Slide 1: Half Year results presentation to 30 September 2020
Half Year results presentation to 30 September 2020 Ian Barkshire Chief Executive Gavin Hill Group Finance Director
Slide 2: Agenda
Agenda Highlights Finance Review Horizon & Covid Updates Operational Review Summary and Outlook Oxford Instruments plc Half Year Results presentation 2020 2
Slide 3: Highlights
Highlights • Resilient first half performance • Continued progress with Horizon strategy • Strong order and order book growth • Revenue impacted by covid-related disruption • Strong margin performance through strategic actions • Growth in net cash, strong balance sheet • Reinstatement of interim div
Slide 4: Finance Review
Finance Review Gavin Hill Oxford Instruments plc Half Year Results presentation 2020
Slide 5: Income Statement
Income Statement Constant Reported Currency £m 2020/21 2019/20 Change Change Revenue 140.3 157.6 (11.0%) (11.0%) Adjusted operating profit 24.3 26.2 (7.3%) (11.5%) Net finance costs (0.6) (0.4) Adjusted profit before tax 23.7 25.8 (8.1%) (12.4%) Amortisation of acquired intangibles (4.3) (4.4) Non-r
Slide 6: Revenue by Sector
Revenue by Sector Materials & Research & Service & £m Characterisation Discovery Healthcare Total 2019/20 73.2 57.8 26.6 157.6 Underlying movement (8.0) (9.5) 0.2 (17.3) FX - - - - 2020/21 65.2 48.3 26.8 140.3 Growth Reported (10.9%) (16.4%) +1.1% (11.0%) Constant currency (10.9%) (16.4%) +1.1% (11.
Slide 7: Revenue by Territory
Revenue by Territory: £m Europe North America Asia RoW Group Revenue % 29% 24% 46% 1% 64.3 63.9 45.9 45.8 40.5 33.8 1.5 2.1 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21 Reported growth (11.8%) (26.2%) (0.6%) +40.0% Constant currency growth (12.0%) (25.8%) (0.8%) +40.0% Orders: rep
Slide 8: Order Book
Order Book: £m 101.7 96.5 76.8 53.4 25.1 26.1 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21 Materials & Research & Service & Characterisation Discovery Healthcare Total Reported growth +43.8% +5.3% +4.2% +16.9% Constant currency growth +44.9% +5.5% (1.3%) +16.6% Oxford Instruments plc Half Year Re
Slide 9: Adjusted Operating Profit by Sector
Adjusted Operating Profit by Sector Materials & Research & Service & £m Characterisation Discovery Healthcare Total 2019/20 12.2 6.4 7.6 26.2 Underlying movement (3.9) (0.5) 1.4 (3.0) FX 0.6 0.5 - 1.1 2020/21 8.9 6.4 9.0 24.3 EBIT Margin 2019/20 16.7% 11.1% 28.6% 16.6% 2020/21 13.7% 13.3% 33.6% 17.3
Slide 10: Cash Flow
Cash Flow Pensions: Accounting asset: £1.1m (31 March 20: £30.7m) (£3.0m) (£0.5m) (£1.1m) (£1.3m) (£1.0m) £81.4m (£4.0m) (£3.7m) £0.0m £0.1m Working Capital £67.5m Outflow: £3.0m (2019: £28.4m outflow of £11.3m) Effective tax rate 20.7% (2019: 20.2%) Net cash EBITDA Working Capitalised Capex Lease I
Slide 11: Currency Exposure
Currency Exposure 70 66.9 28.1 30.3 £m equivalent 30 26.0 18.4 14.3 8.6 2.4 0.6 0.4 (0.6) (10) (30.8) (50) Sterling US Dollar Euro Japanese Yen Chinese Renminbi Other Sales Adjusted operating profit Oxford Instruments plc Half Year Results presentation 2020 11 11
Slide 12: FX Sensitivity
FX Sensitivity • Favourable currency impact in First Half 2020/21: AOP: +£1.1m • Estimated Second Half 2020/21 currency impact – Assuming current hedges and no change from forecast rates, currency sensitivity against FY 2019/20: Revenue: (£1.0m); AOP: +£0.2m • Estimated Second Half 2020/21 currency
Slide 13: Finance Summary
Finance Summary • Strong growth in orders • Margin sustained despite fall in revenue • Good operating cash conversion of 97% with net cash of £81.4m • Total headroom of approximately £214m, including the undrawn £105m credit facility • Robust first half trading and a strong order book supports reins
Slide 14: Operations Review
Operations Review Ian Barkshire Oxford Instruments plc Half Year Results presentation 2020
Slide 15: Horizon Update
Horizon Update • Horizon provided solid foundation for growth, delivering tangible financial gains and supporting margin • Acceleration of market intimacy, further exploiting sales, marketing and service synergies • Expansion of digital sales and marketing capabilities • Transformation of service of
Slide 16: Covid Update
Covid Update • Prioritising health and wellbeing of employees and supporting customers • Trading significantly impacted by covid-related disruption at customer sites and protracted administrative processes • Hybrid workplace model maintained business continuity • Implemented new working practices an
Slide 17: Group Performance
Group Performance Academic: 54% Commercial: 46% Materials & Research & Discovery Service & Healthcare Characterisation • Strong order growth across both commercial and academic customers • Trading more significantly impacted by covid in Q1, with positive momentum through Q2 • Double digit growth in
Slide 18: Group Performance – End Markets
Group Performance – End Markets Academic: 54% Commercial: 46% • Broad and diverse range of attractive end markets with long term growth 9% 20% drivers • Growth supported by resilient end 27% % of market demand in Semiconductor, Revenue Quantum Technology and Advanced 30% Materials 8% 6% • Strong ord
Slide 19: Materials & Characterisation
47% Group revenue Materials & Characterisation Academic: 48% Commercial: 52% Asylum Research; Magnetic Resonance; NanoAnalysis; Plasma Technology Enabling the fabrication and characterisation of materials and devices down to the atomic scale • Orders increased 17% with growth from 4% both academic a
Slide 20: Materials & Characterisation Growth Examples: Semiconductor & Energy
Materials & Characterisation Growth Examples Global Market Drivers Semiconductor & Communications • Buoyant compound semiconductor market Power Electronics Connectivity Communications - strong growth in etch and deposition systems • Strengthened silicon semiconductor market - new products supporting
Slide 21: Materials & Characterisation Growth Examples: Advanced Materials
Materials & Characterisation Growth Examples Advanced Materials • Continued demand for lighter, stronger, higher performing materials • Tailored products enabling faster structural Next Generation Steel and Material Structure Analyser material analysis • Growth in the analysis of advanced polymers F
Slide 22: Research & Discovery
34% Group revenue Research & Discovery Academic: 67% Commercial: 33% Andor Technology; NanoScience; X-Ray Technology Advanced solutions that create unique environments and enable measurements down to the molecular and atomic level • Severe customer covid disruption in Europe and North America signif
Slide 23: Research & Discovery Growth Examples: Healthcare & Lifescience
Research & Discovery Growth Examples Global Market Drivers Healthcare & Lifescience • Fundamental market drivers Cell Biology Personalised Medicine Neuroscience Immunology supporting improved health remain robust • Subdued demand due to customer site closures, positive momentum in Q2 • Increased OEM
Slide 24: Research & Discovery Growth Examples: Quantum Technology
Research & Discovery Growth Examples Global Market Drivers Quantum Technology Secure Quantum • Growth in quantum demand Quantum Quantum Communication Sensors Computing Imaging supported by governments & commercial customers • Partner in consortium to build UK’s first commercial quantum computer Rese
Slide 25: Service & Healthcare
Service & Healthcare 19% Group revenue Provides customer service and support for our own products and the service and support of third party MRI scanners in Japan • Revenue from Japan MRI operations broadly in line with previous year • Accelerated the transformation of our customer Remote Support su
Slide 26: Summary & Outlook
Summary & Outlook • Strong order growth in H1, revenue impacted by covid-related disruptions • Margins sustained despite lower revenues • Robust trading, combined with strong order book, gives us confidence for H2 • “We expect full year performance to be a little behind last year on a constant curre
Slide 27: Thank you
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Slide 28: 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