Oxford Instruments Plc · LSE:OXIG
Oxford Instruments — FY2017 Earnings Presentation
27 slides from Oxford Instruments's earnings presentation, June 2017
Slide 1: Preliminary Results Presentation to 31st March 2017
The Business of Science® Oxford Instruments Preliminary Results Presentation To 31st March 2017 Ian Barkshire – Chief Executive Gavin Hill – Group Finance Director © Oxford Instruments 2017 Page 1
Slide 2: Agenda
Agenda The Business of Science® • Highlights • Horizon Strategy • Financial Review • Operational Review • Summary and Outlook © Oxford Instruments 2017 Page 2
Slide 3: Highlights
Highlights The Business of Science® • Horizon strategy launched - a year of structural, operational and strategic transition • Significant actions to manage portfolio • Stable performance in line with expectations • Continued strength and improved profitability across NanoTechnology Tools • Strong g
Slide 4: Horizon Strategy: A Transformational Programme
The Business of Science® Horizon Strategy A Transformational Programme long-term growth Two Key Anchors: margin improvement © Oxford Instruments 2017 Page 4
Slide 5: Key Elements of Horizon
Key Elements of Horizon The Business of Science® • Focus on segments where nanotechnology drives long term growth • Transform into a focused, market-driven Group • Drive delivery of synergies across Group • Move up the value chain by providing our customers with enhanced solutions, information and s
Slide 6: A New Phase for Nanotechnology
A New Phase for Nanotechnology The Business of Science® Increased commercial exploitation of Nanotechnology © Oxford Instruments 2017 Page 6
Slide 7: Focusing on Growth Markets
Focusing on Growth Markets The Business of Science® Key areas identified where nanotechnology will provide sustainable growth potential End Market Growth Drivers Demand for improvements in disease detection and Healthcare understanding fundamental mechanisms Energy Demand for improved efficiencies a
Slide 8: Evolved Business Model
Evolved Business Model The Business of Science® Fundamental Commercial Applied R&D Research Innovation Markets approach Providing solutions Providing products to Providing tools to to those wishing to enable those wishing Customer support the explore new frontiers Product to exploit the base commerc
Slide 9: New Operating Model
New Operating Model The Business of Science® Application focused Insight and alignment to sales Market Intimacy customer roadmaps Innovation & Customer Customer Product Support Development Broader range of services and support Enhanced outcomes Application focus Leveraging synergies Operational Exce
Slide 10: Horizon Progress to Date
Horizon Progress to Date The Business of Science® • Next stage in the evolution and commercialisation of Oxford Instruments • Progress in establishing a more synergistic portfolio • Disposal of superconducting wire • Exchange of contracts for sale of Industrial Analysis • Magnetic Resonance and X-ra
Slide 11: Financial Review
The Business of Science® Financial Review Gavin Hill © Oxford Instruments 2017 Page 11
Slide 12: Income Statement
Income Statement The Business of Science® Constant Reported Currency £m 2016/17 2015/16 Change Change Revenue 348.5 319.7 +9.0% (3.7%) Adjusted operating profit 42.5 41.2 +3.2% (5.8%) Net finance costs (6.5) (7.6) Adjusted profit before tax 36.0 33.6 +7.1% (3.9%) Amortisation of acquired intangibles
Slide 13: Revenue by Sector
Revenue by Sector The Business of Science® NanoTechnology Industrial £m Tools Products Service Total* 2015/16 187.4 54.0 78.4 319.7 Underlying (2.3) (3.8) (5.7) (11.8) FX 23.6 6.5 10.5 40.6 2016/17 208.7 56.7 83.2 348.5 Growth Reported +11.4% +5.0% +6.1% +9.0% Constant currency (1.2%) (7.0%) (7.1%)
Slide 14: Revenue by Territory
Revenue by Territory The Business of Science® Europe North America Asia ROW Group Revenue % 24.4% 31.9% 42.1% 1.6% 146.6 119.9 110.4 111.2 81.6 85.0 7.8 5.7 2016 2017 2016 2017 2016 2017 2016 2017 Reported Growth +4.2% +0.7% +22.3% (26.9%) Constant (5.9%) (12.0%) + 7.2% (28.2%) Currency Growth Const
Slide 15: Order Book
Order Book The Business of Science® 160 Growth (reported): +9.3% 150 Growth (constant currency): +0.5% 144.5 140 132.2 £m 130 120 110 100 Year End 2016 Year End 2017 © Oxford Instruments 2017 Page 15
Slide 16: Adjusted Operating Profit by Sector
Adjusted Operating Profit by Sector The Business of Science® NanoTechnology Industrial £m Tools Products Service Total 2015/16 21.3 1.1 18.8 41.2 Underlying 4.4 (0.3) (6.5) (2.4) FX (0.1) 0.9 2.9 3.7 2016/17 25.6 1.7 15.2 42.5 EBIT Margin 2015/16 11.4% 2.0% 24.0% 12.9% 2016/17 12.3% 3.0% 18.3% 12.2%
Slide 17: Cash Flow
Cash Flow The Business of Science® (10) Working Capital Pensions: (30) Outflow: £4.4m Deficit: £25.1m (2015/16: £35.0m) Effective tax rate Annual contribution: £6.9m (50) 24.1% (2015/16: 22.9%) Acquisitions (deferred Cash/(Debt): £m consideration): MIR, Spectral, Asylum: £9.8m (70) Disposal: Working
Slide 18: Currency Exposure
Currency Exposure The Business of Science® £m equivalent 188.6 180 120 63.2 65.7 60 42.8 32.7 20.6 18.7 13.6 0.7 0 (60) (55.6) Sterling US Dollar Euro Japanese Yen Other Sales Adjusted operating profit © Oxford Instruments 2017 Page 18
Slide 19: Impairments
Impairments The Business of Science® • Total non-cash impairment of non-current assets of £45.8 million • OI Healthcare - £11.2 million • Lower level of sales of refurbished systems, high level of activity in comparative period, change in licensing policy • New strategy to focus on improving sustain
Slide 20: Summary and Sale of Industrial Analysis
Summary and Sale of Industrial Analysis The Business of Science® • Summary • Stable year with strong profit growth in NanoTechnology Tools and currency effects offsetting OI Healthcare decline • Good cash flow conversion and reduction in net debt • Sale of Industrial Analysis • Sale of Industrial An
Slide 21: Operational Review
The Business of Science® Operational Review Ian Barkshire © Oxford Instruments 2017 Page 21
Slide 22: NanoTechnology Tools
NanoAnalysis Plasma Technology NanoTechnology Tools Andor Technology Asylum Research NanoScience ScientaOmicron The Business of Science® Continued strength and improved profitability • Strong technical and financial performance from NanoAnalysis • Andor continue to perform well supported by new prod
Slide 23: NanoTechnology Tools (continued)
NanoAnalysis Plasma Technology NanoTechnology Tools Andor Technology Asylum Research NanoScience ScientaOmicron The Business of Science® Continued strength and improved profitability • Significant improvement at Plasma Technology • NanoScience performance driven by increased funding into quantum rel
Slide 24: Industrial Products
X-ray Technology Industrial Products Magnetic Resonance Industrial Analysis The Business of Science® Stable performance despite challenging end markets • Progress at X-ray Technology through diversification and increased demand in e.g. medical imaging applications • Magnetic Resonance: strong intere
Slide 25: Service
OiService Service OI Healthcare The Business of Science® • Strong revenues and profit growth from our own products within OiService • Overall performance impacted by market changes within US OI Healthcare • Necessary steps in train to improve sustainable profitability © Oxford Instruments 2017 Page
Slide 26: Summary and Outlook
Summary and Outlook The Business of Science® • In a year of transition, the Group delivered a stable performance, supported by currency tailwinds. • Whilst academic and R&D funding levels remain uncertain, we believe that progress with our strategic initiatives and favourable currency effects will d
Slide 27: Questions?
The Business of Science® Questions? © Oxford Instruments 2017 Page 27