Renishaw plc · LSE:RSW
Renishaw — FY2019 Earnings Presentation
34 slides from Renishaw's earnings presentation, Aug 1, 2019
Slide 1: Renishaw plc – 2019 results
Renishaw plc – 2019 results 1 August 2019
Slide 2: Summary
Summary • Revenue of £574.0m (2018: £611.5m), a decrease at constant exchange rates of 7%. • Growth in the Americas and EMEA regions; weakness in the APAC region (19% decrease at constant exchange rates). • Metrology revenue decreased by 7% to £532.9m: • Strong growth in our additive manufacturing l
Slide 3: Group revenue analysis
Group revenue analysis Changes in geographic area Market conditions Change at actual fx Change at constant % fx % • APAC region impacted by slowdown in demand for APAC -17% -19% encoder and machine tool products. EMEA 1% 2% • Encoder product demand lower due to reduced investments in electronics pro
Slide 4: Summary (continued)
Summary (continued) • Adjusted profit before tax of £103.9m (2018: £145.1m), a decrease of 28% • Substantial increase in adjusted operating profit for Healthcare to £3.1m. • Statutory profit decreased 29% to £109.9m (2018: £155.2m) • People key to delivery of our strategy; headcount increase of 179,
Slide 5: Financial summary (continuing operations)
Financial summary (continuing operations) 2019 2018 Change Revenue £m £m £m % 700 611.5 600 574.0 536.8 Revenue 574.0 611.5 -6% 494.7 500 427.2 400 300 Adjusted profit before tax 103.9 145.1 -28% 200 % return on revenue 18% 24% 100 0 2015 2016 2017 2018 2019 Statutory profit before tax 109.9 155.2 -
Slide 6: Adjusted earnings per share and Dividend per share
Adjusted earnings per share and Dividend per share Adjusted earnings per share p Dividend per share p 180 167.5 170.5 70 160 60.0 60.0 140 132.4 60 52.0 119.9 48.0 120 50 46.5 46.0 46.0 100.4 39.5 100 40 34.0 35.5 80 30 60 40 20 12.5 12.5 12.5 14.0 14.0 20 10 0 0 2015 2016 2017 2018 2019 2015 2016 2
Slide 7: Business sector performance
Business sector performance Revenue 2019 2018 Change Revenue – 1st & 2nd half £m £m £m % 350 332.0 Metrology 533.0 575.8 -7% 300 296.4 279.5 296.7 277.3 270.9 Healthcare 41.0 35.7 15% 250 223.8 233.4 240.4 193.8 Total 574.0 611.5 -6.1% 200 150 100 50 Adjusted operating profit 0 2015 2016 2017 2018 2
Slide 8: Adjusted profit before tax bridge
Adjusted profit before tax bridge
Slide 9: Income statement
Income statement 2019 2018 £m % £m % Change Cost of sales £m 250 80 Revenue 574.0 100 611.5 100 -6% 207.5 200.1 200 182.6 157.8 60 % of revenue 145.3 Cost of sales (200.1) 35 (207.5) 34 -4% 150 40 Engineering (inc. R&D) (89.8) 16 (77.4) 13 16% 100 20 50 Gross profit 284.1 49 326.6 53 -13% 0 0 2015 2
Slide 10: Income statement – Engineering costs
Income statement – Engineering costs Engineering costs Engineering costs (total) £m 2019 2018 Change 100 50 £m £m % 89.8 90 78.0 77.4 80 40 Total spend 97.9 83.6 17% 66.1 68.8 70 % of revenue 60 30 Less capitalised net 3.0 2.1 43% 50 Less R&D tax credit 5.1 4.1 24% 40 20 30 Net R&D 89.8 77.4 16% 20
Slide 11: Income statement – Distribution costs
Income statement – Distribution costs Distribution costs Distribution costs £m 140 126.8 50 121.4 •Continued expansion of global marketing and distribution 120 112.7 40 infrastructure to support new and existing products 100 87.9 93.8 % of revenue 80 30 60 20 •Distribution costs up 4% from last year
Slide 12: Income statement – Administrative costs and Group employees
Income statement – Administrative costs and Group employees Administrative costs Administrative costs £m 70 30 56.9 58.6 •Inflationary increases 60 52.4 25 50 41.8 % of revenue 40.2 20 •Headcount increase to support business growth and increasing complexity 40 15 30 •Offset arising from reduction in
Slide 13: Business systems
Business systems • In recent years, we have made significant progress in enhancing and simplifying financial reporting processes and systems, to further improve the analysis of business performance. • With a focus on increasing productivity and efficiency, major systems developments are in progress
Slide 14: Balance sheet
Balance sheet £m June 2019 June 2018 Change % Property, plant & equipment 263.5 232.6 13% Total equity £m 700 Intangible assets & investments 72.1 64.3 12% 583.3 600 548.6 Deferred tax assets 29.9 27.3 10% 500 428.5 443.8 381.4 Long-term loans to associates & JVs 0.7 4.2 -83% 400 300 Derivatives 1.3
Slide 15: Defined benefit pension schemes
Defined benefit pension schemes UK defined benefit pension scheme - new funding plan Year ended Previous funding plan 30 June Company paid all monthly pension payments and lump sum payments, and transfer 2019 payments to a limit of £1.0m in each year, until the earlier of 30 June 2031 or £’000 reach
Slide 16: Cash flow
Cash flow *Including continuing and discontinued operations
Slide 17: Capital expenditure
Capital expenditure 2019 2018 £m £m Capital expenditure £m Capital expenditure 56.8 34.9 60 56.8 55 53.0 50 48.4 • Property 45 42.6 The main property additions were 40 31.4 34.9 35 27.5 35.6 - in the UK, construction in progress for a 94,000 sq ft extension to our 18.4 Renishaw Innovation Centre due
Slide 18: Property
Property Nagoya, Japan, distribution facility Renishaw Innovation Centre extension (artist’s impression)
Slide 19: Industrial metrology - market drivers
Industrial metrology - market drivers Increasing component complexity and closer tolerances Global skills shortages require: • Easier to use solutions • More automation and robotics Weaker smartphone demand/over- capacity in the supply chain Renishaw’s strength is breadth of products and application
Slide 20: Industrial metrology
Industrial metrology Shopfloor measurement On–machine measurement Cutting tools and components remain in situ on the machine tool and automatically checked using a tool setting probe (e.g. new APCA-45) or inspection probe (e.g. new RMP400). Data is used to automatically update the manufacturing proc
Slide 21: Industrial metrology
Industrial metrology Automation Increasing use of Equator gauging systems within automated manufacturing processes. Parts transferred from machine tools using robots or automatic transfer systems. Increasing use of our transfer systems for Equator systems and CMMs. These allow parts to be loaded on
Slide 22: Position measurement – market drivers
Position measurement – market drivers Market drivers are size, accuracy, speed, ease of use. Reduced investments in electronics production and semiconductors. Opportunities due to increased utilisation of our encoders and new application areas. Positive trends include new flat panel display technolo
Slide 23: Position measurement
Position measurement Multi-axis periscope (RMAP) • Designed to enable accurate six degrees of freedom measurements in XY stage applications, utilising the performance from Renishaw’s RLD10-X3-DI interferometer head. • Higher machine performance requires multiple interferometer feedback axes QUANTiC™
Slide 24: Position measurement
Position measurement ATOM DX™ encoder series • Our smallest incremental encoder, with digital output direct from the readhead, eliminating the need for bulky interfaces. • A high-performance encoder that features resolutions down to 2.5 nm, low Sub-Divisional Error (SDE) and low jitter. • Can be use
Slide 25: Position measurement
Position measurement XM-600 laser measurement system for co-ordinate measuring machines (CMMs) • Uses technology developed for the Renishaw XM- 60 multi-axis calibrator to enable faster and easier error mapping of a CMM. • Measures all six degrees of freedom from a single set-up, in any orientation
Slide 26: Additive manufacturing – market drivers
Additive manufacturing – market drivers Our systems are based on laser powder bed fusion technology for high-value metal part production. Market drivers include machine productivity, lower cost-per-part, process stability and part quality. Opportunities in multiple markets, with greater maturity in
Slide 27: Additive manufacturing
Additive manufacturing RenAM 500Q additive manufacturing (AM) system • Four high-power 500 W lasers, with each able to access the whole powder bed surface simultaneously. • Offers a substantial reduction in cost per part whilst maintaining the quality and precision offered by standard single laser s
Slide 28: Additive manufacturing
Additive manufacturing Recent AM customers • As well as investing in RenAM 500Q systems, Sweden-based Sandvik Additive Manufacturing is also collaborating with Renishaw in areas such as materials development, AM process technologies and post-processing. • In the USA, Knust-Godwin, a supplier to the
Slide 29: Healthcare – market drivers
Healthcare – market drivers Requirement for faster procedures to reduce waiting times, more economical treatments, more patient- specific treatments (e.g. implants), and safer procedures with reduced human errors. Increased life expectancy on a global basis means greater incidences of degenerative d
Slide 30: Raman spectroscopy
Raman spectroscopy Market applications Focus on new application areas to address in existing and new markets for our Raman systems. Current focus in the areas of healthcare (cancer diagnosis) and the environment (microplastics). Several inVia Raman microscope systems supplied for research by academi
Slide 31: Neurosurgery
Neurosurgery New 2D patient registration module The new neurolocate™ 2D module, has obtained a CE mark and can be offered to hospitals across Europe. It allows the surgeon to accurately determine the position of the patient relative to the neuromate robot. The 2D module requires just two X-rays to r
Slide 32: Brexit
Brexit The Board continues to oversee the work of the Brexit steering group in identifying the key risks arising from a no-deal Brexit and implementing mitigation plans, being: • the establishment of a new distribution warehouse in Ireland which, if required, would significantly reduce the number of
Slide 33: Outlook - summary
Outlook - summary • Challenging business environment expected to continue during this year. • Our vision remains unchanged: long-term investments in patented and innovative products and processes, high-quality manufacturing, and the provision of excellent local support to customers in all our market
Slide 34: Disclaimer
Disclaimer This document contains statements about Renishaw plc that are or may be forward-looking statements. These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Renishaw plc. They involve known and unknown risks, uncertainties a