Oxford Instruments Plc · LSE:OXIG
Oxford Instruments — H1 2024/25 Earnings Presentation
28 slides from Oxford Instruments's earnings presentation, Nov 12, 2024
Slide 1: 2024/25 half-year results presentation
2024/25 half-year results presentation 12 November 2024 Richard Tyson, CEO Gavin Hill, CFO
Slide 2: Good H1 performance, positive momentum into H2
2024/25 half-year results presentation Good H1 performance, positive momentum into H2 good progress on strategic priorities What we’ll cover today: • First half performance highlights • Finance update • Strategic progress • Your questions 2
Slide 3: Good H1 performance with positive momentum into second half
Good H1 performance with positive momentum into second half 10.4% revenue growth*: supported by both divisions and underpinned by market-leading technology Strong performance in materials analysis and semiconductor offsetting healthcare & life science weakness Group adjusted operating profit up 3.6%
Slide 4: Progress underlines confidence in improved returns over the medium term
Strategic programme generating positive outcomes Imaging & Analysis Strong growth in operational USA; Asia growth transformation on offsets China pivot track, making good progress in Belfast Group-wide organisation Clear line of sight simplification and to profitable full streamlining well year in A
Slide 5: Finance update
Finance update Gavin Hill, CFO 5
Slide 6: Consolidated statement of income
Consolidated statement of income £m H1 2024/25 H1 2023/24 Reported change Constant currency change Revenue 225.8 209.7 +7.7% +10.4% Adjusted1 operating profit 33.9 36.5 (7.1%) +3.6% Amortisation of acquired intangibles (4.7) (4.6) Non-recurring items (0.8) (0.9) Mark-to-market movement of currency h
Slide 7: Revenue by division
Revenue by division £225.8m £209.7m (2.7%)2 +21.4%1 +7.7%2 Currency Reported Advanced +7.7%2 +6.0%1 Technologies +10.4%2 Reported Imaging & Constant Analysis Currency +10.4%2 constant currency HY 2023/24 HY 2024/25 1 Constant currency growth rate compared to prior year sector revenue 2 Growth rate c
Slide 8: Adjusted operating profit by division
Adjusted operating profit by division Imaging & Analysis £36.5m 24.6% 24.8% N/A1 CC margin Margin HY23/24 Advanced HY24/25 +5.4%1 Technologies £33.9m Imaging & Analysis Advanced Technologies (10.7%)2 (7.1%)2 Currency Reported (1.6%) (0.8%) CC margin Margin HY23/24 HY24/25 +3.6%2 Constant Currency Gr
Slide 9: Imaging & Analysis
Imaging & Analysis HY2024/25 HY2023/24 Change % Constant currency £m £m change % End market by revenue (%) Orders 157.5 152.8 +3.1% +6.0% Revenue 153.9 149.4 +3.0% +6.0% 7% Adjusted1 operating profit 35.9 37.0 (3.0%) +5.4% 16% Adjusted1 operating margin 23.3% 24.8% (150bps) (20bps) Statutory operati
Slide 10: Advanced Technologies
Advanced Technologies HY2024/25 HY2023/24 Change % Constant currency £m £m change % End market by revenue (%) Orders 67.1 71.5 (6.2%) (4.8%) Revenue 71.9 60.3 +19.2% +21.4% 16% 21% Adjusted1 operating loss (2.0) (0.5) - - 1% Adjusted1 operating margin (2.8%) (0.8%) - - Statutory operating loss (2.6)
Slide 11: Revenue and orders by region
Revenue and orders by region Order growth Revenue Europe Europe 2% (13%) (12%) +9% +11% Reported Constant currency Reported Constant currency North America North America 31% +18% +20% +29% +32% £225.8m 43% Reported Constant currency Reported Constant currency Asia Asia Revenue (1%) +2% (4%) (2%) Rep
Slide 12: Order book by division
Order book by division £302m £295m N/A1 Advanced +5.4%1 Imaging & Technologies (2.9%) Analysis Currency (2.2%)2 Reported +0.7%2 Constant Currency 31 March 30 September 2024 2024 1 Constant currency growth rate compared to prior year end divisional order book. 12 2 Growth rate compared to prior year
Slide 13: Consolidated statement of cash flows
Consolidated statement of cash flows Cash conversion Adj effective tax rate (1%) +17%1 25.1% HY23/24: (21%) +41%1 HY23/24: 24.0% Working capital Pension asset (£29.6m) £19.2m HY23/24: £31.6m outflow FY23/24: £16.1m Capex Dividend Capex & capitalised development cost £8.8m £9.2m HY23/24: £16.7m HY23/
Slide 14: FX sensitivity
FX sensitivity Adverse currency impact in the half year: revenue: £5.8m; adjusted operating profit: £3.9m Estimated full year 2024/25 currency impact • Assuming current hedges and no change from current forecast rates, approximate currency sensitivity against 2023/24: revenue (£13.3m); AOP (£8.3m) E
Slide 15: Summary
Summary Order growth at constant Good CC revenue growth of Strong CC margin of >24% currency 10%; operating margin 16.3%, maintained in Imaging & Analysis Orders up 3% in the period reflecting the mix effect of stronger revenue growth from Advanced Technologies Currency headwind in the year; Operati
Slide 16: Progress on strategic priorities
Progress on strategic priorities Richard Tyson, CEO 16
Slide 17: Medium-term growth targets remain in place
Group Strong materials analysis & semiconductor performance offsets healthcare & life science Strong revenue growth in materials analysis and semiconductor; healthcare & life science weaker but orders stabilised. Other 11% includes quantum, with strong performance in the half and further growth anti
Slide 18: A clear plan for value creation
Group A clear plan for value creation Imaging & Analysis Advanced Technologies Good to great Fix, improve and grow Compound semiconductor fabrication equipment Leading range of microscopy, scientific cameras, Capabilities spectroscopy and associated analytical tools and software Cryogenic and magnet
Slide 19: Strategic actions for regional sales starting to take effect
Group Strategic actions for regional sales starting to take effect Strong growth concentrated on North America; positive progress on Asia pivot North America focus drives growth Rest of Asia growth offsets China pivot • £36.7m Group revenue growth outside China 32% 20% 31% revenue order growth in •
Slide 20: Continued investment in new technology supporting growth
Group Continued investment in new technology (9.2% in H1) supporting growth Imaging & Analysis Advanced Technologies Unity adoption New Raman Dragonfly range New atomic layer gathering pace product launched extended deposition system gaining traction Special edition Two new models First academic pap
Slide 21: Operational simplification and cost management
Imaging & Analysis Operational simplification and cost management Four business units Cost management and Marketing function integrated into one streamlining delivered consolidation underway • Single P&L and • Teams delayered • Improved go-to- executive team created market strategy • Belfast facilit
Slide 22: Operational transformation: Wave 1 progress and next steps
Imaging & Analysis Operational transformation: Wave 1 progress to date and next steps Wave 1 has revealed more operational issues than anticipated – with corresponding opportunity Fundamentals of Shop floor Root cause Sales inventory performance reorganisation and problem solving operations manageme
Slide 23: Operational transformation: building change management capability
Operational transformation: building change management capability Wave 2 begins January 2025, with one team remaining in Belfast and a second team deployed in Advanced Technologies’ quantum facility to accelerate its operational transformation Belfast programme continues, with focus Quantum facility
Slide 24: Actions underway to fix, improve and grow
Advanced Technologies Actions underway to fix, improve and grow Focused actions to achieve full growth and margin potential in facilities selling low volume, complex systems into specialist compound semiconductor and quantum markets Compound semiconductor, Severn Beach Compound semiconductor, Severn
Slide 25: Strong progress in compound semiconductor at new Severn Beach facility
Advanced Technologies Strong progress in compound semiconductor at new Severn Beach facility Key wins and a record pipeline Operational progress Key sale into Nvidia Strong leading Clean room set to be Modular approach supply chain for indicators: demo fully operational by end supporting lead time A
Slide 26: Improving picture in quantum
Advanced Technologies Improving picture in quantum CASE STUDY 1 TBC CASE STUDY 1 TBC Significant technology • Order book rebuilt with good Supporting roll out of milestone supporting visibility following China exit commercial quantum data quantum scaling for key centres with key partner tech custome
Slide 27: Good H1 performance and strategic progress with a strong focus on value creation
Good H1 performance and strategic progress with a strong focus on value creation Good half-year performance in a challenging market landscape Both divisions making good progress; strong Imaging & Analysis margins and growth execution in Advanced Technologies Seasonality and actions to drive H2 cash
Slide 28: Your questions
Your questions 5-8% 20%+ Organic Margin growth CAGR Enhance 8-9% growth, >30% Revenue ROCE Q&A invested in R&D margins & returns Selective >85% M&A Cash conversion 28
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