Oxford Instruments Plc · LSE:OXIG
Oxford Instruments — H1 FY2024 Earnings Presentation
23 slides from Oxford Instruments's earnings presentation, Nov 14, 2023
Slide 1: Half-year results presentation
Half-year results presentation to 30 September 2023 Image to follow Tuesday 14 November 2023 Richard Tyson Chief Executive Gavin Hill Chief Financial Officer
Slide 2: Robust performance in the half
Robust performance in the half 7.5% cc growth in revenue and 6.5% growth in adjusted operating profit 10% cc growth in order book to £332m following positive book-to-bill of 1.07 Well positioned in key structural growth markets, providing resilience to macroeconomic headwinds Strong customer demand
Slide 3: Investing for future growth
Investing for future growth Increased investment in operational capacity and vibrant new product pipeline Increasing production capacity with new facilities in Bristol and Belfast Investment areas R&D: £19.7m investment in the half (9.4% revenue) • £75m investment in state-of-the-art • £15m site exp
Slide 4: First impressions: a global leader with strong fundamentals
First impressions: a global leader with strong fundamentals Well positioned in key structural growth markets Resilience across diverse markets, geographies and customer types High-quality business, products and technology A strong brand in the customer base High gross margins and a strong balance sh
Slide 5: Operating in key structural growth markets
Operating in key structural growth markets Advanced £68.3m, Semiconductor & £56.1m Healthcare & £43.4m Other £41.9m Materials +12% Communications + 2% Life Science +22% 20% of Group -3% 32% of Group revenue 27% of Group revenue 21% of Group revenue revenue • Building blocks of • Unleashing full pote
Slide 6: Finance review
Finance review Gavin Hill Chief Financial Officer © Oxford Instruments 2022 6
Slide 7: Income statement
Income statement Constant HY HY Reported currency £m 2023/24 2022/23 change change Revenue 209.7 200.5 +4.6% +7.5% Adjusted1 operating profit 36.5 36.8 (0.8%) +6.5% Amortisation of acquired intangibles (4.6) (4.3) Non-recurring items (0.9) (0.1) Mark-to-market movement of currency hedges (2.4) (6.1)
Slide 8: Revenue by sector
Revenue by sector £209.7m +4.6%2 reported +7.5%2 constant currency £200.5m Service & Healthcare Currency Research & (2.9%)2 Materials & Discovery +4.2%1 Characterisation +17.7%1 +3.1%1 HY 22/23 HY 23/24 1 Constant currency growth rate compared to prior year sector revenue 2 Growth rate compared to p
Slide 9: Adjusted operating profit by sector
Adjusted operating profit by sector £36.5m (0.8%)2 reported £36.8m Service & +6.5%2 constant currency Healthcare Research & (7.3%)1 Materials & Currency Discovery Characterisation (7.3%)2 +44.3%1 Margin 28.1% (2022: 32.3%) +0.5%1 Margin 14.4% (2022: 12.0%) Margin 15.9% (2022: 17.4%) Constant currenc
Slide 10: Materials & Characterisation
Materials & Characterisation 52% Group revenue (Academic: 48% Commercial: 52%) Research & HY HY Constant Fundamental Healthcare & Life Science 2023/24 2022/23 currency Science +9%* £m £m Growth growth +16%* 2% Orders 117.0 135.4 (13.6%) (11.4%) Revenue 109.3 108.7 +0.6% +3.1% 5% Advanced Adjusted1 o
Slide 11: Research & Discovery
Research & Discovery 32% Group revenue (69% academic; 31% commercial) HY HY Constant Research & Fundamental 2023/24 2022/23 currency Science £m £m Growth growth 10%* Healthcare & Orders 67.8 62.8 +8.0% +10.0% Life Science 7% Revenue 66.6 58.1 +14.6% +17.7% +27%* Adjusted1 operating profit 9.6 7.0 +3
Slide 12: Service & Healthcare
Service & Healthcare 16% Group revenue HY HY Constant 2023/24 2022/23 currency £m £m Growth growth Orders 39.5 37.1 +6.5% +10.5% Revenue 33.8 33.7 +0.3% +4.2% Adjusted1 operating profit 9.5 10.9 (12.8%) (7.3%) Adjusted1 operating margin 28.1% 32.3% Statutory operating profit 9.5 11.3 (15.9%) Key per
Slide 13: Revenue and order growth by region
Revenue and order growth by region Order growth Europe North America reported +11% reported (6%) 26% constant currency +10% constant currency (3%) North America Asia1 reported (12%) reported +5% constant currency +9% constant currency (8%) Revenue 48% Asia £209.7m reported (9%) constant currency (5%
Slide 14: Order book by sector
Order book by sector £332m +5%2 reported +10%2 constant currency £316m Research & Service & Materials & Discovery Healthcare Characterisation £121m £54m £157m +5%1 +35%1 +7%1 HY 22/23 HY 23/24 1 Constant currency growth rate compared to prior year sector order book 2 Growth rate compared to prior ye
Slide 15: Cash flow
Cash flow Cash conversion Adj effective -21% (+41%1) tax rate HY22: 47% 24.0% Capex & (65%1) capitalised HY22: 21.4% development costs Working Pension asset capital Working Lease £11.3m payments FX, outflow Adjusted capital Tax interest FY23: £26.4m Pensions £31.6m EBITDA Dividend & other HY22: £12.
Slide 16: FX sensitivity
FX sensitivity Adverse currency impact in the half year: Revenue: (£5.9m) ; AOP: (£2.7m) Estimated full year 2023/24 currency impact • Assuming current hedges as at 30/09/23 and no change from current forecast rates, approximate currency sensitivity against 2022/23: Revenue: (£11.8m) ; AOP: (£3.1m)
Slide 17: Exciting opportunities
Exciting opportunities Accelerating growth Improving margins • Focus on most attractive opportunities • Optimise operating framework within strong structural growth markets • Supply chain improvement • Drive more sales from existing capabilities • Sharing best practice across the Group • Develop ser
Slide 18: Finance summary
Finance summary Constant currency adjusted operating profit growth of 6.5% after investment Increased spend on R&D to 9.4% of sales Cash flow impacted by capacity investments and export licence impacts; normalised cash flow expected to improve in the second half Growth in interim dividend of 6.5% hi
Slide 19: Looking ahead
Looking ahead Well positioned in structural growth markets Exciting opportunities from strong fundamentals evidenced in H1 performance • Accelerating growth from existing product • Life Sciences up 22%; Advanced Material portfolio and new product pipeline analysis up 12%; robust performance in semic
Slide 20: Thank you
Thank you INSTRUMENTS
Slide 21: 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
Slide 22: Appendix
Appendix INSTRUMENTS
Slide 23: Currency exposure
Currency exposure Revenue (£m equivalent) Adjusted operating profit (£m equivalent) Sterling £37m Sterling £(49)m US Dollar £114m US Dollar £58m Euro £41m Euro £15m Japanese Yen £15m Japanese Yen £12m Chinese £2m Chinese Renminbi £1m Renminbi Other £1m Other £0m Oxford Instruments plc | Half-year re