Oxford Instruments plc
Half Year Report September 2009

Summary of Half Year Results

Orders
Revenue
Trading proﬁt
Adjusted proﬁt before tax (note 2)
Net borrowings
Shareholders’ equity

Adjusted basic earnings
Basic earnings
Proposed dividends
Net assets
Employees at half year end

2009
£m
133.9
92.8
4.1
2.8
(29.6)
50.3

2008
£m
97.5
92.8
3.5
2.6
(24.0)
63.6

2009
pence
per share
4.1
8.3
2.4
101.8

2008
pence
per share
3.4
2.6
2.4
128.8

1,324

1,564

Oxford Instruments plc

About Us
This year we celebrate 50 years of continuous
scientiﬁc innovation and excellence. Throughout
this period the expertise of our people has been
the driving force behind our growth and success.
The quest for new ideas, the creation of innovative
products and the provision of a quality service has
built a world class brand.
Oxford Instruments is a worldwide businesssupplying high technology tools and systems
for the analysis and manipulation of matter at
the smallest scale. Our diverse markets include
industrial analysis and quality control, research,education, space, energy and the environment.
As mankind faces the great challenges of the 21stCentury, Oxford Instruments is providing scientists
with the tools to tackle issues concerned withalternative energy, climate change, environmental
pollution and healthcare. For example, today
Oxford Instruments is providing equipment to thedevelopers of new photovoltaic devices who areseeking to produce more cost effective solutions
for turning sunlight into electricity. We are also
working with international agencies on the ITER
programme to develop a technology that seeks todemonstrate the production of large quantities ofcarbon free energy.
Oxford Instruments’ equipment is being used in
the development of High Brightness Light Emitting
Diodes which offer the possibility of lighting which
is so efﬁcient that, if adopted widely, would makesigniﬁcant cuts in worldwide CO2 emissions. Our
hand-held analysers are being used to detect heavy
metal pollution more effectively than has everbeen done before, meeting ever more stringent
environmental regulations. Our instruments arebeing used to model everything from the humangenome to pharmaceuticals being developed astherapies for the diseases which are afﬂicting theworld’s aging and growing population.
The future matters. Scientists can make the world
a better place and Oxford Instruments gives them
the tools, the expertise and the support to do so.

Oxford Instruments plc

1Chairman’s Statement
Introduction
The Group performed well during the ﬁrst half of the year in a difﬁcult market environment. Revenues
were unchanged at £92.8 million (2008: £92.8 million), aided by currency movements of £12.3 million
which offset lower trading volumes in our industrial markets. Trading proﬁt was up 17% to £4.1 million(2008: £3.5 million). This improved result reﬂects enhanced operational efﬁciency as well as favourable
currency movements.
Our markets for products used in scientiﬁc research continue to be robust. As previously reported, we
saw a marked decline in demand in our industrial markets in November 2008. This low level of demand
continued to the end of the ﬁrst quarter of the current ﬁnancial year but has subsequently shown somemodest improvement. Our continuing programme of new product introductions has meant that wehave gained market share in many areas, offsetting the reduced demand in our industrial markets. The
competitive advantage offered by our new products has enabled us to maintain pricing despite the
difﬁcult trading environment.
In January 2009, as previously reported, we instigated a wide ranging restructuring programme. In theﬁrst half of the current ﬁnancial year we have seen the beneﬁt of this restructuring which has yieldeda cost reduction of £5.3 million. This is in line with the plan to produce annualised savings of £11.0
million.
The business has continued to focus on cash generation in the period with operating cash ﬂow (see note
2) increasing by £7.9 million to £7.2 million.
Our order intake in the half year reached a record level of £133.9 million (2008: £97.5 million), driven bylarge orders on the ITER project. ITER is a multi-national collaborative research programme to develop
a prototype reactor that will produce large quantities of carbon free energy via thermonuclear fusion.
Excluding ITER, orders exceeded sales by £0.7 million.
This half year result shows another six months of progress against our stated target of doubling the sizeof the business and improving margins. Extensive and early management actions have protected margins,enabling us to report a growth in proﬁts during a period when many peers have reported substantial
declines. By increasing efﬁciency across the Group, we are well positioned to achieve our targets asmarkets continue to improve.
Financial Summary
In June 2009 we announced a change to our segmental reporting structure for the ﬁnancial year 2009/10
to bring it into line with revised operational arrangements within the Group. We now report in threeoperating sectors: Nanotechnology Tools, Industrial Products, and Service. We previously reported in two
operating sectors: Analytical and Superconductivity. These revised sectors align with the way in which we
now manage the business and go to market.
Revenues in the half year were unchanged from the same period last year at £92.8 million, supported bya strengthening of our major trading currencies which offset a constant currency decline of 13%. This
shortfall in sales occurred in our Industrial Products division which has been hardest hit by the global
recession.
Orders of £133.9 million exceeded revenues by £41.1 million helped signiﬁcantly by the £40.4 million oforders received for superconducting wire for the ITER programme.

2

Oxford Instruments plc

Chairman’s Statement continued

Gross margins rose from 41.2% to 42.1%, despite the relatively stronger performance of our lower margin
businesses. The rise was aided by £0.7 million of efﬁciencies resulting from the restructuring programme
initiated in the second half of the last ﬁnancial year and favourable exchange rate movements in the US
dollar, euro and yen.
Underlying operating expenses reduced by £4.6 million or 14% as a result of last year’s restructuring
programme. Translational foreign exchange effects added £3.1 million, resulting in a net decrease of £1.5
million in reported operating expenses.
Trading proﬁt increased by £0.6 million to £4.1 million. Interest payments on debt increased by £0.1
million to £0.6 million, and net interest on the pension fund increased by £0.3 million, resulting in a risein adjusted proﬁt before tax (note 2) of £0.2 million to £2.8 million.
Reported proﬁt before tax of £5.7 million (2008: £1.3 million) includes a £0.4 million charge relating to
restructuring announced in our preliminary results in June, amortisation of acquired intangibles of £2.2
million (2008: £2.0 million) and a credit of £5.5 million (2008: credit £1.3 million) in respect of mark tomarket adjustments resulting from our policy of not applying hedge accounting to the majority of our
ﬁnancial instruments.
In July 2007 the Group entered into a committed £50 million ﬁve year revolving credit facility with its
banks. At the period end net debt was £29.6 million. Net cash generated from operations excluding
restructuring payments of £2.9 million and pension deﬁcit reduction payments of £1.1 million was £9.4
million (2008: £2.5 million). Expenditure in the period on past acquisitions comprised earn-out paymentsof £2.3 million (2008: £3.4 million). Net capital expenditure was £1.3 million (2008: £1.5 million) andcapitalised development expenditure was £1.9 million (2008 £3.5 million).
As calculated under IAS19 the deﬁned beneﬁt pension deﬁcit has increased by £14.9 million to £29.3
million since 31 March 2009. Assets have grown by 18% to £147.5 million while liabilities have increasedby 27% to £176.8 million due to the recent reduction in corporate bond yields which are used to discountliabilities.
The Directors have recommended an interim dividend of 2.4 pence, unchanged from the previous year,
payable on 8 April 2010 to shareholders who are in the register on 5 March 2010.
Nanotechnology Tools
Our Nanotechnology Tools sector comprises the Group’s NanoAnalysis, Plasma Technology and NanoSciencebusinesses. It produced revenue of £43.5 million and proﬁt of £2.1 million. Had we reported in this way
for the ﬁrst half of the prior ﬁnancial year, the corresponding ﬁgures would have been £39.9 million
revenue and £2.2 million proﬁt which reﬂects a different product mix in the prior year.
Our NanoAnalysis business produces equipment that enables users of electron microscopes to gain precise
chemical and structural data on samples. Our new ﬂagship X-Max product, introduced last year, has now
become the accepted global market leader due to its unique large area silicon drift detector technology.
We have now introduced a version of X-Max speciﬁcally tailored for the high performance end of theelectron microscope market. This cements our position at the leading edge of microscopy. The successof X-Max means that the short term decline in sales of electron microscopes, which has already started toreverse, has had a limited effect on the revenues of the Group.

Oxford Instruments plc

3

Chairman’s Statement continued

Our Plasma Technology business provides tools for nanotechnology fabrication for a range of emerging
industries. It has again performed well in the half year, supported by strong demand from the researchsector and the High Brightness Light Emitting Diode (HBLED) market which has continued to growdespite the impact of the global recession. Overall enquiry levels remain strong with increased interest
from India, Brazil and other emerging markets.
Our NanoScience business produces high magnetic ﬁeld and low temperature equipment for research
and academic customers. Sales of the Triton™ dilution refrigerator have beneﬁted from high levelsof funding worldwide for quantum computing. Triton is now established as the system of choice forcooling devices in quantum research laboratories. Three quarters of the low temperature market has
now migrated to new ‘dry’ technology which avoids the use of increasingly scarce and expensive liquid
helium. The acquisition of VeriCold Technologies in August 2007 has established us as the world leader
in this market. A range of “dry magnets” has been launched for integration into Triton, providing ultra
strong magnetic ﬁelds and ultra low temperatures, giving our customers unprecedented environments
for use in their research activities.
Industrial Products
The Industrial Products sector contains our Superconducting Wire, Industrial Analysis and Magnetic
Resonance businesses. The revenue and loss in the half year were £30.9 million and £0.7 million
respectively (2008 restated: revenue £36.0 million and loss £1.1 million).
Our Superconducting Wire business is the world’s leading provider of wire for the MRI scanner market.
There was some softness in the MRI market during the ﬁrst quarter, though this is now recovering.
In August 2009 we signed a contract with the European Union arm of the ITER procurement programme
to provide €40.7 million worth of superconducting wire for the ITER programme over three years. It is
one of the largest orders ever won by Oxford Instruments. In September 2009 we signed a contract toprovide a further $7.7 million worth of superconducting wire with the US arm of ITER procurement.
The Industrial Analysis business which produces analytical equipment for industrial quality control andenvironmental monitoring has beneﬁted from extensive restructuring. The business is now sized for thecurrently reduced levels of demand. As we are now seeing some tentative signs of recovery in the market
for industrial products, we expect an improved second half for Industrial Analysis. In Asia we have seen
growth as a result of reinforcing our sales and distribution organisation and continued strong demand
from China. Demand in Europe remains weak. Our new Foundry Master Pro product, for use in the ironand steel industry which we launched last year, is selling ahead of expectations and our lab based X-ray
ﬂuorescence analysis equipment is also selling well.
The Magnetic Resonance (formerly Molecular Biotools) business produces bench top instruments forindustrial quality control applications and the analysis of rock-cores for the oil industry. The businesshas been restructured and the newly focused management team has delivered a performance ahead of
expectations.
ServiceOur Service businesses have been separately identiﬁed and grouped into their own sector, bringing
together the recurring revenue portion of our turnover. The high technical content of our productsmeans there is potential for revenue growth in spares, repairs, training and consultancy in our chosenmarket areas. This work can attract premium margins and provides a long term, stable workload.

4

Oxford Instruments plc

Chairman’s Statement continued

This sector consists of our MRI service businesses in North America and Asia, the Austin Scientiﬁc businessand those elements of Nanotechnology Tools and Industrial Products which are classiﬁed as service
business. In the half year, this sector had a turnover of £18.7 million and a proﬁt of £2.7 million (2008restated: £17.4 million and £2.4 million).
The MRI Service business in the USA continues to do well with a record number of magnets under service
contracts. New opportunities for growth are being pursued in private sector clinics and hospitals. The MRI
service team in Japan is a provider in Asia for Siemens magnets, and continues to perform well.
Austin Scientiﬁc continues to operate in a difﬁcult environment but has been strengthened by the
introduction of the E1000 which is used to control remotely the operation of cryopumps used in thesemiconductor industry.
Sustainability
Many of our products are used by customers to reduce environmental impact and comply withenvironmental legislation. This continues to be an important driver of our growth. This year we haveconsolidated our internal sustainability programmes and appointed a Board Director responsible
for sustainability issues. As a result, substantial improvements have already been made in the energy
consumption and carbon footprint of our business. Our target is to continue reducing our ratio of carbon
footprint to turnover each year. In recognition of our sustainability credentials, Oxford Instruments waslisted in the FTSE sustainability index as one of the UK’s greenest companies in July 2009.
PeopleOur people have responded to the requirement to re-shape our business in light of the global recession.
We have needed to control our costs carefully and have introduced a Group-wide pay freeze, and I thankour staff for their continued support during these difﬁcult times.
As previously announced, Jock Lennox, Non-Executive Director, took over Chairmanship of the Audit
Committee on 2 June 2009. Peter Morgan who was previously Chairman of the Audit Committee retired
from the Board at the AGM on 15 September 2009.
Outlook
Our research markets remain robust. Our Industrial markets are showing some tentative signs ofimprovement from the suppressed state that we have seen over the last twelve months.
Despite the continuing difﬁcult market environment, the current trading conditions, together with the
beneﬁts of our efﬁciency actions and our ongoing programme of new product introductions mean thatthe Board remains conﬁdent that the performance for the full year will be in line with its expectations.
Nigel Keen
Chairman
17 November 2009

Oxford Instruments plc

5Condensed Consolidated Statement of Income
half year ended 30 September 2009 - unaudited

Revenue
Cost of sales
Gross profit
Trading expenses excluding cost of sales
Trading profit

Notes
3

Reorganisation costs and impairment
Amortisation of acquired intangibles
Operating profit

4
3
6

Bank interest receivable
Expected return on pension scheme assets
Mark to market gain in respect of derivative
ﬁnancial instruments
Financial income
Interest payable on bank loans and overdrafts
Interest charge on pension scheme liabilities
Mark to market loss in respect of derivative
ﬁnancial instruments
Financial expenditure
Profit /(loss) before income tax
Income tax (expense)/credit
Profit/(loss) for the period attributable to equity
shareholders of the parent

7

Half year to
30 Sept
2009
£m
92.8
(53.7)
39.1(35.0)
4.1

Half year to
30 Sept
2008
£m
92.8
(54.6)
38.2(34.7)
3.5

Year to31 March
2009
£m
206.5
(115.8)90.7(77.6)
13.1

(0.4)
(2.2)
1.5

2.0
(2.0)
3.5

(6.8)
(4.3)
2.0

3.8

0.1
4.7

0.2
9.6

5.5
9.3

4.8

9.8

(0.6)
(4.5)

(0.6)
(5.1)

(1.5)
(10.3)

(5.1)

(1.3)
(7.0)

(9.3)
(21.1)

5.7

1.3

(9.3)

(1.6)

-

2.6

4.1

1.3

(6.7)

pence

pence

pence

Earnings per share
Basic earnings/(loss) per share
Diluted earnings/(loss) per share

8
8

8.3
8.2

2.6
2.6

(13.9)(13.9)

Dividends per share
Dividends paid
Dividends proposed

9
9

2.4
2.4

2.4
2.4

8.4
8.4

£m
5.7
0.4
2.2

£m
1.3
(2.0)
2.0

£m
(9.3)
6.8
4.3

(5.5)
2.8

1.3
2.6

9.3
11.1

pence

pence

pence

4.1
4.1

3.4
3.4

14.8
14.8

Adjusted profit before tax is calculated as follows
Proﬁt/(loss) before income tax
Reorganisation costs and impairment
Amortisation of acquired intangibles
Mark to market (gain)/loss in respect ofderivative ﬁnancial instruments
Adjusted profit before tax

Adjusted earnings per share
Basic earnings per share
Diluted earnings per share

6

8
8

Oxford Instruments plc

Condensed Consolidated Statement of Comprehensive Income
half year ended 30 September 2009 - unaudited

Foreign exchange translation differences
Actuarial (loss)/gain in respect of retirement beneﬁt
obligations
Net proﬁt/(loss) on effective portion of changes in fairvalue of cash ﬂow hedges, net of amounts recycled
Tax on items recognised directly in equity
Net comprehensive (expense)/income recognised
directly in equity
Proﬁt/(loss) for the period attributable to equity
shareholders of the parent
Total comprehensive (expense)/income for the period
attributable to equity shareholders of the parent

Oxford Instruments plc

Half year to
30 Sept
2009
£m
(4.1)

Half year to
30 Sept
2008
£m
0.7

Year to31 March
2009
£m
5.6

(15.6)

-

6.4

0.9
4.1

-

(0.6)
(1.6)

(14.7)

0.7

9.8

4.1

1.3

(6.7)

(10.6)

2.0

3.1

7

Condensed Consolidated Statement of Changes in Equity
half year ended 30 September 2009 - unaudited

Balance at 1 April 2009
Total comprehensive income/(expense) attributable to equity
shareholders of the parent

Other
reserves£m(0.3)

Foreignexchangetranslation
reserve£m
7.9

Retainedearnings
£m
30.5

Total
£m
61.9

-

-

0.6

(4.1)

(7.1)

(10.6)

Transactions recorded directly inequity:- Credit in respect of employee
service costs settled by award of
share options- Dividends paid
Total contributions by anddistributions to equity
shareholders
Balance at 30 September 2009

-

-

-

-

0.2
(1.2)

0.2
(1.2)

2.5

21.3

0.3

3.8

(1.0)
22.4

(1.0)
50.3

Balance at 1 October 2008

2.5

21.3

0.1

3.0

36.7

63.6

Total comprehensive (expense)/
income attributable to equity
shareholders of the parent

-

-

(0.4)

4.9

(3.4)

1.1

Transactions recorded directly inequity:- Credit in respect of employee
service costs settled by award of
share options- Dividends paid
Total contributions by anddistributions to equity
shareholders
Balance at 31 March 2009

-

-

-

-

0.1
(2.9)

0.1
(2.9)

2.5

21.3

(0.3)

7.9

(2.8)
30.5

(2.8)
61.9

Balance at 1 April 2008

2.5

21.2

0.1

2.3

36.4

62.5

Total comprehensive income
attributable to equity
shareholders of the parent

-

-

-

0.7

1.3

2.0

-

0.1
-

-

-

0.2
(1.2)

0.2
0.1
(1.2)

2.5

0.1
21.3

0.1

3.0

(1.0)
36.7

(0.9)
63.6

Transactions recorded directly inequity:- Credit in respect of employee
service costs settled by award of
share options- Proceeds from shares issued- Dividends paid
Total contributions by anddistributions to equity
shareholders
Balance at 30 September 2008

8

Share
capital
£m
2.5

Share
premium
account£m
21.3

Oxford Instruments plc

Condensed Consolidated Statement of Financial Position
half year ended 30 September 2009 - unaudited

As at
30 Sept
2009
£m

As at
30 Sept
2008
£m

As at
31 March
2009
£m

22.4
51.3
13.2
86.9

22.4
50.7
9.8
82.9

23.5
54.9
11.3
89.7

38.4
45.7
0.3
2.0
3.8
90.2

39.4
48.1
0.5
1.3
7.6
96.9

39.9
57.6
0.6
0.2
13.3
111.6

177.1

179.8

201.3

2.5
21.3
0.3
3.8
22.4
50.3

2.5
21.3
0.1
3.0
36.7
63.6

2.5
21.3
(0.3)
7.9
30.5
61.9

30.8
0.8
29.3
6.3
67.2

30.7
1.1
20.7
7.1
59.6

31.8
1.0
14.4
7.6
54.8

0.1
2.5
42.4
1.8
8.3
4.5
59.6

0.1
0.8
45.2
1.6
5.1
3.8
56.6

0.1
9.7
53.3
1.8
12.4
7.3
84.6

Total liabilities

126.8

116.2

139.4

Total liabilities and equity

177.1

179.8

201.3

AssetsNon-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Current income tax recoverable
Derivative ﬁnancial instruments
Cash and cash equivalents

Total assets
EquityCapital and reserves attributable to theCompany’s equity shareholders
Share capital
Share premium
Other reserves
Translation reserve
Retained earnings

Liabilities
Non-current liabilities
Bank loans
Other payables
Retirement beneﬁt obligations
Deferred tax liabilities

Current liabilities
Bank loans
Bank overdrafts
Trade and other payables
Current income tax payables
Derivative ﬁnancial instruments
Provisions

Oxford Instruments plc

9Condensed Consolidated Statement of Cash Flows
half year ended 30 September 2009 – unaudited

Proﬁt/(loss) for the period
Adjustments for:
Income tax expense/(credit)
Net ﬁnancial (income)/expense
Reorganisation costs and impairment
Amortisation of acquired intangibles
Depreciation of property, plant and equipment
Amortisation of capitalised development costs
Earnings before interest, tax, depreciation andamortisation
Cost of equity settled employee share schemes
Restructuring costs paid
Cash payments to the pension scheme more than the
charge to the income statement
Operating cash ﬂows before movements in working
capitalIncrease in inventories
Decrease in receivables
Decrease in payables and provisions
Cash generated by operations
Interest paid
Income taxes paid
Net cash from operating activities
Cash ﬂows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sale of available for sale equity securities
Proceeds from disposal of product line
Interest received
Acquisition of subsidiaries, net of cash acquired
Acquisition of property, plant and equipment
Capitalised development expenditure
Net cash used in investing activities
Cash ﬂows from ﬁnancing activities
Proceeds from issue of share capital
Repayment of borrowings
Increase in borrowings
Dividends paid
Net cash from ﬁnancing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Effect of exchange rate ﬂuctuations on cash and cash
equivalents held
Cash and cash equivalents at end of the period

Half year to
30 Sept
2009
£m
4.1

Half year to
30 Sept
2008
£m
1.3

Year to31 March
2009
£m
(6.7)

1.6
(4.2)
0.4
2.2
1.8
1.9

2.2
(2.0)
2.0
1.8
1.3

(2.6)
11.3
6.8
4.3
3.8
3.4

7.8
0.2
(2.9)

6.6
0.2
-

20.3
0.3
(2.5)

(1.1)

(1.1)

(1.9)

4.0
(0.6)
11.0
(7.8)
6.6
(0.6)
(0.6)
5.4

5.7
(3.5)
7.1
(5.9)
3.4
(0.6)
(1.4)
1.4

16.2
(0.2)
3.6
(2.0)
17.6
(1.5)
(1.7)
14.4

0.1
(2.3)
(1.4)
(1.9)
(5.5)

3.0
0.3
0.1
(3.4)
(1.5)
(3.5)
(5.0)

0.2
3.1
0.3
0.2
(4.4)
(3.6)
(6.4)
(10.6)

(1.0)
(1.2)
(2.2)
(2.3)
3.6

0.1
4.2
(1.2)
3.1
(0.5)
7.2

0.1
(2.6)
(4.1)
(6.6)
(2.8)
7.2

1.3

0.1
6.8

(0.8)
3.6

(2.3)

(0.5)

(2.8)

(2.3)
1.0
(1.3)
(28.3)(29.6)

0.1
(0.4)
(4.2)
(1.6)
(6.2)
(17.8)(24.0)

(0.8)
(3.6)
2.6
(9.5)
(10.5)(17.8)(28.3)

Reconciliation of changes in cash and cash equivalents to movement in net debt
Decrease in cash and cash equivalents
Effect of foreign exchange rate changes on cash and cash
equivalents
Cash outﬂow/(inﬂow) from decrease/(increase) in debt
Effect of foreign exchange rate changes on borrowings
Movement in net borrowings in the period
Net borrowing at start of the period
Net borrowing at the end of the period

10

Oxford Instruments plc

Notes on the Half Year Financial Statements
half year ended 30 September 2009 – unaudited

1

BASIS OF PRESENTATION OF ACCOUNTS

Oxford Instruments plc (the Company) is a company incorporated in England and Wales. The condensed
consolidated half year ﬁnancial statements consolidate those of the Company and its subsidiaries (together
referred to as the Group). They have been prepared and approved by the Directors in accordance with
International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting as adopted by the
EU. They do not include all of the information required for full annual ﬁnancial statements, and should
be read in conjunction with the consolidated ﬁnancial statements of the Group for the year ended 31
March 2009.
As required by the Disclosure and Transparency Rules of the Financial Services Authority, the half year
ﬁnancial information has been prepared applying the accounting policies and presentation that wereapplied in the preparation of the Group’s consolidated ﬁnancial statements for the year ended 31 March
2009, except as noted below.
During the period, the Group has applied IAS 1 ‘Presentation of Financial Statements (revised 2007)’
which has introduced a number of terminology changes (including titles for the condensed primarystatements) and has resulted in a number of changes in presentation and disclosures. The adoption of
IAS 1 means that all owner changes in equity are now presented within the Consolidated Statement of
Changes in Equity and all non-owner changes in equity are presented in the Consolidated Statement ofComprehensive Income. This presentation has been applied in these condensed consolidated half year
ﬁnancial statements as at the half year ended 30 September 2009. Comparative information has beenpresented to conform with this revised standard.
As of 1 April 2009, the Group has adopted IFRS 8 ‘Operating Segments’ and now discloses segment
information based on the internal reports regularly reviewed by the Group’s Board of Directors in order
to assess each segment’s performance and to allocate resources to them. The Group has three reportablesegments (Nanotechnology Tools, Industrial Products and Service) as described in Note 3, which are theGroup’s strategic business units.
The ﬁnancial information contained herein is unaudited and does not constitute statutory accounts as
deﬁned by Section 435 of the Companies Act 2006. Statutory accounts for the year to 31 March 2009,
which were prepared in accordance with International Financial Reporting Standards (‘IFRS’) as adopted
by the European Union (‘EU’) and upon which the auditors have given an unqualiﬁed and unmodiﬁedreport and which contained no statement under Section 237 (2) or (3) of the Companies Act 1985, havebeen delivered to the Registrar of Companies and were posted to shareholders on 31 July 2009.
The condensed consolidated half year ﬁnancial statements have been prepared on a going concern
basis, based on the Directors’ opinion, after making reasonable enquiries, that the Group has adequate
resources to continue in operational existence for the foreseeable future.
The principal exchange rates used to translate the Group’s overseas results were as follows:
Period end rates

US Dollar
Euro
Yen
Average translation rates
Half year to 30 September 2009
Quarter 1
Quarter 2
Year to 31 March 2009
Quarter 1
Quarter 2
Quarter 3
Quarter 4

Oxford Instruments plc

Half year to
30 Sept
2009
1.60
1.09
143

Half year to
30 Sept
2008
1.78
1.27
189

Year to31 March
2009
1.43
1.08
142

US Dollar

Euro

Yen

1.55
1.64

1.13
1.14

150
153

1.98
1.89
1.60
1.44

1.27
1.26
1.20
1.09

206
203
157
136

11

Notes on the Half Year Financial Statements (continued)
half year ended 30 September 2009 – unaudited

2

NON GAAP MEASURES(I) RECONCILIATION BETWEEN PROFIT AND ADJUSTED PROFIT

Proﬁt/(loss) before income tax
Reorganisation costs and impairment
Amortisation of acquired intangibles
Mark to market (gain)/loss in respect of derivative
ﬁnancial instruments
Adjusted proﬁt before income tax
Share of taxation
Adjusted proﬁt
Adjusted earnings per share
Basic
DilutedHalf year to
30 Sept
2009
£m
5.7
0.4
2.2

Half year to
30 Sept
2008
£m
1.3
(2.0)
2.0

Year to31 March
2009
£m
(9.3)
6.8
4.3

(5.5)
2.8
(0.8)
2.0

1.3
2.6
(0.9)
1.7

9.3
11.1
(3.9)
7.2

pence
4.1
4.1

pence
3.4
3.4

pence
14.8
14.8

Adjusted ﬁgures are stated before amortisation of acquired intangibles, reorganisation costs andimpairment and unrealised changes in the fair value of ﬁnancial instruments.

(II) OPERATING CASH FLOW

Earnings before interest tax, depreciation andamortisation
Working capital movements
Proceeds from sale of property, plant and equipment
Acquisition of property, plant and equipment
Capitalised development expenditure
Operating cash ﬂow

12Half year to
30 Sept2009£mHalf year to
30 Sept
2008£mYear to31 March
2009
£m

7.8
2.6
0.1
(1.4)
(1.9)
7.2

6.6
(2.3)
(1.5)
(3.5)
(0.7)

20.3
1.4
0.2
(3.6)
(6.4)
11.9

Oxford Instruments plc

Notes on the Half Year Financial Statements (continued)
half year ended 30 September 2009 – unaudited

3

SEGMENT INFORMATION

Information is presented in the condensed consolidated half year ﬁnancial statements in respect of theGroup’s three business segments. These segments are Nanotechnology Tools, Industrial Products andService. The Nanotechnology Tools segment consists of the Group’s highest technology assets and ischaracterised by a high degree of customisation and high unit price. The Industrial Products segment
contains businesses that carry out medium volume production of high technology products for industrial
customers. The Service segment contains the Group’s service businesses as well as service revenues fromthe service activities from other parts of the Group.
Segment results include items directly attributable to a segment as well as those which can be allocatedon a reasonable basis.
Half year to 30 September 2009

External revenue
Inter-segment revenue
Total segment revenue

Nanotechnology
Tools
£m
43.3
0.2
43.5

Industrial
Products
£m
30.8
0.1
30.9

Service
£m
18.7
18.7

Total
£m
92.8

2.1

(0.7)

2.7

4.1

Nanotechnology
Tools
£m
39.7
0.2
39.9

Industrial
Products
£m
35.8
0.2
36.0

Service
£m
17.3
0.1
17.4

Total
£m
92.8

2.2

(1.1)

2.4

3.5

Nanotechnology
Tools
£m
93.8
0.4
94.2

Industrial
Products
£m
75.1
0.4
75.5

Service
£m
37.6
0.3
37.9

Total
£m
206.5

8.6

(1.3)

5.8

13.1

Half year to
30 Sept
2009
£m
4.1
(0.4)
(2.2)
9.3
(5.1)
5.7

Half year to
30 Sept
2008
£m
3.5
2.0
(2.0)
4.8
(7.0)
1.3

Year to31 March
2009
£m
13.1
(6.8)
(4.3)
9.8
(21.1)(9.3)

Segment trading proﬁt/(loss)
Half year to 30 September 2008

External revenue
Inter-segment revenue
Total segment revenue
Segment trading proﬁt/(loss)
Year to 31 March 2009

External revenue
Inter-segment revenue
Total segment revenue
Segment trading proﬁt/(loss)

Reconciliation of reportable segment proﬁt

Proﬁt for reportable segments
Reorganisation costs and impairment
Amortisation of acquired intangibles
Financial income
Financial expenditure
Profit/(loss) before income tax

Oxford Instruments plc

13Notes on the Half Year Financial Statements (continued)
half year ended 30 September 2009 – unaudited

4

TRADING EXPENSES EXCLUDING COST OF GOODS SOLD

Selling and marketing costs
Administration and shared services
Research and development (note 5)
Foreign exchange loss

5

Half year to
30 Sept
2009
£m
17.4
9.0
5.8
2.8
35.0

Half year to
30 Sept
2008
£m
18.6
8.8
6.3
1.0
34.7

Year to31 March
2009
£m
36.4
19.6
13.3
8.3
77.6

Half year to
30 Sept2009£mHalf year to
30 Sept
2008£mYear to31 March
2009
£m

5.8
(1.9)
1.9

8.5
(3.5)
1.3

16.3
(6.4)
3.4

5.8

6.3

13.3

Half year to
30 Sept
2009
£m
(0.4)
(0.4)
(0.4)

Half year to
30 Sept
2008
£m
3.4
(0.9)
2.5
(0.5)
2.0

Year to31 March
2009
£m
3.4
(1.0)
(8.7)
(6.3)
(0.5)
(6.8)

RESEARCH AND DEVELOPMENT

Total research and development spend by the Group is as follows:

Total cash spent on research and development during
the period
Less: amount capitalised
Add: amortisation of amounts previously capitalised
Research and development charged to income
statement

6

REORGANISATION COSTS AND IMPAIRMENT

Proﬁt on disposal of Oxford Diffraction Ltd
Loss on disposal of MBE product line
Restructuring costs
Impairment of carrying value of ARKeX Ltd

During the period, the Group concluded the restructuring programme started in the previous year. This
resulted in additional redundancy and related costs at sites in Japan, France, Finland and the UK.
Restructuring costs in the year to 31 March 2009 comprise rationalisation of activities at sites in Oxfordshireand High Wycombe UK, Chicago US, Espoo Finland, Uedem and Ismaning Germany and Hobro Denmark.
Costs comprise redundancy and related charges of £5.5m, inventory impairments of £1.8m, capitalised
research and development impairments of £1.0m and ﬁxed asset impairments of £0.4m.
The Group disposed of its 22% holding in Oxford Diffraction Ltd on 4 April 2008 resulting in a proﬁt of£3.4m.
On 22 September 2008 the Group disposed of the Molecular Beam Epitaxy (MBE) product line to Riber SA
for a cash consideration of £0.3m with a resulting loss on disposal of £1.0m.
In the year to 31 March 2009 Group recognised an impairment charge of £0.5m against the cost of its
investment in and loans to ARKeX Ltd.

14

Oxford Instruments plc

Notes on the Half Year Financial Statements (continued)
half year ended 30 September 2009 – unaudited

7

TAXATION

The total effective tax rate on proﬁts for the half year is 28% (2008: nil charge). The Group estimatesthat its full year weighted average tax rate (excluding deferred taxation in respect of mark to market
gains/losses in respect of derivatives, amortisation of acquired intangibles and reorganisation costs) willbe 29% (2008: 35%).

8

EARNINGS PER SHAREa) Unadjusted
The earnings per share is as follows:

Basic
DilutedHalf year to
30 Sept
2009
pence
8.3
8.2

Half year to
30 Sept
2008
pence
2.6
2.6

Year to31 March2009
pence(13.9)(13.9)b) Adjusted
The earnings per share before other operating income, amortisation of acquired intangibles,
reorganisation costs and impairment, and mark to market gains or losses in respect of certain derivatives
is as follows:

Basic
DilutedHalf year to
30 Sept
2009
pence
4.1
4.1

Half year to
30 Sept
2008
pence
3.4
3.4

Year to31 March
2009
pence
14.8
14.8

A reconciliation of the proﬁt for the periods used to calculate earnings per share to the adjusted proﬁt
for the periods used to calculate the adjusted earnings per share shown above can be found in note 2.

Oxford Instruments plc

15

Notes on the Half Year Financial Statements (continued)
half year ended 30 September 2009 – unaudited

8

EARNINGS PER SHARE (CONTINUED)c) Basic
The calculation of basic earnings per share is based on the proﬁt or loss for the period after taxation anda weighted average number of ordinary shares outstanding during the period, excluding shares held by
the Employee Share Ownership Trust, as follows:

Weighted average number of shares outstanding
Less weighted average number of shares held byEmployee Share Ownership Trust
Weighted average number of shares used in
calculation of earnings per share

Half year to
30 Sept
2009
Sharesmillion
49.4

Half year to
30 Sept
2008
Sharesmillion
49.4

Year to31 March
2009
Sharesmillion
49.4

(0.6)

(0.6)

(0.6)

48.8

48.8

48.8

d) Diluted
The following table shows the effect of share options on the calculation of both adjusted and unadjusted
diluted basic earnings per share.

Number of ordinary shares per basic earnings per
share calculations
Effect of shares under option
Number of ordinary shares per diluted earnings per
share calculations

16

Half year to
30 Sept
2009
SharesmillionHalf year to
30 Sept
2008
SharesmillionYear to31 March
2009
Sharesmillion

48.8
0.2

48.8
0.4

48.8
0.2

49.0

49.2

49.0

Oxford Instruments plc

Notes on the Half Year Financial Statements (continued)
half year ended 30 September 2009 – unaudited

9

DIVIDENDS PER SHARE

The following dividends per share were paid by the Group:

Previous period interim dividend
Previous period ﬁnal dividend

Half year to
30 Sept
2009
pence
2.4
2.4

Half year to
30 Sept
2008
pence
2.4
2.4

Year to31 March
2009
pence
2.4
6.0
8.4

The following dividends per share were proposed by the Group in respect of each accounting period
presented:

Interim dividend
Final dividend

Half year to
30 Sept
2009
pence
2.4
2.4

Half year to
30 Sept
2008
pence
2.4
2.4

Year to31 March
2009
pence
2.4
6.0
8.4

The interim dividend for the year to 31 March 2010 of 2.4 pence was approved by the Board on 17
November 2009 and has not been included as a liability as at 30 September 2009. The interim dividend
will be paid on 8 April 2010 to shareholders on the register at the close of business on 5 March 2010.

Oxford Instruments plc

17Responsibility Statement and Principal Risks and Uncertainties
Responsibility Statement of the Directors in respect of the Half Year Financial Statements
We conﬁrm that to the best of our knowledge:UÊ Ì iÊ V`iÃi`Ê ÃiÌÊ vÊ w>V>Ê ÃÌ>ÌiiÌÃÊ >ÃÊ LiiÊ «Ài«>Ài`Ê Ê >VVÀ`>ViÊ ÜÌ Ê -Ê Î{Ê ÌiÀÊFinancial Reporting as adopted by the EU.
UÊ Ì iÊÌiÀÊ>>}iiÌÊÀi«ÀÌÊVÕ`iÃÊ>Êv>ÀÊÀiÛiÜÊvÊÌ iÊvÀ>ÌÊÀiµÕÀi`ÊLÞ\ÊÊ(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events
that have occurred during the ﬁrst six months of the ﬁnancial year and their impact on thecondensed set of ﬁnancial statements; and a description of the principal risks and uncertainties
for the remaining six months of the year; and(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that havetaken place in the ﬁrst six months of the current ﬁnancial year and that have materially affected
the ﬁnancial position or performance of the entity during that period; and any changes in therelated party transactions described in the last annual report that could do so.
Jonathan Flint Chief Executive
17 November 2009

Kevin Boyd Group Finance Director

Risks and Uncertainties
The Group has in place a risk management structure and internal controls which are designed to identify,
manage and mitigate risk.
In common with all businesses, Oxford Instruments faces a number of risks and uncertainties which could
have a material impact on the Group’s long term performance.
On page 18 of its 2009 Annual Report and Accounts (a copy of which is available at www.oxfordinstruments.com), the Company set out what the Directors regarded as being the principal risks anduncertainties facing the Group’s long term performance. Many of these risks are inherent to Oxford
Instruments as a global business and they remain valid as regards their potential impact during theremainder of the second half of the year.
The impact of the economic and end market environments in which the Group’s businesses operate areconsidered in the Chairman’s Statement and outlook sections of this Half Year Report, together with anindication if management is aware of any likely change in this situation.

18

Oxford Instruments plc

Independent Review Report by KPMG Audit Plc to Oxford Instruments plc

Introduction
We have been engaged by the Company to review the condensed set of ﬁnancial statements in thehalf year ﬁnancial report for the six months ended 30 September 2009 which comprises the Condensed
Consolidated Statement of Income, Condensed Consolidated Statement of Comprehensive Income,Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Statement of Financial
Position, Condensed Consolidation Statement of Cash Flows and the related explanatory notes. We haveread the other information contained in the half year ﬁnancial report and considered whether it contains
any apparent misstatements or material inconsistencies with the information in the condensed set ofﬁnancial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist theCompany in meeting the requirements of the Disclosure and Transparency Rules (“the DTR”) of the UK’s
Financial Services Authority (“the UK FSA”). Our review has been undertaken so that we might state to
the Company those matters we are required to state to it in this report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company for our review work, for this report, or for the conclusions we have reached.
Directors’ responsibilities
The half year ﬁnancial report is the responsibility of, and has been approved by, the Directors. The
Directors are responsible for preparing the half year ﬁnancial report in accordance with the DTR of the
UK FSA.
As disclosed in note 1, the annual ﬁnancial statements of the Group are prepared in accordance with
IFRSs as adopted by the EU. The condensed set of ﬁnancial statements included in this half year ﬁnancial
report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of ﬁnancial statementsin the half year ﬁnancial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and
Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the
Entity issued by the Auditing Practices Board for use in the UK. A review of interim ﬁnancial informationconsists of making enquiries, primarily of persons responsible for ﬁnancial and accounting matters, andapplying analytical and other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of all signiﬁcant matters that might
be identiﬁed in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed
set of ﬁnancial statements in the half year ﬁnancial report for the six months ended 30 September 2009is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of
the UK FSA.

S Haydn-Jonesfor and on behalf of KPMG Audit Plc
Chartered Accountants
2 Cornwall Street
Birmingham B3 2DL
17 November 2009

Oxford Instruments plc

19

Oxford Instruments Directory
Oxford Instruments plc

NanoAnalysis

Magnetic Resonance

Head Ofﬁce
Tubney Woods, Abingdon
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393442
email info.oiplc@oxinst.com

X-ray Microanalysis and Electron
Backscatter Diffraction
Halifax Road, High Wycombe,
Bucks HP12 3SE, UK
Tel +44 (0) 1494 442255
Fax +44 (0) 1494 524129
email nanoanalysis@oxinst.com

Benchtop NMR analysers, low
ﬁeld MRI and imaging tools
Tubney Woods, Abingdon,
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393333
email magres@oxinst.com

Lejonvägen 28
Box 1097
S-18122 Lidingö
SwedenTel +46 8 544 81550
Fax +46 8 544 81558
email nordiska@oxinst.com

8403 Cross Park Drive, Suite 3F
Austin, Texas 78754, USA
Tel +1 512 339 0640
Fax +1 512 339 0620
email magres@oxinst.com

Industrial Analysis
X-ray Fluorescence, X-ray
Technology, Optical Emission
Spectroscopy, Coating Thickness
Measurement
Halifax Road, High Wycombe,
Bucks HP12 3SE, UK
Tel +44 (0) 1494 442255
Fax +44 (0) 1494 524129
email industrial@oxinst.com
P.O. Box 85 (Nihtisillankuja 5)
FI-02631 Espoo, Finland
Tel: +358 9 329 411
Fax:+358 9 32941 300
Email industrial@oxinst.com
360 El Pueblo Road
Scotts Valley, CA, 95066, USA
Tel +1 831 439 9729
Fax +1 831 439 6051
email industrial@oxinst.com
Wellesweg 3147589 Uedem, Germany
Tel +49 (0) 2825 9383-0
Fax +49 (0) 2825 9383-100
email industrial@oxinst.com

Plasma Technology
Plasma etching, deposition
equipment and nanostructure
fabrication
North End, Yatton, Bristol
BS49 4AP, UK
Tel +44 (0) 1934 837000
Fax +44 (0) 1934 837001
email plasma@oxinst.com
12214 Plum Orchard Drive
Silver Spring
MD 20904, USA
Tel +1 301 572 7834
Fax +1 301 572 6435
email plasma@oxinst.com

NanoScience
Physical Science : low temperatureand high vacuum environments
Tubney Woods, Abingdon,
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393333
email nanoscience@oxinst.com

Oxford Superconducting
Technology
Superconducting wire
600 Milik Street, P O Box 429,
Carteret,
New Jersey 07008-0429, USA
Tel +1 732 541 1300
Fax +1 732 541 7769
email sales@ost.oxinst.com

OI MRI Service
MRI support services
600 Milik Street, PO Box 429,
Carteret,
New Jersey 07008-0429, USA
Tel +1 732 541 1300
Fax +1 732 541 7769
email sales@ost.oxinst.com

Austin Scientiﬁc
Cryogenic pumps andcompressors
4114 Todd Lane, Austin,
Texas 78744, USA
Tel +1 512 441 6893
Fax + 1 512 443 6665
email cryo-sales@oxinst.com

Bahnhofstrasse 21
85737 Ismaning
GermanyTel +49 89 9699 8560
Fax +49 89 9699 8569
email nanoscience@oxinst.com
20

Oxford Instruments plc

Regional Sales and Service Ofﬁces
China
Room 714, Tower 3
Henderson Centre,
No. 18 Jianguomennei Avenue,
Beijing 100005, China
Tel +86 (0)10 6518 8160/1/2
Fax +86 (0)10 6518 8155
email china.info@oxinst.com
Room 14-F,
No. 1 Plaza,No. 800 Nanjing East Road
Shanghai 200001, P. R. China
Tel +86 (0)21 6132 9688
Fax +86 (0)21 6360 8535
email china.info@oxinst.com
No.129, Lane 150
Pingbei Road, Xinzhuang
Industrial Area,
Minhang District, Shanghai,
201109, China
Tel +86 (0)21 6490 8580/8280
Fax: +86 (0)21 6490 4042
email china.info@oxinst.com
Room2112 Bai Hui Plaza,
193 Zhong Shan Wu Road,
Guangzhou 510030, China
Tel +86 (0)20 8364 9990
Fax +86 (0)20 8364 9996
email china.info@oxinst.com
Czech Republic
Velvarska 13, CZ-160 00 Praha
Czech Republic
Tel +420 233 343 264
Fax +420 224 311 724
email ofﬁce@oxinst.cz

Oxford Instruments plc

FranceBâtiment Ariane
Domaine Technologique de Saclay
4 rue René Razel
91892 Saclay
FranceTel : +33 1 69 85 25 25
Fax +33 1 69 41 46 80
Email infofrance@oxinst.com
Germany
Otto-von-Guericke-Ring 10,65205 Wiesbaden, Germany
Tel +49 6122 937 0
Fax +49 6122 937 100
email ger_info@oxinst.com
India
Ofﬁce no 17, Shreeji Arcade,
Almeida Road, Panchapakhadi,
Thane 400 602 India
Tel/Fax +91 22 25452424
email india.analytical@oxinst.com
Japan
Haseman Bldg., 2-11-6 Tomioka,
Koto-ku, Tokyo 135-0047, Japan
Tel +81 (0)3 5245 3251
Fax +81 (0)3 5245 4472
email info.jp@oxinst.com
Shin Osaka Plaza Bldg
3-3-1 Miyahara, Yodogawa-ku
Osaka 532-0033, Japan
Tel +81 (0)6 6350 0555
Fax +81 (0)6 6350 0880
Email info.jp@oxinst.com

RussiaDenisovskiy per. 26
105005 Moscow
Russian Federation
Tel +7 (095) 933 51 23
Fax +7 (095) 933 51 24
email info@oxford.de
Singapore
10 Ubi Crescent #04-81
Ubi Tech Park Lobby E
Singapore 408564
Tel +65 6337 6848
Fax +65 6337 6286
email
oi.admin@oxford-instruments.com.sg
Taiwan1F, No. 23, Jing-Shang 19th Street,
Hsinchu Taiwan
Tel +886 3 5788696
Fax +886 3 5789993
email
oi.admin@oxford-instruments.com.tw
USA/Canada/Latin America
300 Baker Avenue,
Suite 150,
Concord
MA 01742
USA
Tel +1 978 369 9933
Fax +1 978 369 8287
email info@ma.oxinst.com

21

Oxford Instruments plc
Tubney Woods, Abingdon
Oxon OX13 5QX, UK
Tel +44 (0) 1865 393200
Fax +44 (0) 1865 393442
email info.oiplc@oxinst.com

Cert no. SGS-COC-004037

As part of Oxford Instruments’ environmental policy this brochure has been printed on FSC paper