Slide 1: Preliminary results presentation to 31 March 2020
Preliminary results presentation to 31 March 2020 Ian Barkshire Chief Executive Gavin Hill Group Finance Director
Slide 2: Agenda
Agenda Highlights Horizon Update & Covid-19 Response Finance Review Operational Review Summary and Outlook Oxford Instruments plc Preliminary Results presentation 2020 2
Slide 3: Highlights
Highlights • Progress with Horizon delivering • Gains from improved commercial tangible financial benefits practices & operational excellence programme • Good underlying profit and margin growth • Customer service transformation driving strong growth and • Full year performance impacted by improved
Slide 4: Horizon Update
Horizon Update • Positive progress with Horizon strategy driving underlying growth and improved profitability • Customer centric, market driven approach identifying new markets and optimising value with existing customers • Higher quality product roadmaps delivered through increased utilisation of c
Slide 5: Covid-19 Response
Covid-19 Response • Covid-19 disrupted business throughout Q4, equivalent to approximately two weeks of revenue • Delays in shipment and installation at customer sites • Developed and implemented phased approach through covid-19 disruption • Prioritising health and wellbeing of employees, supporting
Slide 6: Covid-19 Response
Covid-19 Response • Implementing phase four – adapted business practices Our Hybrid Workplace and capabilities to optimise business continuity throughout global recovery Closed • Protecting the business and job security of our Restricted employees through proactive cash management and access cost co
Slide 7: Finance Review
Finance Review Gavin Hill Oxford Instruments plc Preliminary Results presentation 2020
Slide 8: Income Statement
Income Statement Constant Reported Currency £m 2019/20 2018/19 Change Change Revenue 317.4 314.0 1.1% (0.7%) Adjusted operating profit 50.5 47.7 5.9% (1.0%) Net finance costs (1.0) (2.2) Adjusted profit before tax 49.5 45.5 8.8% +1.5% Amortisation of acquired intangibles (8.7) (8.8) Non-recurring it
Slide 9: Revenue by Sector
Revenue by Sector Materials & Research & Service & £m Characterisation Discovery Healthcare Total 2018/19 137.9 125.2 50.9 314.0 Underlying movement (2.6) (1.4) 1.9 (2.1) FX 2.3 2.2 1.0 5.5 2019/20 137.6 126.0 53.8 317.4 Growth Reported (0.2%) +0.6% +5.7% +1.1% Constant currency (1.9%) (1.1%) +3.7%
Slide 10: Revenue by Territory: £m
Revenue by Territory: £m Europe North America Asia RoW Group Revenue % 27% 28% 43% 2% 142.6 136.7 89.5 84.9 84.6 81.5 5.3 6.3 2018/19 2019/20 2018/19 2019/20 2018/19 2019/20 2018/19 2019/20 Reported growth +4.2% +5.8% (4.1%) +18.9% Constant currency growth +4.7% +3.0% (6.5%) +17.0% Orders: reported
Slide 11: Order Book: £m
Order Book: £m 99.0 91.2 50.9 41.2 25.1 20.8 2018/19 2019/20 2018/19 2019/20 2018/19 2019/20 Materials & Research & Service & Characterisation Discovery Healthcare Total Reported growth +23.5% +8.6% 20.7% +14.2% Constant currency growth +20.1% +7.2% 17.3% +12.1% Oxford Instruments plc Preliminary Re
Slide 12: Adjusted Operating Profit by Sector
Adjusted Operating Profit by Sector Materials & Research & Service & £m Characterisation Discovery Healthcare Total 2018/19 21.2 12.9 13.6 47.7 Underlying movement (1.6) 0.3 0.8 (0.5) FX 1.4 1.3 0.6 3.3 2019/20 21.0 14.5 15.0 50.5 EBIT Margin 2018/19 15.4% 10.3% 26.7% 15.2% 2019/20 15.3% 11.5% 27.9%
Slide 13: Cash Flow
Cash Flow Working Capital Pensions: Inflow: £10.1m (2019: inflow of £2.8m) Accounting asset: £30.7m (31 March 19: £2.6m) Cash cost of $3.4m to terminate US defined benefit scheme Effective tax rate 18.8% (2019: 21.8%) £20.4m (£10.0m) £10.1m (£2.8m) (£4.3m) (£8.2m) (£1.0m) (£6.1m) £2.3m £67.5m £60.4m
Slide 14: Currency Exposure
Currency Exposure 180 163.1 140 100 70.2 £m equivalent 63.3 60 47.5 39.7 36.3 21.0 20 3.7 3.5 2.7 (20) (5.6) (60) (77.5) (100) Sterling US Dollar Euro Japanese Yen Chinese Renminbi Other Sales Adjusted operating profit Oxford Instruments plc Preliminary Results presentation 2020 14 14
Slide 15: FX Sensitivity
FX Sensitivity • Favourable currency impact in FY 2019/20: AOP: +£3.3m • Estimated FY 2020/21 currency impact – Assuming current hedges as at 31/03/20 and no change from 31/03/20 spot rates, currency sensitivity against FY 2019/20: Revenue: +£6.0m ; AOP: +£2.0m • Transactional & Translational FX sen
Slide 16: Finance Summary
Finance Summary • Reported revenue and AOP ahead of last year and broadly in line at constant currency, despite the effect of covid-19 on Q4 trading • Good operating cash conversion of 124% and proceeds from disposals push net cash up to £67.5m (£70m at the end of May 2020) • RCF undrawn leaving c.£
Slide 17: Operations Review
Operations Review Ian Barkshire Oxford Instruments plc Preliminary Results presentation 2020
Slide 18: Group Performance
Group Performance Academic: 52% Commercial: 48% Materials & Research & Discovery Service & Healthcare Characterisation • Strong underlying revenue, operating profit and margin growth impacted by covid-19 disruption • Customer-centric approach supported growth from both commercial and academic custom
Slide 19: Group Performance – End Markets
Group Performance – End Markets Academic: 52% Commercial: 48% • Broad and diverse range of attractive end markets – long term growth drivers 11% 23% • Underlying revenue growth across each of our chosen customer segments % of 23% Revenue • Strong growth in Europe and North America, covid-19 disrupti
Slide 20: Materials & Characterisation
43% Group revenue Materials & Characterisation Academic: 45% Commercial: 55% Asylum Research; NanoAnalysis; Plasma Technology Enabling the fabrication and characterisation of materials and devices down to the atomic scale • Strong underlying revenue and profit growth 4% offset by covid-19 • Order gr
Slide 21: Materials & Characterisation Growth Examples: Semiconductor & Communications
Materials & Characterisation Growth Examples Semiconductor & Communications • Continued weakness in silicon semiconductor market leading to reduced sales of imaging and analysis products Semiconductor Wafer • Strong growth in compound semiconductors of our etch and deposition systems • Growth driven
Slide 22: Materials & Characterisation Growth Examples
Materials & Characterisation Growth Examples Advanced Materials • Increasing demand for lighter, stronger, higher functioning materials Graphene image • Market drivers include safer vehicles, increased energy efficiency & reduced materials consumption Energy & Environment • Growth across energy gene
Slide 23: Research & Discovery
40% Group revenue Research & Discovery Academic: 65% Commercial: 35% Andor Technology; NanoScience & Magnetic Resonance; X-Ray Technology Advanced solutions that create unique environments and enable measurements down to the molecular and atomic level • Good underlying revenue growth offset by covid
Slide 24: Research & Discovery Growth Examples: Healthcare & Lifescience
Research & Discovery Growth Examples Global Market Drivers Healthcare & Lifescience • Growth drivers include disease detection, new Cell Biology Personalised Medicine Neuroscience therapies and improved understanding of disease mechanisms • Strong growth with OEM customers across gene sequencing, dr
Slide 25: Research & Discovery Growth Examples: Quantum Technology
Research & Discovery Growth Examples Quantum Technology Global Market Drivers • Increased global investment Secure Communication Quantum Sensors • Growth in cryogenic and material analysis platforms & scientific cameras Quantum Quantum • New cryogenic platform enabling Computing Imaging increased pr
Slide 26: Service & Healthcare
Service & Healthcare 17% Group revenue Provides customer service and support for our own products and the service and support of third party MRI scanners in Japan • Transforming our customer service approach - product offerings, capabilities and delivery • Improves customer capability and productivi
Slide 27: Summary & Outlook
Summary & Outlook • Good progress with Horizon strategy, foundation for long term sustainable growth and margin improvement • Living our purpose of facilitating a greener economy, increased connectivity, improved health and leaps in scientific understanding • Ongoing disruption due to coronavirus wi
Slide 28: Thank you
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Slide 29: Disclaimer
Disclaimer This presentation is prepared for and addressed to authorised persons within the meaning of the Financial Services and Markets Act 2000 (FSMA). The information contained in this presentation is not for publication, distribution or reproduction, in whole or in part, to any persons outside