Renishaw Plc · LSE:RSW
Renishaw — Investor Day (2024)
140 slides from Renishaw's investor day presentation, 2024
Slide 1: Transforming tomorrow together
Transforming tomorrow together Capital Markets Day 2024 Will Lee Chief Executive
Slide 2: Agenda
Agenda 10.00 – Mission, ambition & strategy 11.15 – Strategic priority seminars 14.40 – Refreshments 10.45 Q&A 12.20 Rotations #1 and #2 15.05 Tea & coffee Will Lee, Allen Roberts 12.20 – Lunch & exhibition Chief Executive Group Finance Director 13.35 Buffet lunch with exhibition stands 15.05 – Manu
Slide 3: Renishaw today
Renishaw today We make it possible to create the products, materials and therapies that FY23 revenue will define our world in the decades to come and touch billions of lives Analytical Manufacturing instruments & technologies medical devices Analytical instruments 94% Manufacturing technologies & me
Slide 4: Global footprint
Global footprint 5,175 employees 67 locations 36 countries • R&D mostly in UK • Main manufacturing in UK, Ireland and India • 94% revenues outside of UK FY23 revenue by region FY23 revenue – key territories 23% 31% 24% 20% 17% Americas 13% 10% 9% APAC 6% 3% EMEA (incl. UK) 45% Slide 4
Slide 5: Our ambition
Our ambition Manufacturing technology powerhouse ► Innovator in technologies for an automated, sustainable world ► Leading positions in an expanding range of high-growth markets ► Portfolio of sensor and software-enabled systems businesses ► High single digit through-cycle organic growth with >20% E
Slide 6: Long-term value creation model
Long-term value creation model Targeting high single digit through-cycle organic growth Well positioned in markets growing at >5% 1 p.a. Strategy driving consistent outperformance Manufacturing machine Industrial Growing in Increasing Extending into performance automation existing markets technology
Slide 7: Markets & competitive position
Markets & competitive position Value creation model Competitive position Market growth >5% Outperformance Strategy Market segmentation Existing Tech New Strategic priorities markets value markets Market growth Capital allocation £6bn Emerge Future Estab Market share Portfolio growth Slide 7
Slide 8: Attractive markets growing at >5% p.a.
Attractive markets growing at >5% p.a. Structural growth drivers underpinning sustained market growth Manufacturing machine Relentless drive to improve Industrial processes are Industrial MANUFACTURING TECHNOLOGY performance the precision, speed and becoming more automated automation capability of m
Slide 9: Strong competitive position with opportunities for growth
Strong competitive position with opportunities for growth Strong positions in multiple geographic and end-market niches £6b addressable market Emerging markets Established markets • Opportunity to gain market share • Protect and enhance strong in fragmented emerging markets market positions (#1 / #2
Slide 10: Out-performance strategy
Out-performance strategy Value creation model Competitive position Market growth >5% Outperformance Strategy Market segmentation Existing Tech New Strategic priorities markets value markets Market growth Capital allocation £6bn Emerge Future Estab Market share Portfolio growth Slide 10
Slide 11: Strategy to drive consistent outperformance
Existing Tech New Strategy to drive consistent outperformance markets value markets 3 areas of strategic focus to combat competition & grow our market share Strategy driving consistent outperformance Extending into Growing in existing markets Increasing technology value new markets Strategic Increas
Slide 12: Investment in innovation and productivity
Investment in innovation and productivity Commercial focus Innovation ` In-house manufacturing Capital allocation for through-cycle organic growth Engineering Sales & marketing Capital expenditure • Maintain: current products • Expand local teams to support existing • Property, plant & equipment to
Slide 13: Building our portfolio
Emerge Future Estab Building our portfolio An evolving portfolio of businesses providing profits, growth and exposure to new markets Future Emerging Established •R&D in close •Rapid market •#1 / #2 Portfolio adjacencies to share gain to •Profitable growth grow market grow profit % •Growing R&D to de
Slide 14: Financial track record
Financial track record Sustained organic growth and strong operating margins 40% 2010-23 revenue 800 CAGR = 11% p.a. 35% 700 Average operating Adjusted operating profit margin % 30% 600 profitability since 2010 = 21% 25% 500 Revenue (£m) 20% 400 15% 300 10% 200 5% 100 0% 0 02 03 04 05 06 07 08 09 10
Slide 15: Delivering shareholder value
Delivering shareholder value Long-term track record of dividend growth 200 Progressive dividend policy: 180 • Aims to increase dividend per share whilst maintaining a prudent level of dividend cover Adjusted earnings & dividend per share (pence) 160 • £53m in dividends paid in FY23 140 120 100 49% 3
Slide 16: Transforming tomorrow together
Transforming tomorrow together We make it possible to create the products, materials and therapies that will define our world in the decades to come and touch billions of lives Ambition High single digit through-cycle organic growth with >20% EBIT margin Value creation model Competitive position Mar
Slide 17: Results and strategy Q&A
Results and strategy Q&A Will Lee Allen Roberts Chief Executive Group Finance Director Slide 17
Slide 18: Markets & competitive position
Markets & competitive position Marc Saunders Director of Group Strategic Development
Slide 19: Markets & competitive position
Markets & competitive position Value creation model Competitive position Market growth >5% Outperformance Strategy Market sectors & share Existing Tech New Strategic priorities markets value markets Customers & rivals Capital allocation £6bn Emerge Future Estab Market growth Portfolio growth Slide 2
Slide 20: Market segmentation & business maturity
Market segmentation Emerging •Rapid market Established •#1 / #2 share gain to •Profitable & business maturity grow profit % •Growing Slide 3
Slide 21: Our Product Groups & product lines
Emerge Estab Our Product Groups & product lines Renishaw plc Analytical instruments Manufacturing technologies & medical devices Industrial Position Additive Spectroscopy Metrology Measurement Manufacturing Materials analysis instruments Measurement & control of precision Precision motion control of
Slide 22: Industrial Metrology
Industrial Metrology Established Emerging Measurement & control of precision component manufacturing processes Applications Market-leading sensors Automated process set-up, in-process control and multi- CMM sensors #1 Machine tool probes #1 Styli & fixturing #1 sensor post-process monitoring of prec
Slide 23: Position Measurement
Position Measurement Established Emerging Precision motion control of machinery, robotics & factory automation Applications Contactless encoders for precision motion control Precision motion control for semiconductor manufacturing Open optical encoders #2 Fibre laser encoders #1 Magnetic encoders #2
Slide 24: Additive Manufacturing
Additive Manufacturing Emerging Industrial metal 3D printing for volume production applications RenAM 500Q multi-laser AM Applications machine and QuantAM build Volume production of intricate metal components in a wide preparation software range of sectors, including medical, aerospace, and consumer
Slide 25: Spectroscopy and Neurological
Spectroscopy Established Neurological Emerging Analytical instruments Medical devices Applications Applications Raman spectroscopy for materials research in academia, life Neurosurgical and drug delivery systems to treat neuro- sciences, pharma, and high-tech manufacturing degenerative diseases, can
Slide 26: Market segmentation
Emerge Estab Market segmentation Opportunities for market share gains in substantial markets <£0.1b £0.2b £0.1b £0.1b £6b £0.1b £0.3b addressable market 1 £0.5b £3.6b £2.3b £0.9b emerging established £0.7b markets markets £2.2b £0.7b Metrology systems – shop-floor CMMs, gauging, software Metrology s
Slide 27: Market segmentation & market share
Market segmentation & market share Strong positions and opportunities for market share gains in growing markets Well positioned in markets growing at >5% p.a. Emerging Established Products • IM systems & software • IM sensors • AM machines • Open encoders Manufacturing machine Industrial • Enclosed
Slide 28: Customers & competitors
Customers & competitors Slide 11
Slide 29: Industries served & routes to market
Industries served & routes to market Customer needs Broad range of ultimate Complementary Machine builder Distributor End user end user industries routes to market Pull through demand Sales strategies: 100% Other, 5% Agriculture & construction, 2% Laser encoders Healthcare, 5% Position Measurement 9
Slide 30: Customer age profile
Customer age profile Reoccurring revenues from machine builders and key end-users End users 1 Route to market Machine builders 2 10% 25% 29% 10% 53% 53% 22% 80% 18% >10 years Machine builders >10 years 6-10 years Distributors 6-10 years <5 years End users <5 years • New customers targeted by • 80% o
Slide 31: Competitive landscape
Competitive landscape Range of rivals, opportunities in fragmented markets & growth territories, rising China threat Industrial Metrology Position Measurement Additive Manufacturing Spectroscopy Established rivals Established rivals Established rivals Established rivals • Hexagon • Heidenhain • EOS
Slide 32: Market growth
Market growth Slide 15
Slide 33: Trends in the manufacturing technology ecosystem
Trends in the manufacturing technology ecosystem Size and growth rates of our underlying markets Well-positioned in markets growing at >5% p.a. Key capex market indicators that underpin demand for Renishaw technologies Machine tool Semiconductor Industrial Metal AM Laboratory consumption 1 equipment
Slide 34: Trends in the manufacturing technology ecosystem
Trends in the manufacturing technology ecosystem Historic capex trends and medium-term forecasts Underlying market growth indicators Normalised underlying market growth Forecast Forecast • Machine tool demand has been roughly stable since 2010 – Renishaw MT probing growth achieved through rising fit
Slide 35: Attractive markets growing at >5% p.a.
Attractive markets growing at >5% p.a. Structural growth drivers underpinning sustained market growth Manufacturing machine Relentless drive to improve Industrial processes are Industrial MANUFACTURING TECHNOLOGY performance the precision, speed and becoming more automated automation capability of m
Slide 36: Structural market drivers – machine performance
Structural market drivers – machine performance Improve the precision, speed and capability of manufacturing equipment CASE STUDY: KOVERY linear motors KOVERY KOVERY President, linear motor Kim Houng-joong • Linear motors are widely used in electronics & semiconductor manufacturing & machine tools •
Slide 37: Structural market drivers – industrial automation
Structural market drivers – industrial automation Intelligent process control to automate machining & boost productivity CASE STUDY: automated gauging EQUATOR EQUATOR with in a robotic cell automated transfer system • High-volume component machining is increasingly automated due to labour shortages
Slide 38: Structural market drivers – electrification
Structural market drivers – electrification EV production creates new measurement challenges CASE STUDY: multi-sensing Contact REVO video sensing probe with • Complex products require comprehensive angle change inspection using multiple techniques mirror • REVO® 5-axis multi-sensor inspection system
Slide 39: Structural market drivers – decarbonisation
Structural market drivers – decarbonisation Designing innovative products with a low carbon footprint CASE STUDY: additive servo valves DOMIN Fluid Power’s direct • Hydraulics produce twice as much CO2e drive valves emissions as the aerospace industry – valves are typically only 23% efficient • DOMI
Slide 40: Markets & competitive position
Markets & competitive position Value creation model Competitive position Market growth >5% Outperformance Strategy Market sectors & share Existing Tech New Strategic priorities markets value markets Customers & rivals Capital allocation £6bn Emerge Future Estab Market growth Portfolio growth Slide 2
Slide 41: Q&A Marc Saunders
Q&A Marc Saunders Director of Group Strategic Development Slide 24
Slide 42: Growing in existing markets
Growing in existing markets Steve Oakes Director of Position Measurement Jamie Buckingham Director & General Manager Machine Tool Products Division
Slide 43: Strategy to drive consistent outperformance
Strategy to drive consistent outperformance 3 areas of strategic focus to combat competition & grow our market share Strategy driving consistent outperformance Extending into Growing in existing markets Increasing technology value new markets Strategic Increase Win new Build Expand Smart Diversify i
Slide 44: Sensors for manufacturing & measurement equipment
Established Sensors for manufacturing & measurement equipment Emerging Products for machine builders in a range of manufacturing sectors Component manufacturing Semicon manufacturing Robots & automation CMM sensors Machine tool probes Enclosed encoders Calibration Open optical encoders Fibre laser e
Slide 45: Goals
Goals Component manufacturing Semicon manufacturing Robots & automation Increase revenue per machine tool Grow machine builder customer base Grow sensor revenues by driving up Secure ‘design wins’ at new and existing fitment levels and increasing ‘share customers with superior products and service o
Slide 46: Machine tool growth opportunities
Established Machine tool growth opportunities Emerging Opportunities to increase revenue per machine tool CNC process automation Machine tool accuracy Machine tool probes Enclosed encoders Calibration • £0.4b market 1 • £0.4b market 2 • Leading position in machine • Leader in calibration, recent too
Slide 47: Rising demand for CNC process automation
Rising demand for CNC process automation Our track record of increasing ‘share of wallet’ Notes 1. Renishaw MT sensor revenue includes machine tool probes and enclosed encoders, excludes large projects during 2010s Slide 6 2. Underlying MT capex from: Machine tool apparent consumption from Oxford Ec
Slide 48: Building reoccurring machine tool revenues
Building reoccurring machine tool revenues Long-term customer relationships are critical 80% of machine tool builder revenue A significant proportion of our growth comes from working from long-standing customers closely with machine tool builders to increase probe fitment Sensor sales to machine too
Slide 49: Building reoccurring machine tool revenues
Building reoccurring machine tool revenues Augmenting established revenues with new products Machine tool precision Position encoders Calibration Sensor sales to machine tool builder B 250 Normalised revenue (FY20 = 100) 200 Other 150 metrology Calibration CNC process automation 100 Position Inspect
Slide 50: Machine tool sensor innovations
Machine tool sensor innovations Increase ‘share of wallet’ with metrology and position sensors Recent enhancements to our machine tool probes • QE series radio transmission multi-probe installations and extended probe battery life • RMP24-micro miniature wireless machine tool probe • NC4+ Blue high
Slide 51: Goals
Goals Component manufacturing Semicon manufacturing Robots & automation Increase revenue per machine tool Grow machine builder customer base Grow sensor revenues by driving up Secure ‘design wins’ at new and existing fitment levels and increasing ‘share customers with superior products and service o
Slide 52: Win new machine builder customers
Win new machine builder customers Enhance our strong position in encoders for motion control Track record of winning new customers to out- grow the underlying market • Semicon capital equipment 9% CAGR 1 since 2010, but with significant demand cyclicality • Driven by technology advances, consumer de
Slide 53: Semiconductor & electronics manufacturing
Semiconductor & electronics manufacturing Hotspots where Renishaw position encoders are widely deployed Etch Wafer Packaging PCB drill Deposition Lithography Test Ion implantation dicing Test Pick & place Front end Back end Electronics Wafer Wafer Wire and die Flat panel movement inspection bonding
Slide 54: Building reoccurring encoder revenues
Building reoccurring encoder revenues New machine builder customers contribute 150-200 bps to annual growth New customers are a critical 20 years of encoder sales growth1 at 15% CAGR, contributor to encoder revenue growth driven by reoccurring sales to a growing customer base Customer age profile of
Slide 55: Win new machine builder customers
Win new machine builder customers Enhance our strong position in encoders for motion control INNOVATORS in position measurement Magnetic encoders Optical encoders Laser encoders AkSiM-4 Big Rings for industrial & CENTRUM self-centring disc is easy to fit, RLE fibre laser encoder with picometer resol
Slide 56: Q&A Steve Oakes, Jamie Buckingham
Q&A Steve Oakes Director of Position Measurement Jamie Buckingham Director & General Manager Machine Tool Products Division Slide 15
Slide 57: Increasing technology value
Increasing technology value Derek Marshall Director of Industrial Metrology
Slide 58: Strategy to drive consistent outperformance
Strategy to drive consistent outperformance 3 areas of strategic focus to combat competition & grow our market share Strategy driving consistent outperformance Extending into Growing in existing markets Increasing technology value new markets Strategic Increase Win new Build Expand Smart Diversify i
Slide 59: Increasing technology value in Industrial Metrology
Increasing technology value in Industrial Metrology BUSINESS PROFILE Emerging business with high growth potential within the £2.2b metrology systems market STRATEGIC FOCUS Gaining market share in focused niches: • AGILITY® high-throughput CMMs for at-line and end-of-line inspection • EQUATOR flexibl
Slide 60: An introduction to coordinate measuring machines (CMMs)
An introduction to coordinate measuring machines (CMMs) A CMM is a precision measurement platform used to measure Bridge component dimensions. Manufacturers use CMMs to: Quill • Check goods coming in, before use Probe Table • Check the components they are making CMMs are increasingly being deployed
Slide 61: 50 years of CMM sensor innovation
50 years of CMM sensor innovation Contact Contact sensors sensors Motorised Motorised probe probe heads heads 5-axistechnologies 5-axis technologies Multi-sensor systems Multi-sensor PH20 touch- trigger REVO® multi-sensor Kinematic Video Ultrasonic Strain gauge + Fringe + Temperature Surface finish
Slide 62: REVO 5-axis multi-sensor metrology
REVO® 5-axis multi-sensor metrology Technology overview of 3-axis and 5-axis scanning • High measurement throughput • Flexible feature access • Scanning, optical & surface sensing Slide 6
Slide 63: REVO – an integrated system
REVO® – an integrated system Machine calibration equipment 5-axis measurement requires more system Position Encoders integration than a traditional CMM head, so to introduce REVO, Renishaw had to develop more REVO ® head CMM component parts: • CMM controller supporting ability to control 5 axes simu
Slide 64: Responding to end-user demand for a complete 5-axis solution
Responding to end-user demand for a complete 5-axis solution AGILITY® timeline Products available REVO® 5-axis head & contact sensors 2005 UCC CMM controller REVO® available through CMM manufacturers We continue to strongly support this market today MODUS software 2010 Additional REVO sensors Renish
Slide 65: AGILITY – optimised for REVO
AGILITY® – optimised for REVO® Performance highlights ✓ Shop-floor series designed for shop-floor environments ✓ Delivers rapid results at the point of manufacture ✓ Combines multiple operations, using REVO® Designed for REVO® o Lightning Drive linear motors o 5-axis measurement extends machine life
Slide 66: REVO applications – EV motors
REVO® applications – EV motors EV motor hairpin inspection • Scanning weld heights • Rapid identification of maximum height • 5-axis contact scanning provides rapid inspection on the same platform as other geometric checks Slide 10
Slide 67: REVO applications – EV stators
REVO® applications – EV stators EV stator inspection • Measure paper heights & condition • Check top and bottom on inside and outside of part • Angle Change Mirror (ACM) allows checking inside of part Slide 11
Slide 68: AGILITY applications – ICE powertrain
AGILITY applications – ICE powertrain In-line fully automated robot-loaded inspection of gearbox case • Multi-machine installation with automation, integration and application programming Robot loading (video) Inspection process (video) Slide 12
Slide 69: Increasing technology value in Industrial Metrology
Increasing technology value in Industrial Metrology BUSINESS PROFILE Emerging business with high growth potential within the £2.2b metrology systems market STRATEGIC FOCUS Gaining market share in focused niches: • AGILITY® high-throughput CMMs for at-line and end-of-line inspection • EQUATOR flexibl
Slide 70: Q&A Derek Marshall
Q&A Derek Marshall Director of Industrial Metrology Slide 14
Slide 71: Increasing technology value
Increasing technology value Louise Callanan Director of Additive Manufacturing Matt Parkes AM Strategic Development Manager
Slide 72: Strategy to drive consistent outperformance
Strategy to drive consistent outperformance 3 areas of strategic focus to combat competition & grow our market share Strategy driving consistent outperformance Extending into Growing in existing markets Increasing technology value new markets Strategic Increase Win new Build Expand Smart Diversify i
Slide 73: Additive manufacturing topics
Additive manufacturing topics Market opportunity Our strategy AM adoption Future platform • Market segmentation • Volume AM production • Innovative solutions to • Next step towards and size • Key accounts overcome growth even lower part costs • Growth drivers constraints • Lowest cost-per-part Slide
Slide 74: Laser Powder Bed Fusion
Laser Powder Bed Fusion Largest metal AM market AM is an £14bn industry, forecasted to grow at ~20% CAGR to 20301 Our focus is the £0.7bn metal powder-bed fusion segment, plus associated services – the largest metal AM technology market 1. Spreading 3. Moving for 2. Lasers firing powder next layer 1
Slide 75: AM structural market drivers
AM structural market drivers Limited influence Significant influence Major influence Megatrends that underpin sustained demand growth Well positioned in market growing at c. 20% p.a. Driver Influence AM benefits Manufacturing machine Industrial • Product detail & complexity performance automation •
Slide 76: Our mission
Our mission Accelerate the adoption of metal additive manufacturing as a viable high volume production process Commercial Product Key accounts Mid-size machine Volume applications Cost-per-part leadership Design owners Support for key applications Slide 6
Slide 77: Growth constraints
Growth constraints What factors are limiting wider AM adoption? Relatively high cost-per-part remains the biggest barrier to Cost-effectiveness widespread AM adoption. As our key accounts look to qualify and scale their products into Consistency volume manufacture, consistency is critical, both in t
Slide 78: Cost-effectiveness
“Completing more builds in a day without compromising on quality means we can service our customers more Cost-effectiveness efficiently and effectively, and creates capacity for growth.” MADIT, Spain RenAM 500 Ultra – a new level of AM productivity RenAM 500 series, including Flex (L) and Ultra (R)
Slide 79: Consistency
Consistency Optical System Verification – process foundation for AM • Ensuring process stability is vital for scale adoption of AM Power • Accessory for customers to verify the performance of all four lasers and optical control system to suit their process controls and part criticality. Focus • Trac
Slide 80: Connectivity
Connectivity Software to optimise AM process performance DESIGN SCHEDULE BUILD MONITOR INSPECT QuantAM: Maximising AM value requires leveraging Build file generation API and application. Range of integration partners the fully digital workflow from end-to-end. including end-users. Focus on explicit
Slide 81: Culture
Culture Overcoming cultural inertia is critical to unlock AM benefits Company-wide systems favour existing manufacturing techniques; typical stock sizes, Processes material types, software and finishing methods are suboptimal for AM. Product ranges have been designed for Portfolio conventional manuf
Slide 82: Current generation platform
Current generation platform Supporting customers on their journey to volume AM production LAB: PRE-PRODUCTION: FACTORY: Material prove out Part prove out Volume production Slide 12
Slide 83: Next generation platform
Next generation platform Step change in AM part costs The AM process remains the biggest contributor to total part costs, and the biggest barrier to widespread AM adoption. Productivity Leverages a multiplier effect for reducing cost per part: managed system cost, increased laser productivity and re
Slide 84: Q&A Louise Callanan, Matt Parkes
Q&A Louise Callanan Director of Additive Manufacturing Matt Parkes AM Strategic Development Manager Slide 14
Slide 85: Extending into new markets
Extending into new markets Blake Kendrick Industrial Automation Global Sales & Marketing Manager
Slide 86: Strategy to drive consistent outperformance
Strategy to drive consistent outperformance Three areas of strategic focus to combat competition & grow our market share Strategy driving consistent outperformance Extending into Growing in existing markets Increasing technology value new markets Strategic Increase Win new Build Expand Smart Diversi
Slide 87: Automation – a system-wide view
Automation – a system-wide view Process automation • Replacing manual activities with technology to set up, control and validate processes consistently • Introduce intelligence and decision making into unmanned factories Digitalisation • Automatic collection of data for real time processing, analysi
Slide 88: Why target Industrial Automation?
Why target Industrial Automation? An exciting, untapped, neighbouring market 1 A large, established, quickly growing market 2 Closely adjacent to our core business 3 Setup of industrial automation is very manual and time consuming, and difficult to maintain 4 Analogous to CNC machine tool market 20-
Slide 89: Industrial Automation: a trajectory of growth
Industrial Automation Primary 79% A trajectory of growth Japan 10% 10% ROW Primary 21% 21% 70% Japan 11% 13% 19% 30% Germany 4% 17% 15% China ROW 53% 5% 30% 11% Korea 14% 11% Germany USA 7% 53% Korea USA China 10% 2012 Increase +350% 2022 159,000 installed CAGR 13.3% 553,000 installed Slide 5
Slide 90: Typical automation setups
Typical automation setups Industrial cells and robots Automation Cell Industrial 6-axis robot Delta robot SCARA robot Gantry robot Robot controllers Part handling Rails and rotary tables Guarding and safety systems Slide 6
Slide 91: Major challenges
Major challenges Issues slowing industrial automation adoption Current challenges e Set rvic u e p S Setup Manual commissioning and verification reliant on user’s skill Recovery Excessive time wasted on getting a cell working again after it has failed I nnacc ery Drift No means of recording the chan
Slide 92: Renishaw RCS products
Renishaw RCS products Directly addressing the challenges of Industrial Automation Slide 8
Slide 93: RCS product process flow
RCS product process flow Practical solutions for major challenges in robotics Setup Diagnostics Process Improvement Recovery Service ! Robot setup Ongoing checks Probing datuming Crash recovery Robot mastering Part setup Performance verification RCS T-90, RCS L-90 and RCS P-series Verification check
Slide 94: Automating automation setup
Automating automation setup Eliminating the manual bottlenecks in commissioning and diagnostics Case: US-based Legacy pin-to-pin robot commissioning Renishaw automated approach Integrator Need: • Running Robot Diagnostics • Easily setting Tool Centre Point (TCP) “ Atprecise One Off Robotics, calibra
Slide 95: Improving robot performance
Improving robot performance Mastering robot axes and providing robot consistency Case: Major Aerospace Company A Need: • Mastering of robot axes • Consistency of worldwide cell deployment Outcome: • Global adoption of approach • 12 worldwide facilities purchasing full kits, with more in coming month
Slide 96: Improving robot performance
Improving robot performance Real world example Before After Region: China Customer: System Refurbisher Rationale: Verification of nearly-new robot by a Refurbisher before being supplied to an Form Error: 4.696 mm Form Error: 0.676 mm end-user
Slide 97: Automating cell recovery
Automating cell recovery Getting production up and running quickly with minimal intervention Case: Renishaw MSD Need: Cell recovery • Scaling existing automation cells • Recovering quickly from issues without extensive engineering support “ Internal use of RCS P-series probing has enabled rapid expa
Slide 98: Increasing robot potential
Increasing robot potential Additional accuracy opening new applications Case: Major Robot OEM Need: • Consistent method to set position and cutting angle of robot-based machining tools • Quick check of tool lengths • Locating different parts Outcome: • Showcase of Renishaw solution on the Fanuc Stan
Slide 99: The route to the market
The route to the market Primary Channel partner programme Supporting Robot OEMs Integrators End Users c. 10+ c. 10k+ c. 100k+ P P U U S L H L Slide 15
Slide 100: The route to the market
The route to the market Primary Channel partner programme Supporting Robot OEMs Integrators End Users c. 10+ c. 10k+ c. 100k+ P P U U S L H L Slide 16
Slide 101: Any questions….
Any questions…. Extending into new markets Spotlight on Industrial Automation Blake Kendrick IA Global Sales & Marketing Manager
Slide 102: Manufacturing strategy
Manufacturing strategy Gareth Hankins Group Manufacturing Director
Slide 103: Manufacturing – a key element of our outperformance strategy
Manufacturing – a key element of our outperformance strategy Value creation model Competitive position Market growth >5% Outperformance Strategy Market segmentation Existing Tech New Strategic priorities markets value markets Market growth £6bn Capital allocation Emerge Future Estab Market share Por
Slide 104: Manufacturing strategy topics
Manufacturing strategy topics Strategy Capabilities Investment Supply chain • Global competitiveness • Volume, complexity & • Capex & engineering • Risk management, • Showcase & testbed variety • Miskin expansion compliance & for our products • Footprint & key sustainability • Sustainability process
Slide 105: Manufacturing strategy
Manufacturing strategy Globally-competitive manufacturing: • Perform all important manufacturing operations in our factories to give us control of costs, quality & delivery • Use our own technologies to maximise precision & productivity • Continuous process development & progressive process automati
Slide 106: A vertically-integrated manufacturer
A vertically-integrated manufacturer In-house manufacturing supports high gross margins Cost of goods sold Material costs & gross margin Raw materials Electronic devices Base components 18% of sales 18% 64% of sales of sales Factory costs Part manufacturing Electronics assembly Product assembly Gros
Slide 107: Our manufacturing challenge
Our manufacturing challenge Broad product range across a spectrum of production volume and product complexity Styli Position encoders Metrology sensors Calibration Capital equipment Volume Very high High Medium Low Complexity Low Medium High Very high Variety 50,000 components 40,000 sub-assemblies
Slide 108: Our manufacturing footprint
Our manufacturing footprint Critical functions distributed across multiple manufacturing sites Gloucestershire South Wales Overseas Stonehouse Miskin Dublin, IRE • 9,000 sqm • 96,000 sqm, (52,000 • 9,000 sqm • Machining sqm newly • Product constructed) assembly • Process finishing • Machining • Neur
Slide 109: Component manufacturing
Mill-turning Component manufacturing centres • 200 CNC machines across 2 sites • 24x5 operation, plus weekend working • > 1.5 million parts per month Machining centres Sliding head lathes Metal 3D printed galvo block Slide 8
Slide 110: Showcasing our manufacturing technologies
Showcasing our manufacturing technologies Practicing what we preach • Our machining facilities are showcases for what can be achieved by intelligent application of metrology, position measurement and design for manufacture • Integrated process control and in-house automation enable 24-hour unattende
Slide 111: DFX is the foundation of world-class manufacturing
DFX is the foundation of world-class manufacturing A close link between design and manufacturing Design for manufacture / assembly etc (DFX) New product introduction (NPI) • Re-use proven, repeatable processes • Partnership between Design and Manufacturing • Builds deep process expertise, enabling •
Slide 112: Testbed for new products
Testbed for new products Our most demanding customer is ourselves Our factories are a rich source of insight into real- world manufacturing problems First to evaluate new manufacturing technologies Case study: Renishaw CENTRAL smart data platform deployed across multiple manufacturing sites • Powerf
Slide 113: Process finishing
Process finishing • Anodising plants on 2 sites • Aqua-blasting, auto-deburring, hardening & laser engraving Anodising Deburring Laser engraving Slide 12
Slide 114: Electronics assembly
Electronics assembly • 4 electronics production lines across 2 sites • New product introduction line for rapid prototypes • Automated flow lines & de-panelling • Wire bonding of ICs and strain gauges • Functional & in-circuit test Electronics assembly at Miskin PCB inspection at Woodchester ATOM min
Slide 115: Product assembly
Product assembly • Wide range of product assembly challenges • Cellular assembly of low- and medium-volume products, with extensive use of step-locked jigs • Increasing automation of high-volume operations & position encoders assembly using flow-line principles • Developing dual site assembly capabi
Slide 116: Investment in manufacturing
Investment in manufacturing Investment in FY23 and FY24 to boost capacity, sustainability & productivity Capex Engineering • Miskin expansion • 200 manufacturing engineers • Machine tools • New production processes • Electronic assembly equipment • Assembly process • Robotics & automation automation
Slide 117: Miskin expansion
Miskin expansion Room to grow over the next 5 years Additional capacity • 193 acres site acquired in 2011 Hall 1 • Halls 1 & 2: 44,000 sqm now full Hall 2 • Halls 3 & 4: 52,000 sqm additional space • Occupation of Hall 3 in progress – assembly of large products (Agility CMMs, AM machines, Hall 3 FOR
Slide 118: Reducing our carbon footprint
Reducing our carbon footprint An ongoing journey towards greater energy efficiency • 88% reduction in statutory emissions per £m revenue since 2010 • Steady improvement in energy efficiency (MWh / £m) through investment in facilities and equipment • Increasing use of renewable energy sources to redu
Slide 119: Supply chain
Supply chain Risk management, compliance & sustainability Risk Management Emerging & changing Geopolitical risk Sustainability: Scope 3 compliance impact & approach Likelihood, Investing in resources & Continual monitoring of Engagement and impact/materiality & processes to ensure supply chain vulne
Slide 120: Q&A Gareth Hankins
Q&A Gareth Hankins Group Manufacturing Director Slide 19
Slide 121: Growth investment & driving returns
Growth investment & driving returns Marc Saunders Director of Group Strategic Development
Slide 122: Organic growth investment & driving returns
Organic growth investment & driving returns Value creation model Competitive position Market growth >5% Outperformance Strategy Market segmentation Existing Tech New Strategic priorities markets value markets Market growth £6bn Capital allocation Emerge Future Estab Market share Portfolio growth Sli
Slide 123: Growth through continuous innovation
Created new market Growth through continuous innovation Entered existing market 50-year track record of growth and portfolio expansion built on innovative solutions Touch-trigger Motorised Open optical Interferometric 5-axis Flexible shop- Enclosed optical Industrial probe indexing head encoders las
Slide 124: Growth investment topics
Growth investment topics Commercial Innovation In-house manufacturing focus Capital allocation for through-cycle organic growth Growth investment Value creation & return on investment Engineering Maintain, upgrade & new products Sales & marketing growth Gross margin Expand sales teams & routes to ma
Slide 125: Engineering
Engineering Differentiated products enabling sustainable operating margins Engineering investment: Innovation supports long-term growth & margins: • Novel solutions to solve customer problems • Strengthen & expand our product ranges • Intellectual property to enable high gross margins • Efficient ma
Slide 126: Engineering organisation
Engineering organisation Inter-connected functions working together to develop & commercialise new products Business function Activities • New product development • Market intelligence • Manufacturing • India software team • New product introduction • New product launch engineering for new • Electro
Slide 127: Engineering investment returns
Engineering investment returns A range of engineering activities to protect, enhance and diversify our product ranges Central FY24 engineering spend Maintain What: Shared technical & IP services 9% What: Sustain existing products by supporting all R&D teams design & process change 22% Early careers
Slide 128: Portfolio development
Portfolio development Investing in established, emerging and future businesses to grow our portfolio Future Emerging Established •R&D in close •Rapid market •#1 / #2 Portfolio adjacencies to share gain to •Profitable growth grow market grow profit % •Growing FY24 10% 35% 55% engineering Activities N
Slide 129: New product returns profile
New product returns profile Contribution from product Patient investing for long-term organic growth sales Cash return on Technology adoption cycle: investment • Renishaw product development: 1 – 5 years • Customer testing & evaluation: 0.5 – 2 years • Design-in: 0.5 – 3 years Cumulative cash flow •
Slide 130: Sales & marketing
Sales & marketing Global network providing expert sales, service & support Sales & marketing investment: Commercial focus for profitable growth: • Grow local teams to support our strategic priorities Growing in Increasing Extending into and drive profitable growth existing markets technology value n
Slide 131: Growing our global network
Growing our global network Revenue in major geographic markets Responding to changing demand patterns 175 10-23 CAGR 150 China: 12% Sales & marketing investment: USA: 11% 125 • Revenue (£m) Rapid China growth in 2010s, including large consumer 100 electronics projects - 14 offices, 200 employees • E
Slide 132: Capital expenditure
Capital expenditure Building our sales, R&D and manufacturing capacity Capitalised R&D vs amortisation 20 Capital expenditure: Capex / Amortisation (£m) • Property, plant & equipment to grow our sales network, 15 R&D facilities, and manufacturing capacity 10 Capitalised • Capitalised R&D to develop
Slide 133: Working capital – inventories
Working capital – inventories Adjusting stocks in preparation for growth Working capital – FY24 H1 200 Working capital (£m) 150 Inventory as a competitive advantage: 100 • We build strong customer relationships by being a 50 reliable and responsive supplier 0 • Our investment in inventory means that
Slide 134: Working capital – debtors & creditors
Working capital – debtors & creditors Steady reduction in debtor & creditor days Working capital – FY24 H1 200 Working capital (£m) 150 Stable trading terms: 100 • Large projects in 2010s with consumer electronics 50 contract manufacturers with long payment terms pushed 0 up debtor days -50 • Steady
Slide 135: Growth investment topics
Growth investment topics Commercial Innovation In-house manufacturing focus Capital allocation for through-cycle organic growth Growth investment Value creation & return on investment Engineering Maintain, upgrade & new products Sales & marketing growth Gross margin Expand sales teams & routes to ma
Slide 136: Gross margin (excluding engineering costs)
Gross margin (excluding engineering costs) Factors driving recent margin variation FY24 H1 FY24 H1 gross margin is 3% lower than previous year gross margin Revenue factors: • List price rises in selected markets Discount Pricing Revenue (tendering) (list price rises) • Partially offset by increased
Slide 137: Future margin evolution
Future margin evolution Maintaining gross margins by driving productivity improvements Gross margin (excl. engineering costs) & EBIT margin Historic margin trends • Fluctuations in both GM% and EBIT% as we smooth 80% fixed cost development through the cycle 70% Targeting mid 60% gross margin 60% Hea
Slide 138: Return on capital
Return on capital Robust balance sheet and solid returns Invested capital Assessing returns: 1,200 • Focus on ROIC – independent of capital structure Average invested capital • ROIC typically > 15% 1,000 Other non- current assets • Strong balance sheet to weather economic challenges 800 • More activ
Slide 139: Summary
Summary Continuing to invest at >15% ROIC to support our through-cycle organic growth ambition FY23 growth investment Engineering Maintain, upgrade & new products Sales & marketing growth Expand sales teams & routes to market Capital expenditure Grow our infrastructure & intellectual property Workin
Slide 140: Q&A Marc Saunders, Allen Roberts
Q&A Marc Saunders Allen Roberts Director of Group Strategic Group Finance Director Development Slide 20