive at Halma]

The continuous interaction of the elements you see on this slide have been critical in enabling our performance over many years, including the strong growth in returns in the last year that Carol's just described. Our model also underpins my belief that we can continue to generate strong growth, high margins, returns well above our cost of capital for decades to come. Today, I'm gonna take a closer look at three critical aspects of the model. What makes a great Halmer company and a great Halmer leader? How our companies benefit from being a part of Halmer, and finally, how our organizational design enables our companies to maintain close relationships with their customers, which in turn informs the many opportunities they see to provide innovative solutions to their critical needs.

[Marc Ronchetti, Group Chief Executive at Halma]

So let's look at the qualities of a HAMR company and a HAMR leader, two fundamentals of our model. And unsurprisingly, there's a a high level of overlap between the two. For both our companies and leaders, alignment with our purpose and cultural fit are critical. We want our companies and our people to be ambitious, entrepreneurial, and focused on creating opportunities to grow our positive impact. We want them to do that by leveraging the power of networks and teams in their companies and across Halmar.

[Marc Ronchetti, Group Chief Executive at Halma]

For both our our companies and for our leaders, agility is key. We want to be able to respond with pace to opportunities and to challenges in each of our markets. And this is why we focus on niche products in markets where growth is supported by long term growth drivers. These are markets where our leaders can be close to their customers and understand their challenges. And as part of our organizational model, we give our leaders the autonomy to react rapidly to provide high value, solutions to complex problems.

[Marc Ronchetti, Group Chief Executive at Halma]

And in turn, this means our leaders need to be diverse thinkers, intellectually capable and inquisitive, entrepreneurial, and agile in their thinking. They also need to be comfortable with the accountability that comes with their autonomy. And at the same time, we want them to harness the power of teams and networks to create ever better solutions for our customers, requiring our leaders to have a low ego and be willing to celebrate success through others. So how does this work in practice when we're selecting the companies that we wish to buy? These are the acquisitions that we made in 2025.

[Marc Ronchetti, Group Chief Executive at Halma]

All acquisitions which have increased the diversity of our portfolio, further broadening our market presence across all three of our sectors. As I look forward, I'm confident in further progress in 2026. We've got a healthy pipeline of potential acquisitions, and we've made further investments in our m and a capabilities, adding further skilled resources in our sector and dedicated m and a teams. And it's been great to see a a really high level of activity in these teams alongside our continued discipline in selecting only companies that fit with Halma. Let me try and bring this approach to life by looking at one of this year's acquisitions, MK Test Systems. Ensuring the safety of workers and critical assets has always been a focus for Halma. It was one of the markets that we entered back in 1971 through the purchase of Castel, which is now part of Centric.

[Marc Ronchetti, Group Chief Executive at Halma]

And over the years, this is broadened to include solutions for new end markets, examples including renewable energy installations and and data centers. With our knowledge of safety needs in manufacturing and transportation, we identified a further market niche in testing the integrity and safety of electrical systems. And this led us to the acquisition of VTech in Germany in 2022, and then in May to MK Test. So why did we choose MK Test? it's strongly aligned to our purpose, not only to safety, but also it offers opportunities to support electrification as part of green energy use.

[Marc Ronchetti, Group Chief Executive at Halma]

we see a very strong long term drivers underpinning its growth. Electrical systems are getting ever more complex and more hazardous with increasing use of high voltage. And as a result, regulation is increasing to protect workers and users. And in turn, that means that manufacturers have a greater need to automate electrical testing to fulfill regulatory requirements more efficiently. But in MK Test, we saw a company that had that specialist technology to help its customers.

[Marc Ronchetti, Group Chief Executive at Halma]

It also had strong customer relationships with companies such as Airbus and Daimler Truck resulting in a deep understanding of their developing needs. And really importantly, we also saw that MK Test has an entrepreneurial culture with a ambitious and growth focused leadership team that would fit well within HALMA. And all of these elements giving us the confidence that MK Test can continue to deliver strong and superior growth, margins, and returns for many years to come. So why would a successful business such as MK Test want to join us here at HALMA? Simply put, I believe it's because we can offer them what I see is the best of both worlds, the advantages of retaining their entrepreneurial agility while being part of a large FTSE hundred global group.

[Marc Ronchetti, Group Chief Executive at Halma]

Our model helps them to overcome the barriers to growth that many SMEs experience, how to attract and retain the best talent, how to internationalize their business, how to grow through m and a, and how to leverage the best technology, in AI and cybersecurity. In addition, and for me a real value, it gives them the opportunity to network and share learnings with other companies in the group. All of this while also benefiting from the capital and resources that Halma has to offer. But don't take it from me. Let's hear from some of our companies.

Being part of Halma is an incredible benefit. I mean, basically, we would not be where we are without Alma coming from small manufacturers to a global group of companies that is operating in more than 110 with Sun Queen. What differentiates Alma from other group of companies is that they trust and they give freedom to the leadership team to drive the success of their company. They completely understand that we know our customer, we know our market, our team partner with customer to find innovation and solution to their need. So they give us the freedom to drive sustainable growth.

Now, of course, freedom comes with accountability. And what we want at Centric Safety Group is that those companies that has been operating for one hundred years, we still operate in one hundred years.

Minicom's been a part of Halema since 2017, and the Minicom Group design and manufacture products that are used in the inspection maintenance of the wastewater network. Three years ago, Minicom invested in a a new facility here at Ravenlox in Salford. That facility has been really crucial for us to to facilitate our growth and to allow us to expand as a business. As well, it's been a key attractor of talent. So talent's really important to us as business as we look to grow significantly.

Running a small medium enterprise is always challenging, and it's key that we keep close to our customers' needs and remain agile as a business. But being part of Halmer allows us to have that support and to rely on the experience across the Halmer network to help us grow as business. As a part of Halmer, we have the autonomy to make decisions quickly, the agility to react to customer needs, but also the accountability to make sure that we deliver on the results and the ambitions of the business.

Forty years ago, Procom was a local manufacturer in Oxfordshire. Since then, Halma have enabled us to grow in many, many different locations globally. For instance, we have production in China. We trade under the Sensitron brand in Italy. We've got offices for sales and service in The Middle East, and we're growing our US footprint.

Crocon have been able to grow at a phenomenal rate with investment from Hama. The network of all the other managing directors is so helpful for us all. We're all going through similar things despite being very, very different businesses in some cases. That network is there bounce ideas off. The world's always changing.

Our customers are always changing, and we need access to talent to really move quickly and drive our growth. We set our own strategy, and we have to deliver on that. And we're owners of how we move forward. But what I would say is you get the backing, so you get access to finance, you get access to talent, but it gives us credibility with our customers that we're part of something bigger.

[Marc Ronchetti, Group Chief Executive at Halma]

Some fantastic comments there. Orly highlighting the freedom she has to set Centric's growth strategy. Steve and Graham focusing on the power of the Halmer network and the support they get from the group, and all of them clearly demonstrating how they act as entrepreneurial owners of their companies with autonomy and clear accountability. And it's in this context that I'd like to spend a few moments on the significant growth that we've seen in photonics. And just to remind you, there are some limits to what I can say given the confidentiality agreement that we've got in place with our our customer.

[Marc Ronchetti, Group Chief Executive at Halma]

That said, photonics is a growth story driven by the success of one of our companies, which demonstrates many of the same elements which drive success across our portfolio. Significant technical skills, in this case, application expertise in the use of photonics, the ability to identify a new market opportunity, specifically supporting a hyperscaler technology company as it develops its data center capabilities. A biz a business built on long term customer relationships. Here, over ten years, meaning that we've got that deep understanding of our customer needs. Supporting our customer with a small but critical component of a wider solution.

[Marc Ronchetti, Group Chief Executive at Halma]

Agile and entrepreneurial leadership with the autonomy to lead the company whilst leveraging the benefits of being part of Halma. And, of course, a financial track record that seen revenue grow from under £10,000,000 in 2011 to around 15% of group revenue today. Of course, we also recognize that this level of growth is exceptional. Frankly, we celebrate that success. After all, we're looking to maximize the potential in every one of our portfolio companies.

[Marc Ronchetti, Group Chief Executive at Halma]

We also recognize some of the more unique characteristics, such as the fact that the majority of that growth has come from a single customer. So how are we managing this premium growth and diversifying revenue in the context of our broader portfolio? Well, we support our companies in delivering this growth, helping them maintain the close customer relationships that they've built over many years and supporting them in scaling their company to meet their customers' demand in areas including talent and their facilities. helping our companies develop wider sources of long term growth. In this case, by developing alternative uses for photonics technology through establishing separate teams focused on diversifying revenue streams with new customers in a variety of end market applications.

[Marc Ronchetti, Group Chief Executive at Halma]

And our devolved and autonomous model allows us to, again, have the best of both worlds as a portfolio to benefit from the strong growth being delivered by photonics and at the same time to use this period of premium growth to increase our investment both organically and in m and a to support the excellent and continuing long term growth opportunities in the rest of the group. As you've heard, a a core component of the success in photonics has been the ability to develop close long term customer relationships, and this is a a consistent theme across our portfolio. So let's hear from two of our other companies how they are delivering growth based on their long term customer relationships.

Our working relationship with Zurich Airport, it's like twenty years ago that it starts. It became a real relationship, nearly friendship, because we are really open to come to test our products. We talk with them about new ideas, and they help us also to develop a lot of products for airports.

The most important thing for IZI is to provide the best patient outcomes possible. We do that by providing quality instruments, by providing best clinical support for our physicians and partnering with the best physicians out there. I believe Doctor. Antony is a great example of that and he works for an amazing institution in the Orthopedic Institute.

There's a very close relationship between myself and the team at IZI Medical, to provide the best care we possibly can for patients. This may involve pre procedural imaging on a case by case basis. It may involve specialized equipment that's needed for each individual procedure. It may involve a constant dialogue between myself and the team at IZI Medical on specific parts of the system that's working well, perhaps parts that are needed to improve. And that feedback and that receptiveness for communication with our team has been one of the main reasons why we continue to take a lot of pride in partnership with them. Having IZI representation in the room with Doctor. Anthony is very, very important As he's become very, very familiar with our products, he's able to give feedback directly to those representatives in the room. And because we're a smaller company, because I'm able to take that information directly to our R and D and quality teams, we can implement those types of changes very, very quickly.

[Marc Ronchetti, Group Chief Executive at Halma]

Two further fantastic examples of how we create opportunities to deliver growth from BA, which has been part of HALMA for more than twenty years, and IZI, which has been part of the group only since 2022. So three companies with different histories operating in very different markets but using that same approach. They have entrepreneurial leadership who are driving purpose aligned growth in in markets with long term growth opportunities. They're maintaining close customer relationships. They're acting with agility to seize opportunities and respond to changes in their markets.

[Marc Ronchetti, Group Chief Executive at Halma]

Companies, in short, that have the capabilities to deliver strong growth and returns over the long term. So bringing it all together, Carol has described the strength of our performance in 2025 delivered in varied markets, another record year for the group. And while the broader environment remains uncertain, we expect to deliver another successful year in 2026. You've heard how this continued success is enabled by our sustainable growth model, a proven model whose fundamental strengths have sustained our track record of compounding growth and returns over more than half a century, and a model whose strength support my confidence that we're well positioned to make further progress in this year and over the longer term.

[Marc Ronchetti, Group Chief Executive at Halma]

That's the end of the presentation, and now we've got time for some questions. As ever, there's two ways that you can ask questions. You can either raise your hand using the tool at the bottom of your screen, and I'll invite you to ask your question verbally. Or you can type the question, which Karen and I will read out and then answer. So our question today comes from Andre. Morning, Andre.

[Andre Kukhnin, Managing Director at UBS Group]

Morning. Morning. Thank you very much for the presentation, for your time. I've got a couple of questions. I'll just go one at a time.

[Andre Kukhnin, Managing Director at UBS Group]

Firstly, going through kind of the portfolio and clearly, strong results delivered across the board. I just wanted to ask about Safety, the kind of the organic growth acceleration there, the margins now, I think, all time highs. How do you view that performance in 2026 and maybe now two years? Is this sustainable? Can we push on even further from here?

[Marc Ronchetti, Group Chief Executive at Halma]

Yes. Thanks, Andre. And as you say, really pleased with with the wider results and, in particular, safety. We're we're clearly coming off the back of two strong years, which is great to see. We've got momentum, the order taken, the order books there.

[Marc Ronchetti, Group Chief Executive at Halma]

Really great job by the teams in terms of the margin. A lot of that is real focus both on gross margin, on the mix of business and of course on just managing overhead, but making sure that we continue that investment. So two great years. As we look forward, clearly, are coming up against a stronger comparator. And I think with any of our businesses, it's always fair to say that whilst not material, we're not immune to some of the challenges in the end markets.

[Marc Ronchetti, Group Chief Executive at Halma]

But the portfolio gives us that diversity to give us a level of confidence that FY 2026 will be another good year for the sector.

[Andre Kukhnin, Managing Director at UBS Group]

Great. Thank you. And maybe a question on guidance. There's something coming we got this morning. Clearly, full year guidance is for high single digit growth, margin middle of the range.

[Andre Kukhnin, Managing Director at UBS Group]

How would you expect that to pan out between the half and half, if you can already comment at that stage at this stage?

[Carole Cran, CFO at Halma]

Yes, sure. Andre, Carnell here. Yes, pretty similar to what we've seen historical, Andre, on the revenue and the profits. So revenue probably sort of forty-fifty two splits and then typically the profit comes through a sort of 40 five-fifty five. So yes, on what we're seeing and hearing from the businesses at the moment, that's what we're expecting for this year, too.

[Andre Kukhnin, Managing Director at UBS Group]

Great. Thank you very much to both of you.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Andre. So next up, let's go to Max. Morning, Max.

[Max Yates, Executive Director - Equity Research at Morgan Stanley]

Morning. And thanks thanks for the time. And, yeah, great great to see the growth sort of broadening out into into some of the other areas from from the results. But I I think what I'd I'd really like to focus on just would be actually on the m and a side. And I guess we're we're always interested to hear how you're investing in your your m and a capabilities and how you kind of in continue to enhance that process.

[Max Yates, Executive Director - Equity Research at Morgan Stanley]

So maybe sort of firstly, any examples or investments that you've made particularly in the process, people, or how you go about doing m and a to to sort of continue to develop that that that very successful process going forward?

[Marc Ronchetti, Group Chief Executive at Halma]

Yes. Thanks, Max. And as you say, really good progress on M and A. And as you know, because of our approach to M and A in terms of ultimately buying businesses that aren't for sale in a one year period, you tend to get a few ups and downs. But if we look at our progress over the last five years, including COVID, we're still at a really healthy five point nine percent.

[Marc Ronchetti, Group Chief Executive at Halma]

But that said, to your point, we're never resting on our laurels. We're always thinking about where are the opportunities, where can we invest to maintain that real focus on good quality assets. And in the last twelve, eighteen months, we've invested both in our sector teams at at the DCE level. As you know, they're responsible ultimately for bringing in m and a to the group. They'll then be responsible for delivery of of the results from those businesses.

[Marc Ronchetti, Group Chief Executive at Halma]

So we've added DCEs to give us scalability moving forward. And we've also made investments in the dedicated m and a team, small teams, but there to focus and really help us think through the market mapping, finding those niches, finding those markets with the long term growth drivers. So targeted investment. And as I said on the presentation, really pleased to see the level of activity. And we've got a healthy pipeline.

[Marc Ronchetti, Group Chief Executive at Halma]

And I think importantly across all sectors and a really nice mix between stand alone and bolt on. So, yeah, looking forward to to what's to come on the M and A side.

[Max Yates, Executive Director - Equity Research at Morgan Stanley]

Great. And and maybe just my question is around the the health care business. It it looked like kind of that that turned the corner in the half of the year. I guess maybe when we look at sort of what's happening in The U. S.

[Max Yates, Executive Director - Equity Research at Morgan Stanley]

Around some of the regulatory debates, maybe if you could just talk a little bit about how your customer conversations are evolving. Are you finding any sort of caution across your U. S. Customers? And any sort of the Helmut portfolios that may be kind of more or less sensitive due to their business models in any of these particular areas? But any context around that would be great.

[Marc Ronchetti, Group Chief Executive at Halma]

Yes.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Matt. So I mean, the thing to say, as you point out, it's really, really pleasing to see the H2 recovery. And I think real testament to the teams in terms of keeping that closeness to the markets, taking the appropriate actions, but also a really good example of how the wider portfolio enabled us to continue to invest over the last couple of years. And as we've talked before, we're not we're not immune. We're we're more resilient to some of those wider challenges that we've seen in health care.

[Marc Ronchetti, Group Chief Executive at Halma]

As we sit here today, there's clearly a number of developments that you refer to, particularly in The US, whether that be around Medicaid, whether that be around NIH spending. The reality is because of the types of businesses that we're in, I e, the markets that we operate in are largely nondiscretionary in terms of those disease states, whether that's around cancer diagnostics or acute therapeutics. So you've got an underlying demand there. It's nondiscretionary. In addition to that other end markets that we're in a of high importance around ophthalmology and and eye health, so that certainly helps.

[Marc Ronchetti, Group Chief Executive at Halma]

In addition, most of the time, we're sort of a relatively cheap part of the wider system. So all of those things give us the resilience. We do have a low exposure to academia. And then to your point, we're in good markets. It then comes back to the model.

[Marc Ronchetti, Group Chief Executive at Halma]

And this is where we've got fantastic people leading our companies close to their customers with real deep knowledge that allows them to react accordingly. So we're keeping a close eye in terms of what we're seeing on order take. We're keeping close to our customers. And that's led us to give the group guidance. So I'm certainly not expecting heroic recovery into FY 2026, but certainly half of this year.

[Max Yates, Executive Director - Equity Research at Morgan Stanley]

Great to hear. Thank you very much.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Max. So if we next go, Rory, I see you've got got your hand up, so we'll go to Rory, and then we'll pick up, Jonathan, your your typed questions next.

[Rory Smith, Senior Analyst at Oxcap Analytics]

Many thanks. Can you hear me?

[Marc Ronchetti, Group Chief Executive at Halma]

Yes. Yeah. All clear.

[Rory Smith, Senior Analyst at Oxcap Analytics]

Brilliant. Thank you. Good morning. It's Rory from Oxcap. Thanks for taking my question.

[Rory Smith, Senior Analyst at Oxcap Analytics]

Mark, look, I appreciate the strength across the portfolio here, but I think I think the shares are really up so much this morning based on the strength of the upgrade, and clearly, that's driven by Photonics. So maybe if we can just talk about that for a little bit. The question there is, you know, what kind of what outlook are you willing to give beyond 2026 for that kind of premium growth that's adding the two percentage points to the to the group top line?

[Marc Ronchetti, Group Chief Executive at Halma]

Yeah. Certainly. I I think, Roy, just worth a bit of a step back on on. So as you know, I very much rightly view the group as a portfolio of businesses, and and I think of our performance as such. I don't think it is appropriate to to exclude high performing parts of the portfolio in any given period.

[Marc Ronchetti, Group Chief Executive at Halma]

And I also don't think it's appropriate to exclude those at the other end of the spectrum. But as you've heard today, we also operationally treat our Photonics business in the same way as all others, albeit we are getting rightly a number of questions and interest. We acknowledge the period of exceptional growth. And as I said in the presentation, the fact that we've got a single customer. So what we're trying to do is give a little bit more insight whilst keeping to that principle of a portfolio performance.

[Marc Ronchetti, Group Chief Executive at Halma]

It's also just worth reminding everyone that we do have that confidentiality, so I've got to be a little bit careful in in what I can disclose. So given that we're thinking of it in the wider portfolio performance, that's where that reference is coming to to premium growth. And I guess to try and bring that to life, I'm starting with the assumption that Photonics grows in line with the group's long term organic growth rate of around 7%. And then any growth that we see over and above that, that's what we're calling the the premium growth and then using that level to determine the impact on the group's revenue in the period. So that's the the context, and, hopefully, you'll appreciate that little bit of color that we've given also in in the presentation.

[Marc Ronchetti, Group Chief Executive at Halma]

In terms of of looking forward, I think I've talked before on on the positive side, we've got a really strong relationship with the customer, you know, over ten years, and we're really embedded with the customer. We're embedded with our r and d team. We're managing the supply chain, and, of course, we're able to fulfill the complex manufacturing at scale to meet their needs. So good news there. We're also a critical component of the the wider solution.

[Marc Ronchetti, Group Chief Executive at Halma]

But on the flip side, we've all got to appreciate that this is a really dynamic market. There's rapid development. There's technology change. But all of that means that we're well positioned. Final point then on looking forward, we've had the conversation before and we've shared that we don't have a long contract in place.

[Marc Ronchetti, Group Chief Executive at Halma]

But instead, what we do have is visibility of purchase orders, and it's based on that that we've given the visibility for for FY '26 and inclusion in the guidance. But I come back again to that point on the the dynamic market that we're operating in. Beyond that, clearly, there's a bit of a short term driver in terms of the the build out of that data center capability. But as I look forward, I believe there'll be an element of upgrade. I believe there'll be an element of maintenance.

[Marc Ronchetti, Group Chief Executive at Halma]

So, I trust the team, and I trust the relationship, and and we'll keep updating you as our visibility becomes clearer.

[Rory Smith, Senior Analyst at Oxcap Analytics]

That's brilliant. Thank you. Can I just follow-up there on the sort of capital implications? I noticed the the CapEx guidance has nudged up for 26 a little bit, 45,000,000 to 50,000,000. And just thinking back to h two last year when we thought that the growth or or certainly the guidance around Photonics was for the growth to kind of peter out or or level out.

[Rory Smith, Senior Analyst at Oxcap Analytics]

If anyone cared to look on the AVO Photonics website, there was a comment around expanding that facility. I I noticed this morning that's no longer there. Is that just a sort of sanitization point, or or how are we thinking about the any potential investment that's needed to meet that growth? Thanks.

[Carole Cran, CFO at Halma]

Hi, Rudy, Carol here. Yes, I mean, on the broader CapEx point and that slight tick up for the guidance. I mean, that's generally across sectors where we're expanding capacity. And in fact, the particular step up is for one of our safety businesses that have been in the group actually for a couple of decades, and they're actually bringing three of their facilities together just to get better efficiency. So most of the increase actually relates to them.

[Carole Cran, CFO at Halma]

There is a bit that relates to photonics capacity as well, but in the round that guidance for CapEx is pretty well spread. And as you know, we're not a capital intensive business, so sort of, you know, take take it in take it in the round, really.

[Rory Smith, Senior Analyst at Oxcap Analytics]

Brilliant. Thank you both very much. I'll pass it on.

[Marc Ronchetti, Group Chief Executive at Halma]

Hey. Thank you, Roy. So as I said, I'll just go to to Jonathan's questions. If I read them out, and then we'll divvy them up between us. Question the question there is, can you elaborate on the reasons for the decline in health care r and d spend year on year in f y twenty five?

[Marc Ronchetti, Group Chief Executive at Halma]

The two other divisions saw growth. That's question. question, health care saw a big step in margin in the half. Is this level of profitability sustainable? And then the question, water infrastructure in ENA has been mixed.

[Marc Ronchetti, Group Chief Executive at Halma]

When do you think spend from AMP eight in The UK starts to feed through to Halmar? So if I just pick up the question, Carol can Sure. Pick up the the bit on the margin, and then I'll come back to to the question on water. I think the point there on r and d spend in in FY twenty five is much more around phasing. We had high levels in the last couple of years.

[Marc Ronchetti, Group Chief Executive at Halma]

As you know, our our organic investment in in growth through r and d is bottom up, in the business. Because we remunerate on growth, it means that we can have really good conversations with our businesses every year in terms of the level investment that they need to sustain that compounding growth for decades to come. So nothing to read into that apart from a little bit of phasing. We certainly haven't reined back in the r and d spend in in health care. Yeah. On

[Carole Cran, CFO at Halma]

Can just take a Morning, Jonathan. Just on your question on the the health care H2 margins. I mean, as you know, obviously, the the market backdrop for health care has been quite challenging as we've seen the unwind of the overstockings. So it's fair to say that Steve Brown, the Secretary Chief Executive and his team have done an excellent job managing cost. And so when we saw the revenue starting to recover in H2, then that dropped through nicely to the bottom line.

[Carole Cran, CFO at Halma]

Looking forward, I think the general comment we'd make is clearly if we can continue to see recovery, that will help margins. That said, Steve and the team will make sure that perhaps where they've been more cautious on their overhead addition, then it gives them an opportunity to start to reinvest maybe in some of those more discretionary elements. So, you know, great great progress by the team, and hopefully, we'll see that recovery continue.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Karen. Jonathan, just picking up on the point as a reminder just around water infrastructure and E and A and the timing of of the AMP cycle. Yeah. I I guess the last twelve months have been a little bit mixed. I think you have the end of The UK AMP cycle in addition to some of the wider challenges in in Thames Water and the like.

[Marc Ronchetti, Group Chief Executive at Halma]

So a subdued year. What we are seeing is that, that need for the investment continues. The level of investment is there, and we're starting to see that feed through. But again, I just think worth giving a little bit of context is that we're not dependent on any one market to drive the growth and about onethree of our UK water revenue is from the AMP cycle. So putting that into context, it's approximately 1% of the group's revenue.

[Marc Ronchetti, Group Chief Executive at Halma]

But to answer the question, we're starting to see that come through in the first half of this year. So now just going back to to the calls. Alex, we'll we'll come to you.

[Analyst]

Good morning, both. Well done on a strong set of results, and thank you for taking my questions. Just had a couple. The one is just on this very strong cash conversion. Obviously, was kind of driven by very strong inventory management and lower working capital absorption, kind of down to 17% from 21%.

[Analyst]

Should we think about working capital absorption being around 17% going forward? Or, like, I e, is that kind of level sustainable? That's the one.

[Carole Cran, CFO at Halma]

Sure. Yeah. Carol, obviously. Hi, Alex. Yes, I mean, as you rightly pointed out, the companies have done a brilliant job.

[Carole Cran, CFO at Halma]

We strategically invested into inventory through the supply chain crisis and then have progressively, under Steve Gunning's leadership, been refocusing on the working capital management. So it's great to actually to see it back to what we would consider, I suppose, more normal levels. So to your question, if you look back in time, that is more normal levels. I suppose the only caveat I would put around that, and I made the comment in the presentation, is that if it makes sense to do so in the current climate, then we will, a targeted basis, support the companies in investing into inventory. But in the round, really pleased with the hard work and attention that's been put into delivering that cash conversion number.

[Analyst]

Perfect. No, that's super helpful. Really, thank you very much for that. The next question is probably a slightly, I guess, midpoint, obviously, very strong results today. Think I'm just trying to get my head around something.

[Analyst]

Just looking kind of at the level of acquisitions in '24 was eight, and then there were seven in '25. And, obviously, kind of lower consideration was paid. I noticed that the other acquisition items kind of exceptional cost stepped up quite significantly. I mean, it's still only £20,000,000, but I was wondering if you kind of could kind of under help me to understand the relationship between those other acquisition costs and the level of acquisitions being made slash consideration.

[Carole Cran, CFO at Halma]

Yes, yes, sure, Alex. And I applaud you in going through to that level of detail so quickly. I mean something that comes through there is the movement in the contingent consideration. So for some of our acquisitions, there will be a contingent element. So the timing of that is obviously slightly different to the initial consideration.

[Carole Cran, CFO at Halma]

And then there's an element of that increase that relates to transaction costs as well. So you're right, it's quite a marked step up, but nothing unusual as it were. It just reflects those two components and the timing of them relative to the transactions themselves.

[Analyst]

Okay. No. That's perfect. Really appreciate that, and well done again on a great set of results.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Alex. Appreciate it. Next, I'll I'll go to David, David Farrell. Think you're on mute there, David.

[David Farrell, SVP UK Industrials Equity Research at Jefferies]

Sorry about that. Didn't see the big thing on the front of my screen. Thanks very much for taking my questions, which are slightly kind of interlinked. Just on the topic of M and A. There haven't been any transactions since, I think, November.

[David Farrell, SVP UK Industrials Equity Research at Jefferies]

Just kind of looking back through history, bar COVID, that probably is the longest period where you haven't had any deals. Could you just give us a bit of an update in terms of what you're seeing in the market? I did sense that you referenced that you were being very disciplined in M and A. So there have been some things which have been close and perhaps you've decided not to progress with?

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, David. As as you say, I I think we've got to be a little bit careful with with the m and a and our approach to m and a of looking at individual six month periods. It's very much about relationship build and think of it in some ways is we're trying to buy businesses that aren't for sale. It's built on strong relationships. There'll be factors that bring things to market. There'll be factors that mean that maybe they're delayed.

[Marc Ronchetti, Group Chief Executive at Halma]

So the wider market at this moment in time, as I alluded to, I'm really pleased with pipeline that we've got. It's got a nice mix of stand alone and and bolt ons. It's across all sectors. The wider environment, what are we seeing? I I think there's no doubt from the private owners a little bit of all of the volatility in the world.

[Marc Ronchetti, Group Chief Executive at Halma]

You're you're seeing two camps. On the the one hand, you're seeing those business owners that are thinking there's a lot going on. This is hard work. I would love to find a fantastic home for my business that can support me in in reaching our potential over the next x years. But on the other hand, you've got those business owners that are thinking, actually, the current performance isn't reflective of our true value.

[Marc Ronchetti, Group Chief Executive at Halma]

And therefore, can we keep in contact? Can can we keep the relationship going and revisit in six, twelve months' time? So certainly nothing to to read into there. I guess the other dynamic is just around private equity. You've seen we've actually made a couple of acquisitions from private equity in the last few years.

[Marc Ronchetti, Group Chief Executive at Halma]

What we're seeing there is a number of funds are looking at exiting some of their businesses, But they're really keen to get certainty on timing. They're keen to get certainty on price. They're keen to go to a good home, and that makes us in a good position to get into a one to one relationship. So nothing to read into that point on discipline. We always maintain our discipline.

[Marc Ronchetti, Group Chief Executive at Halma]

We want Halmer like businesses that are gonna give us that growth for decades to come.

[David Farrell, SVP UK Industrials Equity Research at Jefferies]

Okay. Thanks very much for that. And I guess kind of it might be linked. It might not be not be, but I guess, RoTIC went up nicely year on year, I think, to kind of 15%. How can you drive that higher?

[David Farrell, SVP UK Industrials Equity Research at Jefferies]

Clearly, this year margins have helped, but do you see kind of a scenario where that can continue to recover and go higher?

[Carole Cran, CFO at Halma]

I'll take that one, David. Yes, I mean, what you've seen in FY 2025 is that sweet spot as it were of strong top line growth combined with the strength of the margins. So it comes back fundamentally to what we always say about capital allocation and and foremost investing organically to drive that top line and then all the good work around the margins. So we don't give guidance on RoTEK. But if you're thinking about it, then that combination is what moves that metric forward.

[David Farrell, SVP UK Industrials Equity Research at Jefferies]

Okay. Thanks. I guess I was just trying to get understand how impacted the improvement in RoTIC might have been from the absence of M and A and whether or not M and A is initially dilutive to the RoTIC.

[Marc Ronchetti, Group Chief Executive at Halma]

No, David. I mean, strangely, in in terms of RoTIC itself, there's no direct impact from from m and a. Because in the denominator, you've either got the the cash stroke net debt or you've got the the assets and the goodwill. So you don't see that impact. I think the wider point for me is we're not here trying to keep driving our ROTIC up.

[Marc Ronchetti, Group Chief Executive at Halma]

This is very much about how do we maintain a level of ROTIC that's a premium to our cost of capital and keep delivering that growth as as we have done in the last twelve months.

[David Farrell, SVP UK Industrials Equity Research at Jefferies]

Yep. Okay. Great. Thanks very much.

[Marc Ronchetti, Group Chief Executive at Halma]

Great. Thank you, David. Just looking at the screen. So let's go to Maggie. Morning, Maggie.

[Analyst]

Good morning, all. Thank you for taking my question. I just have one. I was very interested in your comments on taking the Photonics capabilities and starting to think about how to broaden those out across other end markets and sectors. And so could you give us some possibly some areas we should be thinking, be it defense or other environmental monitoring areas or where you think those end markets will provide above market growth trends that we should be thinking you would be focusing on to leverage that technology.

[Marc Ronchetti, Group Chief Executive at Halma]

Yeah. I don't I mean, the great news is that with the level of technical expertise that we've got in the teams, the the world is our oyster in some ways in terms of the applications. And, certainly, I think the use of photonics globally in in many industries will continue to grow going forward. So it's really down to our businesses to identify those those opportunities. The same actually in spectroscopy.

[Marc Ronchetti, Group Chief Executive at Halma]

I mean, the use of light more generally. And the use cases we've got there are many and varied, whether that be in metal sorting, whether that be in consumer products, whether that be in the areas that we talk through already in Photonics. So many, many opportunities. The beauty is that we've got a team with that deep knowledge. We've got a team with that autonomy to make the right decisions.

[Marc Ronchetti, Group Chief Executive at Halma]

And I look forward to the opportunities that they're able to identify.

[Analyst]

Clear. I'm sorry. If I can squeeze one more in. And ex photonics and ENA, I know you've talked about The UK infrastructure. But within ENA, are you seeing, you know, more uptick in in other areas, particularly in water analysis with things like PFAS detection coming in in The US, if there's any color you could give us on the ex photonics drivers and ex water infrastructure that we should be thinking about as well.

[Marc Ronchetti, Group Chief Executive at Halma]

Yeah. We we good for you. Thank you, Maggie, for looking beyond photonics in in the sector because there's been some really strong growth in in other parts. And certainly, in environmental monitoring, which includes our our gas detection businesses, we saw some really good growth this year. And and I guess what's that driven by?

[Marc Ronchetti, Group Chief Executive at Halma]

There's a larger number of projects in our gas and air quality businesses. And we've seen that notably in The U. S. Driven by a number of larger projects. But we're also seeing some growth markets in Asia Pacific in a number of our businesses.

[Marc Ronchetti, Group Chief Executive at Halma]

So it's been exciting to to see the investment. It's been exciting to see the growth, and thank you for for recognizing other subsectors in in the sector that have delivered a great performance.

[Analyst]

Alright. Sorry, Nava, but you're a victim of your own success, I guess. So thank you very much. I appreciate it.

[Marc Ronchetti, Group Chief Executive at Halma]

Thanks, Maggie. So last hand up that I've got is is Martin. We'll come to you, Martin.

[Martin Wilkie, Research Analyst at Citigroup]

Yeah. Thank you, for taking the question. Just coming back to acquisitions and the cadence of deals there and how we might think about that globally. There's a lot of things happening in The US at the moment, including also potentially a change to taxation, which I know is not finalized, but it might make multinationals buying in The US sort of less appealing than it has been in the past. Is is that causing you to change how you're thinking about regionally where you're looking at acquisitions?

[Martin Wilkie, Research Analyst at Citigroup]

Obviously, there's offsets elsewhere, you know, with Germany and infrastructure and so but just how you're thinking about internationally, how you're looking at, where some of those acquisitions could come from. Thank you.

[Marc Ronchetti, Group Chief Executive at Halma]

Yes. Thanks, Martin. I I think the start point, and I and I guess the the headline for us is that, you we see great opportunities across the globe and and across all the markets that we operate in today and, in fact, in in new markets moving forward. It's all about where do we see those long term cash flows. So there's been no change in terms of mindset, in terms of what we're looking at, where we're looking to invest.

[Marc Ronchetti, Group Chief Executive at Halma]

Clearly, some of the areas such as section eight ninety nine are in draft. We're monitoring them. I think our understanding today, and Carol will correct me if I'm wrong, a lot of the focus is on repatriation. So of course, our business model where we're investing in markets that are often local for local means that a large amount of the cash that we're generating in any region we're reinvesting. So we certainly don't see that as a barrier today, but it's an area that we'll continue to monitor. Anything on that, Karen?

[Carole Cran, CFO at Halma]

Nope. You've it you've covered it well.

[Marc Ronchetti, Group Chief Executive at Halma]

Is that okay, Martin?

[Martin Wilkie, Research Analyst at Citigroup]

Yeah. That is great. Thank you very much.

[Marc Ronchetti, Group Chief Executive at Halma]

Excellent. So just looking at the screen, it it doesn't look as if we've got any further questions. So thank you for your time. As I said at the outset, a really pleasing set of results. I think a real reflection of the benefits of our model, and we're excited by what lays ahead. Have a great day. Thank you.

Participants

Executives

• Marc Ronchetti, Group Chief Executive
• Carole Cran, CFO

Analysts

• Andre Kukhnin, Managing Director at UBS Group
• Max Yates, Executive Director - Equity Research at Morgan Stanley
• Rory Smith, Senior Analyst at Oxcap Analytics
• Analyst
• David Farrell, SVP UK Industrials Equity Research at Jefferies
• Martin Wilkie, Research Analyst at Citigroup