Slide 1: Oxford Instruments Half Year Results Presentation
The Business of Science® Oxford Instruments Half Year Results Presentation To 30th September 2017 Ian Barkshire – Chief Executive Gavin Hill – Group Finance Director © Oxford Instruments 2017 1
Slide 2: Agenda
Agenda The Business of Science® • Highlights • Horizon Update • Financial Review • Operational Review • Summary and Outlook © Oxford Instruments 2017 2
Slide 3: Highlights
Highlights The Business of Science® • Good progress in the early implementation of Horizon • New market focused sector structure aligning with our customers’ applications • Reported revenue in line with previous year • Increased profitability and operating margin reflecting currency benefits • Growt
Slide 4: Horizon Strategy
Horizon Strategy The Business of Science® • Sustainable revenue growth and margin improvement • Focus on segments where nanotechnology drives long term growth • Creating value for customers through solutions © Oxford Instruments 2017 4
Slide 5: Horizon Progress
Horizon Progress The Business of Science® • Significant management of portfolio • Industrial Analysis sale completed in July 2017 • Sale of Superconducting Wire completed in Nov 2016 • Building management, leadership and core capabilities to deliver Horizon • Transition from product-technique focus
Slide 6: Horizon Progress – New Sector Structure
Horizon Progress – New Sector Structure The Business of Science® • Aligning businesses around customer applications and end- markets • Greater insights into products, markets and growth drivers • Building and exploiting synergies across businesses Materials & Research & Service & Characterisation Di
Slide 7: End Market Segments Revenue
End Market Segments Revenue The Business of Science® Group1 Materials & Research & Characterisation Discovery 2% 6% 4% 20% 15% 31% 28% 2% 42% 3% 4% 7% 46% 8% 14% 6% 11% 30% 20% 1% Funding: Academic: 55% 52% 72% Commercial: 45% 48% 28% 1 includes Service & Healthcare © Oxford Instruments 2017 7
Slide 8: Financial Review
The Business of Science® Financial Review Gavin Hill © Oxford Instruments 2017 8
Slide 9: Income Statement
Income Statement The Business of Science® Constant Reported Currency £m 2017/18 2016/17 Change Change Revenue 132.1 132.4 (0.2%) (4.5%) Adjusted operating profit 18.8 16.4 14.6% (12.2%) Net finance costs (2.5) (3.3) Adjusted profit before tax 16.3 13.1 24.4% (9.2%) Amortisation of acquired intangibl
Slide 10: New Sectors
New Sectors The Business of Science® Half Year to Half Year to Year to 30 September 30 September 31 March Revenue: £m 2017 2016 2017 Materials & Characterisation 50.1 45.3 104.1 Research & Discovery 47.9 55.4 125.2 Service & Healthcare 34.1 31.7 70.9 Total 132.1 132.4 300.2 Half Year to Half Year to
Slide 11: Revenue by Sector
Revenue by Sector The Business of Science® Materials & Research & Service & £m Characterisation Discovery Healthcare Total* 2016/17 45.3 55.4 31.7 132.4 Underlying 3.0 (9.7) 0.8 (6.0) FX 1.8 2.3 1.6 5.7 2017/18 50.1 48.0 34.1 132.1 Growth Reported +10.6% (13.4%) +7.6% (0.2%) Constant currency +6.6%
Slide 12: Revenue by Territory
Revenue by Territory The Business of Science® Group Europe North America Asia ROW Revenue % 25.3% 34.6% 39.2% 0.9% 51.3 51.8 47.9 45.7 33.4 30.4 2.8 1.2 2017 2018 2017 2018 2017 2018 2017 2018 Reported growth +9.9% (4.6%) +1.0% (57.1%) Constant +4.6% (10.0%) (1.6%) (64.3%) currency growth Orders1: r
Slide 13: Order Book
Order Book The Business of Science® 160 Growth (reported): +1.3% 155 Growth (constant currency): +3.3% 150 145 141.8 140.0 140 £m 135 130 125 120 30 September 2016 30 September 2017 © Oxford Instruments 2017 13
Slide 14: Adjusted Operating Profit by Sector
Adjusted Operating Profit by Sector The Business of Science® Materials & Research & Service & £m Characterisation Discovery Healthcare Total 2016/17 4.2 7.0 5.2 16.4 Underlying 0.9 (4.7) 1.8 (2.0) FX 2.1 1.9 0.4 4.4 2017/18 7.2 4.2 7.4 18.8 EBIT Margin 2016/17 9.3% 12.6% 16.4% 12.4% 2017/18 14.4% 8.
Slide 15: Cash Flow
Cash Flow The Business of Science® - Working Capital Pensions: Outflow: £15.0m (2016: £14.9m) Deficit: £22.5m (2016: £25.1m) (20) Annual contribution: £7.1m Effective tax rate 22.1% (2016: 21.4%) Disposal (net cash flow): Industrial Analysis: £73.0m (40) Inv in Dividend Other/FX Cash/(Debt): £m Asso
Slide 16: Currency Exposure
Currency Exposure The Business of Science® 90 73.6 £m equivalent 30 22.5 20.9 19.0 14.9 13.2 7.2 1.9 (3.5) (18.8) (30) Sterling US Dollar Euro Japanese Yen Other Sales Adjusted operating profit © Oxford Instruments 2017 16
Slide 17: Summary
Summary The Business of Science® • Growth in orders and order book at reported and constant currency • Adjusted operating margin up 180 basis points to 14.2%, primarily through expected currency benefits • Continuing adjusted basic earnings per share up 23.9% • Strong balance sheet following receipt
Slide 18: Operational Review
The Business of Science® Operational Review Ian Barkshire © Oxford Instruments 2017 18
Slide 19: Materials & Characterisation: Plasma Technology
Plasma Technology Materials & Characterisation Asylum Research NanoAnalysis The Business of Science® Focuses on applied R&D and commercial customers, enabling the fabrication and characterisation of materials and devices down to the atomic scale (38% of Group revenue) Strong growth and improved prof
Slide 20: Materials & Characterisation: Asylum Research, NanoAnalysis
Plasma Technology Materials & Characterisation Asylum Research NanoAnalysis The Business of Science® Asylum Research – • Strong order growth driven by high demand for new products • Cypher VRS providing new insights in disease mechanisms and drug discovery NanoAnalysis – • Strong performance driven
Slide 21: Research & Discovery: Andor Technology
Andor Technology Research & Discovery NanoScience (including Magnetic Resonance) X-ray Technology ScientaOmicron The Business of Science® Advanced solutions that create unique environments and enable measurements down to the molecular and atomic level, used in fundamental and applied research (36% o
Slide 22: Research & Discovery: NanoScience, X-ray, ScientaOmicron
Andor Technology Research & Discovery NanoScience (including Magnetic Resonance) X-ray Technology ScientaOmicron The Business of Science® NanoScience & Magnetic Resonance – • Cryogenic and magnetic environments critical for exploitation of quantum technology • Performance depressed by high proportio
Slide 23: Service & Healthcare
OiService Service & Healthcare OI Healthcare The Business of Science® Provides customer service and support for our own products and the service, sale and rental of third party healthcare imaging systems (26% of Group revenue) Revenue and profit growth OiService – • Strong demand for services relati
Slide 24: Summary and Outlook
Summary and Outlook The Business of Science® • Good progress from Horizon implementation • Reporting structure enhances our focus on market growth drivers and evolving demands of our customers • Full year expectations remain unchanged • Confidence in long term growth prospects © Oxford Instruments 2
Slide 25: Questions?
The Business of Science® Questions? © Oxford Instruments 2017 25