To accelerate
the breakthroughsthat create abrighter futurefor our world.

Oxford Instruments plc
Annual Report 2024

B

Oxford Instruments plc
Annual Report 2024

Strategic Report

Overview

2024
highlights

To accelerate
the breakthroughsthat create abrighter futurefor our world

page

At a glance

02

page

Chief Executive
Officer’s
review

page

page

04

Reasons
to invest

10

page

Sustainability

Our technology and scientificexpertise enables our customers
to discover and bring to market
exciting new advances that drive
human progress.

Governancepage

Our purposeled approach

page

06

Our
strategy

16

Financereview

34

Financial Statements

page

22

Governance

58

page

83

Contents

We provide academic and commercialorganisations worldwide with marketleading scientific technology and expertise
across our key market segments: Materials
Analysis, Semiconductors and Healthcare &Life Science.

www.oxinst.com

Governance

02 2024 highlights

84

04 At a glance

86 Board of Directors

06 Our purpose-led approach

89 Board leadership and company purpose

151 Consolidated statement of comprehensive
income08 Chair’s statement

89 Corporate Governance statement

152 Consolidated statement of financial position

90 How we engage with our stakeholders

153 Consolidated statement of changes inequityStrategic Report10

Chief Executive Officer’s review

16

Reasons to invest

18

Our business model

20 Engaging with our stakeholders
22 Our strategy
24

Innovation is the driving force behind our
growth and success, supporting our core
purpose to accelerate the breakthroughsthat create a brighter future for our world.
We hold a unique position to anticipate global
drivers and connect academic researcherswith commercial applications engineers,
acting as a catalyst that powers realworld progress.

Overview

Key performance indicators

26 Operations review
27

Materials & Characterisation

30 Research & Discovery
33

Service & Healthcare

34

Sustainability

35

Sustainability: Environment

Financial Statements

Chair’s overview

150 Consolidated statement of income

96 Section 172(1) Statement
97

Division of responsibilities

101 Composition, succession and evaluation
106 Nomination Committee Report
110 Audit and Risk Committee Report
117 Sustainability Committee Report
120 Directors’ Remuneration Report
144 Shareholder information
145 Directors’ report
148 Directors’ responsibilities

51

Sustainability: Social

56

Sustainability: Governance

58

Finance review

155 Material accounting policies
161 Notes to the Consolidated Financial
Statements
192 Parent company statement of financial
position
193 Parent company statement of changes
in equity
194 Notes to the parent company financial
statements
204 Independent auditor’s report to themembers of Oxford Instruments plc
212 Historical financial summary

40 Sustainability: TCFD statement

Visit our investor centre on
our website to view the restof our reporting suite:
www.oxinst.com/investors

154 Consolidated statement of cash flows

70 Risk management
79

Viability statement

82 Non-financial information statement

Contents

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01

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

2024 HIGHLIGHTS

Robust performancesustainable growth
Robust performance and market-leading technology instructural growth markets provide an excellent platform
for revenue growth and margin expansion.
Adjusted financial highlights1
Revenue

Operational and sustainability highlights•

New CEO and leadership team develop
refreshed strategy; Group to be structured
in two new divisions to drive growth andmargin expansion•

Withdrawal of quantum commercial
activities in China, in response togeopolitical dynamics, resulted inin-year losses•

9.8% constant currency revenue
growth underpinned by strong
academic funding•

Action taken to focus resources on
non-sensitive areas in China and growrevenue in other regions•

Underlying book-to-bill positive at 1.03,
underlying orders at constant currency
down 2.5%5 against a strong comparator•

Carbon reduction goals accelerated
to achieve net zero in Scopes 1 and 2
by 2030•£75m state-of-the-art compound
semiconductor facility in Severn Beach
now operational•

AA rating from MSCI for Oxford
Instruments’ ESG performance•

Further investment for growth includes
expansion of Belfast microscopy andscientific camera facility•

78% employee engagement score(September 2023) reflects engaged
employees and supportive,
inclusive culture

Net cash3

470.4m£(2023: £444.7m)
% change
constant currency+5.8%

+9.8%

Cash conversion2

64%

83.8m

£

(2023: £100.2m)

Adjusted operating profit£80.3m(2023: £80.5m)
% change
constant currency(2023: 88%)

(0.2%)

+3.7%

Adjusted basic earnings per share

Adjusted operating profit margin

Revenue

109.0p17.1%£(2023: 18.1%)(2023: £444.7m)(3.3%)(100bps)(2023: 112.7p)

1.	Adjusted items exclude the amortisation and impairment of acquired intangible assets, acquisition items, other significant
non-recurring items, and the mark-to-market movement of financial derivatives. A full definition of adjusted numbers canbe found in the Finance Review, pages 58 to 69, and Note 2, pages 163 to 165.
2.	Cash conversion measures the percentage of adjusted cash from operations to adjusted operating profit, as set out in the
Finance Review.
3.	Net cash includes total borrowings, cash at bank and bank overdrafts but excludes IFRS 16 lease liabilities.
4.	Constant currency numbers are prepared on a month-by-month basis using the translational and transactional
exchange rates which prevailed in the previous year rather than the actual exchange rates which prevailed in the year.
Transactional exchange rates include the effect of our hedging programme.
5.	Adjusted for the impact of £23m orders from China removed from orderbook due to export licence controls.

www.oxinst.com

Statutory financial highlights
Operating profit margin

Basic earnings per share

470.4m

14.5%

87.7p

+5.8%

(180bps)(13.7%)

Operating profit

Profit before taxation

Dividend per sharefor the year (proposed)

£

68.3m

(2023: £72.4m)(5.7%)(2023: 16.3%)

71.3m

£

(2023: £73.5m)(3.0%)(2023: 101.6p)

20.8p(2023: 19.5p)

+6.7%

03

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Oxford Instruments plc
Annual Report 2024

Strategic Report

Overview

Governance

Financial Statements

AT A GLANCE

We are a leading provider of scientifictechnology and expertise to academic
and commercial partners worldwide

2,000

+

Employees

25

Base locations

23

Countries fromwhich we operate

What we do
We develop and manufacture market-leading imaging, analysis and fabrication tools that
accelerate new scientific breakthroughs. Our technology and market insight place us in aunique position to anticipate global drivers and connect academic researchers with commercial
applications engineers, acting as a catalyst that powers real world progress.

Materials & Characterisation
Materials imaging and analysis solutions andadvanced etch and deposition systems forcompound semiconductor devices
For more information / Pages 27 to 29

Total revenue

Research & Discovery
Scientific cameras, microscopy,
cryogenic and superconducting magnet
technology and X-ray tubes

470.4m£Where we operate

Who we work withWe sell products and services all over
the world, employing more than 2,000
people across 25 bases in 23 countries.

We work with thousands of academic
and commercial organisations in three
key structural growth markets.

4

3

For more information / Pages 30 to 32

Service & Healthcare
Customer service and support forour own products and for third-party
MRI scanners in JapanFor more information / Page 33

From 2024 the Group will report against
a new divisional structure:

Revenue split by sector
Materials & Characterisation

£252.2m

Research & Discovery

£142.1m

Service & Healthcare£76.1mprimary regions

primary end markets

From 2024/25, we will report in a newdivisional structure.
For further details / Pages 10 to 15

Imaging & Analysis
Microscopy, cameras, analytical
instruments and software

Advanced Technologies
Compound semiconductor fabrication equipment,
cryogenic and superconducting magnet technology
and X-ray tubes

www.oxinst.com

Revenue by region

Revenue by market

Europe£116.1m

Materials Analysis£201.0m

North America

Semiconductor £126.9m

China£127.4m

Healthcare & Life Science£90.6mJapan and ESEA £94.1mOther markets, including quantum£51.9mRest of world

£9.9m£122.9m05

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

OUR PURPOSE-LED APPROACH

To accelerate thebreakthroughs that create a…

…brighter future for our world

Our technology and scientific expertise enables our customers to discoverand bring to market exciting new advances that drive human progress.
Powering our ambition

Delivering forour key end markets

Be the scientific instrumentation partner in every significant
lab and production facility across the world
Driven by our strategy

Creating value
for our stakeholders
Market drivers

Materials
Analysis

Our strategic priorities / Pages 22 to 23

Supporting advanced
material development
and sustainability progress,
with improved performancefrom finite resources

Customers
Customer intimacy helps us to identify
additional opportunities to deliver increased
value to our customers

Shareholders
Delivering strong growth and shareholder
returns promotes the long-term sustainablesuccess of the company

Local communities

Deliver strong growththrough ‘customer first’
ways of working

Deliver a step change inoperational performance(delivery, quality, efficiency)

Simplify the organisation,
increasing collaboration
and accountability

Semiconductors

Supporting growth inbandwidth, connectivity
and faster devices; power
efficiency and the greeningof the economy

We strive to support the development ofstronger communities and have a positiveenvironmental and social impact

Employees
By working together as one team, we
help and trust each other to succeed

Suppliers

Healthcare& Life Science
Continue to invest in newtechnology and products,
protecting and enhancing
our core strengths

Embed our values
and ways of working
so that they are
lived every day

Supporting developmentof improved treatments &vaccines at lower cost,and personalised
medicine & therapies

Our key end markets / Pages 26 to 33

Our supply chain plays a vital role insupporting sustainable growth andefficiency across the businessSociety
Our technology and scientific expertise
enables our customers to discover and bringto market exciting new advances that drive
human progress

Stakeholder engagement / Pages 90 to 96

Underpinned by our values​:
Inclusive

Innovative

TrustedPurposeful

By seeking out different perspectives anddiverse collaboration, we deliver better
solutions and lasting successThrough our knowledge, expertise and focusedcuriosity, we create new possibilities for ourselves
and for our customers

We build successful, long-term relationships
based on accountability, integrity and respect

We care, and our passion and commitment
drive positive change in the world

www.oxinst.com

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

CHAIR’S STATEMENT

A strong platform
for growthThis has been another good year for Oxford Instruments,
with good financial results and progress made on
many fronts. It has also been a year of transition, as
we develop our new strategy and look to the future.

“The strategic work we havecarried out this year has
reinforced the positive impact
we have on the world around us.
We are committed to protecting
and enhancing our core strengths
as we take the steps needed
to realise the full potential of
Oxford Instruments.”
NEIL CARSON
Chair

I am pleased to report on a busy andpurposeful year at Oxford Instruments:
we delivered record revenue,
welcomed our new CEO Richard Tyson,completed the significant investment
in our new compound semiconductor
equipment facility in the UK, gained
further new colleagues with theacquisition of First Light Imaging,and developed a refreshed purpose
and strategy for the Group, all while
successfully navigating geopoliticaland economic challenges.
We were delighted that Richard
accepted the opportunity to lead us
through the next stage in our growth,joining us in October 2023. Richard
comes to Oxford Instruments withan excellent track record of success,having driven transformational change
during his nine-year leadership of TT
Electronics plc. He is an astute andstrategic leader with a remarkableability to get quickly to the heart of achallenge and find the solution. He is
also people-focused, and I was pleased
to see that he made it a firm priority tomeet his new colleagues face to face, at
all our sites, in a matter of weeks, to gettheir insights into Oxford Instruments.
Over the few months since he joined,
Richard has led the developmentof a refreshed strategy for Oxford
Instruments, working with the Board,
with leadership teams and withcolleagues around the Group to identify
the steps we need to take to realise thepotential of the Group, building on ourstrengths. As he sets out on pages 10 to
15, while we have many strengths, there
are also opportunities to do some things
differently and drive improved outcomes
which will benefit all our stakeholders.
Our new structure (see page 12) will
drive growth by facilitating the deliveryof action plans that are targeted to theprecise and differing needs of eachdivision, while Group-wide we will
focus on simplifying our organisationand processes, driving customer-firstways of working and delivering a stepchange in operational performance.

A new purpose
One of the central elements of thestrategy is our commitment to protect
and enhance our core strengths.
Our new purpose statement neatly
encapsulates both the achievementsof which we are so proud and theambition we are all striving towards:
To accelerate the breakthroughs thatcreate a brighter future for our world.

www.oxinst.com

Our technology and scientific expertise
enable our customers to discover andbring to market exciting new advancesthat drive human progress – and weare determined to continue to do sofor the long term.

Sustainability
The strategic work we have carriedout has reinforced the positive impact
we have on the world around us
through our products and services.
We want that positive impact toextend throughout our operations,from the inclusive culture we seek tobuild to the reduction of our carbon
footprint. I am particularly pleased
that this year we have committed toreach net zero in our own operations
by 2030 (see page 35).

People at the heartof our successOn behalf of the whole Board, I would
like to thank all our employees. The
company’s success is their success,generated as the result of their hard
work, talent and commitment. We areenormously grateful this year, as weare each year, for the contribution of
every individual and every team.

A fond farewell to
Ian Barkshire
I would also like to extend sincere
thanks and best wishes on behalfof the whole Board to Ian Barkshire,
who retired as Chief Executive in
October 2023. Oxford Instruments
made significant progress during
Ian’s tenure: it was he who drove
the development and delivery of the
Horizon strategy, building the strong
foundations from which we move
forward today. Ian’s vision to position
the company in structural growthmarkets, founded on deep market
insights, underpinned a period ofremarkable growth. He can be very
proud of what he and his colleagues
achieved together.

Further Board changes
in the year
We were delighted to welcome
Hannah Nichols to the Board as a
Non-Executive Director in January.
Hannah brings strong financial
expertise, extensive international
experience and a track record ofdriving transformational change,
both within and beyond thefinance function.

I am very pleased to confirm thatHannah will take up the role of Chairof the Audit and Risk Committee
following the Annual General Meeting(AGM) on 25 July 2024, at which point
Mary Waldner will step down fromthe role in preparation for leaving theBoard in February 2025, following hernine years of sterling service.
We bade farewell to Sir Richard Friend
in July 2023. Richard had served foralmost nine years as Non-Executive
Director, and his deep insights, derived
from many years’ experience at thehighest levels of academia, and in
business, will be much missed in
Board discussions.
Finally, Reshma Ramachandran
will stand down as a Non-Executive
Director with effect from the conclusionof the AGM, due to her appointment
in a new executive role externally,
which will restrict the time she is able
to commit to her role with Oxford
Instruments. The Board sincerely
thanks Reshma for the valuable
contributions she has made during
her time as a Director.

Dividend
In line with our progressive dividend
policy and strong trading performancein the year, the Board is proposing a
final dividend of 15.9p per share (2023:
14.9p), which is subject to approval at
the AGM on 25 July 2024.

Looking ahead
I am full of optimism for the future of
Oxford Instruments. Visiting our stateof-the-art new facility at Severn Beachwith my Board colleagues last month,and hearing from the team there how
warmly they welcome the Group’s new
strategic direction, marked a particular
milestone. I was struck by theatmosphere full of momentum, paceand energy, which I sense is replicatedright around the business. I am hugely
looking forward to seeing our plans
come to fruition over the coming year,
and the years that follow.

NEIL CARSON
Chair
10 June 2024

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

CHIEF EXECUTIVE OFFICER’S REVIEW

Robust financial
performance and a refreshedstrategy through a new lensI am pleased to report a robust set of resultsfor Oxford Instruments, and to set out a new
strategy for the Group to enable us to fulfil
our strong potential.

I am pleased to report a robust setof results for Oxford Instruments. We
have delivered 9.8% revenue growthat constant currency, driven by a 7%
increase in semiconductor revenue,
reflecting our greater exposure to thecompound semiconductor market,
and double-digit growth in Materials
Analysis and Healthcare & Life
Science markets, underpinned bystrong research funding.

Orders459.1m£(2023: £511.6m)

Revenue

470.4m£(2023: £444.7m)

Adjusted operating profit

80.3m

£

(2023: £80.5m)“Our exceptional technology,
strong talent base, well-distributed
regional infrastructure and choiceof markets give us a strong
platform from which to grow.
There are significant opportunities
ahead – but to address them infull we need to structure Oxford
Instruments differently.”

Operating margin

17.1%(2023: 18.1%)

Adjusted operating profit of £80.3m
was in line with expectations, up 3.7%
on a constant currency basis. Adjusted
operating margin was down 100bps
at 17.1% (2023: 18.1%), in line withguidance, primarily reflecting losses
incurred in our quantum business as aresult of ceasing certain commercial
activities for these products in China
and continued operational investment.
The successful transition of ourcompound semiconductor business toa new purpose-built facility has beena key operational highlight of the year,
delivering streamlined production andincreased capacity, and presenting
significant opportunity to scale. A
further focus has been the action we
have taken in response to the shifting
geopolitical landscape, pivoting to lesssensitive applications in China andgrowing revenue in other regions. Our
robust revenue growth in Europe andthe rest of Asia bears out the successof this programme, which will continue
into FY24/25.
Underlying order intake (excluding thepivot from China) remained robust,
supported by a good performance inEurope and the rest of Asia. Underlying
book to bill is positive, despite thestrong revenue growth, and theorderbook provides good visibility into
the year ahead. Our pipeline is strong
across all geographies and markets.

A strong platform for growth
Since joining Oxford Instruments in
October, I have carried out a thoroughreview of our business model andmarkets, working collaboratively with
our leadership team and gathering
input from across the business.
Our work confirms that academic
research is the bedrock of Oxford
Instruments’ success. Representing
more than a third of our revenue, it
is resilient across cycles and grows
steadily at 3–6% a year.

Our market-leading technology andexpertise, developed over 60 years,
spans all areas of fundamental
research and provides unrivalled reach
into academic institutions worldwide.
In recent years, by developing andleveraging our market insight, wehave strengthened our position incommercial markets applied R&D,
where the technology is used todevelop new products for industrial
applications (a market four times
larger than the academic researchmarket), which now represents c.
45% of our revenue. We have also
started to make early inroads into theeven larger commercial production
market, representing c.20% of ourrevenue today. The volume potential
in commercial applied R&D andproduction markets is significantly
bigger, offering high single-digit growthunderpinned by structural growth
drivers requiring new technologies
to support decarbonisation andproductivity globally.
Our deep dive review highlights that
90% of our revenue is generated inthree primary markets – Materials
Analysis, Semiconductors and
Healthcare & Life Science. All three
have clear sustainability drivers withhigh single-digit structural growthpotential. Quantum technology, amuch smaller contributor to our current
revenue, also represents a growth
opportunity, though its trajectory isless linear.

Our strategy for the future
Our exceptional technology, strong
talent base, well-distributed regional
infrastructure and choice of markets
give us a strong platform fromwhich to grow. There are significant
opportunities ahead – but to capturethem in full and achieve industryleading margins, we need to structure
Oxford Instruments differently.

RICHARD TYSON
Chief Executive Officer
Full year to
31 March 2024

Reported growthvs full year to
31 March 2023

Constant currency
growth vs full year to
31 March 2023

Orders£459.1m(10.3%)(2.5%1)

Revenue£470.4m

+5.8%

+9.8%

Adjusted operating profit£80.3m

(0.2%)+3.7%

Adjusted operating margin17.1%(100bps)(100bps)Group

1.	Underlying order growth is adjusted for the impact of prior year China orders removed from current year order intake due to export
licence restrictions.

www.oxinst.com

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

CHIEF EXECUTIVE OFFICER’S REVIEW continued
As we set out below, the different areasof our business fall naturally into two
distinct groupings, reflecting different
drivers and business models. This new
structure will also facilitate targeted
actions to unlock the potential in each.

Our future divisional structure
We are restructuring the business
and will be creating two newdivisions: Imaging & Analysis andAdvanced Technologies.
How we are structured today:

Materials & Characterisation
Materials imaging and analysis solutions
and advanced tech and deposition systems
for compound semiconductor devices

Research & Discovery
Scientific cameras, microscopy,
cryogenic and superconducting magnet
technology and X-ray tubes

Service & Healthcare
Customer service and support forour own products and for third-party
MRI scanners in Japan

From 2024 the Group will report against
a new divisional structure:

Imaging & Analysis
Microscopy, cameras, analytical
instruments and software

Advanced Technologies
Compound semiconductor fabricationequipment, cryogenic and superconducting
magnet technology and X-ray tubes

Imaging & Analysis will comprise our
microscopy and cameras businessAndor and our materials analysis
businesses Asylum Research,
Magnetic Resonance, NanoAnalysis
and WITec. (recent adjusted operating
profit margin history 22–24%).
Advanced Technologies will comprise
our compound semiconductor business
Plasma Technology and our quantumfocused business NanoScience,
together with the much smaller X-Ray
Technology business. (recent adjusted
operating profit margin history 0–4%).

www.oxinst.com

Moving forward, service revenue will
be reported within each respective
division. We will report against the
new structure at our half-year resultsin November 2024. The indicative andunaudited pro forma numbers under
the proposed divisional structure forthe full year 2024 are disclosed in
the Finance Review and the annual
results presentation.
The rationale for the planned reportingchange is as follows.
The businesses which will form the
new Imaging & Analysis division
represent c.70% of Group revenue, andhave strong existing synergies and a
track record of success.
They provide similar relatively smallscale imaging and analysis equipment
and software, have common businessmodels, go-to-market strategies andmargins, and they address a similar
client base in their three key markets
in materials analysis, semiconductors,
and healthcare & life science.
In recent years, particularly since
the acquisition of WITec in 2021, theMaterials Analysis businesses havecollaborated more closely, driving
cross-selling opportunities andefficiencies. Joining forces with ourscientific camera and microscopy
business will facilitate further
synergies and simplification. Together,
they will provide an unrivalled rangeof microscopy, scientific cameras,
spectroscopy and analytical tools
and software.
Action plans for these high-performing
business units are under way. It
will result in improved growth andoperational leverage supporting strong
margins. Strategic priorities will include:•

improving sales and service
channels by going to market
through streamlined regionalcustomer-facing teams andgenerating more whole life revenue
from a better customer experience;•

greater focus to leverage
maximum opportunity from theexisting product portfolio andR&D programme;•

simplifying the organisation bystreamlining business processes
and removing duplication;•

increasing cross-selling throughshared marketing initiatives;•delivering a step change inoperational performance by
optimising production andenhancing performance
management and value
engineering; and•increasing commercial sales
through sharing of best go-tomarket practice across regions andtargeted key account management.

The businesses which will form
our new Advanced Technologies
division (representing c.30% of Grouprevenue) have a very different profile.
They sell much lower volumes oflarger-scale complex systems intovery specialised markets (compound
semiconductor and quantum) withunique growth drivers and principally
separate customer bases. Thesebusinesses each require a dedicated,focused approach to leverage theirwell-invested base, deliver improved
margins and achieve their full growthand margin potential.
Our compound semiconductor businessis growing strongly. Scale is important toreap the benefits and recover the costsof our new, larger dedicated facility in
Severn Beach, outside Bristol, UK. The
business is poised to take advantage ofthe structural growth in the compound
semiconductor market, which does
not have the cyclicality inherent in
the silicon semiconductor market.
The leadership team have identified
key areas of specialism within thecompound semiconductor landscapewhere we have leading capability, or
have the potential to do so.
Here, we will maximise productivity
and output following the site move,taking advantage of the process
and efficiency opportunities the site
provides, look to optimise our supply
chain, and continue to simplify our
product range, in order to deliver good
growth and strong margin progression.
A further key focus area is customer
service, which requires a step change
to meet the stretching requirementsof the business’s growing commercial
production customer base.

Our quantum business has been
impacted by export restrictions
which have limited our ability to sell
these capabilities into China. This,
combined with operational challenges,
larger project timescales and strong
competition in the high potential,
but uncertain quantum market, has
impacted performance in 2023/24.
We have already started to restructure
the cost base, commenced a major
operational turnaround programme
in operations and refocused sales
teams on Europe and the USA. This
will continue at pace, focusing onvalue engineering, cost reduction
and performance management.
While leveraging our regionalsales and marketing infrastructure,
the businesses in the Advanced
Technologies division will operatewith greater independence than theircounterparts in Imaging & Analysis,
enabling them to address their
specialist markets in ways which will
maximise their ability to grow bothscale and margin and removing thiscomplexity from the wider business.
Structuring our business in these
two new divisions will improve ourcustomers’ experience and facilitate
the delivery of targeted action plansdesigned to suit the opportunities
and the challenges in each, whilst
supporting greater transparency of
their different paths to significant value
creation for investors.
We will provide a progress update on
the development of the new divisions
via our interim reporting in November,at which point we will report in the newdivisional structure.

Group-level strategic
priorities
While our action plans are targeted
at divisional level, the following
core priorities underpin our strategy
Group-wide.

Improve our customers’
experience
Further growing our reach into
commercial markets requires
on-time delivery paired withexceptional customer service andresponsiveness, particularly in
production environments, where
deadlines are non-negotiable anddown time is not tolerated.
More broadly, we will focus ondelivering deep customer insightand best-in-class customer service
through our regional teams aroundthe world. We also see significant
opportunity to extend whole-life
revenue via our services proposition.

Drive a step change inoperational performanceand productivity
The Group’s rapid growth has
challenged both capacity andcapabilities in some of ourmanufacturing facilities, opening
up significant opportunities in bothdivisions to reconfigure production
areas, design more efficient
production processes and upskill
colleagues to increase
their productivity.
We have appointed a Chief
Transformation Officer who
is leading a broad-ranging
transformation programme
covering all aspects of operational
performance and productivity, fromthe layout of our facilities to value
engineering to reduce our costof goods.

In addition, we have appointed
a dedicated customer service
lead who will focus on our aftersales support infrastructure andcapabilities, and target significant
improvements in our service to
our customers.

Simplify our organisational
structure
With significant overlap between
business units and markets, thestructure of Oxford Instruments
had become overly complex
over a number of years, making
it confusing for stakeholders
to understand and leading to
duplication of processes internally.
Consolidating our eight business
units and six previous end markets
into just two divisions and threecore markets, supported by asimplified customer-facing regional
structure, will drive efficiencies
and operational gearing, andprovide greater transparencyof Oxford Instruments as aninvestment proposition.

Focus on our key strengths
We will continue to protect,invest and enhance our corestrengths by investing c.8–9% ofrevenue annually in R&D, andworking closely with our regional
teams and our customers toensure we focus our efforts on
the most economically attractive
opportunities, delivering strong
return on capital employed.
Focusing on our core markets –materials analysis, semiconductors,
and healthcare & life science –will enable us to maximise our
impact in all three markets, while
deriving efficiencies from this moretargeted approach.

13

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

CHIEF EXECUTIVE OFFICER’S REVIEW continued
Capital allocation priorities
These can be summarised as follows:
•

•

•

•

Invest in the businessOur businesses are well invested,
as evidenced by the capital
investments we are making in
new facilities at Severn Beach
and Belfast. We will continue toinvest c.8–9% of revenue in R&D,
and make targeted operational
investments to support growth.
Drive shareholder returns
We are committed to deliveringstrong shareholder returns,
taking account of underlying
earnings, dividend cover,currency movements anddemands on our cash.
Make selective acquisitions
Our acquisition strategy is highly
selective and disciplined. We will
focus on adding capabilities in
Imaging & Analysis, with a goodpipeline of owner-managed
businesses under consideration.
Maintain strong balance sheet
Our strong balance sheet gives
us flexibility. We will continuallyassess the appropriateness of
returns to shareholders in thecontext of the strategy.

Journey to growth andhigher margins
We expect to deliver revenue growthand higher margins from both divisions
over the medium term, with the Groupcapable of delivering a revenue CAGR
of 5–8% and an adjusted operating
profit margin of 20%+. Actions to
support growth have begun. Changes
in focus and sharing of best practice
are expected to be implemented
over the next 18 months. Operational
performance improvements will require
investment in the short term, meaning
the margin improvement profile will not
be linear. The initial efforts of the lastyear or so have been supplemented
with a dedicated Chief Transformation
Officer and we have added resources
and built a more extensive change
team who have started improvement
actions in our Belfast facility first.

www.oxinst.com

As evidenced by the recent
financial performance in Advanced
Technologies, specific restructuring
and improvement activities are
required in the short term which havebeen commenced and are expected
to have some impact in the coming
financial year.
Overall, we expect these actions todeliver good sustainable organic
growth in the medium term, coupledwith the opportunity to generatesignificant value through operating
margin enhancement to 20%+.
Our anticipated mid-term outcomescan be summarised as follows:•

Organic growth of 5–8% CAGR.

•

Adjusted operating margin
improvement to 20%+.

•

Cash conversion of over 85%.

•

Continuing to invest in growth,
including 8–9% on R&D.

•

Strong return on capital
employed (currently 29%).

•

Selective acquisitions bringing
complementary capabilities.

A clear purpose
We make a tremendous positive
impact through our products andservices – from supporting Nobel
Prize-winning scientific endeavours
and the development of personalised
treatments for cancer to accelerating
the path to decarbonisation through our
extensive role in the battery ecosystem.
Our technology and scientific expertise
enable our customers to discover andbring to market exciting new advancesthat drive human progress. I am proudof the unique contribution we make. As
we set out on our new strategy, I am
delighted to share a new purpose for
Oxford Instruments:
To accelerate the breakthroughs thatcreate a brighter future for our world.
Our position is unique among UK-based
technology companies – and it is myhope that this new purpose, which has
been warmly embraced by colleagues
around the world, will highlight our
positive impact, and focus the energyof everyone at Oxford Instruments.

People and planet
I have visited almost all our global sites
since joining last autumn and havebeen impressed by the energy andcommitment of the colleagues I havemet at every level of the organisation.
Our engagement scores are high, at
78%, based on the organisation-wide
survey carried out last September. But
there is no room for complacency, andin recent months I have led a deep diveexercise, as part of the developmentof our strategy, to understand ourorganisational culture and to drive
action where there is scope to improve.
We have many strengths. Our
workforce is highly skilled, with deep
expertise in a wide range of disciplines,
from science and engineering tomarketing and sales, and our people
are passionate about what we doand the impact we have. However,there are areas we need to focus on
as we move forward in line with our
new strategy. We are clear on our new
strategic priorities, and have worked
collaboratively with focus groups
around the business to set out new
ways of working to deliver them.
We are committed to creating avalues-driven, inclusive culture. To
that end, we have launched a newequity, diversity and inclusion policy,
and successfully piloted new Inclusive
Leadership training to be rolled out
over the coming year.
Our employees have launched impact
groups focused on women’s issues
and neurodiversity this year, adding to
the network begun with our race andethnicity and LGBTQ+ impact groups.
Our products and services have aremarkably positive impact on theworld around us. We want to generatea brighter future through our own
operations, too. To that end, we areaccelerating our progress to net zero,in all the areas we can control. Last
year, we committed to achieve a 50%
reduction in Scope 1 emissions and a
70% reduction in Scope 2 emissions
by 2030. Today, we are setting a newtarget to achieve net zero in Scopes
1 and 2 by 2030, and sooner if wecan. We will continue to work with
our product development teams
and our supply chain to minimise
our Scope 3 emissions, with the goalof accelerating our overall target
to achieve net zero faster than ourcurrent target year of 2045.

Richard Tyson with colleagues in Shanghai (top left) and Belfast (above right); Richard and his Board colleagues also met apprentices on the site
visit to Severn Beach (bottom left).

Summary and outlook
I am pleased with the results for thefull year and the development of
the business during the period. We
have reported strong revenue growthof 9.8% at constant currency, withadjusted operating profit in line withexpectations. I am grateful to mycolleagues across Oxford Instruments
for their commitment and energy
through a busy year.
We have rebalanced our positions
in regional markets in the face ofgeopolitical shifts, focusing ourresources on non-sensitive areas
in China, and successfully growing
revenue and orders in Europe andelsewhere in Asia.

We have continued to make organic
investments to support our future
growth, with our state-of-the-art
compound semiconductor facility now
operational. Underlying order intake
has remained robust, with a positive
book to bill even though we hadstronger growth in the second half, andthe orderbook gives us good visibility
into the year ahead.
I am hugely impressed with the strong
platform at Oxford Instruments,
anchored by our market-leading
technologies and our talented andcommitted workforce. My work withleadership teams around the businesshas confirmed our view that there
is significant opportunity to build
on our core strengths. I have today
outlined a new strategy, setting
targets to improve the returns fromthe business in the medium term.

As part of this strategy, we arereorganising the Group into two distinct
business divisions to simplify andenhance our operations. We will target
growth by focusing on fewer markets
and a sharpened product portfolio,
tackling key areas where improvement
is required and delivering a step change
in operational and service performance.
We are in a strong position to improveand grow the business, putting it ona sustainable growth footing throughour market-leading offering together
with operational and efficiency
improvements. Given our strong orderbook and pipeline, coupled withpositive business improvement actions,
we expect to make good constantcurrency progress in the full year
ending March 2025.

RICHARD TYSON
Chief Executive Officer
10 June 2024

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Oxford Instruments plc
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Financial Statements

REASONS TO INVEST

Our investment case iscentred around the following
key characteristics
Purpose driven, withdifferentiated, innovativetechnologies providing
high value add tocustomers•

Clear purpose to accelerate thebreakthroughs that create a brighter
future for our world is well alignedwith global mega trends.

•

Competitive advantage built on
60-year brand heritage and broad
technology base spanning all
scientific disciplines, placing Oxford
Instruments in a unique position
to anticipate global drivers andconnect academic and commercial
customers, acting as a catalyst thatpowers real world progress.

•

Value-add products and services
accelerating customers’ progress
across the technology development
and production cycle.

 ee CEO Review /S
Pages 10 to 15

www.oxinst.com

Leading positions in
attractive structural
growth markets••

Leadership in specialist
technologies and embedded
positions across three primary end
markets with long-term structural
growth drivers: materials analysis,semiconductors, and healthcare& life science (together, c.90%
of revenues).
Diverse commercial and academic
customer base spanning the world’s
leading companies and scientificresearch communities, primarily
across Asia, North America
and Europe.

See Operations Review /Pages 26 to 33

Purpose and impact
commitments key toattracting high-quality
talent and customers
which are creating amore sustainable planet•••

Strong attraction and retentionof outstanding people with deep
expertise, and a highly experienced
management team, reflect ourcompelling purpose and ongoinginvestment in talent.
Technologies critical to customer
efforts to optimise the use ofresources, advance the green
transition, develop drug delivery,and sustainably power anincreasingly digital world.

Our leading technology and customer-centric, market-focusedstrategy provide a strong platform from which to deliver sustainablegrowth, margin expansion and enhanced shareholder returns.

Track record of delivery,
driving returns••

Revenue CAGR of 8.4% over thelast five years, supporting strong
2023/24 ROCE of 29.1% and a
progressive dividend, with growthof 6.7% in 2023/24.

 ee Finance Review /S
Pages 58 to 69

Strong balance sheet
and attractive financial
profile supporting
investment in growth•

Strong order book and pipeline
provide a positive underpin forcontinued growth.

•High margin and cash generativewith a strong balance sheet withsignificant net cash.

•

Attractive opportunities toaccelerate growth through existingproduct portfolio, new productpipeline, servicing offer, andselective M&A.

••

Margin enhancement opportunities
through operational and supply
chain optimisation, synergies
across the Group and enhanced
customer experience.

Well positioned to invest in
expanding operational capacity andinfrastructure (recent investments
in state-of-the-art facilities inBristol and Belfast), new productdevelopment (8–9% of revenue
annually), and selected acquisitions.

Complemented by value-accretive
acquisitions; most recently, WITecand First Light Imaging.

Building on our strong responsible
business foundations throughsix initiatives: progress to net
zero (Scopes 1 and 2 by 2030;
Scope 3 by 2045); environmental
impact; operating responsibly;
sustainable product stewardship;inclusive culture; and communityand connection.

See Sustainability Report /Pages 34 to 57

Clear opportunities toaccelerate growth andenhance margins

 ee CEO Review /S
Pages 10 to 15

 ee Finance Review /S
Pages 58 to 69

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

OUR BUSINESS MODEL

Helping to create amore sustainable future
Driven by our purpose

How we add value

To accelerate thebreakthroughs thatcreate a brighter futurefor our world.

Our technology and scientific expertise
enable our customers to discover andbring to market exciting new advancesthat drive human progress.
Our core activities

Fundamental research

Impacted by:

We develop tools and systems that enable
academic researchers and scientists to makenew breakthroughs.

Our stakeholders
Engagement with our stakeholders allows us to growand execute our strategy, so we consider the impact wehave on them, as well as what they consider important,when developing our plans for long-term success.

The health and resilience of our chosen end markets
has played a critical role in our strong performance.
We believe our strong position in these end markets,along with their structural growth drivers, will continue
to create value for our customers and present significant
opportunities for sustainable economic growth.

Driven by ourstrategic objectives

01. Deliver strong growth through‘customer first’ ways of working

The identification and evaluation of emerging risks
is derived from the Group’s quarterly risk reporting
framework. Any new risks reported by the business
units are specifically identified and discussed as partof this process, with a formal review of emerging risks
at the year end.

02.	Deliver a step change inoperational performance(delivery, quality, efficiency)

Find out more / Pages 26 to 33

Our key enabling technologies and solutions
cut the time needed to go from discovery toreal world progress.

Find out more / Pages 26 to 33

03.	Simplify the organisation,
increasing collaboration
and accountability

Our products support today’s manufacturing
challenges and increase productivity.

www.oxinst.com

Find out more / Pages 27 to 29

Research& Discovery

04.	Continue to invest in newtechnology and products,
protecting and enhancing
our core strengths

Find out more / Pages 30 to 32

470.4m

£+9.8% at constant currency

80.3m

£

+3.7% at constant currency

109.0p
(3.3%)

Service &Healthcare

05.	Embed our values and ways
of working so that they are
lived every day
Find out more / Pages 51 to 55
Find out more / Page 33

Global demand with strong
positions across Asia (47%of revenue), North America(26% of revenue) andEurope (25% of revenue)

Revenue

Adjusted EPS

Find out more / Pages 26 to 33

Customers acrossacademic (55%) andcommercial (45%) markets

Outcomes

Adjusted operating profit

Find out more / Pages 10 to 15

Production and testing

Underpinned by strong demand for our products and services:
Technology leadership in
three end markets withsustainable, structural
growth drivers

Materials &Characterisation

Find out more / Pages 10 to 15

Find out more / Pages 10 to 15

Our management of risk

Supported byour sectors

Find out more / Pages 10 to 15

Applied R&D

Our markets

Our operations

Return on capital
employed

29.1%

How we invest our capital:
Organic cash investment
with R&D of £39.2m andcapital expenditureof £27.0m

Shareholder distributions
with full-year dividend
payments of £11.4m

Balance sheet flexibility
for inorganic opportunities
with net cash of £83.8m

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

ENGAGING WITH OUR STAKEHOLDERS

As a customer-focused,market-driven business,
our stakeholders are at theheart of everything we do

In November 2023 we were delighted to open
our new Materials Innovation Centre at our High
Wycombe manufacturing site. We welcomed
local community representatives and leading
experts from academia and industry, many ofwhom are customers of Oxford Instruments,
to see demonstrations of our state-of-the-art
materials analysis techniques and explore ourmanufacturing facility.
The Centre brings together products andsoftware from across the Group, serving
as a platform to showcase our analytical
instrumentation and provide training by ourtechnique experts. It also acts as a collaborative
hub, enabling invited scientists and researchers
to access both the technology and expertisehoused at the Centre.

www.oxinst.com“We’re very proud of the Innovation Centre. With
this exceptionally well-equipped facility, we can
now offer demonstrations of the technologies
from all our Materials Analysis businesses in one
space. This gives an excellent experience to ourcustomers and allows us to evidence how our
product suite can address multiple needs.”

Promoting the success of the company
for the benefit of all stakeholders
Engagement with our stakeholders allows us to grow and
execute our strategy, so we consider the impact we haveon them as well as what they consider important whendeveloping our plans for long-term success. We use a range
of engagement mechanisms to understand and consider our
stakeholders’ views. In some cases, the Board engages directlywith stakeholders, but there is also significant engagement by
senior management and throughout the company.

The Board receives reports and updates on suchengagement and the views and feedback gatheredfrom stakeholders are used to inform discussion anddecision-making.
See pages 90 to 95 for details of how we engage with our
stakeholders and page 96 for our statement in accordancewith Section 172(1) of the Companies Act 2006.

Customers

Employees

Shareholders

Customer intimacy helps us to
identify additional opportunities
to deliver increased value to ourcustomers, as we strive to be
the scientific instrumentation
partner in every significant lab andproduction facility across the world.

By working together as one team,
we help and trust each other tosucceed. We nurture our people,
celebrate their successes andsupport them to grow.

Delivering strong growth andshareholder returns promotes thelong-term sustainable success ofthe company.

Suppliers

Local communities

Society

Our supply chain plays a vital rolein supporting sustainable growthand efficiency across the business.

We strive to support thedevelopment of stronger
communities and have a positiveenvironmental and social impact.

Our technology and scientificexpertise enables our customers
to discover and bring to market
exciting new advances that drive
human progress.

MATT HISCOCK
Head of Product Science, Materials Analysis

Read about how the Board engages with our stakeholders in the Governance section / Pages 90 to 96
Images above show the Materials Innovation Centre launch
event at High Wycombe in November 2023

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Oxford Instruments plc
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Financial Statements

OUR STRATEGY
Key medium-term
performance indicators

Our purpose:

To accelerate thebreakthroughs that create abrighter future for our world.

Enhance growth,margins and returns:• Organic growth
CAGR 5–8%.

Our ways of working• We start with the customer.
• We succeed by being focused.

Our opportunity:
Oxford Instruments holds a uniqueposition to anticipate global drivers andconnect academic and commercial
researchers, acting as a catalyst thatpowers real world progress.

• We make and keep our promises.
• We work together as one team.
• We help and trust each other to succeed.

• Adjusted operating
profit margin 20%+.
• Return on capital
employed > 29%.
• Cash conversion > 85%.
• Selective acquisitions.

Our strategic priorities• Deliver strong growth through‘customer first’ ways of working.
• Deliver a step change in operational
performance (delivery, quality, efficiency).
• Simplify the organisation, increasingcollaboration and accountability.
• Continue to invest in new technology andproducts, protecting and enhancing ourcore strengths.
• Embed our values and ways of working sothat they are lived every day.
• Reach net zero in our own operations by
2030 and contribute to global sustainability
through our products.
 ur strategy is set out in detail in the Chief Executive Officer’s Review,Opages 10 to 15

www.oxinst.com

How we’ll deliver• Create a new divisional structure, supported by a simplified customerfacing regional structure, to drive efficiencies and operational gearing,and provide greater transparency.
• Target our action plans by division, addressing the different needs
and opportunities in each.
• Develop our service propositions to better serve customers and maximise
whole life revenue.
• Reconfigure production areas, design more efficient production
processes and upskill colleagues to increase capacity and productivity.
• Drive value engineering opportunities while delivering against
customer needs.
• Focus R&D investment on customer-oriented clear growth opportunities
in our core markets – materials analysis, semiconductors, and healthcare& life science.

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Oxford Instruments plc
Annual Report 2024

Overview

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Financial Statements

KEY PERFORMANCE INDICATORSThe Group uses a range ofmeasures to monitor progressagainst its strategic plans
Measuring our performance
Our goal through our financial KPIs is to deliver shareholder returns through profitable, sustainablegrowth and strong cash conversion and efficient use of capital. The Group uses a range of measures
to monitor progress against its strategic plans. The key performance indicators are presented here.

Cash flow conversion (%)*

5.8%

64%
5.8%

23/24

64%

22/23

21.1%

22/23

88%

21/22

15.3%

21/22

84%

Why we measure: To drive profitable, sustainable growththrough the implementation of our strategy against its
strategic plans.

Why we measure: To maintain a strong operating cash
conversion ratio and high level of free cash flow.

Adjusted earnings per share (EPS) growth (%)

Adjusted operating profit margin (%)(3.3)%

17.1%

23/24

23/24

17.1%

22/23

18.1%

21/22

20.0%

21/22

18.1%

29.1%
23/24

29.1%

22/23

35.2%

21/22

34.7%

Why we measure: To deliver ROCE in excess of ourcost of capital.

1.52

23/24

8.3%

23/24

1.52

22/23

7.8%

22/23

1.55

21/22

8.6%

21/22

1.57

www.oxinst.com

Why we measure: To measure efficiency.

Carbon emissions intensity (tCO2e per £m revenue)

23/24

23/24

2,786

2,786

Why we measure: To assess progress towards our targetof 20%+ adjusted operating profit margin.

5.92

22/23

1,316*

22/23

21/22

1,378

21/22

5.92
2.89*
3.75

What we measure: Carbon intensity = Absolute carbon
emissions/Revenue.
Why we measure: To track our progress towards our Scope 1
and 2 2030 net zero target.

Non-financial KPIs
Employee engagement (%)

Serious injuries (#)

78%

0

23/24

78%

2023

0

22/23

78%

2022

0

20/21**

77%

2021

1

What we measure: Engagement across a number of areas
for feelings of inclusion, value and respect.

What we measure: Rate of serious injuries to employees
for ongoing businesses.

Why we measure: Regular surveys to measure employee
engagement and identify areas of focus. This measure began
in 2019.

Why we measure: To measure the impact of our safety
drive, Push for Zero, to reduce accidents.

*	Adjusted figure following rebaselining in 2023/24; please see
pages 35 to 39.
* Normalised.

What we measure: ‘Value add’ – (adjusted operating profit+employment costs)/employment costs.

Absolute carbon emissions (Scope 1 and 2) tCO2e

Why we measure: To track our progress towards our Scope 1
and 2 2030 net zero target.

19.5%

Return on capital employed (ROCE) (%)

8.3%

What we measure: What we measure: Carbon emissions fromour own operations, Scope 1 and 2, measured using the Green
House Gas Protocol methodology.

22/23

Why we measure: To achieve long-term growth in EPS.

Value added (#)

Why we measure: To measure the effectiveness of our R&D
programmes.

23/24(3.3)%

Investment in R&D (%)

What we measure: Investment in R&D as a percentage ofrevenue. We previously measured the proportion of revenue
coming from products launched in the previous three years,
which was 25% in 2023/24.

Financial KPIs
Revenue growth (%)

Strategic KPIs** Prior to 2022, full surveys were carried out every two years.

Serious injuries are defined as those which are reportable
under RIDDOR (Reporting of Injuries, Diseases andDangerous Occurrences Regulation) and are measured as
an absolute number.

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Oxford Instruments plc
Annual Report 2024

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Financial Statements

OPERATIONS REVIEW

A robust performance
The Group performed well in the year, delivering strong revenue growth, andoperating profit 3.7% ahead of last year at constant currency. Reported adjusted
operating margin of 17.1% (2023: 18.1%) was behind the previous year as a result of
trading losses attributable to prior year orders to China removed from the orderbook
due to export licence restrictions, where long customer lead times meant that these
could not be replaced with short-term revenue. In addition, we have continued toinvest in capability and systems across the business. With underlying book-to-billat 1.03, orderbook levels provide good visibility for the year ahead.
The Operations Review provides performance headlines
at Group level, and updates from each of our three current
segments: Materials & Characterisation, Research &Discovery, and Services & Healthcare.

Materials &Characterisation
The Materials & Characterisation sector’s products comprise:• range of microscopy and analysis techniques and software to identify
aand interpret the properties of materials and samples (Asylum Research,
NanoAnalysis, Magnetic Resonance and WITec, collectively known as
our Materials Analysis businesses); and• dvanced etch and deposition systems for compound semiconductoradevices (Plasma Technology).

With a strong focus on accelerating our customers’ applied R&D, our products
and services in this sector enable the development of new devices and next
generation higher performing materials, as well as enhancing productivity inadvanced manufacturing, quality assurance (QA) and quality control (QC).

As outlined, in the coming months we will move to a newdivisional structure – Imaging & Analysis, and Advanced
Technologies. Indicative and unaudited pro forma numbers
under the proposed structure for the full year are disclosed
in the annual results presentation. Interim reporting inNovember will reflect the new structure and will provide
comparators to the current reporting structure.

Revenue

Key highlights

470.4m£Full year to
31 March 2024

Full year to
31 March 2023

% reported
growth% constantcurrency1 growth£245.3m2£272.8m(10.1%)(7.0%)£252.2m£234.5m+7.5%+11.4%

Adjusted operating profit£46.4m£40.5m

+14.6%+20.2%

Adjusted operating margin

18.4%

17.3%

Statutory operating profit£41.7m£35.7mStatutory operating margin

16.5%

15.2%

OrdersGroup performance

Revenue
3

OrdersOrders intake of £459.1m (2023: £511.6m) was 2.5%
below a strong comparator on a constant currency
basis, and after the removal of £23m cancelled prioryear orders to China from our 2024/25 order intake.
Underlying book-to-bill remains positive, at 1.03.
Our strong pipeline across all regions demonstrates
good demand for our products and services.

Revenue
Reported revenue grew by 5.8% to £470.4m(2023: £444.7m), representing growth of 9.8% atconstant currency. At constant currency, there was
growth of 11.4% in Materials & Characterisation,
5.7% in Research & Discovery, and 12.6% in Service& Healthcare.

Profitability
The strong revenue performance, particularlyin the second half of the year, supported fullyear adjusted operating profits of £80.3m (2023:£80.5m), representing 3.7% growth on a constantcurrency basis.

www.oxinst.com

3

Revenue split by end market

1. For definition refer to Note on page 2.

Materials analysis £201.0m

Semiconductors £126.9m

Healthcare & life science £90.6mOther

£51.9m

2.	Underlying order growth is adjusted for the impact of prior year China orders removed from current year orderintake due to export licence restrictions.
3. Details of adjusting items can be found in Note 2 to the full-year financial statements, pages 163 to 165.

% constantcurrency1 growthvs full year to
31 March 2023

% of Grouprevenuefull year to
31 March 2024

Materials analysis

14.4%

43%

Semiconductors

6.9%

27%

Healthcare & life science

10.7%

19%

Other

(0.6%)

11%

End market

1. For definition refer to Note on page 2.

Other

Healthcare & life science3%5%(13%)1

Materials &Characterisation
revenue(4%)1

Materials analysis

Semiconductor

52%

40%

+19%1

1. Revenue growth at constant currency.

+7%1

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OPERATIONS REVIEW continued

Materials & Characterisation continued
Materials & Characterisation has
performed strongly, with revenue of£252.2m (2023: £234.5m), up 11.4%
at constant currency, with a strong
second half weighting, as anticipated.
Growth was driven by investment
from governments and academia(up 29.9% at constant currency), withcommercial revenue slightly down
year-on-year (-1.7%).
Adjusted operating profit was up
20.2% on the year, at £46.4m (2023:£40.5m), generating a margin of 18.4%(2023: 17.3%).
Adjusted orders were 7.0% behinda strong comparator period atconstant currency.
Regionally, our footprint is shifting
as we adapt to new geopolitical
dynamics, pivoting to non-sensitive
areas in China, and removing someorders from the opening order bookdue to export licence policy. We havefocused successfully on growing
revenue elsewhere in Asia (mostnotably in Korea and Taiwan), in
Europe and in the UK, and on growing
commercial applications such asbattery and materials analysis in
China, which remains an important
market for the businesses in the
Materials & Characterisation segment.

Performance in North America wasbehind last year, primarily due toeconomic uncertainty and later than
anticipated release of CHIPs Act
funding. Internally, improvements are
required to the organisation capacity
and structure to capitalise on thisimportant geographical market. A newleader has been appointed and thisregion will be a focus area within our
updated strategy.

Market drivers
and performance
Our key markets in Materials &Characterisation are materials
analysis (representing 52% of revenue)
and semiconductors (representing
40% of revenue).
In materials analysis, revenue was up
19% at constant currency, reflecting
strong demand across a range ofapplications.
Our products and services address
the growing structural demand
to understand and improve theproperties of materials across a wide
range of markets. Sustainability is a
key driver of growth, as researchers
in both academic and commercial
settings seek to make better use of
the world’s resources while delivering
advanced capabilities that accelerate
human progress.

Customers are using our equipment
to develop greener alternatives, suchas lighter, stronger steels, superalloys
and low-carbon concrete, and safer,longer lasting batteries with a lower
carbon footprint.
Our ability to image and analysea wide range of materials at thenanoscale (that is, to billionths of ametre) enables academic scientists todrive breakthroughs in understanding.
In the commercial world, we support
the translation of such academic
research into product development
and help manufacturers to address
quality control in production processes.
A good example of this end-to-end
applications journey is our tailoredsupport at every stage of the battery
life cycle, from helping academic
customers understand how raw
materials perform right through the
R&D process to quality control andfailure analysis. This market continues
to grow at pace, particularly in raw
materials and geology, as customers
invest in critical minerals analysis.
In semiconductor, we have delivereda strong performance overall, withconstant currency revenue up 7% year
on year.
Our activity in this market is split
between the production of etch anddeposition equipment for the rapidly
growing compound semiconductor
market (representing c.65% of our
exposure) and the provision of imaging
and analysis solutions (c.35%), primarily
into the well-established silicon
semiconductor market.
The drivers for these two distinct
markets differ. Compound
semiconductors present a particularly
exciting market opportunity, withdemand growing by more than 10%
annually. More complex than silicon
semiconductors, they are driving rapid
advances in technology, enabling
the production of higher performing
devices, with lower energy use.
Compound semiconductors are at theforefront of developments in assisted
and virtual reality, 5G connectivity,
power electronics, optoelectronics
and hyperscale datacentres.

www.oxinst.com

Our new facility (see below) is
focused entirely on harnessing thegrowing compound semiconductor
market, which is not impacted by
the cyclicality typically seen in thesilicon market. We are playing a keyrole in all the developments set out
above, right across the life cycle fromearly-stage academic R&D to volume
manufacturing, yield and quality
control. A particular area of strength,
and source of pricing power, is ourability to improve outcomes for thelayers within devices which have thebiggest impact on performanceand yield.
The silicon semiconductor market
is extremely well established, withsilicon devices present in every aspectof consumer electronics. Here, ourmaterials analysis business’ imaging
and analysis tools are used to assess
the properties and performance ofdevices at the nanoscale, supporting
R&D, quality control and defectanalysis as customers seek to makeever smaller devices and improve yield.
This drives the remaining 35% of oursemiconductor revenue.
The breadth of our offering, which
supports customers at every stage ofthe life cycle, offers some buffer to thecyclical nature of the silicon market.
There has been robust demand for ourimaging and analysis suite of productsin the year, despite a downturn inthe wider silicon market. As we head
into 2024/25, demand indicators
across all applications are improving.
Several Tier 1 customers have orderedsystems, and the pipeline is strong
across all stages of the life cycle.

Operational developments
This has been a strong year for
Materials & Characterisation.
Our compound semiconductorbusiness has successfully transitioned
production to a new facility at Severn
Beach, near Bristol. The new site triples
production capacity and will more thandouble clean room laboratory space,taking us to world-class levels ofcompound semiconductor processing
ability. The benefits of operatingfrom the new facility, with its muchimproved layout and process flow
versus the legacy site, contributed
to a strong second half performanceand double-digit revenue growth forthe year.

In parallel with the site move, thebusiness has focused on streamlining
both product ranges and target
markets to support efficiency andfuture growth. A notable success in theyear has been the launch of a new,faster atomic layer deposition system.
A further operational development
has been on repositioning our regional
focus as we pivot to less sensitive
applications within China and grow ourbusiness elsewhere. We have delivered
strong double-digit order growth inEurope, Asia Pacific and Japan, while
China remains an important market
with a healthy pipeline.
Our materials analysis businesses
have generated double-digit
revenue growth as they continue
to maximise synergies and crossselling opportunities in areas
such as battery research andsemiconductor applications.
Two new materials analysis
innovation centres were launched
in High Wycombe, in the UK, andTokyo, joining existing centres in
China, the US, France and Germany,and strengthening our ability todemonstrate the breadth of our
product ranges to customers.

Alongside maximising synergies
between businesses, we have also
focused on extending sales fromacademic into commercial customers.
A notable example is in electronbackscatter diffraction microscopy(EBSD), which we are successfullytransitioning from a purely academic
technique to one used by major Tier 1commercial semiconductor customers.
Key developments in R&D include thelaunch of:•Unity, a new detector for scanningelectron microscopes (SEM) which
combines backscattered electron
and X-ray signals for the first time
to deliver high resolution colour
images at ‘live’ speed;•

Vero, a new atomic force
microscope which enables moreaccurate and repeatable results;
and•a bespoke Raman microscope totarget the semiconductor market.

We were delighted that our trackrecord for innovation was recognisedwith the King’s Award for Enterprise:Innovation for our Symmetry detector,
which enables material properties tobe studied at the nanoscale.

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

OPERATIONS REVIEW continued

Research& Discovery

With £142.1m of revenue (2023: £139.4m),
Research & Discovery has delivered
constant currency growth of 5.7%,
primarily driven by academic funding
into scientific cameras and microscopy.

The Research & Discovery sector’s products comprise:•scientific cameras, microscopy and accompanying software (Andor);•cryogenic and superconducting magnet technology (NanoScience); and•X-ray tubes for a wide range of applications (X-Ray Technology).

This product portfolio enables our customers to capture imaging and analyticalmeasurements down to the atomic and molecular level, as well as to create ultralow temperature and high magnetic field environments. Products from Research& Discovery are used in scientific research, applied R&D, and commercial
environments across a wide range of fields, from accelerating developments
in healthcare, life science and material science to facilitating the growing
commercialisation of quantum technology.

Key highlights
Orders
Revenue
Adjusted operating profit
3

Full year to
31 March 2024

Full year to
31 March 2023

% reported
growth% constantcurrency1 growth£158.4m2£160.4m(1.2%)(1.9%)£142.1m£139.4m

+1.9%

+5.7%

£13.6m£18.0m(24.4%)(26.1%)

Adjusted operating margin

9.6%

12.9%

Statutory operating profit£9.4m£11.3mStatutory operating margin

6.6%

8.1%

3

1. For definition refer to Note on page 2.
2.	Underlying order growth is adjusted for the impact of prior year China orders removed from current year orderbook
due to export licence restrictions.
3. Details of adjusting items can be found in Note 2 to the full-year financial statements, pages 163 to 165.

Other

Healthcare & life science

27%

38%

+4%1

Materials analysis

32%
+1%1

1. Revenue growth at constant currency.

www.oxinst.com

Research& Discovery
revenue+10%1

Semiconductor &communications

3%
+13%1

The sector’s performance has been
adversely impacted by the removal oforders to China from the order book as
we proactively pivot away from sensitive
areas (notably quantum), impacting
revenue and resulting in a trading loss
for the quantum business. This impact,
together with lower OEM life scienceorders, inflationary material costs andour ongoing investment to support future
growth, has resulted in a 24.4% reductionin adjusted operating profit, with
margin 330bps behind last year. Orders
were down 1.9% at constant currency,
excluding the impact of unfulfilled
Chinese orders. This reflects a strong
underlying demand amidst a period oftransition as we rebalance our regionalpresence, moving away from restrictedmarkets within China and growing ourbusiness elsewhere. Constant currency
order growth of 21.7% in Europe has
partially offset the reduction in China
orders, and reflects our increased
marketing activity in this region. North
America orders were slightly down on
the year (-2.4% at constant currency)
due to economic uncertainty. Internally,
improvements are required to theorganisation capacity and structure tocapitalise on this important geographicalmarket. A new leader has been
appointed and this region will be a key
focus within our updated strategy.

Market drivers
and performance
The primary markets served by
Research & Discovery are healthcare& life science (38% of revenue) andmaterials analysis (32%). Quantum
constituted 18% of revenue in the year.
In healthcare & life science revenue
grew by 10% at constant currency,with strong sales of our confocal
microscope systems and Imaris
software. OEM orders and revenue
were down year-on-year, reflecting
wider destocking dynamics as
customers consume inventory built
up during supply chain shortages. We
anticipate a stronger performancein 24/25 as OEMs restock, and with
BC43 beginning to be deployed in
OEM assemblies, such as in the cancer
diagnostics market.
In this market, our equipment andsoftware have a key role to playin accelerating progress towards
a healthier society, as academic
researchers, scientists andpharmaceutical companies seek toaddress the challenges of a growing
and ageing population and develop
new and increasingly personalised
treatments and vaccines. Ouradvanced imaging systems, including
scientific cameras and microscopes,
support these developments byhelping to reveal sub-cellular detailand observe real-time interactions.

In materials analysis, revenue wasbroadly flat year-on-year; however,orders have grown by 12% at constantcurrency, reflecting strong andgrowing demand.
Demand is underpinned by
performance and sustainability drivers
as customers look to develop stronger,higher performing materials and makebetter use of the earth’s resources.
In Research & Discovery, customers
primarily use our equipment to support
their understanding of the propertiesof new materials and enhance thecapabilities of existing materials.
In quantum technology, revenue
grew by 5.5% at constant currency.
We are well placed to benefit fromthe growing commercialisation ofquantum computing, as it evolves froma pure research discipline into practicalapplications in chemistry, logistics andfinance. The world’s largest technology
companies all have quantum
computing programmes as they
explore the potential of this emerging
discipline, with a plethora of smaller
companies also active in the market.
With our range of products forquantum extending from compact
refrigerators to large systems forcommercial customers, we aresupporting customers across the
spectrum from pure academic
research to early stage start-ups
and a large technology company.

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

OPERATIONS REVIEW continued

Research & Discovery continued
Operational developments
Commitment to delivering a stepchange in operational performance isa key pillar of our strategy, as set out in
the Chief Executive Officer’s Review on
pages 10 to 15. In line with this, a wideranging operational programme has
recently begun in Belfast, which will be
the pilot site, with learnings to be rolled
out to other manufacturing businesses
in priority order.
In Belfast, we are also investing£15m in the purchase and fit out ofan additional building, adjacent toour current site, to increase capacity
to support demand growth. Plans
are taking shape and the facility
is expected to be operational in
autumn 2025.
The acquisition of First Light Imaging
in January 2024 for a considerationof €15.7m (with a further earn out of
up to €3m if specific performance
conditions are met) will further support
our imaging capabilities. First Light
specialises in high-speed, low-noise
scientific cameras for infrared andvisible imaging, with applications inastronomy and life sciences, and its
acquisition will enable us to extend
our product line to existing and newcustomers, accelerate our R&D
product roadmap and expand into
adjacent markets.

In other developments, a frameworkorder has been received for BC43
into a cancer diagnostics OEM.
Separately, two new models of the
BC43 have been launched, to makefluorescence, confocal and superresolution microscopy accessible to amuch wider user base across different
research areas and experience levels.
Significant action is required to restore
profitability at our cryogenics andmagnet business based in Oxford,
following our exit from China forquantum products, and in order toaddress operational challenges. This
year we have focused on restructuring
our cost base, including targetedheadcount reductions.

Further key developments in thisbusiness include the launch of a new,smaller cryogenic dilution refrigerator,
Proteox S, ideally suited to small
research laboratories. Alongsidequantum applications, materials
measurement is a core focus area.
We are working in partnership withLake Shore Cryotronics to create an
integrated cryomagnetic measurement
system with a broad range ofapplications in materials science.
Our X-ray tube business, based in theUS, has delivered double-digit revenue
growth and strong double-digit
order growth.

Service &Healthcare
The Service & Healthcare sector comprises the Group’s service and support
related to Oxford Instruments’ own products, and the support and service ofthird-party MRI scanners in Japan. We offer tailored support packages for all our
products, delivered by a global network of product experts, application experts
and service engineers, both in person and via digital channels, including online
training, webinars and remote service support.

Key highlights
Full year to
31 March 2024

Full year to
31 March 2023

% reported
growth% constantcurrency1 growth£78.6m

£78.4m

+0.3%

+4.3%

£76.1m£70.8m

+7.5%+12.6%£20.3m

£22.0m

(7.7%)(2.3%)

Orders
Revenue
Adjusted operating profit
2

Adjusted operating margin

26.7%

31.1%

Statutory operating profit£20.3m

£22.4mStatutory operating margin

26.7%

31.6%

2

1. For definition refer to Note on page 2.
2. Details of adjusting items can be found in Note 2 to the full-year financial statements, on pages 163 to 165.

The sector has delivered double-digit
constant currency revenue growth;
however, order growth was slower
than the prior year. Latent demand
addressed by the investments madein recent years has now largely been
fulfilled, and a period of consolidation
and regrouping is under way as
we set ourselves up to deliver an
improved operational performancefrom which we can maximise value
potential from service. Operating profit
and margin were down as a resultof the investment we are making
in capabilities and infrastructure inpursuit of this goal, and the continued
elevated costs for liquid helium
required to support MRI customers inJapan, as signalled at half year.
Revenue growth to academic
customers has continued in the second
half, as we grow point-of-sales service
contracts for our benchtop systems
and tailored life science packages for
our Imaris imaging software.

www.oxinst.com

Sales to academic customers
account for 53% of revenue in theyear (2023: 48%).
Our medium-term goal is to generate agreater proportion of Oxford Instruments’revenue from service and deliver
market-leading service performance.
As set out in our strategy, we seegood opportunity to enhance wholelife service offerings and subsequent
revenue once we strengthen our
regional infrastructure, deliver crosstraining and share best practice.
The programmes already under way
provide a good platform from which toaccelerate our growth. These include:•

the implementation of fully
integrated service management
systems, which are nearing
completion, combined withknowledge management to ensurethat service colleagues have readyaccess to the technical informationneeded to support customers;•

combining our services workforce inthe regions and cross training themto make the most of their skills andtalent, and investing in headcountto ensure maximum customer
coverage; and•continued growth in remoteconnectivity for diagnostics andproblem resolution, and theprovision of integrated connectivity
in our customer solutions andproducts: the launch of OI View, adigital platform which delivers realtime insights on Oxford Instruments
systems’ health and utilisation to acustomer’s phone, tablet, or PC, wasa notable highlight.

Moving forward, service revenue will bereported within Imaging & Analysis andAdvanced Technologies, supporting afully integrated approach as the wholeorganisation aligns around ‘customerfirst’ ways of working.

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Oxford Instruments plc
Annual Report 2024

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Strategic Report

Governance

Financial Statements

SUSTAINABILITYSUSTAINABILITY: ENVIRONMENT

Sustainability is central to Oxford Instruments, with
our purpose, values, strategy and products all aligningaround the positive impact we seek to haveon our planet and the societies in which we operate

We are proud of the role our products play in supporting
decarbonisation, and we are committed to continuing
to minimise our own environmental footprint

Through our products and services,
we are working to accelerate thebreakthroughs that create a brighter
future for our world. And through ourcommitment to operating responsibly,
in line with our values, we strive tooperate with the highest standards
and integrity.
We take a holistic approach tosustainability, ensuring that it
is embedded throughout theorganisation, from our Board-level
Sustainability Committee, joined by
all Board members, to our workforce
around the world. We also seek toembed principles of sustainability in
our interactions with all stakeholders,
including customers, supply chain
partners and our local communities.
We are committed to building on
past progress and continuing tochallenge ourselves to go further. Our
environmental, social and governance(ESG) strategy focuses on driving
positive action across the following
areas: progress to net zero andenvironmental impact; sustainableproduct stewardship; health andsafety; investing in our people; culture
and engagement, ethical businesspractices and regulatory financial
compliance. We set out our progress
throughout this section.

Environment
For more information /Pages 35 to 39

SocialFor more information /Pages 51 to 55

GovernanceFor more information /Pages 56 and 57

www.oxinst.com

The United Nations Sustainable Development Goals provide an ambitious andpowerful framework for companies and other organisations to focus their efforts
and commitments. We fully support all 17 goals, but have focused our efforts
around those goals where we feel most able to have a positive impact.

Our products contribute toward the following goals:

The way we run our business and the actions we take throughout
our value chain support the following goals:

Introduction
We are committed to advancing ourpositive progress on sustainability
each year. This year we have set a
new level of ambition, accelerating
our emissions reduction targets toreach net zero in Scopes 1 and 2 by2030. We have also strengthened
and re-baselined our data acrossScopes 1, 2 and 3, providing a robust
foundation from which to address our
newly strengthened net zero targets.
Our next steps include setting out thedetail of our net zero roadmap anddeveloping interim Scope 3 targets.
Once complete, we will submit ouroverall carbon reduction targets to
the Science Based Targets initiative(SBTi) to be validated. See opposite
for more detail.
We were pleased to report a strong
health and safety performance, withno serious accidents in the year,
and a continued reduction in minor
injuries. We have strengthened ourreporting framework to support
continuing reductions. Notablehighlights of our social programme
have included:•

the development and launchof our equity, diversity andinclusion policy;•

the publication of our first ethnicity
pay gap reporting in the UK; and•the launch of new employee
impact groups focused onneurodiversity and women’s issues.

Our colleagues have completed
almost 14,000 training courses
and we have launched a new
Foundations programme to support
high-potential colleagues in theirearly career. We continue to extend
both the number of participants andthe range of opportunities offeredin our apprenticeship and graduate
programmes. On Governance, wehave continued to embed responsible
practices throughout our global
operations and supply chain, driving
employee awareness through training
and regular communications. For
more on our people and governancecentred initiatives, see pages 51 to 57.
Remuneration structures are a key
tool to drive sustainability-focused
behaviours and positive impacts.
This year, we have introduced newsustainability-related performancemeasures for Executive Directors.
For further information, see the
Directors’ Remuneration Reporton pages 120 to 143.

Strategy and targets
As a Group we have been proactively
reducing our own environmental
footprint over many years. We
embarked on our environmental
journey in the early 2000s, with thecreation of our first employee-led Go
Green teams; since then, we havedramatically reduced our carbon
footprint, leaving only a relatively small
footprint in our own operations.
In FY22/23 we set near-term targets of a
50% reduction in Scope 1 emissions anda 70% reduction in Scope 2 emissions,both calculated versus our FY18/19
baseline year, and set to be achievedby 2030. As the understanding of ouremissions has evolved, we have taken
the decision to redefine our baseline
year as FY22/23. The data for this year
is more mature and robust than inprevious years, putting us on a stronger
position to enact positive change in themost relevant areas of the business.

As set out opposite, following
this rebaselining, the Board andManagement Board have made thedecision to accelerate our near-termemissions reduction targets. We
have now set the target to reach net
zero (where we add no incremental
greenhouse gases to the atmosphere)
across our own operations (Scopes
1 and 2) by 2030. In addition tothese targets, we remain committed
to delivering net zero emissions
across Scopes 1, 2 and 3 by 2045,
putting us five years ahead of the UK
Government’s commitment.
With the work undertaken to reassess
our baseline year, we took the decision
to delay setting near-term 2030 targets
for our Scope 3 emissions. Work has
been progressing to refine and improve
our data collection techniques andnear-term targets will be set in FY24/25.
We intend that all our targets will alignwith, or exceed, the SBTi framework.

Once set, the near- and long-termtargets will be sent for validation to
SBTi. Through this process we havebeen incorporating sustainability
considerations into our new productdevelopment stage gate process, toensure the ongoing reduction of our
products’ carbon footprint throughenergy use, packaging and distribution,
as well as increased recyclability
and upgradability.
Today, our market-based carbon
intensity metric for Scopes 1 and 2
stands at 5.92 tonnes CO2e per £million
revenue. This is an increase from 2.96
tonnes per £million revenue in FY22/23,
primarily caused by temporarily losing
access to REGO-certified renewableelectricity, as described later inthis section.

CASE STUDY

Go Green Teams
Go Green is a long-standing employee-led initiative,
set up originally at our four UK manufacturing
sites to help promote environmental sustainability.
The scheme has been extended this year to cover
all our major sites internationally with the goal of
improving environmental performance and helping
the Group to hit its accelerated net zero targets. A
total of 14 highly engaged teams have now been
set up, covering 24 sites. As well as delivering
self-guided projects, teams have been given aworkbook of suggested projects to work through,covering topics such as energy, waste, water andtravel. Along with helping to identify larger site
infrastructure projects, Go Green teams are driving
behaviour change projects, helping to educatecolleagues Group-wide to make environmentallyconscious decisions.

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Oxford Instruments plc
Annual Report 2024

Overview

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Strategic Report

SUSTAINABILITY: ENVIRONMENT continued

GHG emissions (tCO2e)2024

Our roadmap to net zero
We have been making significant
progress towards achieving net zeroacross our operations. This has beenstrengthened this year by announcing
our accelerated target to be net zeroin our own operations, that is Scope 1
and 2, by 2030. This ambitious target
will help us to drive positive change
within the business over the coming
years. In addition to this work, we will
also be working to reduce our Scope
3 emissions to ensure we hit our 2045
net zero target across all Scope 1, 2
and 3 emissions. The steps we will takebetween now and 2045 include:
•

•

•

•

•

developing a transition plan during
FY24/25 to map our pathway to
net zero;ensuring that all of our sales,
service and manufacturing
operations, wherever possible, arepowered by electricity backed byrenewable energy certificates, e.g.
Renewable Energy Guarantee ofOrigin (REGO) scheme in the UK.
Where this is not achievable we will
look to move from current sites asleases come up for renewal;
prioritising positive environmental
attributes when we are looking
for new sales, services or
manufacturing facilities;
looking for opportunities to reduceenergy usage at each of our sites.
We will continue to use and invest inenergy-efficient equipment to help
reduce the quantity of energy wepurchase;
early replacement of gas and oil
boilers (with the Board setting atarget to replace boilers at two UK
sites in the next three years (seepage 143));•

switching fleet vehicles to electricrather than internal combustion
engines; and•engaging with our supply
chain to understand theirdecarbonisation strategy.

Streamlined Energy andCarbon Reporting (SECR)
We have outlined our emissions andenergy usage across the whole Group,
accounting for all Oxford Instrumentsites. Absolute location-based Scope
1 and 2 emissions increased by 11.6%
as a result of a full year reporting at
our new Severn Beach site, in addition
to increased electricity usage atsome of our sites across Asia. Scope 1
emissions have reduced by 35% due toreduced company car and fleet usage.
Scope 2 market-based emissions haveincreased significantly due to supply
issues with our renewable energy
certificates at the majority of UK sites
this year. Our previous electricity
supplier is exiting the industrial sector,
and as it pulled back from the market,
it dropped certain services, such asproviding REGO-certified electricity. In
response, we negotiated an early exit
to our contract and have contractedwith a new supplier that can provide
REGO-certified electricity long term.
Due to the time taken to negotiate andset up these new contracts, six monthsof electricity was supplied to some UK
sites that was not REGO backed. The
target to have 100% of UK sites using
renewable electricity by April 2024 has
now been met.

37

Financial Statements

Progress has been made on moving
global sites to use renewableelectricity. The new office in Tokyo
consolidated two sites and added
solar power, water-conservation andenergy-saving measures, as well as
having been constructed in part fromrecycled materials. The new site isa 4-star certified DBJ (Development
Bank of Japan) green building. We
also have an ongoing programme toimprove energy efficiency at existingsites. Actions taken during the year
have included continuing to replace
fluorescent lighting with LED lighting,and optimising heating, ventilation andair-conditioning systems to make themmore energy efficient.
In the near term, we will continue
to purchase renewable energy
certificates to reduce our marketbased Scope 2 emissions. In thelonger term we will explore further
development of onsite generationand power purchase agreements(PPAs) and pursue energy efficiency
opportunities.
We report our emissions and energy
intensity as tonnes CO2e/£m revenue
and kWh/£m revenue. Emissions
intensity has increased 5.5% thisyear, while energy intensity has
increased 3.6%.

Scope 1 fugitive emissions (tCO2e)
Scope 1 combustion emissions (tCO2e)
Total scope 1 (tCO2e)
Scope 2 location-based (tCO2e)

2023

UK

Global(exc. UK)

Group
total

UK

Global(exc. UK)

Group
total

1

1

2

–

49

49

372

51

423

571

41

612

373

52

425

571

89

660

2,315

803

3,118

1,874

641

2,515

Scope 2 market-based (tCO2e)

1,715

647

2,362

–

656

656

Total Scope 1 + 2 location-based (tCO2e)

2,688

855

3,543

2,445

730

3,175

Total Scope 1 + 2 market-based (tCO2e)

2,088

699

2,786

571

745

1,316

Upstream Scope 3 (tCO2e)––64,857––59,199Downstream Scope 3 (tCO2e)––

31,371––

29,853

Total Scope 3 (tCO2e)––96,228––89,052

Total Scope 1, 2 & 3 location-based (tCO2e)––

99,771––

92,227

Total Scope 1, 2 & 3 market-based (tCO2e)––

99,014––90,368

Scope 1 + 2 location based GHG emissions
intensity ratio (per Group turnover) £m

–

–

7.53

–

–

7.14

Total renewable fuels consumption (kWh)

0

0

0

0

0

0

Liquid fuel (diesel, petrol, fuel oil)

662,253

12,706674,959

1,388,935–

1,388,935

Gaseous fuel (natural gas)

1,091,919

261,036

1,352,955

1,240,159

223,210

1,463,369

Total non-renewable fuels consumption (kWh)1,754,172

273,7422,027,914

2,629,094

223,210 2,852,304

Total fuels consumption (kWh)1,754,172

273,7422,027,914

2,629,094

223,210 2,852,304

Consumption of purchased or acquired
electricity renewable (kWh)6,485,154

395,2026,880,356

9,689,500

64,317

9,753,817

Consumption of purchased or acquired
electricity non-renewable (kWh)4,695,603

1,893,110

6,588,713–

1,843,949

1,843,949

Consumption of self-generated non-fuelrenewable energy (solar) (kWh)–255,139

255,139–––

9,689,500 1,908,266

11,597,766

Energy consumption (kWh)Total electricity consumption (kWh)11,180,757

2,543,450 13,724,207

Consumption of purchased or acquired heating,steam and cooling non-renewable (kWh)–252,243

252,243–

153,520

153,520

Consumption of purchased or acquired heating,steam and cooling renewable (kWh)–64,96764,967–

66,852

66,852

6,485,154

715,3077,200,461

9,689,500

Total non-renewable energy consumption (kWh)6,449,775

2,419,094

8,868,869

2,629,094

2,220,679

4,849,773

Total energy consumption (kWh)12,934,929 3,134,402 16,069,330

12,318,594

2,351,848

14,670,442

Total renewable energy consumption (kWh)131,169 9,820,669% renewable electricity from total electricity

58%

16%

50%

100%

3%

84%

Energy Intensity ratio (per Group turnover) £m––

34,161––

32,9901.	This section has been prepared for the reporting period of 1 April 2023 to 31 March 2024. We report on all of the material emission sources inline with an operational control approach method, as required in Part 7 under the Companies Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013 and under the UK’s Streamlined Energy and Carbon Reporting (SECR) requirements.
	Our energy consumption and emissions data is reported in accordance with the reporting requirements of the Greenhouse Gas Protocol (‘GHG
Protocol’), Revised Edition and the Environmental Reporting Guidelines, including the SECR guidance dated March 2019. The GHG Protocol
standard covers the accounting and reporting of seven greenhouse gases (GHGs) covered by the Kyoto Protocol.
	We report on Scopes 1 and 2 GHG emissions, as well as select Scope 3 emissions, providing a detailed breakdown of the Group’s emissions by typeand intensity measurement.
	In our calculations, we have taken into account instances where sites generate their own renewable electricity or purchase electricity backed
by contractual instruments, such as Renewable Energy Guarantee Origin (REGO). Consistent with the Greenhouse Gas Protocol, we regularly
review our reporting procedures in response to changes in business structure, calculation methodologies, and data accuracy and availability.
Consequently, we have restated our Scope 1 and 2 2023 emissions data to reflect updated emissions factors and data availability.
	For Scope 1 emissions, we have utilised emission factors from the UK Government’s GHG Conversion Factors for Company Reporting 2023
(provided by the Department for Environment, Food and Rural Affairs (DEFRA)). Scope 2 emissions, calculated using the GHG Protocol locationbased method, have been determined using country-specific emission factors from the International Energy Agency (IEA) and DEFRA for UK sites.
For Scope 2 emissions calculated using the GHG Protocol market-based method, we have used residual mix emission factors from the Associationof Issuing Bodies (AIB) 2022 where applicable. In cases where residual mix emission factors were not available, we employed country-specificemission factors from the International Energy Agency (IEA) in accordance with GHG Protocol guidelines.

www.oxinst.com

38

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

SUSTAINABILITY: ENVIRONMENT continued
Scope 3 emissions
During the year we re-calculated
our Scope 3 emissions using datafrom FY22/23 and then updated ourfootprint for this year. Our evaluation
confirmed that our value chain
emissions are significantly greater thanour operational carbon footprint, with
our Scope 3 emissions accounting for
97.2% of our total emissions.
We calculated all applicable Scope
3 categories for our carbon footprint,
with five categories not applicableto our business. In line with theGreenhouse Gas Protocol, we continue
to review our reporting in light ofany changes in business structure,
calculation methodology and theaccuracy or availability of data.

Due to recognised inherent
uncertainties in calculating Scope3, we have adopted a continuous
improvement approach. We willcontinue to review our processes anddisclose any restatements in a timely
and transparent manner. Below is a
description of our most material scope
3 categories for our 2023/24 Scope 3
base year footprint.
Purchased goods and services (57.2%
of Scope 3) – We use purchase data by
spend of raw materials, components
and services. As this was our firstevaluation of our purchased goods
and services we have used a ‘spendbased’ approach which allocatesemissions to an amount spent on
specific commodities. While thismethod contains a certain degree of
uncertainty, it provides a view of our
hotspots in our supply chain emissions.

As more granular data becomes
available we will refine thismethodology and look to incorporate
supplier-specific emissions.

Environmental legislation

Use of sold products (32.3% of Scope3) – We calculate the lifetime energy
use for representative products of our
key product ranges, using our annual
sales volume, average power use per
product and estimated hours in use
over life. Emissions factors for our key
sales regions are applied to this data.

Water and waste

Upstream transportation anddistribution (3.3% of Scope 3) – Allinbound, intragroup and outboundlogistics paid for by the Group are
mapped against the transportationmode, weight and distance travelled
to calculate emissions on a well-towheel basis.

As a Group, we are committed to ensuring compliance with all environmental legislation in the countries where we operate.
No environmental fines or penalties have been placed on the Group in the last three years.

Water withdrawal and waste data has been collected across the Group from sites with independent water supplies anddirect control of their waste collection services. This includes all the primary UK manufacturing sites, which account for 83% ofGroup revenue.
Some of our operations are in regions with high or extremely high levels of water stress. However, water is not seen as amaterial risk due to the low volume we consume. In total the Group recorded 10,553 m3 of water withdrawal.
UK sites are sending zero waste to landfill; our waste from these sites is either recycled or used to generate electricity atenergy from waste facilities. We are committed to reducing the quantity of hazardous waste we produce.
Total waste – treatment

Recycled

Category Description

Status55,02950,505––

1

Purchased goods and services

Relevant, calculated2

Capital goods

Relevant, included in category 1

3

Fuel- & energy-related activities

Relevant, calculated

395

296

4

Upstream transportation and distribution

Relevant, calculated

3,150

4,327

5

Waste generated in operations

Relevant, calculated

13

11

6

Business travel

Relevant, calculated

4,825

2,704

7

Employee commuting

Relevant, calculated

1,445

1,353

8

Upstream leased assets

Not relevant, not applicable––

64,85759,199

326

314

–

–

Upstream emissions
9

Downstream transportation and distribution

Relevant, calculated

10

Processing of sold products

Not relevant, not applicable11

Use of sold products

Relevant, calculated

31,03429,52912End-of-life treatment of sold products

Relevant, calculated

11

11

13

Downstream leased assets

Not relevant, not applicable

–

–

14

Franchises

Not relevant, not applicable

–

–

15

Investments

Not relevant, not applicable––

Downstream emissions

31,371

29,853

Total Scope 3

96,22889,052

38.9%

12,656

5.9%

117,743

55.2%

Total

213,302kg% split of waste

615

0.3%

Non-hazardous

212,687

99.7%

Total

213,302

Our Tubney manufacturing site and head office is set in acres of woodlandwww.oxinst.com

82,903

Energy from waste

Hazardous
FY22/23 Scope 3
emissions (tCO2e)% split of waste

Landfill

Hazardous vs non-hazardous

FY23/24 Scope 3
emissions (tCO2e)

kg

39

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT

Task Force on Climate-related Financial Disclosures (TCFD)
Statement for the year ended 31 March 2024
Introduction
In tandem with our net zerocommitment, this report addresses
our climate governance and describes
how we integrate climate risks andopportunities into our risk management,
strategic planning, and decisionmaking, in line with our ambition toachieve net zero emissions acrossScopes 1 and 2 by 2030, and acrossScopes 1, 2 and 3 by 2045.
As a global manufacturer of hightechnology products, mitigating,
adapting and responding to theimpacts of climate change is central to
our strategy, both in terms of how we
operate our business, and in terms of
the key role our products and services

play in the technology pathway toenable the transition from fossil fuels toa low-carbon economy. This year wehave updated our climate-related risk
and opportunity assessment, taking
into account their impact under various
timeframes and scenarios to gain adeeper understanding.

Compliance statement
For clarity around compliance of thefollowing information with the TCFD
framework, and requirements arisingfrom Listing Rule 9.8.6R(8), we consider
our disclosure to be consistent withall TCFD recommendations andrecommended disclosures as detailedin ‘Recommendations of the Task
Force on Climate-related Financial

Disclosures’ (2017) and the additional
guidance as set out in the 2021 Annex,‘Implementing the Recommendationsof the Task Force on Climate-related
Financial Disclosures’ and with theclimate-related financial disclosure
requirements under the Companies(Strategic Report) (Climate-related
Financial Disclosure) Regulations
2022, as shown in the TCFD crossreference and disclosure consistency
summary below.

TCFD pillar

Recommended disclosure

Disclosure location

Governance: Disclose theorganisation’s governancearound climate-relatedrisks and opportunitiesa.	Describe the Board’s oversight of climate-related risks
and opportunities.

Pages 41 and 42b.	Describe management’s role in assessing and managing climaterelated risks and opportunities.

Pages 41 and 42

Strategy: Disclose theactual and potential
impacts of climate-relatedrisks and opportunities
on the organisation’s
businesses, strategy, andfinancial planning wheresuch information is materiala.	Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.

Pages 44 to 49b.	Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.

Page 50c.	Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C or
lower scenario.

Page 50

Risk management:
Disclose how theorganisation identifies,
assesses, and manages
climate-related risksa.	Describe the organisation’s processes for identifying and assessing
climate-related risks.

Pages 42 and 43b.	Describe the organisation’s processes for managing climate-relatedrisks.

Page 43c.	Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s overallrisk management.

Page 43a.	Disclose the metrics used by the organisation to assess climaterelated risks and opportunities in line with its strategy and risk
management process.

Page 50b.	Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhousegas (GHG) emissions, and the related risks.

Pages 35 to 39c.	Describe the targets used by the organisation to manage climaterelated risks and opportunities and performance against targets.

Pages 35 to 39, 50

Metrics and targets:
Disclose the metrics andtargets used to assess
and manage relevant
climate-related risks andopportunities where suchinformation is materialwww.oxinst.com

Governance
Board level
The Board of Directors has ultimate
responsibility for the oversight ofclimate change-related issues andis supported by its Committees(primarily the Sustainability Committee,
the Audit and Risk Committee andthe Remuneration Committee), theManagement Board, the Sustainability
Leadership Forum, and the wider
senior leadership team. Climatechange-related considerations areembedded throughout our governancestructure, and at every level acrossthe organisation, as set out in thegraphic and explained in moredetail below. The Board engages
regularly with a range of external
advisers and internal subject matter
experts on environmental legislation,
decarbonisation and climate risk.

The Group’s environmental strategy
and the management of climaterelated risks and opportunities is
set and directed by the CEO andManagement Board. Any major capital
expenditure, including climate-related
initiatives such as solar arrays orenergy efficiency upgrades to sites, isapproved by the CEO and CFO and, if
required, the Board.

The Audit and Risk Committee provides
oversight and governance in relation
to climate change-related risks andopportunities, while the Remuneration
Committee is responsible for setting
and overseeing climate changerelated remuneration incentives,
together with any other sustainabilityrelated incentives. The current climaterelated executive remuneration
objectives can be found on pages 142
and 143. The Sustainability Committee
in turn provides strategic guidance
and oversight to the managementlevel Sustainability Leadership Forum(SLF) primarily through the attendanceof relevant SLF members at theCommittee’s meetings.

The Board, through its Sustainability
Committee (comprising all the NonExecutive Directors), provides oversightand governance over environmental
strategy, including monitoring progressto net zero targets through its review
of emissions data, and assessing
how these are being managed. The
Sustainability Committee meets atleast three times a year.

Climate-related governance framework
Oxford Instruments plc Board

Audit and Risk
Committee

Remuneration
Committee

Board Sustainability
Committee

Sustainability Leadership Forum
Management
Board

Business unit andregional leaders

Managementof climate
risks andopportunities

Energyuse andreportingTarget setting Productand progress design
towards net
zero

Supplychain

Go Green teams

Note to graphic: Arrows indicate two-way transfers of information and guidance between forums.

Waste
management

Communications
and engagement

41

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Management level
The SLF is a cross-functional forum,
chaired by the Chief HR Officer, witha remit across the full spectrum ofsustainability, including environment,social and governance. It holds
responsibility for environmental
issues at a management level,
including climate-related risks andopportunities and the delivery of
the Group’s environmental strategy.
Representatives of the SLF attend
Sustainability Committee as required toshare strategic updates, and seek theBoard’s input on them. The SLF meetsat least quarterly, and is primarily
responsible for detailed developmentof strategy, together with theassessment, management and tacticaldelivery of the environmental remit.

Its membership includes functional
heads and subject matter experts,
who lead workstreams on:
•


the
management of climate risks
and opportunities;•

energy use and reporting;•development of target setting
and progress towards net zero;•product design;•

supply chain;•

waste management andrecycling; and•communications and engagement.

A key part of the SLF’s remit, working
in collaboration with the Management
Board, is to foster two-way engagementwith business units, regional leadershipand Go Green teams to drive andaccelerate Oxford Instruments’ progress
towards net zero and our managementof climate risks and opportunities. This
year our Go Green initiative (see page35) has expanded to 14 global sites tohelp Oxford Instruments drive progress
towards its 2030 net zero target for
Scopes 1 and 2, and its 2045 overall net
zero target through projects relating toenergy, waste, water and travel.

SLF members lead liaison withexternal consultant CEN-ESG on
climate, energy and progress to net
zero. In addition, members monitor the
KPIs outlined in the Metrics and Target
section on page 50.

Through this assessment, risks are
assigned a Risk Score and classified
as either Low, Moderate, High or
Significant. Risks that are classified as
High or above are reported to the Groupfor further assessment. This process
allows prioritisation of risks and ensuresthat the significance and scope ofclimate-related risks are considered inrelation to non-climate-related risks.

The decision to tolerate, transfer
or treat a risk is determined by theoutcome of the Risk Score; higher
scoring risks need to be managed
to bring the risk impact back in linewith the Group’s appropriate risk
appetite. Action plans for each risk areoutlined in the risk register including
mitigating actions and who is
responsible for these actions.

Climate-related risks scored as Highor above are reflected in the Grouprisk register which is reported to
the Audit and Risk Committee on
a quarterly basis. Risks below thisthreshold are still monitored andconsidered for future review.

Additional information regarding
each risk and opportunity has been
elaborated upon, including anassessment of their implications,
including but not limited to financial
and reputational implications, strategic
responses, associated costs, andthe variability within climate-related
scenarios, where feasible.

Risk Management

Strategy

Our process for identifying and assessing climate-related risks.

Climate-related risks
and opportunities

As a principal risk, climate-relatedrisks and opportunities are identified
and assessed in line with Oxford
Instruments’ processes for wider
enterprise risk management. This
allows the importance of climaterelated risks and opportunities tobe compared with other risks andopportunities. All physical andtransition risk categories (current
and emerging) outlined by the
TCFD are considered by Oxford
Instruments, regardless of whether
they occur within our operations,
upstream or downstream of theGroup. Our approach to identifying
and assessing risks and opportunities
is set out in detail in the Risk
Management section on pages 70
to 78 of the Annual Report 2024.

Relevant risks and opportunities
are identified with help fromexternal consultants, CEN-ESG,
and involve collaboration with key
internal stakeholders such as senior
management, legal and regulatory,
product management and healthand safety functions. As part ofthis process, we carry out horizon
scanning to identify potential threats,
particularly regulatory changes, andany emerging risks and opportunities,
which allows for better preparedness
to support decision making. We
consider climate-related risks andopportunities across the short,medium and long term, with thesetimeframes defined on page 43.

Generally, transition risks are considered
at a macro level by the Group incollaboration with internal stakeholders
and senior management, while physicalrisks are typically more granular andtherefore more relevant at a business
unit and site level. Any new regulatory
requirements are implemented asthey arise, and further actions taken
as appropriate. During the year we
carried out a site-level physical climate
risk assessment using Munich Re’s
Location Risk Intelligence tool, which
provides a geospatial natural hazard risk
assessment and evaluation, to improve
our operational risk assessment.
As with all other Group risks, climate
risks and opportunities are assessedon a 4x5 matrix, which incorporates anassessment of both Likelihood (Highly
Unlikely to Highly Likely) and Impact(Insignificant to Severe1). The financial
impact of a risk is defined below.

Our approach to managing climaterelated risks and leveraging
opportunities is incorporated into
our business strategy. This year
we have performed a new climate
scenario assessment of climaterelated risks and opportunities.
Two separate climate risk
assessments have been carriedout to reflect the contrast between
transitional and physical climate risks.

Impact time horizon

Financial Impact2
Insignificant

NotableSignificant

Major

SevereFinancial impact ofFinancial impact ofFinancial impact ofFinancial impact ofFinancial impact of

250k

250k–£1m£1m–£2m£2m–£5m> £5m

www.oxinst.com

Transition risks
and opportunities
The TCFD defines transition risks infour categories (Policy and Legal,
Market, Technology, and Reputation)and transition opportunities in fivecategories (Resource Efficiency, Energy
Source, Products & Services, Markets
and Resilience). These categories wereconsidered as part of the transition risk
assessment. Risks and opportunities
identified in these categories wereranked, with only the most significant
being reported below. Short, medium
and long-term time horizons defined
below were used as part of thisassessment to identify the impact ofclimate on our business strategy.

Year fromYear toRationale

Short term

2024

2027

In line with the existing risk management time horizon and specificbusiness plan strategy.

Medium term

2027

2035

Encompasses Oxford Instruments’ near-term emission targets.

Long term

2035

2050

Encompasses the Group’s net zero by 2045 target, the UK Government’s
net zero by 2050 target and the useful life of the organisation’s assets.

The following International Energy Agency climate scenarios have been used to perform scenario analysis on our transition
risks and opportunities.
•

Net Zero 2050 (NZE): a narrow but achievable pathway for the global energy sector to achieve net zero CO2 emissions by
2050. This scenario meets the requirement for a ‘below 2°C’ scenario and is used as a positive climate pathway. NZE also
informs the decarbonisation pathways used by the Science Based Targets initiative (SBTi).

•

Stated Policies Scenario (STEPS): representing projections based on the current policy landscape and is used as a basecase pathway. Global temperatures rise by around 2.5°C by 2100 from pre-industrial levels, with a 50% probability.

1.	Likelihood is a measure of the risk occurrence while impact is a measure of the combination of financial, reputational and compliance impacts.
Impact is a combination of financial, reputational and compliance impact.
2.	Materiality limits are set in line with the Group’s financial statement materiality levels. Last year Group financial materiality was £3.68m based on
5% of profit before tax.

Both these risk assessments
involved a Group-wide review ofoperations and value chain to gain
an understanding of how climate can
impact our revenue, assets and otheraspects of our company. An external
consultant, CEN-ESG, was engaged
to facilitate engagement with key
stakeholders within the Group such as
procurement, product development
and senior management in tandemwith horizon scanning of externalindustry risks and a desktop review ofother climate initiatives.

This detailed analysis, coupled withevaluations of impact and likelihood,facilitates the determination of
appropriate risk responses, such as
mitigation, acceptance, or control.
Consequently, resources can beallocated effectively to address themost consequential climate-related
impacts, while other risks necessitate
additional scrutiny or are deemed
acceptable within the Group’s
customary risk tolerance.

43

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Significant risk/opportunity
Report to Group

Transition risks and opportunities

High risk/opportunity
Report to Group

Moderate risk/opportunity
Do not report to Group mitigation
plan expected to be in place

Low risk/opportunity
Do not report to Group

Transition risks identified
Risk

Current andemerging
environmental
regulationand increasing
reportingrequirements

Price inflationin the value
chain

Increasing
stakeholder,
regulatory
and reporting
expectations

Potential impact
on the businessResponse/actions we are taking
and how they are managed

Rise in material prices forswitching to compliant
products or disruption
to production if unable
to react in sufficienttime. Could also
result in component/
process obsolescence.

We have product compliance processes
in place to manage the regulatoryenvironment. We use existing processes
to meet Restriction of Hazardous
Substance (RoHS) and Registration,
Evaluation, Authorisation and Restrictionof Chemicals (REACH) requirements,
which remain appropriate to manage
future changes in standards. Further,
our new product development process
considers environmental regulation.

Penalties for noncompliance withregulation. Further,cost of compliancecould increase
through being late toaddress regulation.

Oxford Instruments has dedicatedinternal risk, legal and environmental
management resource, as well as
investing in external consultancy, toensure that we are aware of, andremain compliant with, legislation.
Further, we implement any new
regulatory requirements as they arise.
Our certified ISO 14001 systems at ourfour UK manufacturing sites support our
mitigation of climate risk.

Potential of higher
supply chain costs
through increased
raw material prices.

Our target is to achieve net zero
emissions by 2045. We are in the processof assessing our Scope 3 emissions –including supply chain. This will be an
essential input into the development of
our net zero target, transition plan andability to identify key levers to reduce
supply chain emissions. We are also
engaging with our key suppliers on theircarbon footprint to identify our carbon
hotspots and mechanisms to reduce this.

Global supply chainsare implementing more
expensive production
methods and changing
raw materials to facilitate
Marketdecarbonisation, although
the extent to which increased
costs will be passed on islargely unknown.

Potential of higher
supply chain costs.

Oxford Instruments maintains close
relationships with key suppliers. ProductDevelopment and Strategic Sourcing
teams identify and evaluate viable
alternatives in materials and processes
and work closely with key suppliers todeliver supply chain solutions.

Key stakeholders aredemanding sustainability
performance from
Oxford Instruments.

Reputational damage
that could result inloss of customers
and shareholders
and reduced accessto capital.

Board-level scrutiny and oversight, andan organisation-wide focus on addressing
the risks and opportunities arising fromclimate change, together with a focus on
impact reporting, wider communications
and stakeholder engagement. Plans todevelop a transition plan will also reduce
exposure to this risk.

Risk description

Increased exposure toenvironmental regulation– such as regulation
on Perfluoroalkyl
and Polyfluoroalkyl
Substances (PFAS).

The global regulatory
landscape for ESG issues
is changing rapidly. Failure
to keep up with emerging
regulation could increase
costs of compliance.

Value chain exposure tocarbon pricing impacts.
Globally, there is anincrease in carbon pricing
mechanisms – both policy
and market instruments –for example Carbon Border
Adjustment Mechanism(CBAM) within the UK and
the EU. Our suppliers may be
exposed to carbon pricing
within their own operations.

Risk type

Policy and legal

Policy and legal

Policy and legal

Reputation*	Materiality limits are set in line with the Group’s financial statement materiality levels. Last year Group financial materiality was £3.68m based on
5% of profit before tax.

www.oxinst.com

NZE scenario
KPIs

2027

2035

STEPS scenario
2050

2027

2035

2050

Scenario Implications

Frequency of horizon
scanning for new
regulation

The pace and magnitude ofregulation would increase more
substantially under NZE – but
no foreseen long-term change
in risk exposure between
NZE and STEPS given our
mitigation processes.

•

Percentage of sites
with ISO 14001
certification

The pace and magnitude ofregulation would increase more
substantially under NZE – but
no foreseen long-term change
in risk exposure between
NZE and STEPS given our
mitigation processes.

•

Scope 3 – category
1, 4 emissions
Global carbon prices

•

•

•

•

•

Net risk= zero;companyplans to be
net zero by2045

Net risk= zero;companyplans to be
net zero by2045

Exposure is likely to be greater
under NZE due to the higher
cost of carbon and increased
global implementation ofcarbon pricing mechanisms.

Percentage of supply
chain spend withdecarbonisation
dialogue
Percentage ofsuppliers engaged tocollect emissions data

Change is more rapid under NZE
compared with STEPS. Pricing
implications under NZE are also
more significant.

Rating agency scores

Higher expectations ofstakeholders in short to medium
term under NZE. Oxford
Instruments’ emissions targets
will even out risk exposure underboth scenarios in the medium tolong term.

45

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Significant risk/opportunity
Report to Group

Transition risks and opportunities continued

High risk/opportunity
Report to Group

Moderate risk/opportunity
Do not report to Group mitigation
plan expected to be in place

Low risk/opportunity
Do not report to Group

Transition opportunities identified
Opportunity

Opportunity description

Opportunity
type

The transition to a low-carbon
economy requires significant
investment in R&D for moresustainable technologies. Innovation Products
and development in technology
and services
areas such as batteries are
critical for the transition to a lowcarbon economy.

Investment
in R&D for a
low-carbon
economyServices thatfacilitate thereductionof carbon
emissions anddeliver value
for customers

Operationalenergy andcarbonreductions

Resource
efficiency

www.oxinst.com

In-house R&D and our new productdevelopment process has thepotential to address the needfor products with sustainability
credentials, e.g. energyefficient products.

Products
and services

Proactive collaboration with
suppliers to drive low-carbon
innovation helps improve thesustainability credentials of
our product portfolio.

Products
and services

Remote Services Solutions is a
developing service across theGroup. This service area not only
Products
provides an area for growth but also
and services
allows for reduction of emissions
in our own operations and forour customers.
Local sourcing and strategic
placement of services delivers
efficiency to customers and allows
Oxford Instruments to reduce
logistics travel.

Obtaining renewable electricity
through renewable electricity
certificates (RECs) and powerpurchase agreements (PPAs)
reduces reliance on local grid andhelps to reduce Scope 2 emissions
as an interim measure whilst
exploring opportunities to reduceenergy usage.

Internally Oxford Instruments canimplement resource efficiency
programmes to improve waste,water use and energy savings.

Potential impact
on the businessResponse/actions we’re taking
and how they are managed

Increased revenue

Our products and services play a key rolein the technology pathway to enable thetransition from fossil fuels to a low-carbon
economy. Our enabling technologies, such as
materials analysis solutions, efficient powerswitching, and semiconductor equipment,
help customers address these challenges.

Increased revenue

Our new product development process
takes environmental considerations into
account. Developments in our semiconductor
equipment are implicitly geared towards
energy efficiency as well as our watersaving alternative to the standard chemicalmechanical planarization (CPM) processused to create a smooth surface on
semiconductor wafers.

Increased revenue

We have been working with key
suppliers to embed material andenergy efficiencies into the products
we purchase.

Increased revenue
and decreasedtransport costand emissions

Almost all our products are already shippedwith remote connectivity and we are building
business system infrastructure to enableremote service capabilities.

Resource
efficiency

Decreasedtransport costand emissions

We are engaging in strategic building of
capabilities and services to deliver efficiency
to customers. Load optimisation in logistics is
also part of this strategy. We continue to lookfor opportunities in this area.

EnergysourceReduced costs andScope 2 emissions.
Renewable
electricity can also
provide operating
cost savings andreduce operational
exposure tocarbon pricing.

Our current renewable energy programme
utilises REGO-certified or REGO-equivalentcertifications of renewable electricity. We
make use of solar arrays on our Severn Beachand Scotts Valley manufacturing sites, alongwith our Tokyo office. We are investigating
adding additional renewable generation
capacity to suitable sites.

Reduced costs
and emissions

Group-wide, we are continually looking foropportunities to embed resource efficiency
into our operations. Opportunities can besmall, such as reducing waste or water
usage, or part of larger capital projects, e.g.
replacement of boilers at our Tubney head
office and manufacturing site, and all-electricheating at our new site in Severn Beach.
We seek to invest in long-term, alternativetechnologies as they become suitable andeconomically feasible.

Resource
efficiency

NZE scenario
KPIs

•
•

Low-carbon market
segments growth
Industry investment in
low-carbon R&D

2027

2035

STEPS scenario
2050

2027

2035

2050

Scenario Implications

Under NZE, there is significant
investment in renewables andalternative technologies. Slower
change under STEPS.

Internal R&D investment
Scope 3 category 11,
12 emissions

Under NZE, there is significant
investment in renewables andalternative technologies. Slower
change under STEPS.

•

Number of suppliers
carbon data obtained
from Scope 3 –category 1, 11 emissions

Under NZE, more significant
investment in renewables andalternative technologies. Slower
change under STEPS.

•

Revenue fromremote services

Slightly increased exposure
under NZE due to additive effectof organisation seeking carbon
reduction opportunities.

•

Scope 3 – category 4,
9 emissions

Slightly increased exposure
under NZE due to additive effectof organisation seeking carbon
reduction opportunities.

•

Scope 2 marketbased emissions
Percentage of
renewable electricity
out of total electricity

Greater availability of supply
under NZE. STEPS lags slightly,
reduced availability of REC.

Scope 1 and Scope
2 (location-based)emissions
Total waste
Total water

Greater exposure under NZE due
to more investment in resource
efficient products and services.

•
•

•

•

•
•

47

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: TCFD STATEMENT continued
Physical risks
The frequency of physical climaterelated impacts is expected to increasein the future through an increased
frequency and severity of extreme
weather events. Oxford Instruments
has used Munich Re’s Location Risk
Intelligence tool to assess the Group’s
sites and key suppliers’ current andfuture risk exposure to climate-related
disruptions. Sites have been assessed
for both acute and chronic physicalrisks, including potential risks such as
drought stress, tornados, storms, sealevel rise and flooding events
among other hazards.

Particular attention has been paid
to the four UK manufacturing sites(Severn Beach, Tubney Woods,
High Wycombe and Belfast) as they
contribute roughly 80% of Grouprevenue. Due to the nature of physicalclimate-related risks manifesting
more over the long term, different time
horizons have been used from thoseused to assess the transition risks andopportunities. These are: 2030 (shortterm), 2050 (medium term) and 2100
(long term).

Significant risk/opportunity
Report to GroupThe following scenarios have beenused for the physical risk assessment:•

RCP 2.6 is an optimistic
scenario whereby atmosphericconcentrations of greenhousegases lead to a global temperaturerise of less than 2°C by the end of
the century relative to the preindustrial period (1850–1900).

•

RCP 8.5 is a pessimistic highemissions scenario, consistent witha future with no policy change toreduce emissions and leading to a
global temperature rise of around
4°C by 2100.

High risk/opportunity
Report to Group

Moderate risk/opportunity
Do not report to Group mitigation
plan expected to be in place

Low risk/opportunity
Do not report to Group

Physical risks identified
Opportunity
type

Potential impact
on the businessResponse/actions we’re taking
and how they are managed

Opportunity

Opportunity description

Flooding

One manufacturing site is
projected to be a Zone 50 (2%chance each year of a flood event)site under all future scenarios
from 2030 onwards. A further
Acutemanufacturing site is located ina Zone 100-year return period
for storm surges (1% chance ofoccurring each year).

Increased costs anddecreased revenue
through decreased
manufacturing output,
delayed production
times and damage
to site infrastructure,equipment, or inventory.

Oxford Instruments’ sites are insured
for asset/property damage as well as
business interruption. Each site has abusiness continuity plan and emergency
response measures in place to deal
with significant events. At our new
Severn Beach facility, the building wasconstructed on a 1.5m raised platform
to mitigate flooding risk exposure.

One manufacturing site is currently
at a high-risk level and projected
to remain high against futurescenario projections. A further
Acutemanufacturing site increases
from medium to high risk acrossall projections including the most
optimistic scenario by 2030.

Increased costs anddecreased revenue
through disrupting
manufacturing output
such as road closures,
evacuation orders,
restricted access,or damage to site
infrastructure.

Oxford Instruments’ sites are insured
for asset/property damage as well as
business interruption. Each site has abusiness continuity plan and emergency
response measures in place to deal withsignificant events.

Decreased revenue

Business interruption insurance provides
a degree of cover in the event that supply
chain issues cause significant disruption
to production.

Wildfire

Supplier
disruption
from extreme
weather

www.oxinst.com

Increasing extreme weather
events can cause supply chain
disruptions or site shutdowns.
Analysis indicates low physicalrisk for our key suppliers currently. Acute
However, two of our key suppliers
are at increasing risk of riverflooding and sea level rise acrossboth scenarios in the long term.

2.6 Scenario
KPIs

•

•
•

•

•
•

•

2030

2050

8.5 Scenario
2100

2030

2050

2100

Scenario Implications

Number of days
operations are
disrupted due toflooding events
Revenue loss fromsite disruption
Insurance premiums

Minimal change in exposure
between RCP2.6 and 8.5.

Number of days
operations are
disrupted due to fire
events
Revenue loss fromsite disruption
Insurance premiums

Increased exposure under
RCP8.5, particularly in the longterm 2100 projections.

Number of days
our operations are
disrupted due tosupply chain issues
resulting from extreme
weather events

Minimal change in exposure
between RCP2.6 and 8.5.

49

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Oxford Instruments plc
Annual Report 2024

Overview

SUSTAINABILITY: TCFD STATEMENT continued
Impact on strategy andfinancial planning
We consider climate change to be aprincipal risk for Oxford Instruments,
but also a source of material
opportunity, given our focus on
accelerating breakthroughs, and theend markets we serve. Our assessment
is based on having evaluated key
climate-related risks and opportunities,
including understanding the potential
impact of each in terms of its time
horizon, likelihood and magnitude,
and the stakeholders or areas of thebusiness that may be affected.
Although there is not a dedicatedclimate-related R&D budget,
our existing R&D expenditure
incorporates climate change. Our
products are designed to address
our structurally growing markets inadvanced materials development
and semiconductors, which both havea key role to play in decarbonisation
and addressing the impacts of climatechange. In terms of the direct impactof our products, considerations areincorporated into the Group’s New
Product Development process, toensure the ongoing reduction of
the carbon footprint of our products
through energy use, packaging anddistribution, as well as increased
recyclability and upgradability. In
addition to R&D considerations, thecosts of planned climate initiatives
are included within each business
unit’s annual budget plans of capital
expenditure requests. For example,
when purchasing new offices andmanufacturing sites we always takeenvironmental considerations into the
procurement process.

Resilience of theorganisation’s strategy
to climate change
The scenarios used in our climate
scenario analysis are explained in
more detail above. They have been
selected to provide contrasting
scenarios which allow us anunderstanding of how resilient theGroup is under different situations andtemperature pathways. Our identified
climate-related risks and opportunities,
and action plans to address these,
highlight that in aggregate our overall
climate risk exposure is moderate. We
believe, given our current mitigationplans, that we can incorporate
climate risks into our business-asusual activities and that the Groupis financially resilient to climatechange. Therefore, we do not currently
envisage any additional significant
capital expenditure or changes tobusiness strategy as a result of climatechange that sits outside of our normalplanning. Please see page 156 of our
financial statements where the impactsof climate have been considered.
The outputs of the scenario analysis
we have carried out can be found on
pages 43 to 49. The limitations of this
scenario analysis are:•scenarios often only provide highlevel global and regional forecasts;•

not all risks are easily subject toscenario analysis;•

scenario analysis requires analysisof specific factors and modellingthem with fixed assumptions;•

impacts are to be considered in
the context of the current financial
performance and prices;•

impacts are modelled to occur ina linear fashion when, in practice,
dramatic climate-related impacts
may occur suddenly after tipping
points are breached;•

the analysis considers each risk
and scenario in isolation when, in
practice, climate-related risks may
occur in parallel as part of a wider
set of potential global impacts; and•carbon pricing is informed by
the Global Energy Outlook 2023
report from the International
Energy Agency.

Metrics and targets
Climate-related metrics
We disclose our Scope 1, 2 and 3
emissions in line with the Greenhouse
Gas (GHG) Protocol A Corporate
Accounting and Reporting Standard,with additional guidance from the GHG
Protocol Corporate Value Chain (Scope3) Accounting and Reporting Standard
and the GHG Protocol Technical
Guidance for Calculating Scope 3
Emissions. This covers the accounting
and reporting of the seven greenhousegases covered by the Kyoto Protocol.
An operational control approach was
adopted, with all material emissions
sources reported.
We also disclose a wide range of
metrics to help us to track our progress
across a number of climate-related
and sustainability-related areas. This
includes electricity consumption, GHG
emissions intensity and water andwaste usage. The specific metrics used
to track our climate-related risks andopportunities are identified on pages
37 to 39. Please see the environment
section, pages 35 to 39 for further
information, and for this year’s SECR
reporting, the primary means by which
we report our progress and track
our impact.

Climate-related targets
As set out in the environment section,
we are committed to reaching net zerocarbon emissions (where we add noincremental greenhouse gases to theatmosphere) against Scopes 1, 2 and 3
by 2045. This year we are also pleased
to announce further ambition on our
Scope 1 and 2 net zero targets, with a
new target to be net zero in Scopes 1
and 2 by 2030. In the coming months
we are planning on setting ambitious
Scope 3 targets and also to have our
Scopes 1, 2 and 3 targets validated by
the SBTi. We subsequently also planto publish a net zero plan that will
detail our costed actions to achievethese targets.

Governance

Strategic Report

SUSTAINABILITY: SOCIAL

Social: We believe that businesses have avaluable contribution to make to society
We are acutely aware of our
responsibility to our employees, thecommunities that we impact and thegenerations to come.

Our social
sustainability agenda
Our social sustainability agenda
comprises six key subject areas,
as follows:• Culture, values and engagement• Equity, diversity and inclusion• Health, safety and wellbeing• Investment in our people• Next-generation talent• Community impact

Culture, values andengagement
We strive to create an open, inclusive andvalues-driven culture, where colleagues
feel able to share their views in a two-way
dialogue with senior leaders.
Our Chief Executive Officer and theleaders of our business units andregional teams based around the world
hold regular in-person and virtual
briefing meetings where employees
are encouraged to, and do, ask awide range of questions. The Board
discusses current workforce issues
regularly with management, andmeets a broad range of employees,
for example at site visits by the Chair
and Non-Executive Directors. We also
gather our people’s views annually
through our global engagement survey,
monitoring a range of cultural KPIs
and taking action on opportunities for
improvement at business unit, regional
and Group level.

Our overall engagement score in our2023 global survey, completed by
86% of employees, was maintained
at 78%, comparing favourably withexternal benchmarking1.
This year, we have carried out an
extensive piece of engagement work
led by Chief Executive Officer Richard
Tyson and the Management Board,
focused on our culture and ways
of working (see page 95). Informedby employee focus groups, this has
resulted in a new articulation of how
we work together, which will support
the delivery of our strategy (see pages
10 to 15 and 22 to 23). Both the strategy
and the ways of working (summarised
below) have been rolled out to all
employees via a global roadshow led
by the Chief Executive Officer, and arebeing fully integrated via leadershipinteractions with teams and ongoinginternal communications.

Our ways of working

We start withthe customer

We succeedby being
focusedWe makeand keep
our promises

We work
together as
one team

We help andtrust each otherto succeed

Our values

Inclusive

Innovative

TrustedPurposeful

By seeking out different
perspectives and diverse
collaboration, we deliver
better solutions andlasting success.

Through our knowledge,
expertise and focusedcuriosity, we create new
possibilities for ourselves
and for our customers.

We build successful,long-term relationships
based on accountability,
integrity and respect.

We care, and our passion
and commitment drive
positive change inthe world.

1.	Gallup 2023 research indicating an average global engagement rating of 23% across a range ofsectors www.gallup.com/394373/indicator-employee-engagement.aspx

www.oxinst.com

Financial Statements

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: SOCIAL continued
Equity, diversity and inclusion
We are committed to creating adiverse and inclusive culture. We
use the term equity, rather thanequality, as not everyone is startingfrom the same place, has the samechallenges or requires the same levelof support. Equity, therefore, refers togiving everyone what they need tobe successful, and reflects our focus
on equality of outcomes. At Oxford
Instruments, we want to encourage
everyone to achieve their potential
by actively ‘levelling the playing
field’ wherever needed. We seek todevelop and sustain a supportive andcollaborative working environment
where difference is recognised,valued and celebrated. However, we
also recognise that we operate in 17
countries around the world in which
the legislative frameworks and culturallandscapes vary hugely. In each of thecountries in which we operate, we aim
to be ahead of the curve in our equity,
diversity and inclusion targets, and ourworking practices, but will ensure that
we are not in conflict with legislative
frameworks.
Our approach to equity, diversity andthe prevention of discrimination isoverseen by the Board Sustainability
Committee. Our global Equity, Diversity
and Inclusion policy, covering 100% of
our operations, and publicised to allcolleagues via our intranet, sets out our
expectations in this area, www.oxinst.
com/corporate-content/diversity-andinclusion.
We have identified several key areasof focus, including gender, ethnicity,disability and sensitive medical
conditions, family responsibilities,
sexual orientation and gender identity,
pursuing a range of initiatives to recruitfrom a diverse pool of talent, and tosupport our existing workforce.
We have joined Business in theCommunity (BITC) and the Business
Disability Forum as part of ourcontinual drive to improve ourawareness and understanding of bestpractice in diversity and inclusion
for businesses. In 2024, we signed
up to the BITC Race at Work charterto underline our commitment toimproving equity of opportunity inthe workplace. We also engage
in externally run schemes offeringinternships and career opportunities inour diversity and inclusion focus areas.

During the year, employees havelaunched a women’s group and aneurodiversity group; these join existing
impact groups focused on race andethnicity and LGBTQ+ issues andhave been enthusiastically adopted
by both members and allies of each
community. During the year we havesuccessfully piloted new inclusive
leadership training, with a wider rollout planned for 2024/25.
We are committed to eliminating our
gender pay gap. We monitor, measure
and take action globally,. Our external
data reporting is focused on our UK
workforce and is published in our
Gender and Ethnicity Pay Gap Reportwww.oxinst.com/corporate-content/
gender-pay-report. The gap for our
Oxford Instruments Nanotechnology
Tools entity in the UK, representing 758
employees in 2023, currently stands at
10.4% (median).
We are also committed toaddressing the gender balance of
our workforce, with targets of 30%
female employees overall by 2030
and 40% female leadership by theend of 2025. A particular area of focus
is on increasing the diversity of ourmanagement board, which is being
actively addressed.
We continue to build on the work wehave done so far to establish balanced
recruitment shortlists (that is, shortlists
including candidates from groups which
are underrepresented in our workforce,
including women). We only engage
executive search firms who have signed
up to the Voluntary Code of Conduct ongender diversity.

CEO Richard Tyson makes his Pride pledge

www.oxinst.com

Our inclusive approach to recruitment
includes the use of technology toensure that the language used in job
advertisements is free from gender bias.
We operate a hybrid working policy
which helps employees to balance
work and personal commitments.
We also offer support and, whereappropriate, special leave, for thosewith caring needs for dependents.
Following the reconfiguration of ourinternal employee data portals to
include the Office for National Statistics
ethnicity categories, some 90% of UK
employees and 78% of employees
globally have provided data on theirethnicity. This year, for the first time,
we have reported on our UK ethnicity
pay data. This indicates that 10% of our
UK workforce identify as being part ofan ethnic minority group, and that on
average, these colleagues are paidslightly more than their peers (1.4%
mean and 1.7% median).
We are committed to using this datato help to ensure that our processes
and pay are fair and equitable withrespect to race and ethnicity, as wellas the characteristics on which wehave had full data for several years.
The Parker Review recommends
that we devise and work towards a
specified target for the percentage of
our senior management team to befrom ethnic minorities by the end of
2027. As an international company, we
recognise the importance of ensuring
we have strong ethnically diverse
leadership role models and a diverse
decision-making team that reflects ourcustomer base and the communities inwhich we operate.

This year we have taken steps to broaden the ethnic diversity of our wider seniorleadership team which, as of the date of the Annual Report, comprises 14 persons,of whom 14% are Asian. There are 102 direct reports of this team, of whom 22%
identify as belonging to an ethnic minority group. In that context, we will beseeking to maintain and improve the ethnic diversity of this cohort (ie, our wider
senior leadership team and their direct reports) on a year-on-year basis, within atarget range of 20% to 25%.

New employees in
FY23/24 by gender

Our Gender and Ethnicity Pay Gap Report provides more information on all theseareas: www.oxinst.com

Gender split
Male

FemaleGlobal Oxford Instruments

73%

27%

Plc Board

50%

50%

Management Board

92%

8%

Male69%

Managers

76%

24%

FemaleEmployees

72%

28%

Male

Female

UK

77%

23%

Europe

68%

32%

Asia

68%

32%

America

69%

31%

31%

Gender split by region

Targets:
Objective

Target (with date if applicable)

Progress to date

Balanced shortlists
for recruitment

100%

End of 2023/24: 82%

Ethnic minority representationon the Board

1 person of colour

Met

Women on the Board

By end of 2023/24: 40%
women in line with FTSE
Women Leaders target

Met

Women as a proportionof senior leadership

By end 2025:
40% women

34% (2023: 31%)

Women as a proportion of total
Oxford Instruments population

By end 2029/30:
30% women

Currently 27%(2023: 26%)

Three cohorts undertook the Oxford Instruments Leadership
Programme during the year

Team-building at the Foundations early careers programme

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: SOCIAL continued
We are proud to support our local community groups andcharities alongside being inclusive of our people and culture
through the celebration of events and achievements.

Health, safety and wellbeing

We are committed to fostering a healthy, safe and productive
work environment for our entire workforce, and to driving continuous
improvement in our health and safety (H&S) performance.
The Board is responsible for oversight of our approach to
H&S, supported by the Sustainability Committee.
Our six-step strategic framework, rolled out in 2023/24,
supports continuous improvement via six key areasof management.

CultureCollaboration

Controls

Employee turnover rates

We have achieved our objective of increasing H&S
awareness and reducing the actual number and severityof incidents. Our accident frequency trend remains on
a downward trajectory, with no serious incidents and adecrease in minor accidents reported in 2023. There havebeen no employee or contractor fatalities in the fiveyear reporting period from 2019 to 2023. While our H&S
performance compares favourably with industry standards,
we remain vigilant and prioritise global safety through ourPush for Zero initiative, which aims for a sustained reductionin accidents over time.

Health and safety five-year performance5

Healthy, safe andproductive working
environments

43
30

CompetenceCommunication

Clarity

1

1

34

35

21

2019

2020

Serious injury

Overall, our management approach is based on the ongoing
identification and control of risk. We focus on preventative
measures to remove hazards before they can escalate into
accidents or near misses.
Recognising that our entire workforce has a role to playin creating a safe working environment, this year we haveenhanced the Shield incident reporting system throughwhich we record, manage and monitor accidents and safety
observations, and to which all employees have access. The
system has supported our improved performance since its
introduction in 2019.

Increasing health and safety awareness
1,349
1,121
876

810

288
77

100

144

2019

2020

2021

Safety notifications raisedwww.oxinst.com

188

2022

283

2023

Shield contributors (allemployees can contribute)

19

2021
Minor injury

0

0

42

41

21

2022

18
2023

Accidents per
1,000 employees

Our structured H&S management systems, subject toexternal audits as required, underpin our commitment tosafe work practices. At our primary manufacturing facilities
in the UK, representing 83% of revenue, we maintain ISO
45001 certification. The effectiveness of our management
systems is further supported by a robust internal audit
programme across all operational domains.
During the 23/24 financial year more than 1,000 employees
have received H&S training. This figure comprises training
renewals and onboarding of new joiners. This year, we havelaunched an Institution of Occupational Safety and Health(IOSH)-accredited training programme globally, acrossall business units and regions. Over a 24-month period,
training will be provided to executive team members andeligible members of our management, production andservices workforce, further enhancing their H&S competency
and awareness.
We support our employees and their families by providing
an increasing range and number of opportunities to enhancetheir wellbeing, including readily accessible support services
on a wide range of topics from financial wellbeing to mental
health and health assistance programmes.
We strive to empower individuals coping with mental healthchallenges or disabilities to thrive in their professional roles,
encouraging colleagues to seek assistance when needed,
via our team of Mental Health First Aiders and through theprovision of independent and confidential digital platforms
and services, accessible to employees globally.

Year

Turnover2023/24

12%, of which 9% was voluntary

2022/23

11%, of which 9% was voluntary

2021/22

14%, of which 11% was voluntary

2020/218%, of which 6% was voluntary

2019/20

15%, of which 7% was voluntary

2018/19

14%, of which 10% was voluntary

Employee numbers

This year, three cohorts (35 employees) have undertaken
our bespoke Oxford Instruments Leadership programme,
which brings together high-potential candidates from acrossthe Group and covers a wide range of topics includinginterviewing skills, self-development, developing others andmanaging remote teams. We have delivered Management
Essentials training to 61 managers Group-wide, andrelaunched programmes focused on Project Management
Fundamentals and Project Leadership. We have also piloted
a new Foundations programme for emerging talent, designed
to give aspiring leaders a variety of tools and techniques toallow them to work effectively as they progress their career at
Oxford Instruments.
We have a robust system of regular feedback. 100% of ouremployees have undergone an evaluation process in theyear, embedded through our annual performance review,which also encompasses career development with a focus
on training opportunities.

Full time

Part time

Contract workers

2023/24

2,090

144

69

2022/23

1,894

134

86

Next-generation talent

2021/22

1,662

126

70

2020/21

1,518

107

100

2019/20

1,448

114

70

We take our responsibility towards developing the nextgeneration workforce seriously and are committed toinspiring the next generation of scientists, engineers andbusiness people by showing them the difference they canmake in the world.

All employees are guaranteed a fair salary and other
employment benefits in accordance with their role andresponsibilities. We ensure compliance with minimum wage
legislation and strive to offer competitive compensation
packages suitable for each position and our business needs.
All employees, regardless of location, are entitled to legallyrequired benefits such as annual leave, sick leave, maternity
leave and standard working hours. A number of employee
benefit changes have been implemented over the lastyear to improve the competitiveness, attractiveness andcost-effectiveness of our total remuneration propositions.
These include the doubling of the potential award under
the growth incentive plan available to all employees notin another bonus scheme to £1,000 (or equivalent). We
also have achieved Living Wage accreditation in the UK. In
addition, all UK-based employees have access to our Share
Incentive Plan scheme after six months’ service. Furthermore,in compliance with UK regulations, all UK employees havethe option to enrol in our workplace pension scheme.

Investing in our people
Our people and their capabilities are core to what makes us
a great company. We are committed to being the company
where the best people in our sector want to work, and to
training our people and enabling their career development
and employability.
We provide a range of opportunities for our employees
across technical, commercial, operational and businesssupport functions to gain knowledge, skills and experience.
This includes challenging assignments, learning fromcolleagues and targeted training. Colleagues havecompleted almost 14,000 online training courses in
FY23/24, pursuing more than 750 different courses.
We continue to strengthen our Oi Academy, which offers
development programmes, core skills training courses
and e-learning opportunities. We also offer a broad rangeof secondments, career breaks, apprenticeships andsupport towards external qualifications.

For us, this begins in schools, colleges and learning institutions,where we equip and encourage our employees around theworld to take any opportunity they can to talk to young people
about careers in our industry. We partner with universities andpost-graduate schools to help students understand the rangeof careers available in a technology company, supporting thiswith work experience and engagement with employees froma broad range of backgrounds. A popular benefit we offer all
employees is the offer of work experience to family members
between the ages of 16 and 25.
We remain committed to providing structured
apprenticeships, sponsorships, internships, early career jobs
and graduate programmes. We intentionally reach out toattract a diverse range of people and those from untapped
talent pools, ensuring we are inclusive and accessible.

Community impact
We actively engage in locally focused activities that makeour communities and environments a better place to live andwork. All employees are offered up to two paid volunteeringdays a year to share their professional or practical skillsin the community; we also participate in charity outreachprogrammes and offer sponsorship of local community events.
Our network of Go Green teams (see page 35) drives action
to be more environmentally friendly, both as a business andas individuals.
When we arrange gifts, celebrations, events and activities
for our teams we aim to support the small, independent
businesses near our sites. We also participate in a rangeof charity outreach activities, including raffles, marathon
sponsorships, pub quizzes and coffee mornings.

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

SUSTAINABILITY: GOVERNANCE

Governance: Upholding high ethical standards
Inclusive, innovative, trusted and purposefulWe are wholly committed to conducting our business
responsibly and holding ourselves to high ethicalstandards. Our strong values (see page 51) underpin
everything we do; from how we work with each otherand our customers to how we trade with suppliers. Every
representative of Oxford Instruments is expected tobehave in a way which is consistent with these values.
Our approach to governance is summarised in our Codeof Conduct, which is updated regularly, issued to all new
joiners and communicated regularly to existing employees.
All colleagues, customers and suppliers also have roundthe-clock access to our widely publicised and independentwhistleblowing hotline, Safecall (www.safecall.co.uk/en/
clients/oxinst/), should they encounter any behaviour not in
keeping with our ethical standards.

Our governance sustainability agenda
comprises eight key areas
Our overarching governance sustainability agenda, set out
below, is overseen by our Board Sustainability Committee,(see pages 117 to 119); with the exception of anti-bribery
and anti-corruption, sanctions, export control and customs,
and financial sustainability and tax transparency, which areoverseen by the Audit and Risk Committee (see pages 110
to 116).
1

Anti-bribery and anti-corruption

When dealing with business partners, suppliers andcustomers, or when engaging with public officials, we expect
our employees to act in a transparent and fair manner. We
choose our business partners and suppliers carefully andavoid working with anyone who does not meet and adhere
to the same high standards.
The key principles we expect everyone to follow include
not offering or accepting bribes or improper payments;
not improperly influencing any individual; and notparticipating in any kind of corrupt business activity, either
directly or through a third party. To help our employees
understand what is expected of them we have developed
a comprehensive training course, refreshed this year, which
all new joiners must complete to pass their probationary
period, and which all employees must retake annually; wealso maintain a detailed policy document, www.oxinst.com/
investors-content/compliance/anti-bribery-and-corruption.
No one has been dismissed during FY23/24 as a result of
having committed bribery.

2

Sanctions, export control and customs

We review our Sanctions Policy regularly (most recently in
May 2024) to align with UN, UK, EU and US sanctions.
We are committed to adhering to both the letter and thespirit of export controls governing our activities, and engage
regularly with the UK Government’s Export Control Joint
Unit and its equivalents in other jurisdictions. In response
to geopolitical shifts, we have pivoted our regional focus
towards less sensitive applications and customers in China
this year, and exited the quantum market in the country.
3

Inside information and share dealing

As a listed company on the London Stock Exchange,
Oxford Instruments and its employees must comply withthe relevant laws relating to inside information and sharedealing, including the UK Market Abuse Regulation, as wellas our internal Share Dealing Policy. We ensure that there
are adequate procedures, systems and controls in place toidentify, manage and disclose inside information and also
support our employees and anyone working on our behalf
with understanding their obligations.
4Supply chain responsible sourcing

We operate our business in compliance with all applicablelaws and regulations and expect our suppliers to do thesame. The overarching standards we expect from our
suppliers, covering all operations, are set out in our Supplier
Quality Manual, which incorporates our Code of Conduct
for Representatives and Suppliers, www.oxinst.com/assets/
uploads/documents/OI_COC_REPS_SUPPLIERS.pdf.
In addition, as part of our supplier contracts, suppliers are
required to warrant that they and their sub-contractors willcomply with all applicable laws, statutes, regulations andcodes relating to modern slavery, anti-bribery and anticorruption, and Oxford Instruments’ Supplier Quality Manual,
which incorporates our Code of Conduct for Representatives
and Suppliers.
We are committed to avoiding the use of controversial
materials and proactively eliminating the use of so-called‘conflict minerals’, i.e. minerals sourced from mines in the
Democratic Republic of Congo and adjoining countries
which support or fund conflict from products and the supply
chain. Our conflict minerals policy covers all operations. We
undertake due diligence on our key suppliers and expect
them, in turn, to conduct due diligence on their own supply
chain to help eliminate the use of conflict minerals.
Our online supplier portal allows us to store and audit
our key supplier documents and has been extended
and updated in 2024 to collect information on productenvironmental compliance, quality and sustainability.

5

Human
rights and modern slavery

We are committed to preventing acts of modern slavery
and human trafficking from occurring within our businessand supply chain. We take a zero-tolerance approach to all
forms of modern slavery, including servitude, forced bonded
and compulsory labour, and human trafficking. We require
our suppliers to guarantee the applicable national statutory
minimum living wage.
Bespoke training is mandatory for relevant employees tohelp them recognise where there may be risks of modern
slavery and human trafficking within our business and our
supply chains.
We have an established Whistleblowing Procedure for
employees to report any concerns, and further guidanceis also made available in our Global Human Rights
Policy. In addition, we have extended the availabilityof our Whistleblowing hotline to all our suppliers andrepresentatives.
Our global Code of Conduct sends a clear message to
our employees, business partners, investors and otherstakeholders about our business principles and ethics.
Our Anti-Slavery and Human Trafficking Statement is
updated annually and can be found both on our website andon the Government’s Modern Slavery Statement Registry.
6Intellectual
property and confidentiality

Our intellectual property (IP) is one of our most important
assets; it is key to our success in the market and enables
us to secure and maintain a competitive advantage. We
have comprehensive policies and procedures in place toprotect it, including templates, guidance and training forcolleagues. We continue to protect our inventions, brandand designs through the use of registered IP rights. In theyear we filed a number of new priority patent applications.
Oxford Instruments often collaborates with third parties
on projects which generate new IP, further enhancing our
product offerings to our customers. In these situations,
we will not use any IP without it first being legitimately
acquired or licensed.

7

Dataprotection, data privacy and data security

Our global privacy standard www.oxinst.com/corporatecontent/privacy sets out the principles that guide ourapproach to handling personal information, and all
employees are required to undertake mandatory training
on data protection.
Our marketing teams work closely with our legal teams
to ensure our marketing activities are compliant with theEuropean General Data Protection Regulation (GDPR), UK
GDPR and related privacy legislation in other territories. We
have invested in high-quality CRM and marketing businesssystems infrastructure that have enabled us to enhance our
security and controls.
Our legal team develops compliance programmes aroundthe world to ensure we can respond quickly to any changes
made in the data protection legislation and guidancefrom regulators.
This year we reduced our internal IT vulnerabilities
significantly as a result of upgrading or decommissioning
approximately 100 IT systems globally. We also conducted
several phishing exercises and rolled out mandatory
training for individuals who were identified as requiring
additional assistance.
8

Financialsustainability and tax transparencyWe manage our tax affairs in accordance with thefollowing objectives:•

ensuring compliance with all relevant tax law inall jurisdictions in which the Group operates whilst
managing the associated tax costs in a manner that is
consistent with our Code of Conduct and its attitude tocommercial risk;•

seeking to maintain stable effective and cash tax rates
which reflect the geographic markets in which we
operate, and the Group’s tax attributes, such as broughtforward losses and special deductions such as forresearch and development; and•ensuring that all communication with tax authorities isconducted in a transparent and professional manner.

Our Group Tax Strategy is available on our website
at oxinst.com.

www.oxinst.com

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

FINANCE REVIEW

Robust growth andinvestment for the future
We delivered a robust financial performance as
we invest for the future, with growth in revenue
and with adjusted operating profit broadly inline with last year. Our underlying book-to-billis positive at 1.03, and our orderbook at £302m
provides good visibility for the year ahead.

Summary
Oxford Instruments uses certain
alternative performance measures
to help it effectively monitor the
performance of the Group as
management believe that these
represent a more consistent measureof underlying performance. Adjusted
items exclude the amortisation andimpairment of acquired intangible
assets; transaction costs; othersignificant non-recurring items; and themark‑to‑market movement of financial
derivatives. All of these are included in
the statutory figures. Note 2 on pages
163 to 165 provides further analysisof the adjusting items in reaching
adjusted profit measures. Definitionsof the Group’s material alternative
performance measures, along withreconciliation to their equivalent IFRS
measure, are included within the
Finance Review.
The Group trades in many currencies
and makes reference to constantcurrency numbers to remove theimpact of currency effects in the year.
These are prepared on a month-bymonth basis using the translational
and transactional exchange rates
which prevailed in the previous year
rather than the actual exchange
rates which prevailed in the year.
Transactional exchange rates include
the effect of our hedging programme.

“We delivered a good constantcurrency financial performancewith growth in revenue andadjusted operating profit. We
continue to invest in resources andinfrastructure across the businessto support future growth. Ourbalance sheet remains strong tosupport organic and non-organic
growth opportunities.”
GAVIN HILL
Chief Financial Officer

www.oxinst.com

Reported orders decreased by 10.3% to£459.1m (2023: £511.6m), 7.0% down atconstant currency. Underlying orders
at constant currency fell by 2.5% after
adjusting for £23.0m of prior year
orders cancelled due to UK export
licence rejections and our commercial
decision to withdraw from the China
quantum market. Orders were lower
against a strong comparator period
and a slowdown in life-science OEMorders. Nevertheless, our underlying
book-to-bill was a positive 1.03. At theend of the year, the Group’s order bookwas £301.5m (31 March 2023: £319.6m),
down 5.7% on a reported basis and3.5% at constant currency.
Reported revenue increased by 5.8%
to £470.4m (2023: £444.7m). Revenue,
excluding currency effects, increased
by 9.8%, with the movement in average
currency exchange rates over the year
reducing reported revenue by £17.8m.
This strong growth was broadly equally
split between price and volume.
Adjusted operating profit was broadly
flat at £80.3m (2023: £80.5m). Adjusted
operating profit, excluding currency
effects, increased by 3.7%, with acurrency headwind in the year of£3.2m. Adjusted operating margin
fell to 17.1% (2023: 18.1%), reflecting
trading losses incurred in our quantum
business as a result of ceasing
commercial activities in China andcontinued operational investment.
Statutory operating profit of£68.3m (2023: £72.4m) includes theamortisation of acquired intangiblesof £9.1m (2023: £9.3m) and a charge of£0.7m (2023: credit of £3.0m) relating
to the movement in the mark-tomarket valuation of uncrystallised
currency hedges for future years. Other
adjusting non-recurring items totalled£2.2m (2023: £1.8m).

Adjusted profit before tax grew by 1.6%
to £83.3m (2023: £82.0m), representing
a margin of 17.7% (2023: 18.4%).
Statutory profit before tax decreasedby 3.0% to £71.3m (2023: £73.5m),
impacted by the mark-to-market
non-cash charge on financial
derivatives against a credit last year.
This represents a margin of 15.2%(2023: 16.5%).
Adjusted basic earnings per share fell
by 3.3% to 109.0p (2023: 112.7p). Basicearnings per share were 87.7p (2023:
101.6p), a decrease of 13.7%.
Cash from operations of £59.4m (2023:£72.9m) represents 47% (2023: 58%)
cash conversion. During the year, we
incurred expenditure of £14.1m on theconstruction of our new semiconductor
systems facility near Bristol and facility
expansion in Belfast; cash conversion
on a normalised basis that excludes
this expenditure was 64%, primarily
due to an increase in inventories. Net
cash after borrowings decreased from£100.2m on 31 March 2023 to £83.8m
on 31 March 2024, with consideration
paid on the acquisition of First Light
Imaging in January 2024.
In March 2024, we entered into a new
revolving credit facility. This provides
for approximately £200m of committed
facilities. This represents total
headroom of just around £284m.

59

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Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

FINANCE REVIEW continued
Geographic revenue growth

Consolidated Statement of Income
The Group Consolidated Statement of Income is summarised below.
Year ended
31 March 2024£m

Year ended
31 March 2023
£m£m

2023/24£m

2023/24% of total

2022/23£m

2022/23% of total

Change£m%
growth% growth
at constantcurrency

ChangeEurope

116.1

25%

104.9

24%

+11.2

10.7%

11.2%

122.9

26%

130.3

29%

(7.4)

(5.7%)(1.5%)

221.5

47%

201.2

45%

+20.3

10.1%

15.7%

9.9

2%

8.3

2%

+1.6

19.3%

26.5%

+25.7

5.8%

9.8%

Revenue

470.4

444.7

+5.8%

North America

Adjusted operating profit

80.3

80.5

(0.2%)

Asia

Amortisation of acquired intangible assets

(9.1)

(9.3)

Non-recurring items

(2.2)

(1.8)

Mark-to-market of currency hedges

(0.7)

3.0

Statutory operating profit

68.3

72.4

Net finance income1

3.0

1.1

Adjusted profit before taxation

83.3

82.0

+1.6%

Statutory profit before taxation

71.3

73.5

(3.0%)

Adjusted effective tax rate

24.4%

20.7%

Effective tax rate

28.9%

20.3%

Adjusted earnings per share – basic

109.0p112.7p

(3.3%)

Earnings per share – basic

87.7p

101.6p(13.7%)

Dividend per share (total)

20.8p

19.5p

+6.7%

Revenue: 2023/24

Rest of World

470.4(5.7%)

444.7

The total reported order book declined by 5.7% (3.5% at constant currency). During the year £23m of orders were removed due
to UK export licence restrictions. We have also seen lower lead times for our products, closer to more normalised levels. The
order book, at constant currency, compared to 31 March 2023, decreased by 11.3% for Materials & Characterisation, against astrong comparator period. Research & Discovery grew by 1.3% at constant currency, with lower demand for our imaging andmicroscopy products due to life science OEM weakness, offset by good demand from North America for cryogenic systems forthe quantum market, as well as good growth from our X-ray tubes business. Continued focus on own product service resulted
in growth of 7.9% (+11.0% at constant currency) from Service & Healthcare.
Materials &Characterisation

Research &Discovery

Service &Healthcare

Total

Revenue: 2022/23

234.5

139.4

70.8

444.7

Constant currency growth

26.7

7.9

8.9

43.5

Currency

(9.0)

(5.2)

(3.6)

(17.8)

252.2

142.1

76.1

470.4

£m

1. Net finance income for 2023 includes a non-cash charge of £0.4m against the unwind of discount on WITec contingent consideration.

Revenue growth: reported

7.5%

1.9%

7.5%

5.8%

Orders and revenue

Revenue growth: constant currency

11.4%

5.7%

12.6%

9.8%

Total reported orders fell by 10.3% (7.0% at constant currency) to £459.1m. Underlying orders at constant currency, excluding
prior year orders of £23.2m removed due to UK export licence rejections, fell by 2.5%.

Gross profit

Materials & Characterisation reported orders fell by 13.7% (10.6% at constant currency), with orders impacted by a strong
comparator period, particularly in China for our portfolio of electron microscope analysers and atomic force microscopes.
Furthermore, orders were depressed by £9.9m of prior year orders removed as a result of UK export licence restrictions.
In Research & Discovery, orders declined by 9.5% (6.5% at constant currency). Primarily due to a cessation of commercial
activities in the China quantum market, we removed £13.3m of prior year orders; in addition, we experienced weak orderintake from our life science OEM customers. Service & Healthcare orders increased by 0.3% (+4.3% at constant currency).
Reported revenue of £470.4m (2023: £444.7m) increased by 5.8% (+9.8% at organic constant currency).
Reported revenue grew by 7.5% for Materials & Characterisation (+11.4% at constant currency), with strong growth across theportfolio of product ranges, including electron microscope analysers, atomic force microscopes, Raman systems and ourcompound semiconductor processing systems.
Research & Discovery reported revenue grew by 1.9% (+5.7% at constant currency), supported by shipments of our optical imaging
and microscopy products and X-ray tubes. Growth in these products was partially offset by lower revenue from our cryogenic
systems resulting from a significant number of order cancellations as we retrench from the quantum market in China due to UK
export licence restrictions. With long customer lead times in this segment, this foregone revenue could not be replaced in-year.
Revenue from service of our own products, including revenue from our MRI service business in Japan, grew by 7.5% reported(+12.6% at constant currency).
The book-to-bill ratio (orders received to goods and services billed in the period) for the year was 0.98 (2023: 1.15). After the
exclusion of prior year orders cancelled due to UK export licence restrictions, underlying book-to-bill was 1.03, supported by agood order performance in Europe and the rest of Asia.
On a geographical basis, revenue grew by 10.7% in Europe (+11.2% at organic constant currency), supported by additionaldeliveries of compound semiconductor processing systems and optical imaging and microscopy products.
Reported revenue for North America decreased by 5.7% (1.5% at constant currency) with fewer shipments of our semiconductor
processing systems.
Asia remains our largest region by revenue, with China constituting 58% of regional revenue and 27% of total Group revenue.
Asia delivered revenue growth of 10.1% (+15.7% at constant currency), with strong demand for our electron microscope
analysers and atomic force microscopes, Raman systems and semiconductor processing systems.
www.oxinst.com

Gross profit grew by 5.3% to £242.4m (2023: £230.2m), representing a gross profit margin of 51.5%, a decrease of 30 basis
points against last year due to a small increase in raw material costs and stock provisioning.

Adjusted operating profit and margin
Adjusted operating profit was broadly flat at £80.3m (2023: £80.5m), representing an adjusted operating profit margin of 17.1%(2023: 18.1%). At constant currency, adjusted operating profit margin was 17.1%, a reduction of 100 basis points. The lower
operating margin reflects losses incurred in our quantum business as a result of ceasing commercial activities in China, as
well as continued investment in operations, IT and infrastructure.
Reported Materials & Characterisation adjusted operating profit increased by 14.6% (+20.2% at constant currency) with
reported margin increasing by 110 basis points to 18.4% (2023: 17.3%). We have seen strong demand across the portfolioof businesses encompassing electron microscope analysers, atomic force microscopes, Raman systems and compound
semiconductor processing systems.
Within Research & Discovery, our imaging and microscopy business did not see a rise in profitability despite an increase inrevenue. A shortfall in life science OEM orders against a backdrop of operations and sales, marketing and R&D investment has
put a brake on short-term profit growth. Furthermore, an increase in material costs and stock provisioning due to an inventorybuild-up resulting from lower than expected order demand and previous high levels of electronic purchases to protect output
and mitigate cost inflation, also impacted profitability. Our cryogenic business has a high exposure to quantum markets andexperienced a large trading loss as a result of ceasing commercial activities in China. Long customer lead times meant that
we were unable to replace foregone production slots within the financial year as we pivot away from markets in China for our
product range. We saw strong growth of 20% at constant currency from our X-Ray Technology business. As a result, adjusted
operating profit for the segment declined by 24.4% (26.1% at constant currency) and reported margin fell to 9.6% (2023: 12.9%).
Service & Healthcare reported adjusted operating profit fell by 7.7% (2.3% at constant currency) due to a significant increase inhelium costs under MRI service contracts and higher than expected spare parts usage. Margin decreased by 440 basis points
to 26.7% (2023: 31.1%).

61

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

FINANCE REVIEW continued
Transaction and translation currency effects (including the impact of transactional currency hedging) have reduced reported
adjusted operating profit by £3.2m when compared to blended hedged exchange rates for the prior period.
Materials &Characterisation

Research &Discovery

Service &Healthcare

Total

Adjusted operating profit: 2022/23

40.5

18.0

22.0

80.5

Constant currency growth

8.2

(4.7)

(0.5)

3.0

£m

Currency

(2.3)

0.3

(1.2)

(3.2)

Adjusted operating profit: 2023/24

46.4

13.6

20.3

80.3

Adjusted operating margin1: 2022/23

17.3%

12.9%

31.1%

18.1%

Adjusted operating margin : 2023/24

18.4%

9.6%

26.7%

17.1%

Adjusted operating margin(constant currency): 2023/24

18.6%

9.0%

27.0%

17.1%

1
1

1.	Adjusted margin is calculated as adjusted operating profit divided by revenue. Adjusted margin at constant currency is defined as adjusted
operating profit at constant currency divided by revenue at constant currency.

Divisional change (indicative and unaudited)
For FY25 we are changing our organisational structure to two divisions: Imaging & Analysis, and Advanced Technologies.
Our Materials Analysis businesses, Andor and Japan MRI will form the Imaging & Analysis division, with Plasma Technology,
NanoScience and X-Ray Technology comprising the Advanced Technologies division. We will report under the new divisional
structure for the 2024/25 interims. For comparative purposes, we show the FY23 and FY24 pro forma results on an indicative
and unaudited basis below.
Imaging &Analysis

Advanced
Technologies

Total

Revenue: 2023/24

327.9

142.5

470.4

Adjusted operating profit: 2023/24

80.1

0.2

80.3

Adjusted operating margin1: 2023/24

24.4%

0.1%

17.1%

£m

1. Adjusted margin is calculated as adjusted operating profit divided by revenue.

£m

Revenue: 2022/23
Adjusted operating profit: 2022/23
Adjusted operating margin : 2022/23
1

Adjusting items
Amortisation of acquired intangibles of £9.1m (2023: £9.3m) relates to intangible assets recognised on acquisitions, being thevalue of technology, customer relationships and brands.
Non-recurring items within operating profit total £2.2m (2023: £1.8m). We recorded net income of £2.9m on settlement of athird-party IP patent dispute. This was offset by acquisition costs of £1.0m, CEO dual running costs of £2.0m (incorporating six
months of overlap and buy-out compensation costs) and one-off costs of £1.7m relating to the move of our semiconductor
processing business to a new site. Finally, we recorded a charge of £0.4m reflecting past service costs on our defined benefit
pension scheme as a consequence of removing the pension increase exchange option for deferred members.
The Group uses derivative products to hedge its short-term exposure to fluctuations in foreign exchange rates. Our hedging
policy allows for forward contracts to be entered into up to 24 months forward from the end of the next reporting period. The
Group policy is to have in place at the beginning of the financial year hedging instruments to cover up to 80% of its forecast
transactional exposure for the following 12 months and, subject to pricing, up to 20% of exposures for the next six months. The
Group has decided that the additional costs of meeting the extensive documentation requirements of IFRS 9 to apply hedge
accounting to these foreign exchange hedges cannot be justified. Accordingly, the Group does not use hedge accounting forthese derivatives.
Net movements on mark-to-market derivatives in respect of transactional currency exposures of the Group in future periods
are disclosed in the Income Statement as foreign exchange and excluded from our calculation of adjusted profit before
tax. In the year this amounted to a charge of £0.7m (2023: credit of £3.0m). The net asset movement for derivative financial
instruments over the year reflects: (i) the crystallisation of forward contracts that were hedging the 23/24 financial year
which are recognised in adjusted operating profit; and an uncrystallised increase in the mark-to-market valuation of forward
contracts from a rise in the value of sterling at the balance sheet date against a blended rate achieved on forward contracts
that will mature over the next 12 months.

Net finance income
The Group recorded net interest income of £3.0m (2023: £1.1m) due to an increase in interest income on our net cash balance.
In addition, we recorded an increase in interest on lease liabilities owing to an increase in right-of-use assets.

Adjusted profit before tax and margin
Adjusted profit before tax increased by 1.6% to £83.3m (2023: £82.0m). The adjusted profit before tax margin of 17.7%(2023: 18.4%) was below last year due to a decrease in the adjusted operating margin, partially offset by an increase in
net finance income.

Reconciliation of statutory profit before tax to adjusted profit before tax

Statutory profit before tax

Year ended
31 March 2024£m

Year ended
31 March 2023
£m

71.3

73.5

9.3

Imaging &Analysis

Advanced
Technologies

Total

308.3

136.4

444.7

Amortisation of acquired intangible assets

9.1

75.1

5.4

80.5

Non-recurring items in operating profit (Note 2)

2.2

2.2

18.1%

Mark-to-market of currency hedges

0.7

(3.0)

Adjusted profit before tax

83.3

82.0

24.4%

4.0%

1. Adjusted margin is calculated as adjusted operating profit divided by revenue.

Add back:

Statutory operating profit and margin

Statutory profit before tax and margin

Statutory operating profit declined by 5.7% to £68.3m (2023: £72.4m), representing an operating profit margin of 14.5% (2023:
16.3%). Statutory operating profit is after the amortisation and impairment of acquired intangible assets; transaction costs;
other significant non-recurring items; and the mark-to-market of financial derivatives. The decline in profit was largely driven
by a charge on the mark-to-market of financial derivatives.

Statutory profit before tax decreased by 3.0% to £71.3m (2023: £73.5m). Statutory profit before tax is after the amortisation andimpairment of acquired intangible assets; transaction costs; other significant non-recurring items; and the mark-to-market offinancial derivatives. The statutory profit before tax margin of 15.2% (2023: 16.5%) was below last year due to a lower operating
margin and the charge from the mark-to-market valuation movement on financial derivatives.

Taxation
The adjusted tax charge of £20.3m (2023: £17.0m) represents an effective tax rate of 24.4% (2023: 20.7%). The increaseprimarily reflects a rise in the UK rate of corporation tax to 25%. The tax charge of £20.6m (2023: £14.9m) represents aneffective tax rate of 28.9% (2023: 20.3%). The increase in the effective tax rate is due to the increase in the UK tax rate,
expenditure not deductible for tax purposes and the impact of prior year adjustments. We expect the adjusted effective
tax rate to increase in 2024/25 to approximately 25.1%.

www.oxinst.com

63

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

65

Financial Statements

FINANCE REVIEW continued
Earnings per share

Dividend

Adjusted basic earnings per share decreased by 3.3% to 109.0p (2023: 112.7p); adjusted diluted earnings per share decreasedby 3.4% to 107.5p (2023: 111.3p). Basic earnings per share declined by 13.7% to 87.7p (2023: 101.6p); diluted earnings per sharedeclined by 13.8% to 86.5p (2023: 100.3p).

The Group’s policy on the dividend takes into account changes to underlying earnings, dividend cover, movements in currency
and demands on our cash. The Board remains confident in the long-term performance of the business and has proposed a
final dividend of 15.9p (2023: 14.9p) per share. This results in a total dividend of 20.8p (2023: 19.5p) per share, growth of 6.7%.
An interim dividend of 4.9p per share was paid on 12 January 2024. The final dividend will be paid, subject to shareholder
approval, on 20 August 2024 to shareholders on the register as at 12 July 2024.

The number of undiluted weighted average shares increased to 57.8 million (2023: 57.7 million).

Currency
The Group faces transactional and translational currency exposure, most notably against the US dollar, euro and Japaneseyen. For the year, approximately 17% of Group revenue was denominated in sterling, 52% in US dollars, 20% in euros, 9% inJapanese yen and 2% in other currencies. Translational exposures arise on the consolidation of overseas company results
into sterling. Transactional exposures arise where the currency of sale or purchase transactions differs from the functional
currency in which each company prepares its local accounts.
The Group’s translation and transaction foreign currency exposure for the full year is summarised below.
Revenue

Sterling

81.0(91.5)

US dollar

243.3

115.3

Euro

93.5

31.5

Japanese yen

42.1

23.1

Chinese renminbi

5.2

0.9

Other

5.3

1.0

470.4

80.3

The Group maintains a hedging programme against its net transactional exposure using internal projections of currency
trading transactions expected to arise over a period extending from 12 to 24 months. As at 31 March 2024, the Group had
currency hedges in place extending up to 18 months forward.
For the full year 2024/25, our assessment of the currency impact is, based on hedges currently in place and forecast currency
rates, a headwind of £8.4m to revenue and £6.2m to profit. Forecast currency rates on unhedged positions for the full year
are GBP:USD 1.28; GBP:EUR 1.17; GBP:JPY 200. The headwind to operating profit is due to stronger sterling currency rates onhedged transactional US dollar, euro and Japanese yen exposures against hedged currency rates achieved in 2023/24. In
addition, we face stronger sterling currency rates on unhedged transactional and translational US dollar, euro and Japanese
yen exposures against actual currency rates achieved in 2023/24. All currency impacts are prior to mitigating pricing and costactions. Uncertain volume and timing of shipments and acceptances, currency mix and rate volatility may significantly affectfull-year currency forecast effects.
Looking further ahead to the financial year 2025/26, based on the above currency assumptions, we would expect currency
effects to have a neutral impact to revenue and operating profit.

Acquisition of First Light Imaging SAS
On 9 January 2024, the Group completed the purchase of 100% of the share capital in First Light Imaging SAS for an initialconsideration of €15.7m. Additional consideration of €3.0m may be paid after a period of one year if specific conditions on
trading performance are met.

Acquisition of FemtoTools AG
On 7 June 2024, the Group agreed to purchase 100% of the shared capital of FemtoTools AG for an initial consideration of
CHF 17m, subject to certain closing conditions which are expected to be satisfied within four weeks of signing these financial
statements. Additional consideration of up to CHF 7m is conditional on trading performance over a period of 33 months.

www.oxinst.com

The Group Consolidated Statement of Cash Flows is summarised below.
Year ended
31 March 2024£m

Year ended
31 March 2023
£m

80.3

80.5

Depreciation and amortisation

11.0

10.8

Adjusted1 EBITDA

91.3

91.3

Working capital movement(24.7)(9.1)

Non-recurring costs

(2.2)

–

Equity settled share schemes

3.0

2.4

Pension scheme payments above charge to operating profit(8.0)(11.7)Cash from operations

59.4

72.9

Interest

2.2

0.4

Tax

(16.1)(5.7)

Capitalised development expenditure

(0.7)

(0.6)

Net expenditure on tangible and intangible assets(26.5)(32.1)

Acquisition of subsidiaries, net of cash acquired(13.4)(4.8)

Dividends paid

(11.4)(10.6)–

0.1

Payments made in respect of lease liabilities

(4.8)

(5.6)

Decrease in borrowings

(1.8)

(0.5)

Net (decrease)/increase in cash and cash equivalents(13.1)

13.5

Adjusted operating profit
Adjusted
operating profit£m (equivalent)

Consolidated Statement of Cash Flows

Proceeds from issue of share capital

1.	Adjusted EBITDA is defined as Adjusted operating profit before depreciation and amortisation of capitalised development costs.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

FINANCE REVIEW continued
Cash from operations

Net cash and funding

Cash from operations of £59.4m (2023: £72.9m) represents 47% (2023: 58%) cash conversion. Cash conversion on a normalised
basis was 64%, which excludes capital expenditure relating to our new semiconductor systems facility and facility expansion
in Belfast. Cash conversion is defined as cash from operations before business reorganisation costs and pension scheme
payments above charge to operating profit, less capitalised development expenditure, capital expenditure and payments
made in respect of lease liabilities, divided by adjusted operating profit.

Net cash

Reconciliation of cash generated from operations to adjusted operating cash flow

Cash from operations

Year ended
31 March 2024£m

Year ended
31 March 2023
£m

59.4

72.9

The Group invested in tangible and intangible assets of £26.5m, of which £11.7m relates to payments associated with the new
semiconductor systems facility in Bristol and £2.4m against the facility expansion in Belfast. For the financial year ended 31
March 2025, we expect payments of approximately £7m to complete the facility in Bristol and expenditure of approximately£10m on the Belfast expansion.
Movement in net cash

Add back/(Deduct):Pension scheme payments above charge to operating profit

8.0

11.7

Non-recurring costs

2.2–

Capitalised development expenditure

(0.7)

(0.6)

Expenditure on tangible and intangible assets(26.5)(32.1)

Repayment of lease payables

(4.8)

(5.6)

Adjusted cash from operations

37.6

46.3

Cash conversion % (adjusted cash from operations/adjusted operating profit)

47%

58%

Cash conversion % (normalised1)

64%

88%

1.	Cash conversion calculated on a normalised basis excludes expenditure in the year of £14.1m (2023: £24.7m) on the new semiconductor systems
facility in Bristol and site expansion in Belfast.

Working capital increased by £24.7m, with inventories increasing by £26.3m. Approximately half the inventory increase wasdue to higher raw materials from customer OEM overstocking within our optical imaging business leading to an unexpected
decline in orders against an already-planned production cycle, raw material investment ahead of the move to the new
semiconductor systems facility in Bristol, and the impact of UK export licence restrictions to China which resulted in an
increase in finished goods. A quarter of the increase related to investment in work-in-progress on a one-off quantum-related
long-term contract, additional demo stock (principally for our newer life science products), higher levels of service stock within
our regions, and additional safety stock to limit operational risk. The remaining increase supports the revenue growth that thebusiness has delivered over the year.

Interest
Net interest received was £2.2m (2023: £0.4m), the improvement reflecting the higher interest income received on our net
cash balance.

Tax
Tax paid was £16.1m (2023: £5.7m). In the prior year the Group benefited from accelerated capital allowances on the new
semiconductor facility currently under construction, partly contributing to cash tax being lower than the accounting charge.

Investment in Research and Development (R&D)
Total cash spend on R&D in the year was £39.2m, equivalent to 8.3% of sales (2023: £34.8m, 7.8% of sales). A reconciliation
between the adjusted amounts charged to the Consolidated Statement of Income and the cash spent is given below:
Year ended
31 March 2024£m

Year ended
31 March 2023
£m

R&D expense charged to the Consolidated Statement of Income

39.1

36.7

Depreciation of R&D-related fixed assets

(0.2)

(0.3)

Amounts capitalised as fixed assets

0.2–

Amortisation and impairment of R&D costs capitalised as intangibles

(0.6)

(2.2)

Amounts capitalised as intangible assets

0.7

0.6

Total cash spent on R&D during the year

39.2

34.8

www.oxinst.com

Cash from operations in the year was partially offset by an increase in capital expenditure and payment of initial consideration
for the acquired First Light Imaging business, resulting in a decrease in the Group’s net cash position at 31 March 2024 to£83.8m (31 March 2023: £100.2m).

£m

Net cash after borrowings as at 31 March 2023

100.2

Cash generated from operations

59.4

Interest

2.2

Tax(16.1)

Capitalised development expenditure(0.7)

Net expenditure on tangible and intangible assets(26.5)

Acquisition of subsidiaries, net of cash acquired(13.4)

Dividend paid

(11.4)

Payments made in respect of lease liabilities(4.8)

Foreign exchange & other(5.1)

Net cash after borrowings as at 31 March 2024

83.8

Net cash including lease liabilities

Year ended
31 March 2024£m

Year ended
31 March 2023
£m

Net cash after borrowings

83.8

100.2

Lease liabilities(33.4)(31.4)Net cash and lease liabilities after borrowings

50.4

68.8

67

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

FINANCE REVIEW continued
Return on capital employed (ROCE)

Funding

ROCE measures effective management of capital employed relative to the profitability of the business. ROCE is calculated
as adjusted operating profit less amortisation of intangible assets divided by average capital employed. Capital employed
is defined as assets (excluding cash, pension, tax and derivative assets) less liabilities (excluding tax, debt and derivative
liabilities). Average capital employed is defined as the average of the closing balance at the current and prior year end. ROCE
has fallen to 29.1% (2023: 35.2%), with the change principally reflecting an increase in assets from the acquisition of First Light
Imaging SAS and the large investment in the new semiconductor systems facility in Bristol which has increased property,
plant and equipment, as well as a higher level of inventories at the year end.

On 19 March 2024, the Group entered into a new four-year unsecured multi-currency revolving facility agreement, with two
extension options. The facility has been entered into with four banks and comprises a euro-denominated multi-currency
facility of €95.0m (£81m) and a US dollar-denominated multi-currency facility of $150.0m (£118m).

Year ended
31 March 2024£m

Year ended
31 March 2023
£m

Adjusted operating profit

80.3

80.5

Amortisation of acquired intangible assets

(9.1)

(9.3)

Adjusted operating profit after amortisation of acquired intangible assets

71.2

71.2

Property, plant and equipment

80.5

59.3

Right-of-use assets

32.4

31.4

Intangible assets

137.9

132.1

1.3

0.5

Inventories

108.4

81.4

Trade and other receivables

114.7

113.2

Non-current lease payables(28.6)(26.2)

Trade and other payables(166.2)(159.4)Current lease payables

(4.8)

(5.2)

Current provisions

(6.4)

(7.6)

Capital employed

269.2

219.5

Average capital employed

244.4

202.1

Return on capital employed (ROCE)

29.1%

35.2%

Return on capital employedLong-term receivables

Return on invested capital (ROIC)
ROIC measures the after-tax return on the total capital invested in the business. It is calculated as adjusted operating profit
after tax divided by average invested capital. Invested capital is total equity less net cash, including lease liabilities. Average
invested capital is defined as the average of the closing balance at the current and prior year end. Oxford Instruments aims todeliver high returns, measured by a return on capital in excess of our weighted average cost of capital. ROIC was lower thanthe previous year due to an increase in property assets and leases, and higher working capital.
Year ended
31 March 2024£m

Year ended
31 March 2023
£m

Adjusted operating profit

80.3

80.5

Taxation(20.3)(17.0)

Adjusted operating profit after taxation

60.0

63.5

Total equity

365.7

344.0

Net cash after borrowings (including lease liabilities)(50.4)(68.8)

Invested capital

315.3

275.2

Return on invested capital

Average invested capital

294.3

262.1

Return on invested capital (ROIC)

20.3%

24.2%

www.oxinst.com

Debt covenants are net debt to EBITDA less than 3.0 times and EBITDA to interest greater than 4.0 times. As at 31 March 2024
the business had net cash.

Pensions
The Group has a defined benefit pension scheme in the UK. This has been closed to new entrants since 2001 and closed tofuture accrual from 2010.
On an IAS 19 basis, the surplus arising from our defined benefit pension scheme obligations on 31 March 2024 was £16.1m(2023: £26.4m). The value of scheme assets fell to £239.7m (2023: £251.5m) due to a fall in value of the scheme’s gilt holdings
and other liability matching assets. Scheme liabilities decreased to £223.6m (£225.1m), principally due to a decrease in the
inflation-linked assumptions.
Pension recovery payments above charge to operating profit total £8.0m (2023: £11.7m). In the comparative year, an advancepayment of £4.0m was made to allow the Trustees to meet collateral calls to swap counterparties under the Liability Driven
Investment scheme. These funds were not required and while the company has the right to recover this advance throughmaking reduced payments in the future, it is not expected to do so.
The scheme’s actuarial valuation review, rather than the accounting basis, determines our cash payments into the scheme.
The cash contributions into the scheme are expected to continue until 2025, at which point we expect, based on current
assumptions, for the scheme to achieve self-sufficiency. The scheme rules provide that in the event of a surplus remaining
after settling contractual obligations to members, the Group may determine how the surplus is utilised.

Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position,
are set out in the Performance Highlights, Chief Executive Officer’s Review and Operations Review sections of this Report. The
financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Finance Review.
The Going concern statement is set out on page 81 in the Risk Management section of the Strategic Report.

Forward-looking statements
This document contains certain forward‑looking statements. The forward-looking statements reflect the knowledge andinformation available to the company during the preparation and up to the publication of this document. By their very nature,these statements depend upon circumstances and relate to events that may occur in the future, thereby involving a degree of
uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the company.

GAVIN HILL
Chief Financial Officer
10 June 2024

69

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

RISK MANAGEMENT

Audit, risk andinternal control

Internal control

Approach to risk management
An ongoing process for identifying,evaluating and managing thesignificant risks faced by the Groupis embedded throughout theorganisation. Day-to-day managementof this process has been delegated by
the Board to the Executive Directors,
as detailed in the Audit and Risk
Committee Report on pages 110 to116. Our risk management and internal
control systems have been in placethroughout the financial year and
up to the date of approval of thisAnnual Report, and are subject toannual review by the Audit and Risk
Committee. In respect of the year
ended 31 March 2024, the Board
considered that these processes
remained effective. A summary of ourrisk management framework andprocess can be found below and on
pages 72 to 73.

The Board has carried out a robust
assessment of the principal risksfacing the Group, including thosewhich threaten its business model,
future performance, solvency andliquidity. Details of all major risks
identified, and the mitigating actions
adopted, are reported to and reviewed
by the Audit and Risk Committee
throughout the year. On pages 73
to 78 we provide an overview of the
major risks and uncertainties faced by
the Group. All business units follow astandard process for risk identification
and reporting. The process is further
described on page 72. On a regularbasis, each business unit reviews
and updates its risk register whichis then consolidated and assessedin the context of the wider Groupand reported to the Chief Executive
Officer. If a material risk changes orarises, a review of the adequacy of the
mitigating actions taken is completedwith the Chief Executive Officer.

The Board and Audit and Risk
Committee also consider any risks
which may impact delivery against
our strategic objectives at a Grouplevel, and consider the approach to
managing and mitigating these risks.

Priorities during financial
year ended 31 March 2024
During the year ended 31 March 2024
our priorities included continuing
to strengthen the Group’s internal
audit provision by engaging external
expertise to support and enhancethe delivery of our internal audit
plan, developing and commencing
execution of a Group-wide compliancetraining programme and working toenhance the risk management andinternal control structures associatedwith our enterprise resource planning(ERP) system. During the year ahead,
we will focus further on our plansto adopt the changes we consider
necessary to comply with the revised
UK Corporate Governance Code as
published in January 2024.

Risk governance framework
The diagram below summarises the key accountabilities and features of our risk governance framework.

Operational
management

Internal audit andassurance function

Audit and Risk
Committee

Board

Responsible for risk
management andcontrol within thebusiness and, throughthe Management Board,
implementing Board
policies on risk andcontrol.

Assesses the adequacyand effectivenessof the managementof significant risk
areas and provides
oversight of operational
management’s frontline
and assurance activities.

Reviews the internalfinancial controls andsystems that identify,
assess, manage andmonitor financial risks,and other internal
control and risk
management systems.

Guided by the internal
audit and assurancefunction, completes
detailed risk reviewson a quarterly basis.

Further information
regarding the scopeof internal audit andassurance activities is
set out on page 71.

More information
regarding the work of
the Committee can befound in its report on
pages 110 to 116.

Oversees the internal
control frameworkand determines thenature and extent of
the principal risks thecompany is willing totake in order to achieve
its long-term strategic
objectives.

www.oxinst.com

Ultimately accountable
for approving theadequacy andeffectiveness of internal
controls operated by
the Group.

Our internal control framework
includes central direction, oversightand risk management of the key
activities within the Group. It includes
a financial planning process which
comprises a five‑year planningmodel and a detailed annual budget
which is subject to Board approval.
All Group businesses’ results arereported monthly and include varianceanalysis to budget and the prioryear. Management also prepares
monthly reforecasts.
Control activities include policies
and procedures for appropriate
authorisation and approval oftransactions, the application offinancial reporting standards andreviews of significant judgements
and financial performance. Financial,
regulatory and operational controls,
procedures and risk activities acrossthe Group are reviewed by the Group’s
internal audit and assurance function,
and are subject to separate review by
subject matter experts where required(e.g. trade compliance and healthand safety).
The internal control frameworkhas been designed to manage,
rather than eliminate, material risks
to the achievement of strategic
and business objectives and canprovide only reasonable, and not
absolute, assurance against material
misstatement or loss. Due to inherent
limitations, internal controls overfinancial reporting may not preventor detect all misstatements. There
has been no material change to theGroup’s internal control frameworkduring the period covered by thisAnnual Report.

The key components designed to provide effective internal control within theGroup include:•

a formal schedule of matters reserved for the Board for decision andspecific terms of reference for each of its Committees; other than thesematters, the Board delegates to the Chief Executive Officer, who in turnreviews the delegation of authorities throughout the management
structure;•

the Group’s internal management beneath the Board is led by theManagement Board. Day‑to‑day responsibility for the management of theGroup is delegated to the Management Board. There are clearly definedlines of management responsibilities at all levels up to and including theGroup Board, and the Group’s accounting and reporting functions reflect
this organisation;•whilst financial executives within Group businesses largely report to theirown operational head, there is also a well‑established and acknowledged
functional reporting relationship to the Chief Financial Officer;•

the Board reviews strategic issues and options both as part of the annual
strategic planning process and on an ongoing basis throughout the year.
In addition, the Executive Directors maintain a five‑year planning model ofthe Group and its individual businesses;•

annual budgets are prepared for each of the Group’s businesses which
include monthly figures for turnover, profit, capital expenditure, cash
flow and borrowings. The budgets are reviewed through the Groupmanagement structure and result in a Group financial budget which isconsidered and approved by the Board;•the businesses prepare monthly management accounts which compare
the actual operating result with both the budget and prior year. They also
prepare rolling reforecasts for orders, turnover, operating profit and cash.
These are reviewed by the Board at each of its scheduled meetings;•

the Board approves all acquisition and divestment proposals and there
are established procedures for the planning, approval and monitoring of
capital expenditure;•

for all major investments, the performance of at least the first 12 months
against the original proposal is reviewed by the Board;•internal audits are carried out through a system of regular reviews of
the financial and non‑financial internal controls at individual businesses.
See the Audit and Risk Committee Report on pages 110 to 116, for more
information;•

the Board and its Committees receive regular updates on tradecompliance, sustainability, business ethics, health and safety, treasury, tax,
insurance and litigation, amongst other topics;•

authorisation limits are set at appropriate levels throughout the Group;compliance with these limits is monitored by the Chief Financial Officer and
the Group assurance function;•

there is a detailed and risk‑based delegation of authority structure inplace for sales contracts and managing commercial risks. Contracts withonerous terms and conditions (such as unlimited liability contracts) are
subject to enhanced approval requirements;•

the International Trade Committee monitors, considers action and makes
recommendations around the management of key risks relating tointernational trade, including sanctions, export controls and customs; and•as regards the UK pension scheme, the Group nominates half of
the Trustee Directors of the scheme’s Corporate Trustee; involves asappropriate its own independent actuary to review actuarial assumptions;agrees the investment policy with the Trustee; works with the Trustee on
its investment sub‑committee to deal with day‑to‑day investment matters;
ensures there is an independent actuarial valuation every three years; andagrees funding levels to provide adequate funding to meet the benefit
payments to the members as they fall due.

71

Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

RISK MANAGEMENT continued
Risk management process

1

The diagram below summarises our methodical approach to risk management. The principal risks and uncertainties detailedon pages 73 to 78 are identified, reported and monitored through this process.

Alignmentwith strategy

Evaluationof risk

Mitigation
implementation

Risk
review

The broad range ofpotential factors which
could impact the Groupare considered andthose which have asignificant effect on
its ability to deliver its
strategy are determined
to be principal risks anduncertainties.

Careful consideration
is given to:

Suitable management
actions or robust
control mechanisms are
determined, developedand implemented.

An embedded, cyclicalprocess review:

It is recognised that emerging risks
can also be principal risks. A detailed
description of the principal risks andthe activities to mitigate these is set
out on pages 73 to 78.
The identification and evaluationof emerging risks is derived fromthe Group’s quarterly risk reporting
framework. The output from thebusiness units’ detailed risk registers
is reviewed by the Group Head of Risk,
Assurance and Trade Complianceand the Chief Financial Officer every
quarter. Any new risks reported by thebusiness units are specifically identified
and discussed as part of this process.
A formal review of emerging risks is
conducted annually, with the outputs
shared and discussed with the Audit
and Risk Committee as part of its
review of the Group risk register andprincipal risks and uncertainties.
During the latest review the Audit andRisk Committee considered whether
generative artificial intelligence(‘Generative AI’) may represent an
emerging risk. They concluded thatwhilst this presents significant risks
and opportunities for the Group, these
are already contemplated by some of
our other principal risks, such as new
product introduction and legal andregulatory compliance, and therefore
it is not necessary to consider it aprincipal risk in its own right.

Principal risks
and uncertainties
Principal risks are reported anddiscussed at every meeting of the
Audit and Risk Committee. We
generally consider that principal
risks are those which could have asignificant adverse impact on theGroup’s business model, financial
performance, liquidity or reputation.
The Audit and Risk Committee also
considers emerging risks, within therisk management framework. A formal
review of emerging risks is conductedannually. Risks relating to the use ofgenerative AI were identified but were
not considered to represent a principal
risk to the Group.
Four risks which were separately
identified in the Report and Financial
Statements 2023 have now beencombined into two risks, as their natureand potential impacts were considered
to be similar. Market risk and the risk

Principal risks anduncertainties matrix
Our principal risks and uncertainties
are mapped onto a probability
and impact matrix, so that we canmeaningfully assess their relative
importance. The arrows used in thismatrix indicate the change in therisk by comparison to the prior year’s
assessment. Our methodology uses
the Group’s assessment of the residual
risk, being the probability of the risk
occurring and the potential impact
it may have, taking account of any
mitigating actions and controls thathave been implemented.
In the simplified version of this matrix
shown here, the most significant
risks are positioned in its top rightquadrant and the least significant in
the bottom left. It shows that, basedon our assessment, the likelihood of
the Cyber/Information technology
risk materialising has increased
compared to the prior year, due toexternal factors, while the residual
risk for all existing risk categories
remains the same as the prior year.

Severeof adverse movements in long-term
foreign currency are considered
to be part of macroeconomic risk.
Risks relating to disruption from a
global pandemic or disaster havebeen incorporated into businessinterruption risk. The Board no longer
considers risks relating to the fundingof the Group’s defined benefit pension
scheme to be a significant risk and it is
no longer identified nor disclosed as aprincipal risk.

Major

The Board is required to complete arobust assessment of the company’s
emerging and principal risks andconfirms that it performed such anevaluation during the financial year.

The Committee also consideredmanagement’s proposal to add
operational transformation as a newprincipal risk, which was identified
as part of the emerging risk review.
It is disclosed as principal risk 2 andfurther details are set out on page
74. The Committee agreed withmanagement’s assessment that
operational transformation constitutes
a principal risk, because delivering
future improvements in operating
margins partly depends upon realising
efficiency gains from the operationaltransformation programme, andconsiders the detailed disclosure tobe appropriate.

ii)	the effectiveness of
the implemented
mitigation
mechanisms.

1
10

5

2

3

GeopoliticalContext: The Group operates in global markets and isrequired to comply with relevant regulations including,but not limited to, sanctions, embargoes and export
controls. Government policy on the export of specifictechnologies and the approval of particular end users
is subject to foreign policy objectives which can changeover time.
Risk
Changes in the geopolitical landscape, or an escalationin global trade tensions, may result in major obstacles
to trade with specific customers or end users in key
markets. Events such as conflicts and regime change cantrigger changes in foreign policy objectives relating tosanctions, trade embargoes, export licensing and trade
tariffs. Further, as a consequence of such restrictions,affected nations may seek to reduce reliance on imports
in strategic technologies through the development ofdomestic competition and/or implement protectionist
measures. This risk is particularly relevant to the exportof certain technologies to China for end uses in bothquantum computing and advanced semiconductor
manufacturing. With manufacturing operations in the UK,
the US, Germany and France, the Group is exposed tochanges in the sanctions, embargoes and export controls
imposed by those jurisdictions.

7

Possible impact
Significant

Emerging risksi)	determination ofprincipal risks anduncertainties; andA contraction in export volumes to key markets andconsequential loss of revenue and reputational damage.
• Restrictions on the provision of after-sales service,leading to lower service contract revenues.
• Reduced volumes may impact research anddevelopment (R&D) investment decisions due toadverse impacts on business cases.
• Lower net pricing to markets adversely affected bytariffs, reducing contribution margins.
• Increases to input costs and lower gross margins.
• Counter measures by countries affected, such as
restrictions on supply of key raw materials andinvestment in domestic alternatives, the latter leading
to longer term reduction in export opportunities tospecific markets.
•

6

Moderateii)	the various potential
impacts which therisk could present.

The risk management process identified 11 principal risks.
Across pages 73 to 78 we have summarised each risk,
explained why it is relevant for the Group, set out thepotential consequences should it materialise and detailed
the risk mitigation mechanisms. The arrows indicate thechange (up for an increased risk, down for a decreasedrisk). A static risk is depicted by an equals symbol. Risks aremanaged at Board level and are not assigned an individual
risk owner.

9

8

4

11

Minor

i)	the specific scenarios
in which the risk could
arise; andOur assessment of the operational transformation risk is thatshould it materialise, the impact is likely to be major, while
the likelihood is considered to be possible.

Impact72

Rare

Unlikely

Possible
Likelihood

Probable

Very likely

Key:
1

Geopolitical2Operational transformation3

Supply chain4

Routes to market

5New Product Introduction (NPI)

6

Macroeconomic

7

Cyber/information technology

8Legal and regulatory compliance9People and capability

10Business interruption

11

Climate change

Control mechanisms
Engagement with UK Government and regulatory
authorities.
• Contract review and protection against breach ofcontract should export licences be withheld.
• Long-term investment planning strategies.
•

Mitigation
Focus on lower-risk markets and end users.
Broad global customer base; contractual protection.
• Market diversification.
••

Change in the year:

Unchanged
www.oxinst.com

Increased

Reduced73

74

Oxford Instruments plc
Annual Report 2024

Overview

Governance

Strategic Report

Financial Statements

RISK MANAGEMENT continued
Operational transformation2

3

Supply chain

Routes to market

4

New Product Introduction (NPI)

5

Context: Following our latest strategy review anoperational transformation programme is in progressthat aims to improve operating efficiencies. Businessplans include revenue growth and operating margin
improvements that are, in part, dependent on
realising those efficiencies in production, service
and support functions.

Context: The Group operates a global supply chain,sourcing from many suppliers across a wide range ofcategories. For certain technologies, there are limited
alternative sources. Disruption may be triggered by
global events such as conflict, natural disaster, ora pandemic.

Context: In some instances, the Group’s products arecomponents of higher‑level systems sold by original
equipment manufacturers (OEMs), and thus theGroup does not control its route to market.

Context: The Group provides high-technology
equipment, systems and services to its customers.

Risk

Risk

Risk

Risk

•

Operational disruption or price increases,
due to supply chain shortages, particularly inelectronic components.
• Suppliers de-committing orders due to their inability
to supply as a result of internal production issues.
• Change of supplier ownership resulting in lossof supply.
• Regulatory changes or economic viability causing
suppliers to discontinue production, impacting thelong-term availability of key components.

•

Possible impact

Possible impact

Possible impact

Lower sales volumes than planned due tohigher lead times.
• Higher costs of production leading tolower gross margins.
• Higher overhead costs leading to lower
operating profit.

•

Short-term delays or hiatus in our production
arising from component shortages.
• Poor customer service.
• Reputational damage.
• Lost revenue.
• Downward pressure on margins.
• Increased lead times and potential of being unable
to fulfil orders.
• Increased stock holding adversely impacting
cash conversion.

•

Control mechanisms

Control mechanisms

Control mechanisms

Control mechanisms•

Sales and operational planning process.
• Group strategic sourcing programme to consolidate
demand and manage key supplier risks.
• Sourcing of alternative options and/or buffer stocks
in relation to high-risk suppliers.
• Long-term contracts with key suppliers.

•

Customer insight to match product performance tocustomer needs.
• Positioning of the Oxford Instruments brand andmarketing directly to end users.

•

Mitigation

Mitigation

Mitigation

Strategic, selective and diversified supplier base.
Long-term demand planning.
• Buffer stock in extended supply chain.
• Relationship management with key suppliers.
• Responsive and adaptive engineeringchange process.

•

Strategic relationships with OEMs to promote thebenefits of combined systems.
• Product differentiation to promote advantages ofOxford Instruments’ equipment and solutions.
• Direct marketing to end users.

•

Change in the year:

Change in the year:

Change in the year:•

The programme may fail to generate operational
efficiencies intended to improve operational gearing
through measures such as lead time reduction andreduced overheads in relative terms.

••

CEO and steering group oversight of operational
excellence programme.

Mitigation•

Programme headed by Chief Transformation
Officer with a proven track record in operational
improvement with dedicated support in key areas
such as manufacturing and strategic sourcing.

Change in the year: New•••

Vertical integration by OEMs.

Loss of key customers/routes to market.
Reduction in sales volumes and/or pricing andlower profitability.

•

Failure of the Group’s R&D programme to produce
commercially viable products.

Possible impact
Loss of market share or negative pricing pressure,
resulting in lower turnover and reduced profitability.
• Additional NPI expenditure.
• Adverse impact on the Group’s brand and reputation.
•‘Voice of the Customer’ customer listening approachand deep market knowledge to direct productdevelopment activities.
• Formal NPI processes to prioritise investment and to
manage R&D expenditure.
• Product life cycle management.

Understanding customer needs/expectations andtargeted new product development programme tomaintain and strengthen product positioning.
• Stage gate process in product development tochallenge commercial business case and mitigate
technical risks.
• Operational practices around sales‑production
matching and inventory management to mitigate
stock obsolescence risks.

Unchanged
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RISK MANAGEMENT continued
6

Macroeconomic

7

Cyber/information technology

8

Legal and regulatory compliance

People and capability

9Context: Macroeconomic factors such as recession,
inflation and government budget priorities may affectdemand or place upward pressure on key elementsof the cost base such as labour and materials. A
high proportion of the Group’s revenue is in foreign
currencies, notably US dollars, while the cost base ispredominantly denominated in GBP.

Context: Elements of production, financial and othersystems rely on IT availability.

Context: The Group operates in a complex
technological and regulatory environment,
particularly in areas such as export controls andproduct compliance. Competitors may seek toprotect their position through intellectual property(IP) rights and the Group may at times experience
unintentional regulatory or IP compliance issues.

Context: Delivering and protecting core capability
and knowledge is a strategic priority for the Group.

Risk

Risk

Risk

Risk

•

Lower demand for the Group’s products and services.
• Rises in key cost drivers such as people costs,
energy, components and raw materials.
• For sales of long lead-time items, requirement tomake inflationary estimates when pricing, which may
be inaccurate.
• Long-term strengthening of sterling against key
foreign currencies.

•

Cyber-attack on the Group’s IT infrastructure.
• Ransomware/spread of viruses or malware.

•

Infringement of a third party’s intellectual property.
• Regulatory breach.

•

Possible impact

Possible impact

Possible impact

Possible impact

Decrease in sales volumes.
• Increased cost of production leading to a
reduction in operating profit if not offset by
sufficient price increases.
• Potential for under-recovery of increases if inflation
estimates are too low, or reduction in order volumes
if competitors do not react similarly.
• Reduction in reported revenue and earnings.

•

System failure/data loss and sustained disruption to
production operations.
• Loss of business-critical data.
• Financial and reputational damage.
• Data privacy breach.

•Potential loss of future revenue.
• Future royalty payments.
• Payment of damages.
• Fines and non-financial sanctions such as
restrictions on trade, exclusion from public
procurement contracts.
• Reputational damage.

•Control mechanisms

Control mechanisms

Control mechanisms

Control mechanisms•

Strategic focus on growth markets.
• Price reviews.
• Inflation protection in commercial response to long
lead-time tenders and long-term agreements.
• Strategic management of currency exposure.

•

Suite of IT protection mechanisms including
penetration testing, regular backups, virtual
machines and cyber reviews.
• External IT security consultants.
• Internal IT governance to maintain protection
systems and our incident response.
• Employee awareness training.

•

Formal ‘Freedom to Operate’ assessment to identify
potential IP issues during product development.
• Internal control framework including policies,
procedures and training in risk areas such as bribery
and corruption, sanctions and export controls.
• Product compliance teams.

•

Mitigation

Mitigation

Mitigation

Mitigation

Ability to address inflationary pressures throughprice management reviews.
• Reviews of key drivers of financial performance.
• Reviews of supply chain currency base.
• Active review of net exposure in key currencies.

•

Managed service with third-party security specialists
providing incident monitoring.
• Regular review, monitoring and testing of key security
measures to assess adequacy of protection against
known threats.
• Upgrade of enterprise resource planning (ERP)and other internal systems.
• End user education and phishing
simulation exercises.

•

Confirmation of ‘Freedom to Operate’ during new
product development stage gate process.
• Compliance training, communications andmonitoring programmes for key compliance risks.

•

Change in the year:

Change in the year:

Change in the year:

Change in the year:••

Challenges in attracting and retaining high-quality
talent in a tight labour market.
• Shortage of key capabilities required to meet theGroup’s strategic priorities.

Salary inflation and/or additional recruitment costs.
Adverse impact on NPI.
• Operational disruption.
• Lower sales and profitability.
•

Strategic focus on the employee experience,
including career development, communications
and competitive remuneration, to differentiate
Oxford Instruments.

Talent management and succession processes.
Leadership and technical development programmes.
• Hybrid and remote working policies to facilitate
location-agnostic appointments.
• Visa sponsorship registration for employee mobility.
• Comprehensive internal communications.
• Regular updates to benefits packages tomaintain competitiveness.
•

Unchanged
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RISK MANAGEMENT continued
10

Business interruption

Context: Business units’ production facilities
are typically located at a single site and are
dependent on availability of parts sourced fromglobal supply chains.

Strategic Report

Governance

Financial Statements

VIABILITY STATEMENT
11

Climate change

Context: Climate change generates both risks andopportunities. Our response needs to address risks
and optimise opportunities. More detail on our
approach is set out in our Task Force on Climaterelated Disclosures Statement on pages 40 to 50.

The Board has assessed the viability of the Group over a three-year period, taking into consideration its current position andthe potential impact of certain of its principal risks and uncertainties. This assessment concerns the three-year period from
1 April 2024 to 31 March 2027 (the ‘Viability Assessment Period’).
Whilst the Board has no reason to believe that the Group will not remain viable for a longer period, it is comfortable thatthree years is an appropriate assessment period and is consistent with the approach taken since the introduction of therequirement to prepare a viability statement in 2016, in line with the UK Corporate Governance Code.

Scenario testing
Risk

Risk

Sustained disruption to production arising from amajor incident at a site.
• Hiatus in production due to shortage of supply.

••

The transition from fossil fuels to a low‑carbon/net
zero economy may require significant changes inmaterials used and production methods that may
impact our own operations and those of our suppliers.
• Chronic changes in weather and extreme weather
events may disrupt supply chains, operations
and logistics.

Possible impact

Possible impact

Inability to fulfil orders in the short term, resulting in a
reduction in sales and profitability.
• Additional, non-recurring overhead costs.

••

Rises in production costs and product development
costs to reduce CO2 emissions linked to our products.
• Delayed production and/or installation leading todelayed revenue.
• Reduction in sales volumes if we fail to meetcustomers’ environmental expectations/requirements.
• Reputational damage or loss of investment arisingfrom failure to anticipate or address climate risk.
• Increased freight and packaging costs.
Control mechanisms

Business continuity plans for all manufacturing sites.
Contractual protection to limit financial
consequences of delayed delivery.
• Group strategic sourcing programme.

••

Sustainability Committee and management-level
Sustainability Leadership Forum.
• Climate-related risks and opportunities evaluation
and reporting embedded in operating businesses.
• Strategic sourcing.
• Product compliance groups.

Mitigation

Mitigation

Business continuity plans can reduce downtime
arising from incidents and facilitate the restoration or
relocation of production.
• Standard sales contracts include clauses forlimitation of liability, liquidated damages and theexclusion of consequential losses.
• Business interruption insurance.

•

Change in the year:

Change in the year:•

Product compliance teams have an establishedmethodology to deal with changes to environmental
regulations.
• Investment in product development to capitalise on
the opportunities for our key enabling technologies tohelp customers address climate-related challenges.
• Investment in CO2 reduction solutions.

Unchanged
www.oxinst.com

The process and methodology used for the Viability Assessment is consistent with prior years.
The below table outlines the risk areas and their potential impact and explains the nature of the scenario testing performed.
RISK AREA
1. Geopolitical, operational transformation, supply chain, routes to market, macroeconomic

Control mechanisms•

The viability assessment process is informed by the potential impact of the principal risks and uncertainties and the likelihoodof them arising. This led to the application of four sensitivities against management’s base-case forecasts to quantify thepotential impact of risks materialising. Further detail regarding the key risks and uncertainties which have been consideredin this assessment are set out in the Risk Management section on pages 70 to 79.

Increased

ReducedPotential impact of risk

Explanation

Loss of revenue due to lower volumes,
leading to lost margin

The potential impact is estimated by applying thefollowing sensitivities to revenue:
Year 1 – use of detailed budget revenue(after Group contingency)
Year 2 – no revenue growth for any businessYear 3 – same as for Year 2

RISK AREA
2. Operational transformation, supply chain, macroeconomic, climate change
Potential impact of risk

Explanation

Reduction in gross margin if business
units are unable to mitigate cost
increases through higher selling prices

Simulates lower gross margins from failing to recover increased input costs
via increases in the selling price. Considers the potential impact of incremental
overheads that could arise in the principal areas of expenditure such as staff
costs, logistics and facilities costs, including energy.

Increased overheads

In years 2 and 3 of the viability assessment period, the impact is simulated
by applying a 200 basis points reduction in the gross margin year-on-year(cumulatively 400 basis points).
No specific additional charges for recurring overheads have been included
relating to inflation risk compared to the baseline scenario. This is because, in a
scenario of stagnant revenue growth (scenario 1), the baseline assumptions for
inflationary increases are considered sufficient as they include a reasonable yearon-year increase throughout the Viability Assessment Period when compared to
Bank of England forecast inflation.

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VIABILITY STATEMENT continued
RISK AREA
3.	Legal and compliance, Cyber/Information technology, New Product Introduction, macroeconomic,
people and capability
Potential impact of risk

Explanation

Additional non-recurring
overhead costs

Additional non-recurring overheads have been applied, representing acontingency for the potential impact of a significant one-off charge totalling £15m.
As timing is unpredictable, it has been spread evenly over the three years.

RISK AREA
4. Business interruption
Potential impact of risk

Explanation

Increased working capital

The financial impact of major disruption to the Group’s manufacturing operations
is mitigated through business interruption insurance. Consequently, for the
purposes of this assessment, the sensitivity applied relates to increased working
capital requirements only and was applied broadly at a Group level. In each year,
the additional working capital requirements in the baseline forecasts have been
doubled to quantify the impact of this sensitivity.

Note that not all principal risks and uncertainties have been utilised for scenario testing purposes in this context. The potential
impact of cyber risk (for example, disruption to business-as-usual operations arising from a cyber-attack or malware) has
not been estimated through the inclusion of a specific scenario, as the impact is unpredictable (as it would depend on thenature and duration of the issue) and because the downside impact assessed from the impact of the other risks is considered
to be sufficient to account for this risk. Further, some of the potential short-term impacts that may arise from climate change
are reflected in the inflationary cost sensitivities that have been applied to direct costs, but potential longer-term impacts falloutside the Viability Assessment Period.

Methodology
The Group starts the Viability
Assessment Period with a positive
net cash position and the criteria
used to assess viability in aggregate
were the same as the prior year. The
Board believes that either maintaining
a positive net cash position during
the Viability Assessment Period or,alternatively, operating within agreed
debt arrangements (particularly
relevant if retained cash is used to fundacquisitions), would demonstrate theGroup’s liquidity to meet its liabilities
as they fall due. Currently, the Grouphas committed credit facilities ofapproximately £200m. There arecovenants associated with the facilities
which principally require the Group to
operate within a ratio of three times
EBITDA to net debt. These covenants,
therefore, could limit the headroom
available from facilities and arefactored into the viability assessment
calculations where relevant.

www.oxinst.com

The starting point to undertake theviability assessment is the three-year
Group forecast (‘Forecast’) produced aspart of the annual budgeting process.
The Forecast has several scenarios
which include a downside case, a basecase and an upside case. The basecase Forecast forms the ‘Baseline’ forthe viability assessment calculations.
The sensitivities set out above wereapplied to the Baseline to provide asensitised operating profit figure for
the Group.
The Forecast includes cash flow
forecasts for each year of the Viability
Assessment Period at Group level
only. These start with the operating
profit calculations (after sensitivities),
and then generally apply the same
assumptions as the baseline model
to calculate movements in working
capital, investing activities, tax,
dividends paid, etc. to forecast the
net cash flow in each year. The
only exception is the application of
additional working capital requirements
set out in sensitivity 4 above.

Thus, the viability assessment uses
the same model as the Forecasts toestimate annual movements in net
cash and includes no adjustment forany mitigating actions that the Groupmight take in the event of adverse
financial performance such as reduced
capital expenditure, changes todividend policy, reduction in bonuses,
etc. This reflects a prudent approach tothe viability assessment calculations.
The cumulative impact of the scenarios
tested is to reduce revenue by £116m(7% of the Baseline total) and operating
profit by roughly £96m compared to
the Baseline in the three-year period
covered by the assessment. However,
the only elements of the cash flow
forecasts that have been adjusted in
the viability assessment relate to the
movements in working capital andthe tax payment. All other cash flows,
including, but not limited to, capital
expenditure, R&D expenditure anddividends, have not been adjusted in
the viability assessment. The Baseline
revenue for year 1 already includes aGroup contingency.

Conclusion

Going concern statement

In aggregate, over the three years of
the Viability Assessment Period andsubsequent to scenario testing, thecalculations demonstrate that theGroup would remain profitable andwould continue to generate a positive
operating cash flow. The outcomes
show positive EBITDA and positive
adjusted operating profit in all three
years. Further, the calculations showthat the Group would continue togenerate a positive net cash flow inevery year of the Viability Assessment
Period, leading to additional headroom.
Consequently, the Group would
maintain a healthy net cash balanceat the end of the Viability Assessment
Period and at each balance sheet dateduring the period.

The Group’s business activities
and factors that are considered
likely to affect its performance andposition in the future are set out in
the Strategic Report on pages 10 to
82. The Finance Review on pages 58
to 69 discloses information relevantto the Group’s financial position, its
cash flows, borrowing facilities andliquidity. The Board has considered
the Group’s current financial position
and future prospects and, as set out
in the accounting policies note, hasperformed an assessment up to 30
June 2025, as well as an assessmentof longer-term viability up to 31
March 2027 as noted in the viability
statement. On this basis, the Directors
conclude that there is a reasonable
expectation that the Group willcontinue in operational existence forthe foreseeable future and that there
are no material uncertainties which
may cast significant doubt over its
ability to continue as a going concern.
As a result, the Board considers it
appropriate to continue to adopt thegoing concern basis of accounting. For
further information, see the accounting
policies on page 155.

The forecast level of net cash,
combined with banking facilities ofapproximately £200m, demonstratethat during the Viability Assessment
Period, the Group’s forecasts include
substantial headroom. Consequently,
the Board has a reasonable
expectation that the Group will be able
to continue in operation and meet its
liabilities as they fall due over the next
three years.
The outcome of this assessment
supports not only the Viability
statement, but also the Going concern
statement, as set out subsequently.

Approval
The Strategic Report wasapproved by the Board on
10 June 2024.

RICHARD TYSON
Chief Executive Officer
10 June 2024

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Financial Statements

NON-FINANCIAL INFORMATION STATEMENT
The table below explains where relevant non-financial information can be found within this report, further to the Financial
Reporting Directive requirements contained in Sections 414CA and 414CB of the Companies Act 2006. Where appropriate,
details on where additional information on these matters can be found, have also been included.
Key policies and procedures

Information within this report

Additional information

Health and Safety Policy

Sustainability Report: pages 34 to 57

www.oxinst.com/investors-content/sustainability

Environmental Policy

Sustainability Committee Report:
pages 117 to 119

www.oxinst.com/investors-content/compliance/
environmental-policy

Task Force on Climate-related
Financial Disclosures (TCFD)
Statement: pages 40 to 50

www.oxinst.com/CBCE

www.oxinst.com/corporate-content/health-and-safety

Working at Oxford Instruments Policy

Engaging with our stakeholders:pages 20 and 21

Leaving Oxford Instruments Policy

Sustainability Report: pages 34 to 57

www.oxinst.com/corporate-content/employees

IT Infrastructure and Use Policy

How we engage with our stakeholders:pages 90 to 96
Board Leadership and Company
Purpose: page 89

Environment

Supplier Due Diligence and Audit Procedureswww.oxinst.com/corporate-content/supplier-and-partnerengagement

Employees
Health and Safety Policy

Conflicts of Interest Policy
Business Travel Policy
Crisis Management Policy
Reward and Recognition Policy

Sustainability Committee Report:
pages 117 to 119

Governance
84

Chair’s overview

86

Board of Directors

www.oxinst.com/investors-content/compliance/crisismanagement-policy

89

Board leadership and company purpose

www.oxinst.com/corporate-content/diversity-and-inclusion

89

Corporate Governance statement

www.oxinst.com/CBCE

www.oxinst.com/careers

Performance Management Policy
Opportunity and Career Policy
Share Dealing Policy

90 How we engage with our stakeholders
96

Section 172(1) Statement

97

Division of responsibilities

101 Composition, succession and evaluation

Social matters
Export Control Policy

Sustainability Report: pages 34 to 57

www.oxinst.com/corporate-content/privacy

Privacy Policy

Community engagement:
page 92 and 93

www.oxinst.com/CBCE

106 Nomination Committee Reportwww.oxinst.com/investors-content/compliance/groupsanctions-policy

110 Audit and Risk Committee Reportwww.oxinst.com/investors-content/compliance/groupexport-controls-policy

117 Sustainability Committee Report

Code of Conduct
Group Sanctions PolicyGroup Export Controls

Sustainability Committee Report:
pages 117 to 119

120 Directors’ Remuneration Report

Human rights
Global Human Rights Policy

Ethics – human rights: page 57

www.oxinst.com/corporate-content/human-rights-policy

Modern Slavery Statement

www.oxinst.com/corporate-content/modern-slavery

Gender & Ethnicity Pay Gap Reportwww.oxinst.com/corporate-content/gender-pay-report

Privacy Policy

www.oxinst.com/corporate-content/privacy

Whistleblowing Policy
Share Dealing Policy
Supplier Code of Conduct

Ethics – anti-bribery andcorruption: page 56

www.oxinst.com/investors-content/compliance/antibribery-and-corruption

Supplier engagement:
pages 92 and 93

www.oxinst.com/investors-content/compliance/businessmalpractice-procedure
www.oxinst.com/CBCE

Conflicts of Interest Policy
Supplier Due Diligence and Audit Procedures
Additional disclosures: – Business model – Principal risks – Non-financial KPIs
Group Tax Strategy

Investment case: pages 16 and 17
Business Model: pages 18 and 19
Strategy: pages 22 and 23
KPIs: pages 24 and 25
Principal Risks: pages 72 to 78
Audit and Risk Committee Report:
pages 110 to 116

The Directors’ Report is approved by the Board and signed on its behalf by

SARAH HARVEY
Company Secretary
10 June 2024

www.oxinst.com

145 Directors’ report
148 Directors’ responsibilities

Anti-bribery and corruption
Anti-bribery and Anti-corruption Policy

144 Shareholder informationwww.oxinst.com/investors-content/compliance/group-taxstrategy

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CHAIR’S OVERVIEW
Governance highlights•••

Richard Tyson joined the Board
as Chief Executive Officer on
1 October 2023, following arobust appointment process.
Hannah Nichols joined theBoard as a Non-Executive
Director, effective 1 January2024, and will take up the roleof Chair of the Audit and Risk
Committee with effect fromthe conclusion of the AGM
on 25 July 2024.
Redeveloped the company’s
strategy and purpose, with astrong recognition that these
are crucial underpins which
will guide the organisation as
it strives to fulfil our ambitions
and to achieve even more forall of our stakeholders.

•Received strong shareholder
support for our new Directors’
Remuneration Policy at our
AGM on 19 September 2023.

•

Gained meaningful insights
through our programme of
employee engagement activity.

Dear Shareholder,
On behalf of the Board, I am pleased
to introduce the Governance Reportfor the year ended 31 March 2024.
This report describes our governancestructures and procedures,summarises the work of our Boardand its Committees during the year
and illustrates how our responsibilities
have been discharged. We recognisethat the Board’s fundamentalrole is to promote the long-termsustainable success of the company
and the Group, generating value forshareholders and contributing to wider
society. To achieve this, we strive toensure that we implement and follow
good governance practices.

••

Board composition andsuccession planning
It is imperative that our Board’s
composition encompasses thenecessary skills, knowledge andexperience to provide effective
leadership, and our Nomination
Committee actively keeps undercontinuous review the constitution of
the Board and its Committees. There
have been a number of changes tothe Board during the year and up to
the date of signing the Annual Report,
as follows:•

As noted in the Report and Financial
Statements 2023, after having
served on the Board for almost nine
years, Professor Sir Richard Friend
stepped down as a Non-Executive
Director of the company with effectfrom 28 July 2023.

•

www.oxinst.com

On 1 October 2023, Ian Barkshire
retired as Chief Executive Officer
and was succeeded in this roleby Richard Tyson. As noted in theReport and Financial Statements
2023, the Board is thankful for thetremendous contribution Ian has
made and he can look back on hislong career with Oxford Instrumentswith immense pride. Richard has
joined us from global electronics
company TT Electronics plc, where
he was Chief Executive Officer,
and we have been delighted withthe actions he has taken so far, as
he leads us into the next phase of
our growth.
Anticipating the departure of
Mary Waldner as Director in linewith best practice in relation to
her tenure and independence,as she will have served on the
Board for nine years by February
2025, we acted to ensure smooth
succession for the role of Audit andRisk Committee Chair, which Mary
currently fulfils. We also remained
mindful of the Board’s diversity
policy. As a result, we were pleased
to appoint Hannah Nichols as a
Non-Executive Director with effectfrom 1 January 2024. Hannah’s
strong financial expertise, extensive
international experience and trackrecord of driving transformationalchange, both within and beyond thefinance function, will complement
the current range of expertise andexperience on our Board and meanthat she is well equipped to takeup the role of Chair of the Audit andRisk Committee. She will do so witheffect from the conclusion of theAGM to be held on 25 July 2024.
Reshma Ramachandran will standdown as a Non-Executive Director
with effect from the conclusion of
the AGM, due to her appointment
in a new executive role externally,
which will restrict the available
time which she can commit to herrole with the company. The Board
sincerely thanks Reshma for thevaluable contributions she has
made during her time as a Director.

•

Mary Waldner will stand down as a
Non-Executive Director in February
2025 in line with best practice, as
set out above. She will step downfrom the role of Chair of the Audit
and Risk Committee with effect fromthe conclusion of the AGM, with
Hannah Nichols taking up this role,
as noted above.

Further information regarding the workof the Nomination Committee can befound on pages 106 to 109.

Strategy and purpose
One of the most important areas offocus for the Board during the year
was the redevelopment of our strategy
and purpose. As noted earlier in the
Annual Report, these are consideredcrucial underpins which will guideus as we strive to fulfil our ambitions
and to achieve even more for all of
our stakeholders. The Group’s new
strategy is founded on developing
focused, customer-first ways ofworking, simplifying our organisationand processes, and making a stepchange in operational performance,
while protecting our investments
in products and technology – thefoundation of our existing success.
At the core of our strategy andfuture plans, is our newly articulated
purpose, which is to accelerate thebreakthroughs that create a brighter
future for our world, as our technology
and scientific expertise enables ourcustomers to discover and bring tomarket exciting new advances thatdrive human progress.
For more information, see Our Purposeled Approach on pages 6 to 7, Our
Strategy on pages 22 to 23 and thecase study: 'Guiding our ambitions: Our
new strategy and purpose' on page 95.

New Directors’
Remuneration Policy
We were delighted to receive strong
shareholder support for our new
Directors’ Remuneration Policy at
our AGM on 19 September 2023,
with a supporting vote of 98.04%.
When developing the new policy, ourRemuneration Committee engaged
with our major shareholders and otherkey stakeholders and also considered,amongst other things, the overall
competitiveness of the package andthe mix of performance measures used,
including the use of sustainabilityrelated metrics and targets. During theyear, the Committee shifted its focus toensuring the appropriate operation of
the policy, with particular consideration
given to the remuneration policies for
our wider workforce.
For information regarding theimplementation of the Directors’
Remuneration Policy and the workof the Remuneration Committee, seepages 120 to 143.

Employee engagement
The Board was again pleased toparticipate in its formal programmeof employee engagement activity
this year. We strongly believe that thisstrengthens the Board’s understandingof employees’ perspectives and helps
to ensure that they are considered aspart of our decision-making processes.
The Board plays a role in shaping the
programme each year and we aim tomeet with employees across a broad
range of roles, sites and stages intheir career. This year our programme
included, amongst other things, a fullBoard site visit to our new compound
semiconductor site at Severn
Beach and a dedicated session on
remuneration hosted by Alison Woodin her capacity as Chair of the Board’s
Remuneration Committee. After eachof these events the Board discusses,
as a specific agenda item at the next
Board meeting, the insights gained anddetermines any appropriate actions.
We look forward to participating in our
programme of engagement activity for2024/25.

To find out more about our approach to
stakeholder engagement, please see
the ‘Engaging with our stakeholders’section on pages 20 to 21 and the‘How we engage with our stakeholders’section on pages 90 to 95.

Annual General Meeting
The 2024 Annual General Meeting(AGM) of Oxford Instruments plc will
be held at Ashurst LLP, London Fruit& Wool Exchange, 1 Duval Square,
London, E1 6PW at 11.00am on
Thursday 25 July 2024.
Further details, including theresolutions to be proposed to ourshareholders, can be found in the
Notice of Meeting which has been
sent to our shareholders and whichis also available on our website at:www.oxinst.com/investors-content/
annual-general-meeting. The resultof the votes on the resolutions put
forward at the AGM will be publicly
announced to the stock exchange andpublished on our website as soon as
possible following the conclusion of
the meeting.
As usual, I will be available at the AGM
and will be very happy to take any
questions you may have regarding theoperation of the Board during the year.

NEIL CARSON
Chair
10 June 2024

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Governance

BOARD OF DIRECTORS

Neil Carson

Richard Tyson

Gavin Hill

Alison Wood

Mary Waldner

Sir Nigel Sheinwald

Chair

Chief Executive Officer

Chief Financial Officer

Senior Independent Director

Non-Executive Director

Non-Executive Director

Appointed to the Board:
1 December 2018

Appointed to the Board:
1 October 2023

Appointed to the Board:
9 May 2016

Appointed to the Board:
8 September 2020

Appointed to the Board:
4 February 2016

Appointed to the Board:
22 September 2021

Non-Executive

Executive

Executive

Non-Executive

Non-Executive

Non-Executive

Independent: No1

Independent: No

Independent: No

Independent: Yes

Independent: Yes

Independent: Yes

Richard has a track record of businessleadership in the advanced technology
sector spanning more than 30 years.
In his previous role as Chief Executive
Officer at TT Electronics plc from 2014
to 2023, Richard transformed, reshaped
and refocused the business, delivering
product innovation, building the grouporganically and through acquisition,and delivering strong growth in revenue,
profits and margin. Richard previously
held senior roles at defence group
Cobham plc, where he was a memberof the executive committee and led theaerospace and security division, and at
Goodrich Aerospace. Richard is a fellowof the Royal Aeronautical Society and a
Governor of St Swithun’s Independent
School for Girls in Hampshire. Richard
is a graduate of the Executive Senior
Leadership programme at Henley
Business School, and holds a diploma
from the Chartered Institute of Marketing
and a BSc in Management Sciences fromThe University of Manchester.

Gavin holds a BA in Economics andAgricultural Economics from the
University of Exeter. He is a Chartered
Accountant and an Associate Member ofthe Association of Corporate Treasurers.

Alison holds a BA in Engineering,
Economics and Management fromthe University of Oxford and an MBAfrom Harvard Business School. Her
background is in leading businessdevelopment, M&A and strategicplanning across blue-chip UK
companies, particularly in the defence
sector. She was formerly the Global
Director for Corporate Development &Strategy at National Grid plc and before
that, Group Strategic Development
Director for BAE Systems plc. She isa highly experienced Non-Executive
Director and committee chair, with her
experience being particularly well suited
to her role as Chair of Oxford Instruments’
Remuneration Committee.

Mary is the Chief Financial Officer of
Lloyd’s Register, the global professional
services company specialising inengineering and technology for the
maritime industry. She holds an MA in
physics from the University of Oxford andis a Fellow of the Chartered Institute ofManagement Accountants. She has abroad range of experience in a variety
of sectors and an excellent track recordof delivery throughout a number ofsenior financial roles with major public
limited companies, which particularly
benefits her role as Chair of the Audit andRisk Committee.

Sir Nigel previously served as a British
diplomat and has deep knowledge ofinternational politics, strategy, regulationand communication. He holds an MAfrom Balliol College, University of Oxford,
where he is now an Honorary Fellow.
He joined the Diplomatic Service in1976 and served in Brussels, Moscow,
Washington and in a wide range ofpolicy roles in London. He served as
British Ambassador to the UnitedStates (2007–12) and European Union(2000–03) and as Foreign Policy and
Defence Adviser to the Prime Minister(2003–07). Since leaving the Diplomatic
Service in 2012 he has served on a wide
range of corporate and not-for-profit
boards. The extensive range of skills andexperience that he brings, along withhis commitment to Oxford Instruments’sustainability agenda, is a good fit
with the Group’s requirements andparticularly benefit his role as Chair of
the Sustainability Committee.

Senior Independent Directorof Videndum plc.

Non-Executive Director and Chair of the
Audit Committee of BMT Group Limited.

Skills and experience:
Neil is a former FTSE 100 chief executive.
After completing an engineering
degree, Neil joined Johnson Matthey
in 1980 where he held several senior
management positions in the UK and
the USA, before holding the role of Chief
Executive Officer from 2004 to 2014.
He has a broad industrial outlook anda highly commercial approach witha practical perspective on business.
He provides valuable insight basedon his former executive position andoperational experience and bringsa track record of strong operational
exposure, familiarity with capitalintensive business and a first-classinternational perspective on driving
value in complex environments and thisexperience makes him particularly well
suited to serving as Chair of the Board.
Neil was awarded an OBE for services tothe chemical industry in 2016.
Neil’s previous non-executive roles
include serving as Chairman of TT
Electronics plc, Deputy Chairman of
TI Fluid Systems plc and as a NonExecutive Director of Paypoint plc andAmec Foster Wheeler plc.

External appointments:
Non-Executive Director, memberof the Sustainability Committee
and Chair of the Remuneration
Committee of Shell plc.

Gavin served as Group Finance Directorof Synergy Health plc from April 2010
until its successful combination withSTERIS Corporation on 3 November
2015. He previously served as Corporate
Finance Director of Serco Group plc andhas also worked in a variety of regional,
corporate and treasury roles with
Syngenta AG and AstraZeneca plc.

Alison’s previous roles include serving
as Senior Independent Director andRemuneration Committee Chair of
Costain Group PLC and the British
Standards Institute, a Non-Executive
Director and Remuneration Committee
Chair of Cobham plc and Capricorn
Energy PLC (formerly Cairn Energy PLC),
Senior Independent Director of e2v plc
and a Non‑Executive Director of both
BTG plc and THUS plc.

Non-Executive Director and Chairof Galliford Try Holdings plc.
Non-Executive Director and Chairof the Remuneration Committeeof TT Electronics plc.

Director of The Goldsmiths’
Company Charity.

Mary was previously the Group FinanceDirector of Ultra Electronics Holdings plc,
the Director, Group Finance at QinetiQ
Group plc and Group Financial Controllerof 3i Group plc. Prior to this, Mary held anumber of senior roles at British Airways,
General Motors and Vauxhall Motors.

Sir Nigel was previously a NonExecutive Director and Chair of the
Safety, Environment and Sustainability
Committee at Royal Dutch Shell plc (nowShell plc).

Chief Financial Officer of Lloyd’s Register.

Non-Executive Director of Invesco Ltd.

Non-Executive Director and Chair of the
Audit Committee of Senior plc.

Senior Adviser to the Universal
Music Group.
Chair of the Royal Institute ofInternational Affairs (Chatham House).
Visiting Professor at King’s College,
London.

Committee membership:
NRS

None

None

ANRS

ANRS

ANRS

Committee Membership
A
R
1.

Neil was independent upon appointment to the Board, in line with provision 10 of the UK Corporate Governance Code 2018.

www.oxinst.com

Audit and Risk Committee Member
Remuneration Committee Member

N
S

Nomination Committee Member
Sustainability Committee Member

C

Chair of Committee

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Annual Report 2024

Overview

BOARD OF DIRECTORS continued

Strategic Report

BOARD LEADERSHIP AND COMPANY PURPOSE
Effective Board

Reshma Ramachandran

Hannah Nichols

Sarah Harvey

Non-Executive Director

Non-Executive Director

Company Secretary

Appointed to the Board:
1 September 2022

Appointed to the Board:
1 January 2024

Non-Executive

Non-Executive

Independent: Yes

Independent: Yes

Skills and experience:
Reshma is currently the Chief
Transformation Officer and a member ofthe Executive Board at APCOA Parking
AG. Prior to that she worked as the
Senior Vice President & Group Head ofTransformation at Adecco Group AG. She
has also previously held senior roles at
ABB Ltd, Alstom Power (a General Electriccompany) and Accenture Management
Consulting. She holds a bachelor's andmaster’s degree in Technology and isan alumnus of the Indian Institute ofTechnology Madras, India. Additionally
she holds a master's degree in businessadministration from the S.P. Jain Instituteof Management & Research, India.
Reshma has over 20 years of experience.
She is an engineer by background andhas led large-scale, multi-cultural teams
and budgets as well as developing
internal collaboration and customer focus.
External appointments:
Chief Transformation Officer andmember of the Executive Board of
APCOA Parking AG.

Hannah is currently Chief Financial
Officer of Hill & Smith PLC, a leading
provider of sustainable infrastructure
products and services and a constituentof the FTSE 250 index on the London
Stock Exchange, a role she has held
since September 2019. She holds a
Classics degree from the University ofCambridge and is a qualified charteredaccountant. Hannah is an experienced
financial professional; prior to her current
executive role she had a successful
14-year career at BT Group plc, latterly
serving as Chief Financial Officer, Asia,
Middle East and Africa for BT Global
Services, based in Singapore. She has
also held a number of commercial
roles at Cable & Wireless plc andqualified as a chartered accountant
at Arthur Andersen.

Sarah became the Company Secretaryin August 2021. She is an Associate of
the Chartered Governance Institute.
Before joining Oxford Instruments,
Sarah held company secretarial rolesat intu properties plc, HSBC Holdings
plc, BP plc and PwC Legal LLP.

Changes to the Board and its
Committees
During the financial year and up to
the date of signing of the Annual
Report, the composition of theBoard changed as follows:• ichard Friend stepped downR
as Non-Executive Director on
28 July 2023.

•

Ian Barkshire stepped down as
CEO and Executive Director on
1 October 2023.

•

 ichard Tyson was appointedR
as CEO and Executive Director
on 1 October 2023.

•

 annah Nichols was appointedH
as a Non-Executive Director on
1 January 2024.

Chief Financial Officer of Hill & Smith PLC.

Non-Executive Director of ISS A/S.
Senior advisor at Boston Consulting
Group LLC.

Upcoming changes to the Board
are as follows:

Committee membership:
ANRS

ANRS

•

•

•

www.oxinst.com

Financial Statements

Governance eshma Ramachandran willR
step down as a Non-Executive
Director on 25 July 2024.
Mary Waldner will step downfrom the role of Chair of the
Audit and Risk Committee witheffect from 25 July 2024 and will
step down from the Board on
4 February 2025.
 annah Nichols will take up
H
the role of Chair of the Audit
and Risk Committee witheffect from 25 July 2024.

The primary function of the Board isto promote the long-term sustainablesuccess of the Group, to generate
and preserve value and to contributeto wider society. Our Board equips
itself to achieve this by utilising good
governance practices and it comprises
Directors who possess the necessary
skills, knowledge and experience toprovide effective leadership.
The Board’s approach to governance is
explained throughout this Governance
Report, on pages 84 to 143, and each
Director’s biographical information isset out in the Board biographies on
pages 86 to 88.

Purpose, strategy
and stakeholders
Our core purpose is to accelerate thebreakthroughs that create a brighter
future for our world. Our technology
and expertise enable our customers
to discover and bring to market
exciting new advances that drive
human progress.
The Board is responsible forestablishing our purpose. It is also
responsible for setting the strategy
which will deliver in line with the
purpose, and which is underpinnedby our values, culture and how we dobusiness. Read more about the Board’s
work on redefining the company’s
purpose and resetting its strategy on
page 95.

For more information on our purpose,see pages 6 and 7 and for more
information on our strategy, seepages 22 and 23.
To ensure that it fulfils its obligations
to its shareholders and wider
stakeholders, the Board actively
engages with these groups in orderto understand their needs and how
delivery of our strategy impacts anddelivers value for them.
For more information on our approachto shareholder and stakeholder
engagement, see pages 20 to 21
and 90 to 95.

CORPORATE GOVERNANCE STATEMENT
for the year ended 31 March 2024
This Corporate Governance Statement,along with the Governance Report asa whole, details how the Group has
applied the principles and compliedwith the relevant provisions of the
UK Corporate Governance Code2018 (the 'Code') and other relevant
requirements to which it is subject,such as the Financial Conduct
Authority’s Listing Rules and Disclosure
Guidance and Transparency Rules,
during the financial year ended
31 March 2024.
This Corporate Governance Statement,
as required by the Disclosure Guidance
and Transparency Rules, forms partof the Directors’ Report and has been
prepared in line with the Code, which
can be found on the website of the
Financial Reporting Council at
www.frc.org.uk. The structure of theGovernance Report largely aligns withthe structure of the Code in order tomost effectively demonstrate how its
principles have been applied.
During the financial year ended 31
March 2024, the Board considers thatit has complied with the provisions of
the Code.

Whilst the specific disclosuresrequired by Disclosure Guidance andTransparency Rule 7.2 are covered in
more depth throughout the Annual
Report, by way of reference, they canbe found as follows:•

A description of the main featuresof our internal control and risk
management systems in relation to
the financial reporting process canbe found on pages 70 to 72.

•

Share capital information can befound in the Directors’ Report on
page 145.

•

Details of the composition of theBoard and its Committees can befound on pages 86 to 88.

•

Our Board diversity policy is
described on page 108.

The Board notes the publication of
the revised UK Corporate Governance
Code in January 2024 and its work in
the year ahead will include planningto adopt the necessary changes it
considers appropriate in order tocomply with the revised Code.

Board approval of the
Corporate GovernanceStatementThis separate Corporate GovernanceStatement is approved by the Boardand signed on behalf of the Board by
its Chair and Company Secretary.

NEIL CARSON
Chair

SARAH HARVEY
Company Secretary
10 June 2024

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

HOW WE ENGAGE WITH OUR STAKEHOLDERS

The Board remains committed todeveloping its understanding of
the views of its key stakeholders
Stakeholder andwhy we value them

Customers

What matters to them•

We put our customers’ needs atthe centre of our conversations
and decision making.
Customer intimacy is key not
only to helping us identify
additional opportunities todeliver increased value to ourcustomers, but to the longterm growth of our business.

Employees
Our employees are thefoundation of our businesssuccess, and we have a
responsibility to support
their health, wellbeing anddevelopment.
A highly capable, diverse
workforce also enables us
to better understand ourcustomers and markets.
Building an organisation witha broad range of perspectives
and experiences increases ourability to innovate, to makethe right decisions and tomeet or exceed our customers’
expectations.

www.oxinst.com

Excellent customer
support andengagement
throughout thebuying cycle.

•

High-quality products
and technical expertise.

•

Products which deliver
value and help to meettheir objectives.

•

•

•

Remote access andcontinuity of supply
during disruption.

•

Development
and progression
opportunities.

•

Health, safety
and wellbeing.

•

Equity, diversity
and inclusion.

•

Understanding how
they contribute to ourstrategy and success.

•How we engage

Clarity of expectation
on how recognition
and remuneration
structures align withaccountabilities.

•

•

•

The Executive Directors and senior management
frequently host direct meetings with key customers
from around the world, both virtually and in person
at our sites. These meetings provide meaningful
opportunities to understand first hand, at a seniorlevel of the organisation, how we can enhance ouroffering to customers by shaping our understandingof their current and future needs.
The Board considers feedback from thesemeetings, together with, for example, outputs
from our heightened customer intimacy such as
customer trends.

The Board was delighted to again participate ina formal programme of employee engagement
activity this year, which included sessions focused on
executive remuneration, the ways of working which
will enable our colleagues to deliver our strategy,
and a full-Board site visit to our new compound
semiconductor site at Severn Beach.
We maintain an engaging and structured approachto connecting with our employees, with regularsessions for all employees held at business unit
and regional level, together with a lively and active
intranet and Group-wide email communications
on key strategic initiatives. An annual engagement
survey tracks employee sentiment.
We continue to promote our ‘Push for Zero’ healthand safety programme and Shield reporting system.

Our approach to engagement
On pages 20 and 21 we have described our key stakeholder groups, the value of each group to the company, the issues
which matter most to them and how we engage with them, focusing on our activity over the past year. The Board iscommitted to developing its understanding of the views of its key stakeholders. As noted earlier in this Annual Report, in someinstances the Board engages directly with stakeholders, but there is also significant engagement by senior management
and throughout the company. The Board receives reports and updates on such engagement, and the views and feedback
gathered from stakeholders are used to inform discussion and decision making.
For a snapshot of our key stakeholders see / pages 20 and 21

Outcomes of our engagement•

Our technology and scientific expertise enable our customers to discover and bringto market exciting new advances that drive human progress.

•

Continuing to invest in R&D allows us to deliver cutting-edge products and services.
Insights gained from customer intimacy are instrumental in helping to determine
where investment should be made.

•Through deep knowledge of our target market segments and the challenges facedby customers, we have changed the way we communicate with prospective andexisting customers, more clearly identifying the value our products can add.

•

Our portfolio focuses on areas where our key enabling technologies are driving
long-term success. This allows us to help customers to make ground-breaking
discoveries, accelerate their applied R&D and increase productivity in hightech manufacturing.

•

Insights from customers help us to align our innovation and product development
initiatives to their strategic roadmaps, so we can create differentiated products
and solutions which provide significant value.

•

We have continued to refine our service offering with digital connectivity helping
to maintain productivity through remote access and service.

•

The Board discusses the insights and actions from all of its employee engagement
activity. This continues to foster meaningful consideration of employees as key
stakeholders. The Board will be participating in an extensive programme ofengagement activity during 2024/25.

•

The Remuneration Committee reviewed the wider workforce remuneration
landscape and related policies, and considered these when setting Executive
Director and Management Board remuneration.

•

We have continued to promote observation reporting, aiming to ensure that
remedial actions can be taken to prevent accidents from happening.

•

The Sustainability Committee considered our maturing approach and internal
targets and measures relating to equality, diversity and inclusion.

Board decisions wherestakeholders were considered
Continued investment in highquality products and technicalexpertise is key to the longterm growth of the businessand is in firm alignment with thecompany’s strategy, which theBoard sets and supports.
See our strategy /pages 22 and 23

Decisions relating to our social
sustainability agenda, fromhealth, safety and wellbeing toinvestment in our people.
See the Sustainability Report /pages 34 to 57 and theSustainability Committee
Report / pages 117 to 119

Setting Executive Director
and Management Board
remuneration.
See the Directors’
Remuneration Report /pages 120 to 143

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Overview

Strategic Report

Governance

Financial Statements

HOW WE ENGAGE WITH OUR STAKEHOLDERS continued
Stakeholder andwhy we value themShareholders
Generating value forshareholders is part of theBoard’s fundamental role,
alongside promoting the longterm sustainable success ofthe company and the Groupand contributing to society.

What matters to them•

Current and futurefinancial performance.

•

Communication andengagement.

•

We actively engage with shareholders throughout
the year to ensure they understand the performanceof the business.

•

Our ongoing programme of dialogue includes
numerous shareholder meetings and roadshows,which are facilitated alongside the publicationof the Annual Report and full-year and half-year
results announcements.

•

Suppliers•

Long-term partnerships.

Our supply chain plays a vitalrole in supporting sustainablegrowth and efficiency acrossthe business.

•

Visibility of the wider
supply chain, so thatthey can best forecast
future requirements.

•

Local communities•

The environment.

Striving to meet our purposein alignment with our values
enables us to support thedevelopment of stronger
communities and have apositive environmental andsocial impact.

•

Local small businesses.

•

Schools and colleges
within their region.

•

Our externally appointed IR specialist increases the
bandwidth available to meet and inform a broader
range of new shareholders.

•

It is crucial to provide our suppliers with accurate
forward visibility in order to align our customers’
requirements with our total supply capabilities. We
share the output from our sales and operations
planning process with them, and we have dedicatedCategory Managers to help reduce risk andimprove efficiency. We must ensure our extended
supply chain adheres to our strict environmental
compliance, whilst challenging them to provide
improvements to quality. Our key suppliers areencouraged to become part of our new productintroduction process, allowing them to add value
to our process.

Charitable donations.

•

The appearance andtangible impact of oursites and operations.

••Board decisions wherestakeholders were considered

The Board as a whole receives updates regarding the nature and outcome of
meetings and engagement by certain Directors with the company’s shareholders.
This feedback helps the Board to shape the strategy which enables the company todeliver shareholder returns through profitable, sustainable growth with strong cash
conversion and efficient use of capital.

Developing and delivering
against our strategy

Our Remuneration Committee engaged with and considered the feedback ofour major shareholders and other key stakeholders when developing the new
Directors’ Remuneration Policy. Their feedback proved particularly insightful in
helping to shape the sustainability-related performance metrics for Executive
Director remuneration.

Implementation of the Directors’
Remuneration Policy.

See our strategy /pages 22 and 23

See the Directors’
Remuneration Report /pages 120 to 143

Consideration and decisions
relating to our wider
sustainability agenda, fromdiversity and inclusion to setting
net zero targets.
See the Sustainability Report /pages 34 to 57 and theSustainability Committee
Report / pages 117 to 119••

As part of our operational excellence programme, we have continued to work tostrengthen our supply chain through executing a procurement strategy focusedon leveraging our scale and building long-term strategic relationships with fewer
suppliers. We have also appointed a Chief Transformation Officer whose remit
includes supply chain best practice.
We have continued to develop our supplier due diligence and audit procedures. We
have a zero-tolerance approach to all forms of modern slavery, including servitude,
forced, bonded and compulsory labour and human trafficking, and we expect our
suppliers to adopt the same approach.

Developing and delivering
against our operational
excellence programme.
Decisions relating to theenvironmental and governancestrands of our sustainability
agenda, from supply-chain
responsible sourcing to humanrights and modern slavery.
See the Sustainability Report /pages 34 to 57 and theSustainability Committee
report / pages 117 to 119•

The Board remained mindful of potential supply
chain challenges and where appropriate, will bebriefed as regards any necessary work to mitigate
the impacts of these challenges.

•

We actively engage in locally focused activities thatmake our communities and environments a better
place to live and work.

•

We operate ‘Go Green’ committees at many of our sites to deliver a local
environment agenda and promote positive behaviours amongst peers. They arefocused on finding innovative ways to improve our environmental impact.

•

We are committed to empowering students withan understanding of the working world and therange of career opportunities that choosing STEM
subjects could open up, so we facilitate school
visits, work experience programmes and industrial
postdoctoral placements.

•

Many of our people are keen to share their expertise and to make a difference to thepeople and organisations that are close by, and we encourage them to get involved
through volunteering schemes. We operate a ‘Volunteer time-off’ programme for
eligible employees which offers many benefits, including increasing the positive
impact we have in our communities, boosting employee morale and enhancing
team bonding.

•We aim to support the small, independent
businesses near our sites.

•

We have facilitated collections of contributions to local food banks and fundraising
activity for local charities and causes.

•

We help our employees to support their local
communities through charitable donations.

•

We are committed to minimising emissions.

•

We aim to be considerate neighbours in all aspectsof how we operate, but in particular, we recognise
the importance of the appearance and tangible
impact of our sites and operations.

Volunteering
opportunities.

•

Outcomes of our engagement

During the year, the Chair, Senior Independent
Director, Remuneration Committee Chair andExecutive Directors all directly engaged with arange of shareholders, including both virtual andin-person meetings at our sites. Key topics included
the company’s financial results, strategy and the new
Directors’ Remuneration Policy which was approvedby shareholders at the 2023 AGM.

•

Strong relationships
built on trust andrespect.

Engaging with our supply
chain is also crucial in thedevelopment and delivery of
our net zero commitment.

www.oxinst.com•

Sustainability.

Our goal is to deliver
shareholder returns throughprofitable, sustainable growthwith strong cash conversion
and efficient use of capital.

It is imperative that we attainthe highest quality products
and service for our customers,
whilst also striving to enhancethe efficiency of the businessand to reduce risk.

How we engage

Decisions relating to
our wider sustainability
agenda, from community
impact to supporting nextgeneration talent.
See the Sustainability Report /pages 34 to 57 and theSustainability Committee
Report / pages 117 to 119

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Overview

Strategic Report

Financial Statements

Governance

HOW WE ENGAGE WITH OUR STAKEHOLDERS continued
Stakeholder andwhy we value themSocietyThrough our statedpurpose – to accelerate thebreakthroughs that create abrighter future for our world –we are committed to making
a positive impact on theworld through our solutions
and services.
Our purpose underpins ourwholehearted commitment
to playing our part increating a sustainable future
throughout our operations,and by behaving as a
responsible business.

What matters to them

How we engage•

Protecting andenhancing theenvironment.

•

Our technology and scientific expertise enable ourcustomers to discover and bring to market exciting
new advances that drive human progress.

•

Addressing the impacts,
risks and opportunities
arising from climatechange.

•We use our market intimacy to develop new products
and services in pursuit of our purpose.

•

We engage directly with universities, governments
and leading companies to explore and develop new
ideas, and to support productivity.

•

Our Sustainability Committee elevates oversight of
the Group’s sustainability agenda to Board level,with a specific focus on considering our approach toclimate change, amongst other things.

•

The development of
new and affordable
vaccines andtreatments for diseases.

•

Fostering a moreconnected world.

•

Enabling advances intechnology.

Board decisions wherestakeholders were considered

Outcomes of our engagement•

Our sites and grounds are well maintained and sensitive to the local environment
and wildlife.

•

We continue to develop new products and services, as set out in the operational
review on pages 26 to 33.

•

Our Sustainability Committee has continued to keep under review the progress
being made across its wider remit, including our work towards achieving ourultimate net zero target of 2045 and interim targets to 2030 in respect of both our
Scope 1 and 2 emissions.

See our Sustainability Report /pages 34 to 57
Information on the work of the
Sustainability Committee canbe found on / pages 117 to 119

PRINCIPAL DECISION CASE STUDY

Guiding our ambitions: our new strategy and purpose
A key area of focus during the year was theredevelopment of our strategy and purpose. These are
crucial underpins which will guide us as we strive tofulfil our ambitions and to achieve even more for all of
our stakeholders, especially our customers, employees
and shareholders. The process was consultative andcollaborative from the outset and throughout, withthe executive team and Board taking a range of views
from different stakeholders on the status quo and thebusiness’s strengths and challenges, before developing
the Group’s future strategy. The Management Board
participated in a series of full-day workshop sessions,and focus groups were held with a wide cross-sectionof employees representing different businesses, regions
and functions. Interviews with external stakeholders
including customers, brokers and corporate advisers
also played a key role in shaping the strategy.
At the core of our strategy and future plans, is our
newly articulated purpose, which is to accelerate
the breakthroughs that create a brighter future forour world, as our technology and scientific expertise
enables our customers to discover and bring to market
exciting new advances that drive human progress.

www.oxinst.com

This reflects in particular how our scientific andtechnical expertise is the beating heart of ourorganisation. In redefining our purpose and as aparticular consideration in our decision making, wehave sought to ensure that we have not lost sight ofthe science, technology and innovation which has
been at the core of the company and its successsince its inception, whilst now reflecting that we are
the enabler which can help to accelerate and unlock
progress across critical areas spanning healthcare,sustainability and global connectivity.
The Group’s new strategy (see pages 10 to 15 and 22
to 23) is founded on developing focused, customerfirst ways of working, simplifying our organisation andprocesses, and making a step change in operational
performance, while protecting our investments
in products and technology – the foundation of
our existing success. It sets out a pathway which
will enable us to achieve greater value for all our
stakeholders, improving our delivery to customers,delivering higher returns to shareholders, and providing
career development opportunities for our employees.

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Overview

Strategic Report

SECTION 172(1) STATEMENTDIVISION OF RESPONSIBILITIES

During the year to 31 March 2024, the Board of Directors has acted to promote the long-term
success of the company for the benefit of its shareholders, whilst having due regard to thematters set out in Section 172(1)(a) to (f) of the Companies Act 2006, being:

Our governance structurea. The likely consequences of any decision in the long term.

Financial Statements

GovernanceThe below structure summarises our approach to governance throughout the organisation. The Board is ultimately
responsible for having oversight of and providing leadership to the Group. Our governance structure demonstrates how
the Board is supported in carrying out its responsibilities. It is particularly supported by its Committees, the Management
Board and the work of various internal forums led by senior management.

b. The interests of the company’s employees.
c.

The need to foster the company’s business relationships with suppliers, customers and others.

Board of Directors

d. The impact of the company’s operations on the community and the environment.
e. The desirability of the company maintaining a reputation for high standards of business conduct.
f.

Audit and Risk
Committee

The need to act fairly between members of the company.

Nomination
Committee

Further information which demonstrates how the Board has had regard to these matters can be found in the preceding‘How we engage with our stakeholders’ section on pages 90 to 95.

Remuneration
Committee

Sustainability
Committee

Management Board

Senior management: Internal forums

Additional information demonstrating how the Board has had regard to the factors set out in
Section 172(1) of the Companies Act 2006
Matters per Section 172(1)(a) to (f)of the Companies Act 2006

Key example(s)Page number

Our purpose-led approach

6 and 7

Our strategy

22 and 23

Risk management

70 to 78

Employee engagement

90 and 91

Our purpose-led approach

6 and 7

Sustainability

34 to 57

Engagement with suppliers

92 and 93

Board of Directors•

Consequences of any decisionin the long term

Interests of employees

Fostering business relationships
with suppliers, customers and others

Impact of operations on the community
and the environment

Maintaining a reputation for highstandards of business conduct

Acting fairly between members

www.oxinst.com

Engagement with customers

90 and 91

Supply chain practices

56

Sustainability

34 to 57

Our purpose-led approach

6 and 7

Our purpose-led approach

6 and 7

Compliance

56 and 57

Anti-bribery and anti-corruption

56

Human rights and modern slavery

57

Privacy and data protection

57

Data security

57

Whistleblowing

114 and 115

Export Control Policy

56

Shareholder engagement

92 and 93

Shareholder information

144

The role of the Board is to promote
the long-term sustainable successof the company, generating value
for shareholders and contributing towider society.

•Responsibilities of the Board are
documented within its schedule ofreserved matters which form part ofits governance reference materials;
these are reviewed and amended
by the Board periodically.

•

Delegates certain matters to
its Committees and the dayto-day running of the businessto the Executive Directors andManagement Board.

•

Collectively responsible forengagement with the workforce.

Board Committees••

These comprise Non-Executive
Directors and meet theindependence requirements
set out in the UK Corporate
Governance Code 2018.
Four dedicated Committees:
Audit and Risk, Nomination,
Remuneration, and Sustainability.

•

A summary of the key
responsibilities of each Committee
is set out in their respective reports
included within this Annual Report.

•

Responsible for a range of mattersspecifically delegated by the Board,as set out in their respective termsof reference, which are reviewed on
an annual basis and can be foundon our website at: www.oxinst.com/
investors-content/advisers-andcompany-secretary.

Responsibilities of the Chair,Chief Executive Officer andSenior Independent Director
The responsibilities of the Chair,Chief Executive Officer and Senior
Independent Director are documented
within the Board’s governancereference materials which are reviewed
and amended by the Board on aperiodic basis. A high-level summary ofthese responsibilities is set out below.

Chair

Management Board•

Leads the Board.

•

Responsible for the day-to-day
running of the business of theGroup, where delegated by the
Chief Executive Officer.

•

Promotes high standards ofgovernance and ensures the Boardis effective in directing the company.

••

Focuses on Group-wide
performance, strategy
and risk management.

Ensures that the Board has effective
decision-making processes andapplies appropriate challenge tomajor proposals.

•

Meets at least monthly.

•

Sets the agenda of the Board.

•

Facilitates participation andengagement by all Directors
in meetings.

S enior management:Internal forums•

Report to the Management Board
either directly or indirectly.

•

Lead internally on delivering
the objectives delegatedby management as well asworkstreams which encompass
our sustainability strategy via the
Sustainability Leadership Forum.

Chief Executive Officer•

Day-to-day running of thebusiness of the Group.

•

Leads the Management Board.

•

Proposes and implements
the strategy.

Senior Independent Director•

Acts as a sounding board to the
Chair and supports delivery of
their objectives.

•

Leads the evaluation of the Chair
on behalf of the other Directors.

•

Available to the company’s
shareholders.

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Financial Statements

Governance

Stakeholders considered key:

DIVISION OF RESPONSIBILITIES continued
Board and Committee meetings and attendance
The table below sets out the number of meetings attended by each Director during the year ended 31 March 2024, of thosewhich they were required and eligible to attend.
This includes all customary meetings as well as ad hoc meetings scheduled during the year. The Directors also held anumber of meetings without the Executive Directors present, both with and without the external auditor in attendance.
As noted in the Committee reports included within this Annual Report, Directors who are not members of the respective
Committees may be invited to join meetings as regular or ad hoc attendees.

1

Customers

3

Shareholders

5

Local communities

2

Employees

4

Suppliers

6

Society

Key areas of focus and discussion

Theme: Strategy, performance and operations
Annual dedicated strategy review session and across a range of meetings, particularly in the latter halfof the year, with a focus on the redevelopment of our strategy and purpose
Regularly reviewed business development activities and the acquisition proposal pipeline, including approvalof the acquisitions of First Light Imaging SAS, which was completed in January 2024 and FemtoTools AG, which
was agreed on 7 June 2024, subject to certain closing conditions which are expected to be satisfied within fourweeks of signing this Annual Report

1

2

4

Reviewed and approved individual capital expenditure projects, including that relating to the extension of
our production capacity in Belfast to meet growing Life Science demand

2

3

5

1

2

3

4

5

6

9/9

N/A

3/3

7/7

5/5

Richard Tyson

3/3

N/A

N/A

N/A

N/A

Gavin Hill

9/9

N/A

N/A

N/A

N/A

Alison Wood

8/9

7/8

3/3

6/7

5/5

Mary Waldner

9/9

8/8

3/3

7/7

5/5

Sir Nigel Sheinwald

9/9

8/8

3/3

7/7

5/5

Theme: Finance, reporting, risk management and controls

Reshma Ramachandran

8/9

7/8

2/3

6/7

4/5

Monitored progress against the 2023/24 financial plan and reviewed and approved the 2024/25
financial plan

2/2

2/2

2/2

1/1

1/1

3

Monitored performance and provided challenge relating to key areas within operations in the broadest sense,
including health and safety, operational excellence, human resources, innovation and business development.
Considered in particular the ongoing operational improvement-related work

Board

Hannah Nichols

6

6

Sustainability
Committee

2

3

5

2

Remuneration
Committee

121Nomination
Committee

Neil Carson

1
4

4

Audit and Risk
Committee

Director

Stakeholders
considered

Considered and approved the Annual Report, half-year results and trading updates, as well as the proposedinterim and final dividend payments

3

Increased the multi-currency facility available to the Group

3

Monitored the outputs from the formal process which identifies, evaluates and reports on risks andopportunities across the Group

1

2

3

4

5

6

Assessed current composition of the Board including tenure, skills, experience and diversity characteristics, inorder to inform the approach to future Board composition

2

3

6

Where they judge it to be necessary to discharge their responsibilities, Directors may obtain independent professional advice
at the company’s expense. All Directors also have access to the advice of the Company Secretary, who is responsible foradvising the Board on all governance matters.

Continued focus on organisational capability and succession planning within senior leadership teams andacross the organisation2

For information regarding the development activities undertaken by the Board during the year, see the Board professional
development section on page 102.

Completed the recruitment process for a new Non-Executive Director with the capability to take up the role of
Chair of the Audit and Risk Committee in due course, resulting in the appointment of Hannah Nichols, effective
1 January 2024

2

3

Stakeholder engagement

Concluded the succession process regarding our change of Chief Executive Officer, with Richard Tyson
succeeding Ian Barkshire as Chief Executive Officer with effect from 1 October 2023

2

3

2

3

1.

Appointed to the Board on 1 October 2023.

2. Appointed to the Board on 1 January 2024.

Directors’ continuous development and access to advice
The Chair is responsible for ensuring that all of the Directors are appropriately briefed on matters arising at Board meetings
and that they have full and timely access to accurate and relevant information. To enable the Board to discharge its duties,
all Directors receive sufficient information, including briefing papers distributed in advance of their meetings. The Committeesof the Board have access to sufficient resources to discharge their duties, including external advisers and access to internal
resources and personnel.

The Board is committed to developing its understanding of the views of its key stakeholders. As noted earlier in this Annual
Report, in some instances the Board engages directly with stakeholders, but there is also significant engagement by senior
management and throughout the company. The Board receives reports and updates on such engagement and the views
and feedback gathered from stakeholders are used to inform discussion and decision making. Please see pages 20 and 21
regarding 'Engaging with our stakeholders' and pages 90 to 95 regarding 'How we engage with our stakeholders' for more
information, including the Board’s Section 172(1) statement.

Board priorities during the year
The table below summarises some of the highlights from the Board’s key areas of focus and discussion during the financial
year. For more information regarding the key areas of focus for the Committees of the Board, please see their respective
reports within this Annual Report.

Theme: Leadership and people

Theme: Governance and responsible business
Presented the new Directors’ Remuneration Policy for approval at our AGM on 19 September 2023 andreceived strong shareholder endorsement with a supporting vote of 98.04%
Consideration of views of key stakeholders and impact of decisions on them, including reviews of shareholder
feedback as collated by external advisers

1

2

3

4

5

6

Full-Board site visit to our new compound semiconductor site at Severn Beach, including dedicated workforce
engagement activities, strategy deep-dive session and a full site tour

1

2

3

4

5

6

Reviewed and discussed the outcomes of the internal Board performance review and agreed an action plan for2024/25. Reviewed progress against the 2023/24 internal Board evaluation action plan

3

Regular meetings without the Executive Directors present

3

Regular meetings with BDO LLP, both with and without the Executive Directors present

3

Maintained oversight of our progress towards achieving our net zero targets
Monitored progress against the targets and measures which aim to advance the social and governancepillars of our sustainability strategy
Oversight of the Group’s sustainability-related narrative reporting and external disclosures, including our
Task Force on Climate-related Financial Disclosures Statement, the integrated Sustainability Report and ourstandalone Sustainability Reportwww.oxinst.com

1

2

3

4

5

6

1

2

3

4

5

6

3

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DIVISION OF RESPONSIBILITIES continued

COMPOSITION, SUCCESSION AND EVALUATION

Board independence

Appointments to the Board

At the conclusion of the financial year, the Board comprised eight Directors, including the Chair (who was considered
independent upon appointment to the Board), five Non-Executive Directors (all of whom were considered by the Board
to be independent upon annual assessment), and two Executive Directors (being the Chief Executive and Chief Financial
Officer). The Board is therefore compliant with the recommendation of the Code, that it should comprise at least 50%
independent Non-Executive Directors, excluding the Chair. The Committees of the Board also remained compliant with therecommendations of the Code during the year and further information regarding their membership can be found within therespective Committee reports included within this Annual Report.

The Nomination Committee is responsible for leading the process for appointments to the Board and its standard process
when making new appointments to the Board is set out below.

Director appointment process
Evaluate Board composition anddetermine required capabilities
of proposed appointee

External commitments
The Board is mindful of the time commitment required by the Non‑Executive Directors in order to effectively fulfil theirduties. Prior to appointment, prospective Directors provide details regarding other roles and significant commitments which
may impact their ability to commit to the company. All Directors keep the Board informed regarding proposed external
appointments or significant commitments as they arise, with Chair approval required prior to taking on any additional external
appointment and commitments monitored to ensure that each Director has sufficient time to fulfil their obligations. Each
Director’s biographical information and significant time commitments are set out in the Board biographies on pages 86 to 88.
Changes to Directors’ commitments during the year are noted in the below table.

Advertise role and determine
long list of potential candidates

Refine short list of potential
candidates and complete interviews

Conflicts of interest
The Companies Act 2006 states that Directors must avoid a situation where they have, or can have, a direct or indirectinterest that conflicts, or possibly may conflict, with the company’s interests. Boards of public companies may authorise
conflicts and potential conflicts, where appropriate, if permitted by the company’s Articles of Association – and the company’s
Articles of Association do allow for this.
Directors are required to disclose conflicts and potential conflicts to the Chair and the Company Secretary as and when theyarise. When a Director takes on additional external commitments, they will discuss the potential position with the Chair andconfirm that, as far as they are aware, there are no conflicts of interest. During the year, none of the Directors declared to thecompany any actual or potential conflicts of interest between any of his or her duties to the company and his or her privateinterests and/or other duties, except for the Executive Directors, who hold the position of Director of the company as well as
acting as director of a number of Group subsidiary companies. Alison Wood, our Senior Independent Director and Chair of theRemuneration Committee also serves as a Non-Executive Director of TT Electronics plc, where Richard Tyson was previously
the Chief Executive. Whilst not obliged to do so, she prudently decided to recuse herself from all decision making in relation
to Richard’s appointment and remuneration, both at Oxford Instruments plc and TT Electronics plc. The system for monitoring
potential Director conflicts remained effective throughout the period.

Change in Directors’ commitments
The table below sets out the changes to the external appointments of the Directors which took effect or were confirmed
during the financial year and up to the date of signing the Annual Report.
Director

Change in commitment

Effective date of change

Alison Wood

Resigned as Non-Executive Director and Chair of the Remuneration
Committee of the British Standards Institute (non-listed).

August 2023

Gavin Hill

Appointed as Non-Executive Director and Chair of the Audit
Committee of BMT Group Limited.

April 2023

Nigel Sheinwald

Resigned as Senior Adviser to Tanium, a cyber-security company.

June 2023

Reshma RamachandranAppointed as Non-Executive Director of ISS A/S.

April 2023

Appointed as Chief Transformation Officer and member of the
Executive Board of APCOA Parking AG.

October 2023

Appointed as Senior advisor at Boston Consulting Group LLC.

August 2023

Consideration and approvalby Nomination Committee

Consideration and approval by Board

Advertise the role using open advertising (unless confidential) and by instructing
external executive search consultants with the necessary expertise.
Identify long list of potential candidates based on, amongst other things,
experience, capabilities, merit and diversity.
Determine short list and invite the potential candidates to complete a formalinterview process.
Interview process to be facilitated by various Board members but specificallythe Chair, Chief Executive Officer and senior management, as appropriate.
Nomination Committee to consider the short-listed candidates and feedback
from interview process from both interviewers and interviewee.
Determine the preferred candidate and recommend their appointment to theBoard for approval.
Board to consider and, if thought fit, approve the proposed appointment of thepreferred candidate.
Market announcement made in accordance with regulatory requirements.

Director re-election
In line with best practice and thecompany’s Articles of Association,
all Directors are required to retire
from office at each AGM, in order tobe proposed for re-election by thecompany’s shareholders should theywish to continue in their role. At thecompany’s 2023 AGM, all Directors on
the Board at that time were reappointedby shareholders with majority votes
ranging from 95.91% to 99.87%.
On 1 October 2023, Richard Tyson was
appointed to the Board as an Executive
Director in his capacity as Chief
Executive Officer and on 1 January2024, Hannah Nichols was appointed
to the Board as a Non-Executive
Director. Both Richard and Hannah
will stand for election for the first timeat the company’s 2024 AGM. Hannah
will also take up the role of Chair of the
Audit and Risk Committee with effectfrom the conclusion of the AGM.
Reshma Ramachandran will not
submit herself for re-election byshareholders and will stand down asa Non-Executive Director with effectfrom the conclusion of the AGM, due
to her appointment in a new executive
role externally, which will restrict theavailable time which she can commit
to her role with the company.

www.oxinst.com

Evaluate the Board’s skills, experience, independence, diversity and knowledge
and utilise this to develop a specification which reflects the role and specificcapabilities required.

The Board sincerely thanks Reshma
for the valuable contributions she has
made during her time as a Director.
Mary Waldner joined the Board in
February 2016, and will stand down asa Non-Executive Director in February
2025, when she will have served as a
Non-Executive Director for nine years,
in line with best practice. She will step
down from the role of Chair of the
Audit and Risk Committee with effectfrom the conclusion of the AGM, with
Hannah Nichols taking up this role, as
noted above.
Each of the other Directors will retire
from office at the AGM and each has
agreed to submit himself or herself for
re-election by shareholders.
Having considered the performanceand contribution of each of the
Directors, the Board remains satisfied
that they are operating effectively andcontinue to demonstrate commitment
to their roles. The Board will therefore
recommend the election or re-electionof all Directors who intend to stand forappointment at the AGM.

The biographical information of each
Director, their initial appointment dates
and the reasons for their respective
election or re-election, whereapplicable, can be found on pages 86
to 88. More information regarding theBoard and the Director performance
review process is set out on pages 102
and 103.

Board induction programme
The Chair and Company Secretary
are responsible for ensuring thatall Directors receive a full, formal
and tailored induction upon joining
the Board. Whilst our induction
programme will be tailored based on
the needs, experience and backgroundof the individual Director, it will ensurethat they gain a comprehensive
understanding of the Group throughactivities including: visits to our sites,
one-to-one sessions with the Executive
Directors, sessions with all membersof the Management Board, meetings
with various functional and regional
heads, and the opportunity to meetwith a range of employees acrossthe business.

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COMPOSITION, SUCCESSION AND EVALUATION continued
The case study on page 103 provides
an illustration of our induction
programme in practice, following theappointment of Hannah Nichols asa Non-Executive Director during thefinancial year.

Board professional
development
The Board and Committees receive
dedicated training and information
on matters relevant to the Group’sbusiness, including operational andtechnological briefings and updates
on legal, regulatory and governancedevelopments. During the year, training
and updates were provided by thecompany’s remuneration adviser andexternal counsel, as well as internal
subject matter experts.
For more information regarding ourapproach to Directors’ continuous
development and access to advice,please see page 98.

Board composition
The Board, via the Nomination
Committee, keeps under continuous
review its composition and that of its
committees. Its review considers thebalance of the Directors’ skills andexperience as well as their tenure,
independence, time commitment anddiversity. The Nomination Committee
also carries out a formal, in-depth
review of Board and committee
composition at least annually.
For more information regarding therecent and anticipated changes tothe Board’s composition, see theNomination Committee Report on
pages 106 to 109.

Annual Board
Performance Review
The Board recognises the need tocontinually monitor and improve its
performance. It carries out internalor externally facilitated Board
performance reviews annually, in orderto obtain feedback to help to improve
its effectiveness.

Internal Board evaluation
2022/23: Progress•

The Board completed an internallyfacilitated performance review during
the previous financial year. This
generated recommendations which
the Board agreed to implement. In linewith its dedicated action plan, during
the year the Board:••as part of their work on theredevelopment of the company’s
strategy and purpose, considered
the current and anticipated macro
backdrop impacting the Group;developed and delivered asmooth succession plan for therole of Chair of the Audit and Risk
Committee, with the appointmentof Hannah Nichols as a NonExecutive Director on 1 January2024 who will take up the rolewith effect from the conclusion of
the 2024 AGM. Hannah has been
completing a robust handoverwith the current Audit and Risk
Committee Chair, Mary Waldner,
who will be stepping down fromthe Board in February 2025;•

continued to progress the workforce
engagement programme throughmeeting and hearing from a
range of employees at various
levels and roles, primarily as partof the full-Board site visit to our
new compound semiconductorsite at Severn Beach andthrough a dedicated session on
remuneration hosted by Alison
Wood in her capacity as Chair of theRemuneration Committee; andfacilitated Director development
opportunities across a range of
topics including sustainability,
corporate governance and the
evolving legal landscape. Also
received briefings on mattersrelevant to the Group’s business,
including operational updates.

Internal Board Performance
Review 2023/24: ProcessThis year, the Board completed aninternally facilitated performance
review. The process included:•

discussions between the Chair andthe Company Secretary to agree
the scope of the evaluation andfocus areas;•

online questionnaire issued to andcompleted by all Directors;•

evaluation report prepared andfindings discussed by the Chair andCompany Secretary;•

aggregated feedback andproposed actions shared with anddiscussed by the Board; and•Board discussed and agreed
actions to be implemented.

Internal Board Performance
Review 2023/24: Outcomes
and actions
The internal Board performance
review concluded that the Board and
its Committees function well and that
all individual Directors contributemeaningfully and demonstratecommitment to their roles. The Board
developed and agreed an action planfor the year ahead, highlights fromwhich include:•

enhancing the Board’s approach torisk management;•

continuing to advance the formal
workforce engagement programme
to provide meaningful insights forboth the Board and our colleagues;
and•providing even further director
development opportunities, relevantto the business.

Induction of Richard Tyson as Chief Executive Officer

Induction of Hannah Nichols as Non‑Executive Director

Richard Tyson was appointed to the Board with effect from 1 October 2023 and since joining, has
immersed himself in getting to know the business at first hand, meeting key stakeholders including
customers, shareholders and colleagues around the world.

Hannah Nichols was appointed to the Board with effect from 1 January 2024 and, since joining, has
undertaken a full and formal induction, tailored to her individual needs.

“I’m really grateful for the very warm welcome I’ve had everywhere I’ve been. I’ve also come away from every visit
impressed by the talent and commitment of our teams, the strength of our product ranges and the brilliant ideas
coming through for new product development. I can also see huge potential for us to be even more effective in theyears to come, with opportunities to simplify the way we operate that will deliver efficiencies that we can reinvest
back into the business.”
Highlights from Richard’s first few months as heimmersed himself into the business included:•

embarking on multiple visits to all of our major
sites around the world, including those across the
UK, China, Germany, Japan and the US, which
provided opportunities to:– see our advanced technology in action;– meet with and hear from a wide range ofcolleagues across our organisation;– gain a first-hand insight into the working
practices at our sites; and– assess our strategy in action; helping to shapehis views on the future of the organisation;www.oxinst.com••

building strong working relationships withmembers of the Board and developing his
understanding of their views on the opportunities
for and challenges facing the business; anddeveloping a robust framework
to support him in delivering hisrole, ranging from expanding theManagement Board to engaging
external advisers to support
robust and well-informed
decision making.

“I am delighted to have joined Oxford Instruments as Non-Executive Director and was very impressed with theleading-edge products and services showcased during my recent visits to High Wycombe and Tubney Woods.
I really appreciate the warm welcome I have received to date and look forward to spending more time with ourtalented teams during future visits.”
Key features of Hannah’s tailored induction
programme included:•

one-to-one sessions with the Executive Directors
to gain an in-depth understanding of the business;•sessions with all members of the Management
Board, to develop an understanding of their roles
and responsibilities;•

visits to our sites at Tubney Woods, High
Wycombe and Severn Beach;•legal training session with the company’s UK
corporate counsel regarding the obligations ofa UK listed company and its directors, with afocus on the regulatory framework for UK listedcompanies, directors’ duties and the UK Corporate
Governance Code and related obligations;•

meetings with various functional and regional
heads including the Company Secretary, GeneralCounsel, Director of Communications, Group
Financial Controller, Group HR Director, Head of
Tax and Head of Internal Audit, Risk Assuranceand Group International Trade Compliance;•

introductions to the company’s key
advisers including its auditor,
UK corporate counsel andremuneration consultant; and•commenced handover activities
with Mary Waldner, whom
Hannah will succeed as Chair of
the Audit and Risk Committeewith effect from theconclusion of the AGM on
25 July 2024.

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105

Financial Statements

COMPOSITION, SUCCESSION AND EVALUATION continued
Board skills, experience and diversity characteristics

Board diversity characteristics

The Board is committed to promoting diversity and inclusion, both on the Board and throughout the Group. The Board
recognises that diversity, construed in its broadest sense and including gender, religious and ethnic diversity, disability, sexual
orientation, social and economic backgrounds, age and cognitive and personal strengths, is an important factor in Board and,indeed, operational effectiveness.

Age

What is your ethnic group?

During the year, the Directors participated in a process to identify their own skills, experience and diversity characteristics. The
results of this process are set out below and on the page opposite and have been used to help assess the future needs of theBoard, particularly in determining the ideal attributes of prospective appointees to the Board.
The Board diversity policy and our plans and progress in line with the recommendations of the FTSE Women Leaders Review
and the Parker Review, respectively, are described in the Nomination Committee Report on pages 106 to 109.

40–49

2

50–59

3

White British

7

For more information regarding our approach to equality, diversity and inclusion across the Group, please see ourSustainability Report on pages 34 to 57.

60–69

2

Indian

1

70+

1

Level 6 –Bachelor’s degree

4Level 7 – Master’s degree4

Level 8 – Doctorate or PhD0

Other

0

Male

4

Female4

Board skills and experience
Specific skill, experience or expertise

Chairmanship

Number of Directors identifying as having specific skill, experience or expertise2

Do you consider yourself to have a disability
defined by the Equality Act 2010?

5

Listed Company Executive directorship(s)7Listed Company Non-Executive directorship(s)Financial expertise

4

Financial reporting experience

4
6

Risk managementNo

8

Corporate governance

5

Executive remuneration

4

Workforce engagement
Strategy development

8

International business experience8

Were you educated outside the UK?

Board gender diversity

4

Commercial and business development
Business management

5

Operations and manufacturing

53Services and life cycle revenue

Yes1

4

Technology, Science or Engineering

3

Sustainability

4

Climate change
Energy transition

3

Customer focus

35People leadershipwww.oxinst.com

85

Investor relations

Digital experience

What is your highest level of
educational attainment?

2

No

6

Educated both 
inside andoutside UK

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Governance

NOMINATION COMMITTEE REPORT
Dear Shareholder,I am pleased to present the report of
the Nomination Committee for the year
ended 31 March 2024.
The Committee has again enjoyed abusy year, with the range of recent andupcoming changes to the composition
to our Board being a reflection of
the importance we place on robust
succession planning and the executionof our plans.

NEIL CARSON
Chair of the Nomination Committee

Committee membership
The current membersof the Committee are:Neil Carson (Chair), Alison Wood,
Mary Waldner, Nigel Sheinwald,
Reshma Ramachandran and
Hannah Nichols.

Changes to Committee
membership:
Richard Friend stepped down asa member of the Committee upon
his resignation from the Board
on 28 July 2023 and Hannah
Nichols joined as member of theCommittee upon her appointment
to the Board on 1 January 2024.
For details of attendance at
Committee meetings during thefinancial year, see page 98.
• For the biographies of all
Committee members, seepages 86 to 88.
•

After completing a rigorous search
process, we were pleased torecommend that the Board appoint
Hannah Nichols as a Non-Executive
Director with effect from 1 January
2024. Hannah’s experience meansthat she is well equipped to takeup the role of Chair of the Audit andRisk Committee, which she will dowith effect from the conclusion of
the AGM to be held on 25 July 2024.
Since joining the Board, Hannah
has completed a formal induction
programme, which you can read more
about on page 103. Further details
regarding our Director appointment
process can also be found on
page 101.
During the year we were pleased
to have concluded the succession
process regarding our change of Chief
Executive Officer, with Richard Tyson
succeeding Ian Barkshire as Chief
Executive Officer with effect from 1
October 2023. The Board is thankful
for the tremendous contribution Ian
has made and is sure that he will lookback on his long career with Oxford
Instruments with immense pride.
Richard has joined us from global
electronics company TT Electronics
plc, where he was Chief Executive
Officer, and we have been delighted
with his work so far, as he leads us into
the next phase of our development
and growth.
For more detail regarding remuneration
arrangements applicable to Ian’s
retirement and Richard’s appointment
to the Board, see the Directors’
Remuneration Report on pages 120
to 143.

As explained earlier in this Annual
Report, Reshma Ramachandran
will stand down as a Non-Executive
Director with effect from the conclusionof the AGM, due to her appointment in
a new executive role externally, which
will restrict the available time which
she can commit to her role with thecompany. The Board sincerely thanks
Reshma for the valuable contribution
she has made during her time as a
Director. In addition, and as noted in
the Report and Financial Statements
2023, after having served on the Board
for almost nine years, Professor Sir
Richard Friend stepped down as a
Non-Executive Director of the company
with effect from 28 July 2023. Further,
Mary Waldner will stand down as a
Non-Executive Director in February
2025 in line with best practice and will
step down from the role of Chair of the
Audit and Risk Committee with effectfrom the conclusion of the AGM, with
Hannah Nichols taking up this role.
We have also kept under review ourapproach to diversity, particularly
in light of the recommendations of
the FTSE Women Leaders Review
and the Parker Review. We remaincommitted to meeting the targets andrecommendations set out in thesereviews, at Board level, for senior
management and throughout theorganisation. Our Board diversity policy
and our plans and progress in line withthe recommendations of both of thesereviews are explained on pages 108
and 109.

Key responsibilities•

Review the structure, size and composition (including the skills, knowledge,
experience and diversity) of the Board.

•

Ensure plans are in place for orderly succession to Board and Management
Board positions, and oversee the development of a diverse pipeline forsuccession, taking into account the challenges and opportunities facing thecompany, and the skills and expertise needed on the Board in the future.

•

Review the leadership needs of the organisation, both Executive and NonExecutive, with a view to ensuring the continued ability of the organisation tocompete effectively in the marketplace.

•

Be responsible for identifying and nominating for the approval of the Board,candidates to fill Board vacancies as and when they arise.

•

Before any appointment is made by the Board, evaluate the balance ofskills, knowledge, experience and diversity on the Board and, in light of thisevaluation, prepare a description of the role and capabilities required for aparticular appointment and the time commitment expected.

•

Ensure that, on appointment to the Board, Non-Executive Directors receive aformal letter of appointment setting out clearly what is expected of them.

•

Review the results of the Board performance evaluation process that relate
to the composition of the Board and succession planning.

•

Review annually the time required from Non-Executive Directors.

•

The Committee shall also make recommendations to the Board concerning:changes needed to the succession planning process, if required; suitable
candidates as new Directors and succession for existing Directors;
membership of the Audit and Risk, Remuneration, and Sustainability
Committees; the reappointment of Non-Executive Directors at theconclusion of their specified term of office; the re-election by shareholders of
Directors; any matters relating to the continuation in office of any Director at
any time; and the appointment of any Director to executive or other office.

Committee composition

I will be available at the AGM toanswer any questions you may haveregarding the work of the Committee.

In line with the Committee’s terms ofreference, which are available on our
website at: www.oxinst.com/investorscontent/advisers-and-companysecretary, the Committee comprises amajority of independent Non-Executive
Directors and is chaired by the Chair of
the Board, Neil Carson.

NEIL CARSON

Meetings

Chair of the Nomination Committee

The Nomination Committee holds aminimum of one meeting annually, as
required under its terms of reference,and this year held three meetings.
Regular attendees at meetings
may include the Chief Executive
Officer, Chief Financial Officer andChief HR Officer, where appropriate.
The Company Secretary is thesecretary to the Committee.

10 June 2024

Committee performance
review
During the year, an internal
performance review of the effectivenessof the Committee was conducted aspart of the wider review of the Boardand the Board Committees.

www.oxinst.com

More information can be found on
pages 102 to 103. The review foundthat the Committee functions effectively
and that matters are dealt with in athoughtful and rigorous manner.

How the Committee spent its
time during the year ended
31 March 2024
The responsibilities of the Committee
are set out in its terms of reference,
which were last reviewed in January2024 and which are summarised
above. Whilst these responsibilities
guide the operation of the Committee
and shape its agenda, it will also
consider other matters as requested by
the Board and as relevant to its remit.
The key activities and areas of focus
for the Committee during the year are
as set out below.
•

Reviewed the Board’s composition
and future needs, bearing in mind
in particular the current tenure,skills, experience and diversity
characteristics of the Directors.

•

Reviewed the succession plans for
Board and Management Board
positions.

•Continued to consider our approachto diversity, particularly in light of
the recommendations of the FTSE
Women Leaders Review and theParker Review.

•

Completed the recruitment process
for a new Non-Executive Director,
resulting in the appointment ofHannah Nichols, effective 1 January
2024.

•

Concluded the succession process
regarding our change of Chief
Executive Officer, with Richard Tyson
succeeding Ian Barkshire in this rolewith effect from 1 October 2023.

Board composition andsuccession planning
The Nomination Committee keeps
under continuous review thecomposition of the Board and its
Committees. We take seriously our
responsibility for Board effectivenessand continuity and the need to conduct
a continuous and proactive processof planning and assessment, in thecontext of the company’s strategic
priorities and the main trends andfactors affecting the long-term successand future viability of the company.
Anticipating the departure of Mary
Waldner as Director in line with bestpractice in relation to her tenure
and independence, as she will have
served on the Board for nine years by
February 2025, the Committee acted
to ensure smooth succession for therole of Audit and Risk Committee Chair,
which Mary currently fulfils. As a result,
we were pleased to recommend thatthe Board appoint Hannah Nichols
as a Non-Executive Director witheffect from 1 January 2024. Hannah’s
strong financial expertise, extensive
international experience and trackrecord of driving transformationalchange, both within and beyond thefinance function, will complement
the current range of expertise andexperience on our Board and meanthat she is well equipped to take up
the role of Chair of the Audit and Risk
Committee, which she will do witheffect from the conclusion of the AGM
to be held on 25 July 2024. See page
101 for further information regarding
the Committee’s appointment process
and page 103 for details regarding
Hannah Nichols' appointment andinduction experience. The Nomination
Committee engaged Russell Reynolds,
an executive search agency, to assist
with this appointment.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

109

Financial Statements

Governance

NOMINATION COMMITTEE REPORT continued
The company and the Directors haveno other connection with Russell
Reynolds. As explained in the Report
and Financial Statements 2023, further
to a rigorous selection process, Richard
Tyson was appointed to succeed Ian
Barkshire as Chief Executive Officer.
We are pleased to have concluded theformal appointment process during
the year, with Richard succeeding Ian
in this role with effect from 1 October
2023. The Director appointment
process detailed on page 101 wasfollowed, except that open advertising
was not utilised as it was not
appropriate in these circumstances.
The interview process in particular,
gave each of the Committee members
a meaningful opportunity to carefully
assess the experience and capabilitiesof the potential internal and external
candidates. The Committee ensured
that the insights gained by each of its
members were carefully considered incoming to a conclusion regarding theirpreferred candidate. Alison Wood, ourSenior Independent Director and Chairof the Remuneration Committee also
serves as a Non-Executive Directorof TT Electronics plc, where Richard
was previously the Chief Executive.
Whilst not obliged to do so, she
prudently decided to recuse herself
from all decision making in relation to
Richard’s appointment, both at Oxford
Instruments plc and TT Electronics
plc. The Nomination Committee
engaged Korn Ferry’s executive search
consultancy to assist with this process.
Korn Ferry also acts as an adviser tothe Remuneration Committee andinformation regarding its fees forserving in this capacity are set out
on page 122.
Upon Sir Richard Friend stepping
down from the Board in July 2023, theCommittee was mindful of ensuringthat it retained access to his depth oftechnical expertise and experience.
Since his departure from the Board, hehas been engaged to work with theBoard in an advisory capacity and thishas helped to ensure that it retains
the skills, knowledge and experience
it needs to operate optimally. In due
course, consideration may be given
to seeking to appoint a further NonExecutive Director with a similar skillset, but it is not considered appropriate
at this time.

www.oxinst.com

In addition to reviewing Board
composition, the Nomination
Committee oversees the succession
plans for the Management Board. It
has regular opportunities to meet withits members and other members of
the wider senior leadership throughtheir attendance at Board meetings
to report on their respective businessareas or functions and throughworkforce engagement activities.

Board diversity
The Board is committed to promoting
diversity and inclusion, both on the
Board and throughout the Group.
The Board recognises that diversity,
construed in its broadest sense, is an
important factor in Board and, indeed,
operational effectiveness. The Board’s
diversity policy considers a range ofcharacteristics, namely age, disability,
social and educational backgrounds,
as well as gender and ethnicity, andincludes a commitment to sustaining
an effective balance of female andethnic representation on the Board andthroughout the wider organisation.
At the end of the financial year,
the Board had 50% female
representation as well as ethnicallydiverse representation, with oneof our Board colleagues being aperson of colour. The compositionof our Board therefore met both
the recommendations of the FTSE
Women Leaders Review (40% female
representation by the end of 2025)
and the Parker Review (at least one
Director of colour by the end of 2024).
We are delighted to have surpassed
the target for at least 40% of the Board
to comprise women, with 50% female
representation at present, given thatfour of the Board’s eight Directors are
women. We are mindful that upon
the exit of Reshma Ramachandran asa Non-Executive Director on 25 July
2024, we will still surpass the target
with 43% female representation, but
upon Mary Waldner stepping downfrom the Board in February 2025, will
have 33% female representation. The
Committee intends to take active steps
to address this during the year ahead.
We are pleased to have also met therecommendation to have at least one
woman in one of four specified senior
roles by the end of 2025, as Alison
Wood currently serves as our Senior
Independent Director.

We have met the target of the Parker
Review for the Board to include at least
one Director of colour by the end of2024, with Reshma Ramachandrancurrently serving as a Non-Executive
Director, but recognise that we willneed to take active steps during theyear ahead to address the fact that
we will no longer meet this target
once Reshma steps down as a NonExecutive Director.
The Parker Review also recommends
that we devise and work towards a
specified target for the percentage of
our senior management team to befrom ethnic minorities by the end of
2027. As an international company,
we recognise the importance ofensuring we have strong ethnicallydiverse leadership role models anda diverse decision-making team thatreflects our customer base and thecommunities in which we operate. In
2024 we published our ethnicity pay
gap data for the first time and wereencouraged to report that both mean
and median pay across our entire UK
workforce was slightly higher for thosecolleagues who identify as belonging
to an ethnic minority group. We havemade efforts to improve the extent of
ethnicity data we hold and are pleased
to now have data in respect of 90%
of our UK workforce and 78% of ourglobal workforce. This year we havetaken steps to broaden the ethnic
diversity of our wider senior leadershipteam which, as of the date of theAnnual Report, comprises 14 persons,of whom 14% are Asian. There are 102
direct reports of this team, of whom
22% identify as belonging to an ethnic
minority group. In that context, we will
be seeking to maintain and improvethe ethnic diversity of this cohort (ie, ourwider senior leadership team and theirdirect reports) on a year-on-year basis,
within a target range of 20% to 25%.
Any future appointments to the Board
will continue to be based on meritand objective criteria to ensure thatthe best individuals are considered
and appointed to the role. Wherever
possible, the search pool will be
extensive and where an executive
search consultancy is used, we will
only engage with those firms thathave adopted the Voluntary Code of
Conduct for Executive Search Firms.
For details of our approach to diversity
within the wider organisation, pleasesee our Sustainability Report on pages
34 to 57.

Diversity of individuals on the
Oxford Instruments plc Boardand executive management
In accordance with the UK Financial
Conduct Authority’s Listing Rule 9.8.6
R (9) the Board confirms that as of 31
March 2024, Oxford Instruments plc:•

had surpassed the target for
at least 40% of the Board tocomprise women, with 50% female
representation given that four of theBoard’s eight Directors are women;•

had met the remaining targets
set out in that rule with (i) Alison
Wood holding the role of Senior
Independent Director and awoman therefore holding one of
the specified senior positions on
the Board (Chair, Chief Executive
Officer, Senior Independent Director
or Chief Financial Officer); and (ii)Reshma Ramachandran being ofan Asian background, meaningthat the Board included at least
one Director from a minority ethnic
background; and•with the upcoming exit of Reshma
Ramachandran as a Non-Executive
Director on 25 July 2024, we will still
surpass the target for at least 40%of the Board to comprise women,with 43% female representation,
but will no longer meet the target
for the Board to include at least
one Director from a minority ethnic
background. However, upon Mary
Waldner stepping down from theBoard in February 2025, the Board
will comprise six Directors: four
men and two women, resulting in
33% female representation. The
Committee intends to take active
steps to address this during theyear ahead.

Our approach to collecting this data
was two-fold. For our Directors,
we asked that they complete
a questionnaire regarding theirskills, experience and diversity
characteristics, including their gender
identity or sex and their ethnic
background. For our Management
Board, we collated this data fromour employee records, which they
have provided on a voluntary basis
understanding that it may be used fordisclosure purposes, as well as to help
to ensure that our processes and pay
are fair and equitable with respect
to race and ethnicity, as well as thecharacteristics on which we have hadfull data for several years.

In accordance with Listing Rule9.8.6 R (10) the below tables provide
data as of 31 March 2024 regarding
the gender identity or sex and theethnic background of both the
Oxford Instruments plc Board andthe executive management team,its Management Board.

Gender identity or sex
Number of
Board members

Percentageof the Board

Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)

Men

4

50%

3

9

90%

Women

4

50%

1

1

10%

Not specified/prefer not to say

–

–

–

–

–

Number of
Board members

Percentageof the Board

Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)

Number in
executive
management

Percentageof executive
management

White British or other White(including minority-white groups)

7

87.5%

4

8

80%

Mixed/Multiple ethnic groups

–

–

–

–

–

Asian/Asian British

1

12.5%

–

2

20%

Black/African/Caribbean/Black British

–

–

–

–

–

Other ethnic group, including Arab

–

–

–

–

–

Not specified/prefer not to say

–

–

–

–

–

Number in
executive
management

Percentageof executive
management

Ethnic background110

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

AUDIT AND RISK COMMITTEE REPORT
Dear Shareholder,I am pleased to present the Reportof the Audit and Risk Committee forthe year ended 31 March 2024. We
have continued to play an integralrole as part of the Group’s governanceframework, monitoring the integrityof the financial statements of thecompany and providing oversightand challenge across the financial
reporting processes and internal
control environment.

MARY WALDNER
Chair of the Audit
and Risk Committee

Committee membership
The current members of
the Committee are:During the year, the Committee’s work
focused particularly on the Group’s
approach to several key areas ofgovernance whilst continuing to deliverits core remit. Specific areas of focus
included:••

Mary Waldner (Chair), Alison
Wood, Nigel Sheinwald, Reshma
Ramachandran and Hannah
Nichols.

Changes to Committee
membership:
Richard Friend stepped down asa member of the Committee upon
his stepping down from the Board
on 28 July 2023 and Hannah
Nichols joined as member of theCommittee upon her appointment
to the Board on 1 January 2024.
Hannah will take up the roleof Chair of the Audit and Risk
Committee with effect from theconclusion of the AGM to be heldon 25 July 2024, succeeding Mary
Waldner in this role.
•

For details of attendance at
Committee meetings during thefinancial year, see page 98.

•

For the biographies of all
Committee members, seepages 86 to 88.

www.oxinst.com•

delivery of the internal audit planacross a broad range of key risk
areas;
considering the procedures tomanage risk, oversee the internal
control framework and determine
the nature and extent of theprincipal risks the company iswilling to take in order to achieve its
long-term strategic objectives;
monitoring the processes for
identifying, evaluating and reportingon climate‑related risks andopportunities across the Groupand their integration into the wider
enterprise risk management
processes. This includes thedetailed assessment of key risks
using a standardised methodology,
as performed by the business units
across the Group;•working with BDO LLP in respectof the delay to the completion of
the annual audit in respect of theyear ended 31 March 2023 due totheir requesting additional time to
finalise their audit quality control
procedures, to ensure a smoothconclusion to this process; and•the review of papers and supporting
calculations and data relating
to the significant Audit and Risk
Committee judgements andestimates during the financial year
ended 31 March 2024.

I will be stepping down as Chair of
the Committee with effect from theconclusion of the AGM on 25 July2024 and am delighted that I will be
succeeded in this role by Hannah
Nichols. Hannah joined the Board as a
Non-Executive Director and member of
the Committee on 1 January 2024. As
an experienced financial professional,
a qualified chartered accountant andthe current Chief Financial Officer of Hill
& Smith PLC, she is excellently suited
to undertake this role. I will remain asa Non-Executive Director on the Board
until February 2025.
The Committee has noted the
publication of the revised UK Corporate
Governance Code in January 2024
and its work in the year ahead will
include planning to adopt the changes
it considers necessary to comply withthe revised Code. During the year
ahead the Committee will continue toretain a focus on assessing the level ofassurance provided over key financial
controls whilst also addressing a rangeof risk-based audit areas.
Should you have any questions orcomments regarding the work of theCommittee during the year, I would bepleased to hear from you.

MARY WALDNER
Chair of the Audit
and Risk Committee
10 June 2024

Key responsibilities•

Monitor the integrity of the Financial Statements of the company and Group and review and report to the Board on
significant financial reporting issues and judgements.

•

Review statements relating to financial performance and narrative reporting, including any climate-related financial
disclosures.

•

Review the company’s internal control and risk management systems.

•

Review the arrangements relating to compliance, speaking up and fraud.

•

Monitor and review the effectiveness of the company’s internal audit function.

•

Advise the Board on the appointment, reappointment and removal of the external auditor, agree their terms ofengagement and monitor their independence and objectivity.

•

Review the effectiveness of the external audit process.

•Develop and implement the policy on the engagement of the external auditor to supply non-audit services.

Committee composition

Meetings

In line with the requirements of the
UK Corporate Governance Code andthe Committee’s terms of reference,
which are available on our website at:www.oxinst.com/investors-content/
advisers-and-company-secretary, theCommittee comprises independent
Non-Executive Directors and, as awhole, has competence relevant to thesector in which the company operates.
All members of the Committee areconsidered to be independent. Mary
Waldner, the Committee Chair, has
specific, recent and relevant financial
experience as the Chief Financial
Officer of Lloyd’s Register, is a Fellow of
the Chartered Institute of Management
Accountants and has also held anumber of senior executive financial
roles with major public companies. She
will step down from the role of Chairof the Audit and Risk Committee witheffect from the conclusion of the AGM
to be held on 25 July 2024 and will
be succeeded by Hannah Nichols, as
noted opposite.

The Audit and Risk Committee
holds a minimum of three meetings
annually, as required under its termsof reference, and this year held fourscheduled meetings and four ad hoc
meetings. See page 99 for a summaryof the key matters considered at eachmeeting during the year. Regularattendees at meetings include theChief Executive Officer, Chief Financial
Officer, Group Financial Controller,
Head of Risk, Assurance and Trade
Compliance, and BDO LLP, our external
auditor. Other attendees who attend
as required include the Chair andmembers of senior management. The
Company Secretary is the secretary to
the Committee.

Committee performance
review
During the year, an internal
performance review of theeffectiveness of the Committee
was conducted as part of the wider
review of the Board and the Board
Committees. More information can befound on pages 102 to 103. The review
found that the Committee functions
effectively and that matters are dealt
with in a rigorous manner.

How the Committee spent its
time during the year ended
31 March 2024
Structured programme of activities
The responsibilities of the Committee
are set out in its terms of reference,
which were last reviewed in
January 2024.
The Committee sets a structured
programme of activities for the year,
developed from its terms of reference
and including standing items for its
consideration at certain meetings.
In addition, it considers specific risk
areas identified for detailed review inlight of the evolving risk environment,
assurance activities relating to key
non-financial areas and any othermatters that arise during the year.

Financial Statements
and reporting
During the year, the Committee
continued to monitor the financial
reporting process of the Group. As
part of the year-end reporting process
the Committee reviewed in detail thisAnnual Report in respect of the year
ended 31 March 2024 and concluded
that, taken as a whole, it is fair,balanced and understandable andprovides the information necessary forshareholders to assess the company’s
position, performance, business modeland strategy. The Board recognises theimportant role which the Committee
plays in making such assessments.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

AUDIT AND RISK COMMITTEE REPORT continued
The main areas considered at Committee meetings during the year are set out below.
Matters considered

June
2023

June
20231

Half-year and full-year Financial Statements including
appropriateness of accounting policies, representation letters,
associated narrative reporting (Annual Report and Financial
Statements) and market announcements
External auditor Year-end Audit Report and Interim Review Report
Significant accounting estimates and judgements
Going concern
Viability statement
Group risk register, including climate-related risks and opportunities
Principal risks and uncertainties
Adequacy of internal control environment including internal control
framework and risk management processes
Internal audit update (specific theme addressed at each meeting,per the internal audit plan for the financial year)
Internal audit plan
Effectiveness of internal audit function
External auditor strategy for year-end audit
External auditor terms of engagement
External auditor independence and objectivity
Effectiveness of external audit process
Policy on non-audit services carried out by external auditor
Litigation register
Systems and controls for detecting fraud and the preventionof bribery and corruption
Whistleblowing arrangements
Committee effectiveness review
Committee terms of reference
Committee members and external auditor closed meeting1.

Meetings scheduled on an ad hoc basis rather than as part of formal annual meetings calendar.

July
20231

July
20231

Sept
2023

Nov
2023

Jan
2024

Mar
20241

Significant Audit and Risk
Committee judgements andestimates during the financial
year ended 31 March 2024
The Committee considered reports
from management on accounting
policies, current accounting issues andthe key judgements and estimatesin relation to this Annual Report. It
assessed whether suitable accounting
policies had been adopted and thereasonableness of the judgements
and estimates made by management.
The following sections summarise thesignificant judgements and estimatesconsidered by the Committee in
relation to the Financial Statements
for the year ended 31 March 2024 andhow they were addressed.

Revenue recognition
Revenue is recognised in accordancewith IFRS 15, Revenue from Contracts
with Customers, using principlesbased criteria such that the timing
depends on performance of therelevant conditions in the customer
contract. Prescriptive rules areapplied to revenue recognition thatare appropriate to both products andservices. Through the applicationof IFRS 15's principles, revenue
recognition is less subjective than prior
to its implementation. However, due tothe potential impact of any significant
timing error in revenue recognition,
revenue cut-off remains an areaof audit focus. The Committee hasreceived no reports of any significant
error in revenue recognition.

UK defined benefit pension scheme
IAS 19 requires the Group to recognise
any difference between the net present
value of the defined benefit pension
scheme’s liabilities and the fair valueof its assets as at 31 March 2024 in
the balance sheet as either a pension
scheme asset or deficit. The Group isalso required to appoint an external
actuary to value its obligations tomembers of the defined benefit
pension scheme at each reporting
date. Further, the actuary must
recommend suitable assumptions as
the basis for the valuation. The Group
has appointed the pension scheme‘sactuary, Aon Hewitt, to perform biannual valuations on its behalf foraccounting purposes.
For the year ended 31 March 2024, Aon
Hewitt recommended assumptions on
a basis that is largely consistent withthose adopted for the prior year end.

www.oxinst.com

The discount rate remained at 4.8%,
which represents a slight decrease fromthe rate of 5.5% that was used in respectof the half-year ended 30 September
2023. Further, inflation assumptions
decreased by 20bps for RPI and10bps for CPI compared to the prioryear. Actual membership experience
continues to be based on the results of
the latest triennial valuation which wascompleted as at 31 March 2021.
The net present value of the scheme’s
liabilities decreased by £1.5m during
the year, with the largest decrease of£11.0m relating to benefits paid, while
the largest increase in liabilities related
to the notional interest charge of£10.5m, as the obligations are recordedat the discounted net present value.
The scheme’s investment manager,
Schroders Solutions, provided avaluation of the scheme assets in linewith current market practice relating
to the valuation of investment assets,
the methodology for which has notchanged since the prior year.
As disclosed in Note 24 to the Financial
Statements, the actuarial surplus for
the UK scheme has decreased from£26.4m in the prior year to £16.1m at
31 March 2024. This arises from theaggregate impact of a small decreasein scheme liabilities of £1.5m anda decrease in the scheme’s assetsof £11.8m.
The decrease in scheme assets
arises primarily from negative
investment returns on gilts due tochanges in interest rates, offset bycompany interest received of £12.0m,
contributions of £8.5m, less benefits
paid of £11.0m and administrative costsof £0.5m. As set out in Note 24, it is thescheme’s actuarial valuation review,
rather than the accounting basis that
determines the level of cash payments.

First Light Imaging acquisition
The Group completed the acquisitionof First Light Imaging SAS ('FirstLight') on 9 January 2024 for cash
consideration of €14m with anadditional €3m contingent on thebusiness meeting certain performancetargets during the first 12 months ofGroup ownership.
The performance targets for the earnout were intended to be stretching,
but achievable. We cannot yet
confirm whether those targets will beachieved but it is considered likelythat the full value of the contingent
consideration will be payable.

Therefore, for the purposes of the
Financial Statements, the purchaseprice is assessed at the full amountof €17m – albeit the fair value of thisis €16.5m due to the timing of thecontingent consideration.
KPMG LLP were appointed to valueFirst Light to help determine theallocation of the purchase price to FirstLight’s assets. This identified a numberof adjustments to be made at theacquisition date to reflect the fair valueof the assets and liabilities acquired.
In particular this includes a proposed
fair value adjustment of €13.5m tointangible assets to account for thetechnology and brand purchased.
Per IFRS 3, the Group has a year fromthe date of the acquisition to finalise
the purchase price allocation (PPA),
and it is acknowledged and acceptedby the standard that for acquisitions
close to the reporting date it will benecessary to estimate certain values,
though it is necessary to indicate which
numbers have been estimated. If in
the following 12 months it becomes
necessary to amend any of thoseestimates, this should be performed
and disclosed appropriately.
The final draft PPA report fromKPMG was received too close to
the signing date to allow sufficient
review by management and audit by
BDO LLP. As a result, the acquisition
adjustments and closing fair values
have been disclosed in the accounts
as provisional. These will be finalised indue course and any adjustment posted
in the Financial Statements as at
30 September 2024.

FemtoTools acquisition
The Group has recently negotiated thepurchase of FemtoTools AG, a strategicacquisition to complement the existing
Materials Analysis portfolio. The
company signed the share-purchaseagreement on 7 June 2024 for an initialpurchase price of CHF 17m with anaggregate earn-out of CHF 5.5m.
It is expected that the acquisition willclose in late June 2024. At the balance
sheet date, the acquisition has notbeen accounted for as no purchasehad been agreed. Given that the saleand purchase agreement was signed
after the balance sheet date andprior to signing the Annual Report, theacquisition has been disclosed as a
post-balance sheet event.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

AUDIT AND RISK COMMITTEE REPORT continued
Provisions for intellectual
property claims
The Group faces potential exposure tothird-party claims in relation to alleged
intellectual property infringement. The
Committee obtains management reports
and analysis on potential claims twicea year. The Committee has reviewed
the information and explanations
provided by management relating to
the provisions for intellectual property
claims that have been recognised in the
Financial Statements. This also covers
claims for which no provision has beenrecognised. The external auditor has
also reported on intellectual property
provisions. As at 31 March 2024, thevalue of the provisions recognisedin the Financial Statements for suchclaims is £0.6m (2023: £0.6m). Whilst
not significant or material, it remains amatter of accounting judgement.
The Committee has reviewed themethodology and calculations used inquantifying the provisions required andconcluded that it is reasonable andconsistent with the basis used in the prioryear. The Committee recognises thatthe final outcome in any specific case islikely to vary from the amount provided.
When considered in aggregate, theCommittee considers that no adjustment
to the provisions is required.

Provision for inventory
Provision is made for obsolete, slow
moving and defective stock where
there is evidence of impairment,
to reduce the carrying value to its
net realisable value. This requiresconsideration of several factors
including but not limited to recent
usage, expected future demand, newproduct introduction plans and likely
realisable values to estimate theexcess quantities and net realisablevalue. The level of provisioning
requires certain estimates regarding
future demand and possible designchanges to identify excess quantities.
The Committee is satisfied thatthe amounts provided represent inaggregate the Group’s best estimate of
the levels of provisioning required.

Adjusted profit and EPS
The Group applies adjustments tothe statutory definition of profit and
EPS to present adjusted profitability
and earnings, as we consider thatthey present a clearer picture of thefinancial performance of the Group.
These adjustments are set out at
Note 2 to the Financial Statements.

www.oxinst.com

For the year ended 31 March 2024, theaggregate sum of the adjustments tooperating profit was £12.0m. The largest
item in value terms was the amortisation
charge relating to capitalised intangible
assets of £9.1m (2023: £9.3m). The
Group recognised a loss of £0.7m (2023:
gain of £3.0m) arising from the markto-market impact of currency hedging
contracts. Settlement of a claim broughtby the Group for intellectual property
infringement generated a gain of £3.3m(2023: nil). The Group also incurred CEO
dual running costs of £2.0m (2023: nil)and one-off costs of £1.7m relating to
Plasma Technology’s move to a newsite at Severn Beach (2023: £0.4m) andtransaction-related costs were £1.0m(2023: nil). Other adjusting charges
included in the year ended 31 March2024 included charges relating to
the defined benefit scheme of £0.4m(2023: nil) and litigation costs linked tointellectual property claims of £0.4m(2023: £0.5m).
The Committee has reviewed thenature of the adjustments and themethodologies used to calculate
them. Based on these enquiries andexplanations provided, the Committee
concluded that adjustments havebeen applied consistently. Further,
the Committee is satisfied with thepresentation of these adjusting items inthe 2024 Financial Statements.

Misstatements
Group management has provided
the Committee with reports that they
were not aware of any material or
immaterial misstatements that had
been made with the intent of achievinga particular presentation in the
Financial Statements. The Committee
also reviewed BDO’s report on
unadjusted audit differences and thesewere discussed by the Committee inJune 2024. On the basis of its review
and those discussions, the Committee
concluded that the unadjusted
differences were not material to the
Financial Statements and therefore
no adjustment was required. The
Committee also concluded that theexternal auditor had fulfilled its duties
with diligence and with an appropriate
level of professional scepticism.

Viability and Going Concern
Assessment and Statements
The Committee and the Board
reviewed the Viability and Going
Concern Statements as presented in
more detail on pages 79 to 81.

The Committee reviewed the Viability
Assessment, which was based upon
consideration of the Group’s current
financial position and the potential
impact of certain of its principal
risks and uncertainties on future
performance. It performed a reviewof the scenario analyses preparedby management in the Viability
Assessment and concluded that theGroup would be able to continue inoperation and meet its liabilities as theyfall due over the next three years.
In addition, the Committee noted that
there were no material uncertainties
which may cast significant doubt
over the Group’s ability to continue
as a going concern over the period ofat least 12 months from the date of
approval of the Financial Statements
and concluded that it was appropriate
to continue to adopt the going concern
basis of accounting.

Whistleblowing
Employees can report concerns of
non-compliance, ethical issues ormalpractice via an independent andconfidential reporting route. Reports
can be made anonymously if required
and are covered by the Group’s
Whistleblowing Policy which provides
for protected disclosure. The Group
recognises the importance of otherreporting channels such as via line
management and HR. A reporting routeto the Senior Independent Director isalso available. Employees are informedof the reporting channels throughthe Code of Business Conduct andEthics. Irrespective of the reporting
channel used, the Group operates aformal protocol for the independent
investigation of reports which isoverseen by the Chief HR Officer andGroup Compliance.
The Committee performs an annual
review of the Whistleblowing Policy
and receives a summary report into
the outcome of investigations during
the year.
It also receives a report frommanagement on its activities in thisarea. The latest report and review
took place in January 2024 and all
matters raised in the year-to-date
had been resolved. The Committee
was pleased to note that during theyear, management had completed
a campaign to ensure employee
awareness of the whistleblowing
channels available to them, including
guidance and an online training course.

Internal control
The Committee oversees the internal
control framework on behalf of theBoard. In June each year, it undertakes
an annual review of the effectivenessof the internal control environment,
comprising the company’s internalfinancial controls systems that identify,
assess, manage and monitor financial
risks, and other internal control andrisk management systems. To support
this review, the Committee liaised with
the Head of Risk, Assurance and Trade
Compliance and considered the internaland external audit reports presented.
In respect of the financial year ended
31 March 2024 and up to the date of
the approval of this Annual Report, theCommittee concluded that the required
standards had been met and noted thatduring the financial year, it had received
no reports in the year about concernsof possible improprieties in matters offinancial reporting.

Risk management
The key risk management activities
performed by the Group are describedon pages 70 to 78.
The Committee reviews the Group risk
register, which now includes climatechange-related risks and opportunities,
at each meeting and uses these,
supplemented by reports frommanagement, the external auditor andother subject matter experts, to assess
the approach taken to identify andmitigate the risks faced by the Group.
The Committee will continue to carefully
review risk reporting and the associatedrisk management activities during theyear ahead, in particular aiming todevelop and enhance its approach tothe consideration of climate-relatedrisks and opportunities as well as thebroader landscape of emerging risks.
For more information regarding ourapproach to risk management see
pages 70 to 78.

Internal audit function
The internal audit function is led by
the Head of Risk, Assurance and Trade
Compliance, who is a regular attendee
at Committee meetings. Its purpose
is to provide assurance regarding
the effectiveness of internal controls
through regular reviews and theprovision of reports to the Committee.

Once finalised, all internal reports arealso shared with the external auditor.
The Head of Risk, Assurance andTrade Compliance has direct accessto the Chair of the Board and the Chairof the Committee, to help safeguard
independence from the executive andaccountability to the Committee.
During the year, the internal audit
function was strengthened throughthe implementation of a co-sourcing
relationship, whereby an external
service provider has been engaged
to supplement certain of the workon internal audits focused on
financial controls, with the deliveryof the first two engagements fromthis relationship scheduled for laterin the year. They will also provide
support in other areas where specificsubject matter expertise is requiredor advantageous.

Internal audit plan
The annual internal audit plan waspresented to the Committee at its
meeting in January 2024. It comprises
audits which assess the effectivenessof internal financial controls, to be
performed on a rotational basis
across operational business units
and the principal regional offices.
Complementing this, the programmealso includes risk-based audit areas
which are proposed or recommended
by a combination of the Committee
and management. Following due
consideration, the Committee
approved the proposed annual internal
audit plan.

Effectiveness review
The Committee has a responsibility
to carry out an annual assessment of
the effectiveness of the internal audit
function. As part of its assessment inrespect of the financial year ended 31
March 2024, the Committee liaisedwith the Head of Risk, Assurance
and Trade Compliance, reviewed
and assessed the annual internal
audit plan, reviewed the results of theinternal auditor’s work, considered
whether the quality, experience andexpertise of internal audit remains
appropriate for the business andreviewed the actions taken bymanagement to implement therecommendations of internal audit andto support the effective working of theinternal audit function.

The Chair also held a one-to-one
meeting with the Head of Risk,
Assurance and Trade Compliance inJanuary 2024 to discuss key risk areas
in advance of the new financial year.
Following due consideration, theCommittee agreed that the internal
audit function had remained effective.

External auditor
The Committee has principal
responsibility for managing therelationship with the external auditor,
including assessing its performance,
effectiveness and independence andmaking recommendations to the Board
regarding its reappointment, removal
and terms of engagement, including
all fees.
BDO LLP ('BDO') was reappointed asexternal auditor at the 2023 Annual
General Meeting, having been initiallyselected to undertake this role witheffect from the financial year ended 31
March 2021 following a competitive
tender process. In line with thecurrent requirement to complete atender for audit services every ten
years, the Committee intends to
conduct a tender process ahead of
the financial year ended 2031. Thisremains subject to the outcome of
the Committee’s annual assessmentof the performance, effectivenessand independence of the incumbent
external auditor. The Committee
regularly meets with the external
auditor, both with and without the
Executive Directors or members of the
management team present, to discuss
any appropriate matters in a frank andopen manner.

Audit strategy
BDO presented its proposed audit
strategy and plan for the financial
year ended 31 March 2024 to theCommittee. The suggested strategy
had been informed through feedback
from various stakeholders including
the Committee Chair, Chief Financial
Officer and Group Financial Controller.
The proposal included details of therecommended scope, materiality,
fees and timelines plus the principal
areas of audit risk and the anticipatedapproach for addressing such.
Following due consideration, theCommittee approved BDO’s proposed
audit strategy and plan.

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Overview

AUDIT AND RISK COMMITTEE REPORT continued
Effectiveness review

Independence and objectivity

The Committee has a responsibility toreview the effectiveness of the audit
process, including an assessment of
the quality of the audit, the handling of
key judgements by the auditor, and theauditor’s response to questions fromthe Committee.

The Committee should assess on anannual basis the external auditor’s
independence and objectivity taking
into account relevant law, regulation,
the Ethical Standard and otherprofessional requirements and theGroup’s relationship with the auditor
as a whole, including any threats tothe auditor’s independence and thesafeguards applied to mitigate thosethreats including the provision of any
non-audit services.

As part of its assessment in respectof the financial year ended 31 March
2023, the Committee consideredreports from BDO and feedback fromkey members of the finance teams
across the Group. The assessment
noted that BDO had demonstrated
strong investigative, analyticaland judgemental competence inaddition to providing a good degreeof challenge to management.
BDO’s increasing familiarity with theGroup and individual business units
had supported the delivery of theaudit at a component level. It wasrecognised that there had been adelay to the completion of the annual
audit as a result of BDO requesting
additional time to finalise its audit
quality control procedures, and that
this had caused the company’s 2023
AGM to be delayed to 19 September
2023 and the payment of the final
dividend to be delayed to 12 October
2023. The Committee noted thatthe audit client service received inthis context, particularly regarding
communication, was not consideredsufficient. Subsequent discussions with
BDO had provided confidence that thesame issues would not be encounteredduring the audit in respect of thefinancial year ended 31 March 2024.
Following due consideration theCommittee agreed that the audit,
particularly its quality, had beeneffective. The Committee also noted
the FRC’s Audit Quality Inspection andSupervision report relating to BDO as
published in July 2023, and confirmedthat it would continue to work with
BDO to ensure that the audit quality
received by the company remained
appropriate.
In line with the Committee’s
structured programme of activities, anassessment of the effectiveness of theaudit for the financial year ended 31
March 2024 is expected to be carriedout in September 2024.

To make this assessment, theCommittee obtains confirmationfrom the external auditor regardingwhether it considers itself to remain
independent and also satisfies
itself that there are no relationships
between the auditor and the company(other than in the ordinary courseof business) which could adversely
affect the auditor’s independence andobjectivity. During the financial year,
the Committee made this assessment
in both June 2023 and January 2024,
in addition to again assessing in June
2024. In January 2024 and June 2024,
the Committee was comfortablethat BDO remained independent andobjective. As explained in the Report
and Financial Statements 2023, inJune 2023 the Committee noted that
BDO had identified a breach of the
FRC’s Ethical Standard, through theprovision of services by BDO, Singapore
to Oxford Instruments Private Limited in
2021 and 2022.

Upon identifying this breach, theprovision of such services was
immediately terminated. BDO
completed an investigation tounderstand the circumstances ofthe breach, with the outcome of thisexercise being that it has enhanced theapplicable processes and proceduresto prevent future breaches of thisnature occurring. In this context andnoting the financially immaterial natureof the breach, with the prohibited
services incurring under £1,000 in fees,
the Committee remained comfortablethat BDO remained independentand objective.

NIGEL SHEINWALD

Non-audit services

Chair of the
Sustainability Committee

The Committee oversees thecompany’s formal policy regarding
the provision of non-audit services by
the auditor, including prior approval of
non-audit services by the Committee
and specifying the types of non-audit
service to be pre-approved, andassessment of whether non-audit
services have a direct or material effecton the audited Financial Statements.
During the financial year, theCommittee approved the provision of
non-audit services by BDO amounting
to £8k which, when considered inlight of the audit fees amounting to£1,102k, represented a non-audit fee
to audit fee ratio of 1:144 or 0.68% of
the total fees payable to the auditor
and its associates. A further illustrationof this comparison can be seen in thefollowing table.

Fees

Proportion£1,102k

95%

Audit-related assurance services

£50k

4.31%

Non-audit services

£8k

0.69%

£1,160k100%

Total fees payable to the auditor
and its associates

See Note 5 of the Financial Statements for further information regarding theexternal auditor’s remuneration.

Statement of Compliance with the Competition and Markets Authority(CMA) Order
The company confirms that it has complied with The Statutory Audit Services forLarge Companies Market Investigation (Mandatory Use of Competitive Processes
and Audit Committee Responsibilities) Order 2014 (Article 7.1), including withrespect to the Audit and Risk Committee’s responsibilities for agreeing the audit
scope and fees and authorising non-audit services.

Reappointment of external auditor
BDO LLP has expressed its willingness to continue as auditor of Oxford
Instruments plc and separate resolutions will be brought to the Oxford Instruments
plc 2024 AGM, proposing BDO LLP’s reappointment as auditor and to authorise
the Board, through the Committee, to negotiate and agree its remuneration.
www.oxinst.com

Governance

Financial Statements

SUSTAINABILITY COMMITTEE REPORT

Audit and non-audit fees for the financial year ended 31 March 2024

Audit fees

Strategic Report

Dear Shareholder,I am pleased to present the report of
the Sustainability Committee for theyear ended 31 March 2024.
The Committee has continued todischarge its wide-ranging remit
covering the company’s policies andperformance in the environmental,social and governance areas.

Committee membership
The current members of
the Committee are:Nigel Sheinwald (Chair), Neil
Carson, Alison Wood, Mary
Waldner, Reshma Ramachandranand Hannah Nichols.

Changes to Committee
membership:
Richard Friend stepped down asa member of the Committee upon
his resignation from the Board
on 28 July 2023 and Hannah
Nichols joined as member of theCommittee upon her appointment
to the Board on 1 January 2024.
•

For details of attendance at
Committee meetings during thefinancial year, see page 98.

•

For the biographies of all
Committee members, seepages 86 to 88.

We have monitored progress towards
achieving our net zero targets andhave welcomed the strengthening
and re-baselining of our data acrossScopes 1, 2 and 3, enabling a morerobust foundation from which toaddress our ambitious targets. Basedon this work, the Board has moved toaccelerate our Scope 1 and 2 targets
for 2030 (that is, all those areas which
are under our direct control). Having
previously set targets of a 50% and
70% reduction respectively, we are now
setting the target to reach net zero in
Scopes 1 and 2 by 2030.
Our focus will now shift to refining
the detail of our roadmap to net zero,developing interim targets for our
Scope 3 emissions (which constitutethe largest element of our total), andassessing the progress made towards
our goals. For more detail, read our
Sustainability Report on pages 34 to 57.
The Committee welcomed thestructure developed by management
to deliver against the sustainability
agenda across the company, under
the direction of the Sustainability
Leadership Forum which reports to the
Sustainability Committee.
We spent time considering the socialand governance elements of thecompany’s sustainability agenda. The
Committee considered in particular thecompany’s developing approach andinternal targets and measures relating
to equity, diversity and inclusion.
We were pleased to emphasise
our support for the initiatives being
undertaken to drive change within
the Group, such as the development
and launch of our equity, diversity
and inclusion policy; the publicationof our first ethnicity pay gap reportingin the UK, and the launch of new
employee impact groups focused onneurodiversity and women’s issues.

Oxford Instruments remains committed
to being the company where the best
people in our sector want to work, todeveloping the next generation of theworkforce, and to training our people
and enabling their career development
and employability. We therefore
welcomed the ongoing activity acrossthis area, including the expansion ofboth the number of participants andthe range of opportunities offeredin our apprenticeship and graduate
programmes; the careers pathway
guidance available; the range oftraining provided to managers; andthe piloting of a new Foundations
programme for emerging talent. For
more information, see page 55.
We were also very pleased to notethat MSCI, a leading provider of criticaldecision support tools and services forthe global investment community, hasrated our ESG practices as AA, its second
highest rating – citing in particular that
we lead amongst our global peers incorporate governance practices.
The Committee continued to support
the priority given by management
to further improving our health andsafety performance.
Recognising the importance of utilising
remuneration structures to promoteand drive the behaviours and positive
impacts we desire for the Group,
we supported the Remuneration
Committee in devising appropriate
sustainability-related performancemeasures. These will be implemented
for the awards made to Executive
Directors during FY24/25. For further
information, see the Directors’
Remuneration Report on pages
120 to 143.
As part of the Board’s formal
programme of employee engagement
activity, I was pleased to co-host asession with a group of employees
as part of the full-Board site visit to
our new compound semiconductor
technology site at Severn Beach near
Bristol. The attendees, who spanned abroad range of roles in the company,
confirmed the strong appetite
among employees for progressing
our sustainability agenda across a
range of initiatives which matter tothem, from fostering a supportive andinclusive culture to addressing thedesign and packaging of our products.

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Strategic Report

Financial Statements

Governance

SUSTAINABILITY COMMITTEE REPORT continued
Participants welcomed the support inplace for maternity cover and flexible
working, while from an environmental
perspective, there was a constructive
discussion about opportunities to use
more reusable materials.
The Committee noted the appointmentof a new external adviser onsustainability matters and looks
forward to working with them in theyear ahead.
We are pleased to have published
our integrated Sustainability Report,
which is available on pages 34 to
57 and includes our Task Force on
Climate-related Financial Disclosures
Statement, as set out on pages 40
to 50. The standalone version of the
Sustainability Report will be publishedon our website at: www.oxinst.com/
sustainability. We are committed
to building on past progress andcontinuing to challenge ourselves
to go further.

Key responsibilities
The current key responsibilities of the Committee per its terms of reference,
are as follows:••

Determine the guiding principles to be used when setting targets inrelation to the Group’s sustainability goals and implementation plans.

•

Regularly review and provide advice on the Group’s ongoing activities andprogress in relation to the three key elements of its sustainability agenda,
broadly comprising environmental, social and governance-related matters,
as follows:– Environmental: review with management and recommend to the Board
for approval, sustainability‑related targets, including environmental
targets and timescales; review the company’s progress towards
decarbonisation of energy use globally; and consider and recommend to
the Board for approval, the methodology to be used for achieving net zero.
– Social: review any relevant externally published policies and statements
and approve targets set in respect of the following areas: equity,
diversity, inclusion and belonging; health, safety and wellbeing;
investing in our people; next-generation talent; and community impact.
– Governance: review any relevant corporate policies and approvetargets set, in respect of the following areas: anti-bribery and anticorruption; sanctions, export control and customs; dissemination of
inside information to the market and share dealing; supply chain
responsible sourcing; human rights and modern slavery; intellectual
property and confidentiality; data protection, data privacy and data
security; and financial sustainability and tax transparency.

I will be available at the AGM toanswer any questions you may haveregarding the work of the Committee.
Should you have any queries in themeantime, I would be very happy tohear from you.

NIGEL SHEINWALD
Chair of the Sustainability Committee
10 June 2024

Review all sustainability-related narrative reporting and external
disclosures, including, but not limited to, those relating to the Greenhouse
Gas Protocol, Streamlined Energy and Carbon Reporting Regulations,Sustainable Development Goals and the Task Force on Climate-related
Financial Disclosures.

•

Through policy reviews and discussions with management, seek to ensurethat the highest ethical standards and concern for human rights areembedded in the company across its global operations.

Committee composition
In line with its terms of reference,
which are available on our website at:www.oxinst.com/investors-content/
advisers-and-company-secretary, theCommittee comprises a majority of
independent Non-Executive Directors.
Nigel Sheinwald, the Committee
Chair, brings a wealth of skills andexperience, particularly from his timeas Chair of Shell plc’s equivalent
Sustainability Committee.

Meetings
The Sustainability Committee
holds a minimum of three meetings
annually, as required under its termsof reference, and this year held fivemeetings. Standing attendees atmeetings include the Chief Executive
Officer, Chief Financial Officer and Chief
HR Officer. Other members of senior
management may also attend as
required. The Company Secretary is thesecretary to the Committee.

The key activities and areas of focus
for the Committee during the year are
as set out below.

•

Considered and endorsed updates
to the company’s environmental
policy.

•Kept up to date with the activities
ongoing to achieve the company’s
net zero targets.

••

Supported the Remuneration
Committee to develop appropriate
sustainability-related performancemeasures to be implemented forthe awards made to Executive
Directors during FY23/24 andFY24/25.

Agreed that suitable external
attendees should continue to be
invited to present on relevant topics
at future meetings, to help ensurethat the Committee keeps up todate with the wider sustainability
landscape so that its work anddecisions can be delivered on an
informed basis.

•

Post year end, reviewed andrecommended to the Board forapproval, the sustainability-related
narrative reporting and external
disclosures, including our integrated
Sustainability Report, which isavailable on pages 34 to 57 andincludes our Task Force on Climaterelated Financial Disclosures
Statement, as set out on pages
40 to 50 and our standalone
Sustainability Report which will be
published on our website at:www.oxinst.com/sustainability.

•

Received updates from the Chief
Executive Officer and management
regarding climate-change
related matters.

•

Received an insightful presentationfrom the sustainability lead at acomparable, adjacent company
regarding its sustainability agenda,
including progress to date and thecompany’s future priorities.

•

Via papers and attendance of
selected members at Committee
meetings, maintained oversightof the activities of the internal
Sustainability Leadership Forum,
which leads on delivery of thecompany’s sustainability agenda
on a day-to-day basis within
the organisation.

•

Considered the annual review ofsocial matters forming part of thecompany’s sustainability agenda.
Noted the maturing approach andinternal targets and measuresrelating to equity, diversity andinclusion, amongst other things.
Emphasised its support for theongoing social initiatives being
undertaken and developed to drivechange and enhance the culture
within the Group.

•

Noted the annual review ofprogress in line with the company’ssustainability governance agenda,
remaining mindful of developments
to either the internal approach or
the external landscape impacting
the key aspects of this pillar of thesustainability agenda.

Committee performance
review
During the year, an internal
performance review of the effectivenessof the Committee was conducted aspart of the wider review of the Boardand the Board Committees. Moreinformation can be found on pages
102 to 103. The review found that
the Committee functions effectively
and that matters are dealt with in athoughtful and rigorous manner.

How the Committee spent its
time during the year ended
31 March 2024
The responsibilities of the Committee
are set out in its terms of reference,
which were last reviewed in January2024 and which are summarised on
page 118. Whilst these responsibilities
guide the operation of the Committee
and shape its agenda, it will also
consider other matters as requested by
the Board and as relevant to its remit.

www.oxinst.com

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Overview

Strategic Report

Financial Statements

Governance

REMUNERATION COMMITTEE REPORT
Letter from the Chair of theRemuneration Committee
Dear Shareholder,I am pleased to introduce the Directors’
Remuneration Report for the year
ended 31 March 2024. The report ispresented in three sections:••

The Directors’ Remuneration Policy(‘Policy’), which was approved at the2023 AGM.

•

The Annual Report on
Remuneration, detailing the
remuneration outcomes for theyear ended 31 March 2024 and theimplementation of the Policy for theyear ahead.

ALISON WOOD
Chair of the Remuneration
Committee

Committee membership
The current members of
the Committee are:
Alison Wood (Chair), Neil Carson,
Mary Waldner, Nigel Sheinwald,
Reshma Ramachandran and
Hannah Nichols.

Changes to Committee
membership:
Richard Friend stepped down asa member of the Committee upon
his stepping down from the Board
on 28 July 2023 and Hannah
Nichols joined as member of theCommittee upon her appointment
to the Board on 1 January 2024.
•

For details of attendance at
Committee meetings during thefinancial year, see page 98.

•

For the biographies of all
Committee members, seepages 86 to 88.

My annual statement as Chair,summarising the work of theCommittee during the year.

Wider employee
remuneration
In what has continued to be a busy
year on executive remuneration
matters, the Committee has been keen
to ensure that our wider workforce
has continued to receive carefulconsideration in the wider market
and economic contexts. We werepleased to note that base salaries for
UK employees would increase 3.8%
on average this year, and that thecompany pays above minimum wage
across the world and above the living
wage in the UK. We also aim to provide
benefits which are above the statutory
minimums, where appropriate.
The structure of bonus plans
throughout the organisation is aligned
to incentivise the behaviours which
deliver value, both financial and nonfinancial, to shareholders and our
key stakeholders.
More generally, to ensure that our
workforce is appropriately balanced
in relation to gender, ethnicity,
neurodiversity, disability and otherfactors, there are processes in place
to address unconscious diversity andinclusion biases during recruitment,
including the use of balanced
shortlists, and in decisions aboutcareer progression and remuneration.

www.oxinst.com

In May 2024 I was delighted tohost a session with a number ofcolleagues from HR roles across theGroup, focusing on the alignment ofexecutive remuneration with our wider
remuneration structures.

Operation of the Remuneration
Policy in 2023/24
Performance for the year ended
31 March 2024 was good, with thecompany’s business model andstrategy continuing to drive robust
revenue growth, positive book-to-billand a healthy orders pipeline, andgood progress made against strategic
initiatives.
The outcome for the 2023/2024
annual bonus scheme was calculated
based on a combination of profit
before tax, cash conversion, operating
profit margin and non-financial
strategic targets.
The profit element achieved fullpayout, but operating profit marginand cash conversion did not achieve
the stretching target range. This
results in a payout relating to thefinancial elements of the scheme,of 75% of salary for both the Chief
Financial Officer (CFO) and the former
Chief Executive Officer (CEO), out of a
maximum of 150% of salary. The nonfinancial strategic targets were basedon specific operational improvements,
implementation of new businesssystems and progress in line with thecompany’s sustainability agenda.
Having considered each element
carefully, we determined achievementof 15% out of 25% of base salary
opportunity for the former CEO and the
CFO. The overall bonus achieved wastherefore 90% of salary for the CFO
and former CEO (prior to pro-rating forthe former CEO, based on his periodof active service during the year). Onethird of the annual bonus will be paidin shares, which must be retained forthree years.

Awards granted in 2021 under the
Performance Share Plan (PSP) werebased on two equally weighted
performance measures. Earnings Per
Share (EPS) was assessed over thethree years to 31 March 2024 andachieved a performance level at 95%
of maximum, with compound EPS
growth of 11.5% per annum. In the final
year of the performance period Returnon average Capital Employed (ROCE)
was 30.5% and therefore achieved aperformance level of 100%. As a resultof this strong performance, the 2021
PSP grant will vest at 97.5% overall. A
two-year holding period applies to thevested award.
Whilst not a performance measurefor the 2021 PSP award, we werepleased to note that the company’s
Total Shareholder Return (TSR) over thethree‑year PSP performance period
was +15.9%, compared to the FTSE 250
Index at -7.4%.
Given the company’s good
performance during 2023/24 and over
the three-year performance period,
there has been a robust link between
reward and performance, as well asalignment with investor returns. We aresatisfied that the Policy has operated
as intended and the remuneration
outcomes are appropriate, considering
the relativities between outcomes for
employees and Executive Directors, andthe wider stakeholder experience as set
out above. We therefore concluded that
it would not be necessary to exercise
discretion to adjust the 2023/24
incentive outcomes.

Chief Executive Officer
succession
Richard Tyson succeeded Ian Barkshireas CEO with effect from 1 October
2023. Details of their remuneration
arrangements were provided in theReport and Financial Statements 2023
and further information can also befound in this report.
As he joined part-way through the year,
a strategic element for his 2023/2024
annual bonus scheme award was notincluded for Richard as incoming CEO
and instead the other measures were
adjusted proportionately.

The payout relating to the financial
elements of the scheme, will be 90%of salary (prior to pro-rating for the
proportion of the year served in hisrole). One third of the annual bonus
will be paid in shares, which must be
retained for three years.

Operation of the Remuneration
Policy in 2024/25
We carefully reviewed therecommendations and supporting
benchmark data regarding basesalary increases for employees. In that
context we determined that the basesalary for the new CEO and the CFO
will increase by 3% from £570,000
to £587,100 and from £400,000 to£412,000 respectively, being, below
the average UK workforce increaseof 3.8%.
The annual bonus opportunity for2024/25 will remain at 150% ofsalary and performance measures
will continue to be based on profit
growth (50%), cash conversion (16.7%),
operating profit margin (16.7%) andnon-financial strategic objectives(16.7%). One-third of any bonus payable
will be delivered in shares which must
be retained for three years.
Awards under the Long-Term Incentive
Plan (LTIP) will be at 200% of salary for
the CEO and 175% of salary for the CFO.
Last year, as part of the Committee’s
work to review the Policy, we madesignificant changes to the performancemeasures for LTIP award. This year,
we will retain the same broad mixof measures to provide a rounded
overall assessment of performance.
The measures for the 2024 grant will
therefore be EPS (30%), ROCE (30%),
TSR (25%) and two sustainabilityrelated measures (15%).
The EPS measure will requirecompound annual growth of between
2% and 8% over three years and the
ROCE measure will be based on atarget range of 26%-30%. TSR will bemeasured relative to the companies
comprising the FTSE 250 Index,
requiring median performance forthreshold vesting and upper quartile
performance for maximum vesting.

The target range for the EPS growthmeasure has reduced slightly from theranges applying to prior years’ awards.
This recognises the relatively high2023/24 profit baseline from where thegrowth is measured over the next three
years. It also takes into account higher
corporation tax which means that EPS
growth is forecast to be materiallyflatter than PBT. Finally, this takes into
account the more challenging market
conditions that we anticipate. Similarly,
the target range for the ROCE measure
has also been reduced slightly, albeit
the Committee recognises that it is still
sector leading. We are satisfied thatthese target ranges are appropriately
stretching in light of both the businessplan and market outlook, as well as
the grant levels under the Policy andanticipate that we should be able torevert to target ranges more in line withhistoric norms from next year.
The sustainability targets arealigned to our long-term strategy
and will require (i) a continued
significant reduction in our Scope
1 and Scope 2 emissions by way ofcompleting at least two of our siteheating infrastructure projects and(ii) achievement of improvements
in female representation inleadership positions.

Non-Executive Directors’(NED) fees
The fees of the Chair and NEDs will
increase by 3%. This is consistent
with the base salary increase for
the Executive Directors and is below
the average increase across our
UK workforce.

Conclusion
We hope that you will be supportiveof the annual advisory vote to approve
the Annual Report on Remuneration at
our AGM on 25 July 2024.

ALISON WOOD
Chair of the Remuneration
Committee
10 June 2024

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Oxford Instruments plc
Annual Report 2024

Overview

REMUNERATION COMMITTEE REPORT continued

Strategic Report

DIRECTORS’ REMUNERATION REPORT
Remuneration at a glance

Key responsibilities
The Remuneration Committee (the ‘Committee’) is responsible for recommending to the Board the remuneration
packages for Executive Directors and has oversight of the pay, bonus and share incentive strategy for the Group’s
executive management. The Chair and the Executive Directors are responsible for determining the remuneration of theNon‑Executive Directors, and the Remuneration Committee, in the absence of the Chair, is responsible for determining
the remuneration of the Chair. The key responsibilities of the Committee include:•

determining the Remuneration Policy for the Executive Directors and senior leadership;•considering and determining the components and total remuneration packages for the Executive Directors;•

determining the Policy for pension arrangements, service agreements, recruitment terms and termination payments
for Executive Directors;•

designing effective performance‑related incentive plans aligned, for Executive Directors and senior leaders, to thebusiness strategy and the wider workforce;••

The Committee sets stretching performance targets for the annual bonus and performance share plan, that areclearly linked to the strategy and financial performance of the Group. The outcomes in respect of the financial year ended 31
March 2024 are as set out below.

Annual bonus
Adjusted PBT

LTIPCash conversion

Threshold:£82.4mThreshold:82%

Target:£84.4mTarget:85%

approving the structure and targets for all performance‑related remuneration plans for executives as well as theoverall payments made under such plans; andMax:£86.4mMax:

92%

reviewing and noting Remuneration Policy and trends across the Group and considering the Executive Directors’
remuneration within this context.

ActualCommittee composition
In line with its terms of reference,
which are available on our website at:www.oxinst.com/investors-content/
advisers-and-company-secretary theCommittee comprises a majority of
independent Non-Executive Directors.
Alison Wood has held the role of Chairof the Committee since 26 January
2021 and has significant priorremuneration committee experience,in particular, chairing remunerationcommittees at other listed companies,
and is sufficiently experienced toundertake this role in line with Provision
32 of the UK Corporate Governance
Code 2024.

Meetings
The Remuneration Committee holds aminimum of two meetings annually, as
required under its terms of reference,and this year held seven meetings.
Standing attendees at meetings may
include the Chief Executive Officer,
Chief Financial Officer and Chief HR
Officer. Other members of senior
management may also attend as
required. The Company Secretary is
the secretary to the Committee.

www.oxinst.com

Financial Statements

GovernanceCommittee performance
review
During the year, an internal
performance review of theeffectiveness of the Committee
was conducted as part of the wider
review of the Board and the Board
Committees. More information canbe found on pages 102 to 103. The
review found that the Committee
functions effectively and that matters
are dealt with in a thoughtful andrigorous manner.

Committee advisers
Korn Ferry was the Committee’s
independent remuneration consultant
during the year and continues withthis appointment in 2024/25. Korn
Ferry is appointed by the Committee
to provide advice on all aspects ofexecutive remuneration as requiredby the Committee.

Korn Ferry is a signatory to theRemuneration Consultants’ Code of
Conduct and has confirmed to theCommittee that it adheres to theCode. During the year, Korn Ferry had
discussions with the Committee Chairon remuneration matters relevantto the company and on how best its
team can work with the Committee
to meet the company’s needs. The
Committee is satisfied that the advice
it received from Korn Ferry for the year
ended 31 March 2024 was objective
and independent.
Fees are charged predominantly on atime spent basis. The total fees paid to
Korn Ferry for the advice provided to
the Committee during the year were
£95,591 (excluding VAT).

86.6m

64%

Adjusted operating
profit margin
18.0%

Target:

18.2%

Max:

18.3%

Max:

12% pa CAGR

Return on capital employed

Targets based on a range ofobjectives linked to operational
effectiveness, business systems
and our sustainability agenda.

Threshold:

24%

Max:

30%

Actual 2023/24

30.5%

Actual

17.1%

4% pa CAGR

11.5%

Strategic objectives

Threshold:Threshold:

Actual (CAGR over
3 years to 31 March 2024)

Actual£Earnings per share
growth (% CAGR pa)

For details see / pages 133 and 134

For details see / page 135

Executive Directors’ remuneration at a glance
Total remuneration payable for 2023/24
Base salary£’000

Benefits£’000

Pension£’000

Annual bonus
£’000

LTIP
£’000

Other
£’000

Total
£’000

Richard Tyson1

285

13

15

256

N/A

823

1,392

Ian Barkshire

269

27

26

246

646

5

1,219

395

24

32

360

503

0

1,314

Gavin Hill1.

1

On 1 October 2023, Richard Tyson succeeded Ian Barkshire as Chief Executive Officer.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Directors’ Remuneration Policy (A)This part of the Directors’ Remuneration Report sets out the Group’s Remuneration Policy (‘Policy’) for its Directors.

Principle

Committee approach

The Policy was subject to a binding shareholder vote at our AGM on 19 September 2023 and the Policy, unless changed
with shareholders’ prior agreement, will continue until the 2026 AGM. The complete approved Policy can be found in the
Directors’ Remuneration Report in the Report and Financial Statements 2023, which is available on our website atwww.oxinst.com/investors-content/financial-reports-and-presentations

Proportionality – the link between
individual awards, the deliveryof strategy and the long-term
performance of the company
should be clear. Outcomes should
not reward poor performance.

•

Variable pay comprises the majority of the Executive Directors’ packages, with theindividual limits and payout for different levels of performance set out in the Policy
and the scenario charts within this Directors’ Remuneration Report.

•

The performance conditions are aligned to strategy and the targets are set to be
stretching to reward for delivering above-market returns.

•

The Committee retains discretion to override the formulaic outturns of incentives if
the payout does not reflect broader company performance and other factors.

Alignment to culture – incentive
schemes should drive behaviours
consistent with company purpose,values and strategy.

•

The alignment of metrics to the medium and long-term strategy ensures
behaviours consistent with the company’s purpose and values are being
encouraged.

•

Clawback and malus provisions discourage behaviours that are not consistent withthe company’s purpose, values and strategy.

•

The Committee reviews the wider workforce pay and policies to ensure there isalignment with the Executive Directors’ Remuneration Policy and that remuneration
is designed to support the company’s people-centric culture. There is a broadly
consistent implementation of the Policy throughout the senior management team.

Policy overview
The Policy promotes the delivery of the Group’s strategy and seeks to align the interests of Directors, shareholders andother stakeholders. The Committee regularly reviews the link between its incentive structures and strategy to ensure that
remuneration packages are appropriate to attract, motivate and retain the high calibre executives that are needed to deliver
the Group’s strategy.
The company seeks to reward executives fairly and responsibly based on Group performance and their individual
contribution. The company has a strategy aimed at delivering significant, balanced and sustainable long‑term growth andit is important for motivation and retention that the remuneration of the executives reflects this.
The Committee carefully considers the motivational effects of the incentive structure in order to ensure that it is effective
and does not have an unintentional negative impact on matters such as governance, environmental or social issues. Moregenerally, the Committee ensures that the overall Policy does not encourage inappropriate risk-taking.

The Committee’s approach to determining, reviewing and implementing the new Policy

Consideration of shareholder views

The Committee considered the following factors described below when determining the new Policy. For details of how wewill implement the Policy for 2024/25, see pages 142 to 143.
Principle

Committee approach

Clarity – remuneration
arrangements should betransparent and promote effective
engagement with shareholders
and the workforce.

•

The metrics used in our annual bonus have a direct link to our company KPIs,
which are familiar to our shareholders and the workforce.

The Committee considers feedback from shareholders received at each AGM, together with any feedback from additional
meetings, as part of any review of Executive Director remuneration. In addition, the Committee engages proactively withshareholders and their proxy advisers where any material changes to the Policy are proposed. As part of the Policy review
during FY23, the Committee wrote to 20 of our largest shareholders and the major shareholder representative bodies to
consult on the proposed Policy and its operation going forward. Shareholders were invited to provide any feedback they had
and were offered the opportunity to discuss the proposals with the Committee Chair.

•

Performance Shares are linked to our long-term business strategy, familiar to ourshareholders and the workforce.

Remuneration Policy•

The Remuneration Committee consults with shareholders to explain and clearly
set out any proposed changes to the Policy and is committed to having an open
and constructive dialogue with shareholders.

Simplicity – remuneration
structures should avoid complexity
and their rationale and operation
should be easy to understand.

•

Our Remuneration Policy is in line with market norms.

•

The application of the Policy is described clearly each year in this report with aclear link between reward and performance.

Risk – remuneration arrangements
should ensure reputational andother risks from excessive rewards,
and behavioural risks that can arise
from target-based incentive plans,
are identified and mitigated.

••

Performance Shares (with holding periods), annual bonus deferral in shares,
together with share ownership requirements, including post-employment shareownership requirements, ensure executives are not encouraged to make shortterm decisions but to deliver sustainable shareholder returns over the long term forthe benefit of all stakeholders.

Predictability – the range ofpossible values of rewards toindividual Directors and any otherlimits or discretions should be
identified and explained at the timeof approving the Policy.

•

The scenario chart on page 129 sets out the potential rewards available to the
Executive Directors under three different performance scenarios.

•

Limits to incentive plans and the basis for the Committee to use discretion are
clearly set out.

www.oxinst.com

Element of pay: Base salary
Purpose and link to strategy•

The Committee has ensured that risks are identified and mitigated by:– having discretion to override the formulaic outturn of incentives; and– having robust clawback and malus provisions.

•

To provide a competitive andappropriate level of basic fixed
pay to recruit and retain superiortalent and avoid excessiverisk‑taking that might otherwise
result from an over‑reliance onvariable remuneration.
Reflects the experience,
performance and responsibilitiesof the individual.

Operation

Maximum opportunity•

Normally reviewed annually with any
increase usually effective 1 July.

•

There is no minimum or
maximum annual increase.

•

Takes account of experience, performanceand responsibilities as well as theperformance of the company, the complexityof the role within the Group and salary
increases for employees generally.

••

Set with regard to market data forcomparable positions in similar companies
in terms of size, internationality, businessmodel, structure and complexity, including
within the industry.

•

Pay rises typically aligned with or below thatof the workforce.

Higher increases than the
average percentage for theworkforce may be appropriate;
for example, where an
individual changes role or their
responsibilities increase, where
the complexity of the Groupchanges, where an individualis materially below market
comparators or is appointed ona below‑market salary with the
expectation that his/her salarywill increase with experience andperformance.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Directors’ Remuneration Policy (A) continued
Element of pay: Benefits
Purpose and link to strategy•

Provided on amarket‑competitive basis, aids
retention and follows the reward
structure for all employees.

Element of pay: Long-Term Incentive Plan (LTIP)
Operation•

Currently include, but are not limited to,the cost of:Maximum opportunity•– life assurance;– private medical insurance;– company car benefit (car, driver, carallowance, fuel); and/or•– overnight hotel accommodation where
necessary to enable the executive to carryout his duties efficiently at the Head Officeand other company sites.
•

Executive Directors are also eligible toreceive long service awards in line with other
employees.

•

The benefits provided may be subject
to amendment from time to time by theCommittee within this Policy.

•

Relocation costs and other incidental
expenses may be provided as necessary
and reasonable.

•

Purpose and link to strategy

The value of benefits varies fromyear to year depending on thecost to the company and is not
subject to a specific cap.

•

Benefit costs are monitored andcontrolled and represent a small
element of total remuneration
costs.

••

To incentivise the executives
and reward them for meeting
stretching long-term targets
linked to the business strategy.
To align the Directors’ interests
with those of shareholders.

•

To contribute towards the cost ofliving in retirement.

••

Company contributions to a money purchasepension scheme and/or salary supplement.

Maximum opportunity•

Pension contributions (or salary
supplement in lieu) are aligned
to the maximum employer
contribution applying to themajority of the UK workforce,currently 6% of salary.

•

Drives and rewards the
successful achievement oftargets set at the start of theyear with performance normallyassessed over a one-year period.

www.oxinst.com

Operation••

Performance targets based on the key
performance indicators and strategic
objectives of the business.
At least 70% of the bonus is based on
financial metrics and the balance on
non‑financial/strategic metrics.

•

One-third of any bonus earned will be paidin shares, which are beneficially owned andwhich must be held by the Executive Director
for at least three years.

•

The Committee may use discretion to
override the result of any formula-driven
bonus payment.

•

Clawback and malus provisions apply for
misstatement, error, misconduct, corporate
failure or reputational damage, or in othercircumstances at the discretion of theCommittee.

Up to 15% of salary payable forachieving threshold performance.

•

75% of salary at year end
payable at target performance.

•

150% of salary at year end
payable for maximum
performance.

Awards may be granted in conjunction witha tax-advantaged option granted under
the applicable schedule to the LTIP (aLinked Option). This arrangement gives theparticipant and Group the opportunity tobenefit from the tax treatment applicable totax advantaged options without increasing
the pre-tax value of the award delivered tothe participant.

•

Up to 25% of the awards will vest at
threshold performance under eachperformance condition.

•

Vested awards must be held for a further
two years before sale of the shares (otherthan to pay tax).

•

The Committee may use discretionto override the result of any formuladriven payment.

•

Clawback and malus may be applied for
misstatement, error, misconduct, corporate
failure or reputational damage, or inother circumstances at the discretion of
the Committee.

Maximum opportunity•

Awards structured as options may havea zero exercise price or an exercise
price equivalent to the par value of an
ordinary share.

The Committee will set targets each year
linked to the long-term business strategy
and may be based on financial performance,
a stock market‑based metric and nonfinancial performance.

Element of pay: Annual bonus
Purpose and link to strategy

Annual awards of Performance Shareswith vesting subject to achievement of
performance targets. Both the vesting andperformance period will normally be over athree-year period.

•

Benefits are not part of pensionableearnings.

Operation••

Facilitates share ownership toprovide further alignment withshareholders.

Element of pay: Pension
Purpose and link to strategy

Operation

Maximum opportunity•

The maximum award limit is200% of salary.

•

If an LTIP award is granted as a
Linked Option, the shares subject
to the tax-advantaged option towhich it is linked will not counttowards the award limit.

•

In a recruitment situation the limit
may be exceeded to facilitate
a buy-out award (see further
details in the ‘Recruitment andpromotion policy for Executive
Directors’ section on page 130).

•

Dividend equivalents may accrue
on the LTIP awards over thevesting and holding period andwould normally be paid out asshares in respect of the numberof shares that have vested.

Element of pay: All-employee share schemes
Purpose and link to strategy•

To encourage employee shareparticipation.

Operation•

The company may from time to time
operate tax‑approved share schemes (suchas the HMRC‑approved Share Incentive
Plan (SIP)) for which Executive Directors
could be eligible.

•

The SIP is open to all UK permanent staff.

Maximum opportunity•

The schemes are subject to thelimits set by tax authorities.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Directors’ Remuneration Policy (A) continued
Discretion retained by the Committee in operating its incentive plans

Element of pay: Shareholding guideline
Purpose and link to strategy•

To further align Executive
Directors’ interests withshareholders’.

Operation•••

The Committee has establishedshareholding guidelines which encourage
the Executive Directors to build and retain
a holding of company shares equivalent to200% of base salary.

Maximum opportunity•

Not applicable.

The Committee operates the Group’s incentive plans according to their respective rules and in accordance with HMRC rules,
where relevant. To ensure the efficient administration of these plans, it may apply certain operational discretions, including:

Until the guideline is met, Executive
Directors are expected to retain or acquire
shares equivalent to the value of 50% of the
net amount realised from exercise/vestingof share awards as appropriate after
allowing for tax payable.

•

selecting the participants in the plans;•

determining the timing of grants and/or payments;•

determining the quantum of grants and/or payments;•

determining the extent of vesting based on the assessment of performance;•

determining ‘good leaver’ status and, where relevant, the extent of vesting in the case of the share‑based plans;

Post cessation of employment there will
be a requirement to retain the lower of thelevel of shareholding at that time, or 200%of base salary, for two years (unless by
genuine exception e.g. serious ill health). At
the Committee’s discretion, shares whichhave been purchased voluntarily may be
excluded, so as not to discourage further
self-purchases.

•

where relevant, determining the extent of vesting in the case of share‑based plans in the event of a change of control;•

making the appropriate adjustments required in certain circumstances (e.g. rights issues, corporate restructuring events,
variation of capital and special dividends); and•the annual review of weighting of performance measures and setting targets for the annual bonus plan and discretionary
share plans from year to year.

The Committee may adjust the targets and/or set different measures and alter weightings for existing annual bonus plans
and share‑based awards only if an event occurs which causes the Committee to reasonably consider that the performance
conditions would not without alteration achieve their original purpose and the varied conditions are no less difficult to satisfy
than the original conditions. Any changes, and the rationale for those changes, will be set out clearly in the Annual Report on
Remuneration in respect of the year in which they are made.

Element of pay: Non-Executive Director (NED) fees
Purpose and link to strategy•

To remunerate the Chair and
NEDs. The fees may be in theform of cash or shares.

Operation•

Normally reviewed annually.

•

Determined and reviewed taking into
account time commitment, experience,
knowledge and responsibilities of the role
as well as market data for similar roles inother companies of a similar size and/or
business to Oxford Instruments.

••

The Committee may adjust the formula‑driven outturn for an annual bonus or LTIP performance condition if it considers
the quantum to be inappropriate in light of wider company performance or overall shareholder experience. Any suchuse of discretion would be detailed in the Annual Report on Remuneration (Part B) and in the Annual Statement of theCommittee Chair.

NEDs based outside the UK may receive
additional fees taking into accountadditional travel and time commitment
associated with their role.
Out‑of‑pocket expenses including travel
may be reimbursed by the company inaccordance with the company’s expenses
policy including tax thereon grossed up as
appropriate.

Maximum opportunity•

There is no prescribed maximum
or maximum annual increase.

Legacy arrangements
In approving this Directors’ Remuneration Policy, authority is given to the company to honour any commitments enteredinto with current or former Directors (such as the payment of a pension or the vesting or exercise of past share awards) thathave been disclosed to and approved by shareholders in previous remuneration reports. Details of any payments to former
Directors will be set out in the Annual Report on Remuneration as they arise.

Remuneration scenarios for Executive Directors
The charts below show the level of remuneration potentially payable to Executive Directors under different performance
scenarios for FY24/25 (see page 130 for assumptions).

Remuneration scenarios£3,500k£3,277k£3,000k£3,277k£2,690k£2,500k£2,160k
44%£2,000k£1,799k£1,663k£1,500k40%

35%£1,130k
33%£1,000k
£635k

32%

27%

34%

£500k
100%

38%

23%

Below target

TargetMaximum

£460k

27%

100%

41%

26%

Below target

TargetMaximum£0

CEO
Fixed Pay

www.oxinst.com

CFO
Annual Bonus

LTIP

LTIP with 50% Share price growth

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

DIRECTORS’ REMUNERATION REPORT continued
Directors’ Remuneration Policy (A) continued
Assumptions for charts on page 129:

Details of contractual terms and the policy on cessation of employment are summarised in the table below. Payments todeparting Directors can only be made in line with this shareholder-approved Policy:•

Fixed pay comprises salary levels as at 1 July 2024, pension of 6% of salary and the value of benefits received in 2023/24.

•

The on‑target level of bonus is 75% of salary.

Contractual provision

Detailed terms•

The on‑target level of vesting under the LTIP is taken to be 50% of the face value of the award at grant, i.e. 100% of salary
for the CEO and 87.5% of salary for the CFO.

Notice period

12 months by the company or by the Director.

•

The maximum level of bonus is 150% of salary and the maximum LTIP award level is 200% of salary for the CEO and 175%of salary for the CFO.

Termination payment•

To show the impact of potential share price growth on the value of an Executive Director’s package, the impact of shareprice growth of 50% on the LTIP is used.

A Director’s service contract may be terminated without notice and without any further
payment or compensation, except for sums accrued up to the date of termination, in theevent of gross misconduct.
For termination in other circumstances, the company has a right to pay salary in lieu of thenotice period (or part thereof) if it so determines.
In addition, any statutory entitlements in connection with the termination would be paid
as necessary, and, at the Committee’s discretion if deemed necessary and appropriate,
outplacement, legal fees and settlement of claims or potential compensation claims.

Recruitment and promotion policy for Executive Directors
In setting total remuneration levels and in considering quantum for each element of the package for a new Executive
Director, the Committee takes into account the skills and experience of the individual, the market rate for a candidate of thatexperience and the importance of securing the relevant individual.
The company seeks to align the remuneration package with the Policy approved by shareholders. Salary is provided at sucha level as required to secure the most appropriate candidate. For new appointments, base salary and total remuneration may
be set initially at below normal market rates on the basis that it may be increased once expertise and performance has been
proven and sustained.
Specific variable remuneration performance targets can be introduced for an individual where necessary for the first year of
appointment if it is appropriate to do so to reflect the individual’s responsibilities and the point in the year in which he or shejoined the Board.
Flexibility is retained to offer additional cash and/or share‑based payments on appointment in respect of deferredremuneration or benefit arrangements forfeited on leaving a previous employer (ie a buy-out award). The Committee would
look to replicate the arrangements being forfeited as closely as possible and, in doing so, will take account of relevant factors
including the nature of the remuneration forfeited, performance conditions, attributed expected value and the time over which
they would have vested or been paid. Such awards may be made under the terms of the LTIP (which, when combined with anormal annual LTIP award, may exceed the ‘normal’ 200% of salary limit per annum) or as permitted under the Listing Rules.
For an internal appointment, any variable pay element awarded in respect of the prior role may be allowed to continue to
pay out according to its terms, adjusted as relevant to take into account the appointment. In addition, any other ongoing
remuneration obligations existing prior to appointment may continue.

Remuneration
entitlements

Pro‑rata bonus may also become payable for the period of active service based on thesatisfaction of performance conditions and payable at the normal time, along with vesting foroutstanding share awards or deferred bonus shares (in certain circumstances – see below).

Change of control

No Executive Director’s contract contains additional provisions in respect of a change of control.
Any applicable share plan rules address the treatment of unpaid and unvested awards.

Any share‑based entitlements granted to an Executive Director under the company’s share plans will be determined basedon the relevant plan rules. The default treatment for existing awards is that any unvested awards lapse on cessation of
employment. However, in certain prescribed circumstances, such as death, injury, ill health, disability, retirement or othercircumstances at the discretion of the Committee, ‘good leaver’ status may be applied. Under the LTIP (and PSP), awards togood leavers will vest on the normal vesting date, subject to the satisfaction of the relevant performance conditions at thattime and will normally be scaled back to reflect the proportion of the original vesting period or performance period actually
served. In the event of a good leaver there would be no early release from a post-vest holding period (again, unless by
genuine exception, for example, serious ill health). The Committee has discretion in exceptional circumstances to disapply
time pro‑rating, to measure performance to, and vest awards at, the date of cessation. Vesting at cessation would be thedefault position where a participant dies. Deferred bonus shares are beneficially owned by the executive from the time of
the bonus payment, so are not at risk of forfeiture (other than in relation to clawback).

Non‑Executive Directors

For external and internal appointments, the Committee may agree that the company will meet certain relocation, legal andany other incidental expenses as appropriate.

For the appointment of a new Chair or Non‑Executive Director, the fee arrangements would be in accordance with theapproved Remuneration Policy in place at the time.

Executive Directors’ service contracts and policy on cessation of employment

Non‑Executive Directors are appointed under letters of appointment for fixed terms of three years; however, in line withgovernance best practice, the company proposes all Directors for annual re-election by shareholders at the AGM. Theirappointment can be terminated without notice and with no compensation payable on termination, other than accrued feesand expenses.

Details of the service contracts of the Executive Directors, available for inspection at the company’s registered office and at
the company’s AGM, are as follows:

Richard Tyson
Gavin Hill

www.oxinst.com

Contract dateUnexpired term of contract

1 October 2023

12-month rolling contract

9 May 2016

12-month rolling contract

Date of appointment

Notice period

Unexpired term

Neil Carson

1 December 2018

Rolling six months

2024 AGM

Mary Waldner

4 February 2016

None

2024 AGM

Alison Wood

8 September 2020

None

2026 AGM

Sir Nigel Sheinwald

22 September 2021

None

2024 AGM

Reshma Ramachandran1 September 2022

None2025 AGM

Hannah Nichols

1 January 2024

None

2026 AGM

131

132

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

133

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Annual Report on Remuneration (B)The financial information in this part of the report has been audited where indicated.

Fees
£’000

Benefits
£’000

Total
£’000

2024

204

–

204

2023

194

–

194

2024

42

–

42

2023

54

–

54

2024

66

–

66

2023

62

–

62

2024

76

1

77

2023

70

–

70

2024

66

–

66

2023

62

–

62

Non‑Executive Director

Directors’ remuneration (audited)
The remuneration paid to the Directors during the year under review and the previous year is summarised in the tables below:

Richard Tyson

Ian Barkshire7

Gavin Hill

Total

Other5£’000

Richard Friend1

Salary£’000

Benefits1£’000

Pension2£’000

Annualbonus3
£’000

2024

285

13

15

256

N/A

823

313

1,079

1,392

2023

–

–

–

–

–

–

–

–

–

2024

269

27

26

246

646

5

327

892

1,219

2023

523

84

58

534

936

0

665

1,470

2,135

2024

395

24

32

360

503

0

451

863

1,314

2023

376

27

47

395

731

0

450

1,126

1,576

2024

949

64

73

862

1,149

828

1,091

2,834

3,925

2023

898

111

105

929

1,667

1

1,115

2,596

3,711

Executive Director
6

Long‑term
incentive
awards4£’000

Total fixed
£’000

Total
variable
£’000

Total
£’000

1.	Benefits comprise provision of a car or car allowance, health insurance, life assurance, overnight hotel accommodation where necessary to
carry out duties at the Head Office of the company. For Ian Barkshire this also includes provision of a driver to allow him to make best use of his
commuting time, which accounted for £23,086 up to 1 October 2023, when he stepped down as Chief Executive Officer, and £30,782 for the year to
1 December 2023 when he ceased to be in active service (2023: £70,716) of the total benefits for Ian Barkshire.
2.	Each Executive Director is entitled to receive a contribution to a money purchase pension scheme for a fixed value, which up to 18 September 2023
was calculated as 14% of base salary earned on 1 April 2020 and from 19 September 2023 was calculated as 6% of current base salary. Where thecontractual pension contribution exceeds the annual or lifetime allowance, any balancing payment is made by the company as a cash allowance
which, in line with the policy for all UK employees, is paid net of employer’s national insurance contributions.
3.	Annual bonus represents the annual bonus for the year to 31 March 2024 and would usually be paid in the July 2024 payroll. Of the total bonus
amounts payable, £85,500, £109,200 and £120,000 will be paid in shares for Richard Tyson, Ian Barkshire and Gavin Hill, respectively, which mustbe held for three years, as per the policy.
4.	Long‑term incentive awards are those awards where the vesting is determined by performance periods ending in the year under review andtherefore reports the value of the PSP award granted on 5 July 2021. The value has been determined using the average share price over thethree months to 31 March 2024, £21.5587. Further details of these calculations are set out on page 135. The value of the prior year awards has
been restated using the share price on the vesting date of 25 September 2023 of £21.75, giving a total vested award value, including dividend
equivalents, of £936,338 (before restatement £1,032,876) for Ian Barkshire and £730,822 (before restatement £806,156) for Gavin Hill.
5.	The company operates a Share Incentive Plan (SIP) which is open to all UK permanent staff employed for at least six months. For Ian Barkshire
and Gavin Hill, ‘Other’ is the value of matching SIP shares attributable to the year, as they both participated in the SIP up to the maximum extent
permitted by HMRC. The company offers a 1:5 match for partnership shares purchased by employees and this amounted to £130 and £360 each ofmatching shares for Ian Barkshire and Gavin Hill, respectively.
6. 	For Richard Tyson, who took up the role of CEO with effect from 1 October 2023, the figure stated in ‘Other’, is the value of the buy-out award in
relation to his pro-rated FY23 bonus from his previous employer. This buy-out award is based on the FY23 performance achieved against theoriginal financial and ESG targets at TT Electronics plc which resulted in an outcome of 92% of maximum. The bonus is payable 70% in cash and
30% in Oxford Instruments plc’s shares which must be held for two years in line with the policy at TT Electronics plc. This figure also includes thevested value of the buy-out award in respect of his 2021 LTIP award from TT Electronics plc, further details of which are set out later in this report.
7.	Ian Barkshire retired from his role as CEO and from the Board with effect from 1 October 2023, he then remained in active service until 1 December
2023 before serving the remainder of his notice period on garden leave until 11 April 2024. The figures disclosed above relate to his time as a
Director and the remainder of his remuneration is disclosed on page 139. In addition to the value explained at footnote 5 above, the figure statedwithin ‘Other’ in respect of Ian also comprises an amount of £6,708.50, by way of a reimbursement payment in respect of the immaterial disbenefit
resulting from the conversion of the awards from nil-cost options to nominally priced options of £0.05 per share, during the prior financial year
ended 31 March 2023.

www.oxinst.com

Neil Carson

Mary Waldner

Alison Wood

Nigel Sheinwald

Reshma Ramachandran2

Hannah Nichols3

Total
1.

2024

57

1

58

2023

32

4

36

2024

14

–

14

2023

–

–

–

2024

525

2

527

2023

474

4

478

Richard Friend stepped down as a Non-Executive Director effective 28 July 2023.

2. Reshma Ramachandran was appointed as a Non-Executive Director effective 1 September 2022.
3. Hannah Nichols was appointed as a Non-Executive Director effective 1 January 2024.

Details of annual bonus earned in year (audited)
As in previous years, the Committee set stretching performance targets for the annual bonus which are clearly linked to thestrategy and financial performance of the Group. The targets set and the achievement against them are set out in the tablebelow. Note that Ian Barkshire’s annual bonus is pro-rated for the period of his active service, up to 1 December 2023. Richard
Tyson’s annual bonus is pro-rated from the date of his appointment, of 1 October 2023.

Targets

Percentage of salary payable –Ian Barkshire (subject to prorating) and Gavin Hill

Percentage of salary payable(subject to pro-rating) –Richard Tyson
OntargetMaximum

ActualIan
Barkshire

Gavin
Hill

RichardTyson

Payout % of salary(pro-rating applied)

MeasureThresholdOntargetMaximum ThresholdOntargetAdjusted
profit before
tax£82.4m

£84.4m

£86.4m

7.5%

37.5%

75%

9%

45%

90%

£86.6m

50%

75%

45%

Adjusted
operatingprofit margin

18.0%

18.2%

18.3%

2.5%

12.5%

25%

3%

15%

30%

17.1%

0%

0%

0%

Cash
conversion

82%

85%

92%

2.5%

12.5%

25%

3%

15%

30%

64.0%

0%

0%

0%

Strategic
objectives

–

–

–

2.5%

12.5%

25%

–

–

–

15%

10%

15%

–

60%

90%

45%

Maximum Threshold

134

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Annual Report on Remuneration (B) continued
The non‑financial strategic objectives were set at the start of the year. Details of the objectives and an assessment as to theirachievement are set out below:
CEO objectives (Previous CEO, Ian Barkshire)

WeightingAchievements toward objectives/performance•

Delivery of targeted operational improvement
outcomes.

As regards business systems, complete ERP
implementations in respect of two major sites
during the year.

8/25

•

8/25

•

Deliver substantive progress against each of
the core drivers of improvement within oursustainability agenda.

9/25

Total

100%

CFO objectives (Gavin Hill)

Weighting

As regards business systems, complete ERP
implementations in respect of two major sites
during the year.

•

8/25

9/25

Total

100%

6 out of 8•

Performance level2 out of 8

7 out of 9Good progress including margin improvement
through high-quality outsourcing,
implementation of a new commodity strategy
for a notable proportion of spend andconsiderable lead time reductions.

4% to 12% per annum

25%–100%

Maximum

12% per annum and above

100%

Actual EPS

109.0pActual growth achieved over the period (per annum)

11.5%

Implementation at one major site was
successfully completed, albeit with some
disruption to operations. Implementation at
the other major site was not completed.

2 out of 8

Good progress delivered, with the launch of
the Go Green programme, new renewableenergy contracts secured, updates to NPI
processes and launch of employee impact
groups, amongst other things.

7 out of 995%

50% of the award is based on the company’s return on capital employed in the final year of the three-year performance period1:
ROCE1 for the final year of theperformance period% of award that will vest

Less than 24%

0%

24%

25%

ThresholdMaximum

Between 24% and 30%

25%-100%

30% per annum and above

100%

30.5%

100%

Actual ROCE achieved in 2023/24

1.	ROCE is calculated as Earnings Before Interest and Tax (EBIT)/capital employed where EBIT is adjusted operating profit less amortisation of
acquired intangibles (£71.2m), and capital employed (£269.2m) is defined as documented in the Finance Review on page 68.

Based on the performance against targets, the PSP awards will vest on 5 July 2024 as follows:

Richard Tyson3

37.5%

75%

45%

60%

£256,500

Ian Barkshire

50%

100%

60%

60%

£327,600

75%

150%

90%

60%

£360,000

Actual bonus payable1,2
for 2023/24

Bonus is calculated on salary as at 31 March 2024.

2.	Of the amounts disclosed, £85,500, £120,000 and £109,200 will be paid in shares to Richard Tyson, Gavin Hill and Ian Barkshire, respectively,
which must be held for three years, as per the policy.
3.	For Richard Tyson, the above represents the Oxford Instruments element of his annual bonus, for which the quantum has been pro-rated based on
his appointment date of 1 October 2023. In addition to this and as explained in more detail on page 132, Richard also received a pro-rated annual
bonus in respect of what he would have received at his previous employer and based on its performance, by way of his buy-out package uponjoining the company.
4.	Ian Barkshire’s annual bonus is pro-rated for the period of his active service, up to 1 December 2023. The bonus in relation to the period of the year
Ian Barkshire was CEO is shown in the Directors' remuneration table (£245,700) and the bonus in relation to the period of active service is shown in
the payments to past directors section (£81,900).

Value1 ofshares vesting
including
dividend
equivalent(£’000)Date award
grantedTotal numberof shares
granted

Reduction due
to pro-rating
for good
leaver

Percentage ofaward vesting

Number ofshares vesting

Value1 ofshares vesting(£’000)

Numberof shares
awarded as
dividend
equivalent2

Ian Barkshire

5 July 2021

32,468

2,488

97.5%

29,230

630

723

646

Gavin Hill

5 July 2021

23,338N/A

97.5%

22,755

491

563

503

15% out of 25%

Maximum bonus(% of salary)www.oxinst.com

25%

Between threshold and maximum

On‑target bonus(% of salary)1.

0%4% per annum

Below threshold
6 out of 8

% of award that will vest

Less than 4% per annum

Performance level

Actual bonus
payable for 2023/24(% of salary)1

Gavin Hill

Below threshold

Between threshold and maximum

Good progress delivered, with the launch of
the Go Green programme, new renewableenergy contracts secured, updates to NPI
processes and launch of employee impact
groups, amongst other things.

Actual bonus
payable for 2023/24(% of maximum)

EPS growth over three years

Threshold

The on‑target and maximum bonus potentials for the Executive Directors, as well as the amounts actually payable for theyear ended 31 March 2024, are set out below.

4

The performance targets which applied to the awards made on 5 July 2021 for the performance period ending in the year
under review and actual performance achieved against them were as follows:
50% of the award is based on EPS measured over a three‑year performance period starting 1 April 2021:

Achievements toward objectives/performance

8/25

Deliver substantive progress against each of
the core drivers of improvement within oursustainability agenda, including embedding
related reporting into financial processes in arevised financial model.

Implementation at one major site was
successfully completed, albeit with some
disruption to operations. Implementation at
the other major site was not completed.

The performance targets, performance against them and the resulting value in respect of the long‑term incentive awards
where vesting is determined by a performance period ending in 2024/25 are as follows:

Performance Share Plan (PSP)

15% out of 25%•

Delivery of targeted operational improvement
outcomes.

Good progress including margin improvement
through high-quality outsourcing,
implementation of a new commodity strategy
for a notable proportion of spend andconsiderable lead time reductions.

Long‑term incentive plans (audited)

1.	As the awards vest after the date of this report, value has been calculated using the average mid‑market closing price of the company’s shares
over the three‑month period ending 31 March 2024, £21.5587. This will be restated for the actual value on vesting in next year’s report.
2.	Dividend equivalents have been calculated based on dividends paid up until the date of this report. If dividends are payable between the date ofthis report and the vesting date, additional dividend equivalents will be awarded and the value will be updated in next year’s report.

135

136

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Annual Report on Remuneration (B) continued
As at 31 March 2024, the outstanding options for Richard Tyson, Ian Barkshire and Gavin Hill under the PSP and LTIP1 wereas follows:

Long-Term Incentive Plan awards made in the year and outstanding share incentive awards(audited)
Richard Tyson joined the company as Chief Executive Officer on 1 October 2023. On 14 November 2023, he was granted
two awards of nominally priced options of £0.05 under the LTIP which comprise the buy-out arrangements to replace the2021 and 2022 LTIP awards from his previous employer, TT Electronics plc, which lapsed in connection with his joining thecompany. The awards will vest based on the achievement of the original TT Electronics plc performance targets and they
will accrue dividend equivalents. A two-year post-vesting holding period applies to all awards. With regards to his forfeited
2023 TT Electronics plc LTIP award, Richard did not receive a replacement award in the same way as his other forfeited LTIP
awards, but instead received an award under the Oxford Instruments LTIP in 2023, further details of which are set out below.
The buy-out awards made to Richard Tyson under the LTIP during the financial year ended 31 March 2024, and details
relating to their vesting where applicable, are as follows:

Date
award
grantedTotal numberof shares
grantedRichard 14 Nov
Tyson
2023

Face valueof award at
grant date

Share priceon day before
award date

Vesting
date

Percentage
of award
vesting

Numberof shares
vesting

Value1 ofsharesvesting(£’000)

Numberof shares
awardedas dividend
equivalent

Scheme31 March
2024

Granted13,521

27,872

Exercised

LapsedDividend
equivalents1

1 April
2023

Exercise
price2

Share priceon date of
grant

Date of
grant

Earliest
exercise

Latestexercise

15,635

1,284

–

£0.05

£20.55

14/11/23

16/03/24

15/03/31

Richard Tyson
LTIP3
3

LTIP

30,97530,975–£0.05£20.55

14/11/23

14/03/25

13/03/32

LTIP

53,02353,023–£0.05£20.55

14/11/23

31/07/26

13/11/33

Ian Barkshire4

Value1 ofshares vesting
including
dividend
equivalent(£’000)27,872£572,770£19.2416 Mar2024

43.91%

12,237

255

1,284

281

30,975£636,536£19.2414 Mar
2025

N/A

N/A

N/A

N/A

N/A

PSP

–

67,99867,998

£0.05

£9.58

25/09/17

25/09/20

24/09/27

PSP–

66,172

66,172£0.05£10.1003/07/18

03/07/21

02/07/28

PSP49,497

PSP

43,05049,497£0.05£14.0015/07/19

15/07/22

14/07/29

42,019£0.05£16.2423/09/20

23/09/23

22/09/30

PSP532,46832,468£0.05£23.8005/07/21

05/07/24

04/07/31

PSP

40,97940,979£0.05£19.4020/06/22

20/06/25

19/06/32

53,07153,071

£0.05

£9.58

25/09/17

25/09/20

24/09/27

1,031

Gavin Hill
1.

Calculated based on the share price on the 18 March 2024 of £20.80 (being the closest date to the vesting date).

PSP

Awards made in the ordinary course under the LTIP during the financial year ended 31 March 2024 were as set out below. As
noted in last year’s report, and for the reasons set out therein, the Committee determined that the 2023/24 LTIP award for
Gavin Hill should be based on 200% of salary, on an exceptional basis.
Date award
grantedTotal numberof shares
granted

Percentage
of salary

Face valueof award at
grant date

Share priceon day before
award date

Vesting date

Gavin Hill

25 Sept 2023

36,697200%£798,160£21.8031 July 2026

Richard Tyson

14 Nov 2023

53,023200%£1,089,623£19.2431 July 2026

The awards are nominally priced options of £0.05 and are subject to the following performance conditions:
Performance measure

Weighting

Performance targets

PSP

51,646

51,646£0.05£10.1003/07/18

03/07/21

02/07/28

PSP

38,63338,633£0.05£14.0015/07/19

15/07/22

14/07/29

PSP

33,60132,796£0.05£16.2423/09/20

23/09/23

22/09/30

805

5

PSP

23,33823,338£0.05£23.8005/07/21

05/07/24

04/07/31

PSP

29,45629,456£0.05£19.4020/06/22

20/06/25

19/06/32

LTIP

36,697–£0.05£21.7525/09/23

31/07/26

24/09/33

1.

36,697

Dividend equivalents are awarded on vesting of PSP and LTIP awards, for the period to vesting, in respect of the actual number of shares vesting.

2.	During the prior financial year ended 31 March 2023 the Remuneration Committee agreed that those awards outstanding under the PSP, both
vested and unvested, which had been granted as nil-cost options, would be converted to nominally priced options of £0.05 per share. For the
Executive Directors, a reimbursement payment will be made in respect of the immaterial disbenefit (ie the difference between £0 and £0.05 pershare), at the point at which any award vests or for those awards which have already vested, at the earlier of when they exercise their options orwhen future vesting activity is scheduled to take place. Upon any such payment being made, this will be disclosed and explained in the Single
Figure Table as an item of ‘Other remuneration’.

Earnings Per Share (EPS)30%

4% pa (25% vesting) to 10% pa (100% vesting) CAGR over three financial years
measured from the 2022/23 financial year end EPS.

3.	The awards granted to Richard Tyson with vesting dates in 2024 and 2025 comprise the buy-out arrangements which replace Richard’s 2021,
2022 and 2023 LTIP awards from his previous employer, TT Electronics plc, which lapsed in connection with his joining the company.

Return on Capital
Employed (ROCE)

30%

30% in the final year of the performance period (2025/26 financial year) (25%vesting) to 34% (100% vesting).

4.	Ian Barkshire’s outstanding awards will be treated in line with good leaver status under the relevant share plan rules and as such, will be prorated to the date of his cessation of employment. The total gain received by Ian Barkshire on the exercise of share options during the year was£3,216,553.

Relative Total Shareholder
Return (TSR)Median (25% vesting) to Upper quartile (100% vesting) over three financial years
commencing with the 2023/2024 financial year relative to the companies comprising
the FTSE 250 Index (minus Investment Trusts) at the start of the performance period.

5.	The performance conditions relating to this award have been tested and have vested at 97.5%.

25%

Sustainability –emissions reduction

7.5%

2% reduction of absolute Scope 1 and 2 emissions in the final year of theperformance period (2025/26 financial year) (25% vesting) to 9% (100% vesting).

7.5%

35% in the final year of the performance period (2025/26 financial year) (25% vesting)to 40% (100% vesting). The current percentage of females in senior leadership
positions is 31.9%. Senior leadership is defined as Leadership Committee, their direct
reports and key decision makers.

Sustainability – percentage
of females in seniorleadership positions

The market price of the shares at 28 March 2024 was £21.25 (2023: price on 31 March 2023 was £25.05) and the range during
the year was £17.12–£28.55 (2023: £17.20–£26.25).
Performance conditions for outstanding, unvested awards which are not stated elsewhere in this report are described below:
PSP

20 June 2022

2

50% of award

50% of award

EPS growth – 4% pa (25% vesting) to 10% pa(100% vesting)

ROCE1 in the final year of the performance period –26% (25% vesting) to 32% (100% vesting)

1.	ROCE is calculated as EBIT/capital employed where EBIT is adjusted operating profit less amortisation of acquired intangibles, and capital
employed is defined as documented in the Finance Review on page 68.
2. Three‑year performance period commencing 1 April prior to date of grant.

www.oxinst.com

137

138

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

DIRECTORS’ REMUNERATION REPORT continued
Annual Report on Remuneration (B) continued
Dilution limits (unaudited)

Payments to past Directors and for loss of office (audited)

The company’s Long-Term Incentive Plan rules which were approved by shareholders at the Annual General Meeting on 19
September 2023, provide that overall dilution through the issuance of new shares for employee share schemes should notexceed an amount equivalent to 10% of the company’s issued share capital over a ten‑year period. They also provide that
overall dilution through the issuance of new shares for employee share schemes pursuant to awards to Executive Directors
and other senior executives should not exceed an amount equivalent to 5% of the company’s issued share capital over aten‑year period. The SIP scheme uses only market‑purchased shares.

During the year no payments were made to Directors for loss of office.
Ian Barkshire retired from his role as CEO and from the Board with effect from 1 October 2023, he then remained in active
service until 1 December 2023 before serving the remainder of his notice period on garden leave until 11 April 2024.
An overview of the treatment of Ian’s remuneration for 2023/24 and for the duration of his notice period is set out below:•

Ian received salary, benefits and pension for the duration of his notice period; however the benefit provision of a driverceased at the end of his active employment. In respect of the period post his retirement as CEO, he received salary of£273,000, benefits of £11,950 and pension of £16,146 (broken down as a contribution of £5,000 into the company’s Group
Personal Pension Plan and £11,146 as a balancing payment).

•

Ian was eligible to participate in the 2023/24 annual bonus plan for the period of his active service and this will be payableat the usual time based on performance, payable in cash and deferred shares, as detailed on pages 133 and 134. The
value of the bonus payable in respect of his period of active service post stepping down as CEO, is £81,900.

•

Ian was not eligible to receive an LTIP award for 2023/24.

•

Ian is treated as a good leaver in respect of his unvested LTIP awards and these will continue subject to a time pro-rata
reduction to the end of his notice period, the achievement of performance conditions and vesting at the normal time. The
two-year post-vesting holding periods continue to apply for these awards.

•

In line with the Policy, Ian will be subject to the post-cessation shareholding requirement which requires him to retain ashareholding on cessation, equivalent to 200% of base salary, for two years (unless by genuine exception, e.g. serious illhealth). The two-year period is effective from the end of his notice period.

The company monitors the position prior to making awards to ensure that it remains within the applicable limit. As of the dateof this report, the company’s utilisation is under 2%.

Shareholding requirements (audited)
The Executive Directors are required to build and retain a shareholding in the company equivalent in value to 200% of basic
salary. Until the requirement is met, the Executive Directors are expected to retain or purchase shares equivalent to the valueof 50% of the net amount realised on exercise of long‑term incentive awards after allowing for tax payable. The value ofvested but unexercised PSP and LTIP awards may count towards the shareholding level, calculated at the net of tax value.
Directors’ shareholdings (and those of any persons closely associated) as at 31 March 2024 are shown in the table below.
Beneficiallyowned shares

Share option
awards vested but
unexercised

Percentage of salaryheld in shares undershareholding guideline1

Guideline
met as at
31 March 2024

Share option awards
unvested and subject toperformance2

Richard Tyson

0

13,521

27%

No

83,998Ian Barkshire3

4,744

92,547

209%

Yes

73,447

Performance graph and CEO’s remuneration (unaudited)

Gavin Hill

4,014

176,951

520%

Yes

89,491

Neil Carson

24,000

–

–

N/A

–

Mary Waldner

1,000

–

–

N/A

–

The graph below shows for the ten years ended 31 March 2024 the total shareholder return (TSR) on a holding of thecompany’s ordinary shares compared with the TSR of an equivalent value invested in the FTSE 250 and FTSE 350 Electronic
and Electrical Equipment indices. These indices have been chosen as they are considered to be the most appropriatecomparator groups for the company.

Alison Wood

0

–

–

N/A

–

Nigel Sheinwald

0

–

–

N/A

–

Reshma Ramachandran

0

–

–

N/A

–

Hannah Nichols

0

–

–

N/A

–

Richard Friend4

0

–

–

N/A

–

Total Shareholder Return
300

250

1.	The notional tax rate used to determine the net value of the vested share awards is 47%. Shares valued using the market price of the shares on 28
March 2024: £21.25.
2.	Award granted in July 2021 will vest at 97.5% in July 2024. Awards granted in June 2022, September 2023 and November 2023 remain subject toperformance conditions.

200

3. Ian Barkshire will be subject to the post-cessation shareholding obligations as set out in the Policy.
4. Richard Friend stepped down as a Non-Executive Director effective 28 July 2023.

150

Pension arrangements

100

Executive Director pension arrangements (audited)
Executive Directors can decide to contribute to a pension plan of their choice. The company contributes a fixed amount, which
up to 18 September 2023, was calculated as 14% of base salary paid in year to 31 March 2020. With effect from the AGM
held on 19 September 2023, the pension contribution for Executive Directors reduced to 6% of salary, which is the maximum
percentage amount payable to the majority of the UK workforce. Only base salary is pensionable. Where the company’s
pension contribution exceeds the annual allowance, a balancing payment is paid by the company to the Director, which istaxed as income. In line with the policy for all UK employees, this cash payment is reduced by 12.12% to cover employer’s
national insurance costs.
During the year and in respect of the periods in which they served as Directors of the company, respectively, the company
contributed £5,001 (2023: £4,000) into the company’s Group Personal Pension Plan for Ian Barkshire, £10,000 (2023: £4,000)
into a personal defined contribution plan for Gavin Hill. Balancing payments of £20,828 to Ian Barkshire, £22,293 to Gavin Hilland £15,027 to Richard Tyson (net of employer’s national insurance contributions) were paid as cash.

www.oxinst.com

50£031/03/2014

31/03/2015

31/03/2016

31/03/2017

31/03/2018

Oxford Instruments

31/03/2019

31/03/2020

FTSE 350 E & EE

31/03/2021

FTSE 250

31/03/2022

31/03/2023

31/03/2024

139

140

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

141

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Annual Report on Remuneration (B) continued
The total remuneration of the CEO over the last ten years is shown in the table below. The annual bonus payout and PSP/LTIP
vesting level as a percentage of the maximum opportunity are also shown.
2017

2024

1

Year ending 31 March

Total remuneration(£’000)

2015

579

2016

743

Jonathan
Flint

64

3

Ian
Barkshire

620

2018

791

2019

2020

1,957

1,967

2021

2,244

2022

2023

2,087

2,135

Ian
Barkshire

Percentage change in the remuneration of the Directors (unaudited)
The table below shows the percentage change in each of the Director’s salaries, taxable benefits and annual bonus earned
between 2019/20 to 2023/24 compared to that for the average UK‑based employee of the Group (on a per capita full‑timeequivalent basis).

Richard
Tyson

1,219

1,392

Annual bonus
outcome (%)

7.5%

38.6%

0%

56.3%

63.7%

94.4%

62.9%

100%

74.2%

80.56%

60%

60%

ESOS vesting (%)

0%

0%

0%

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

SELTIS/PSP/LTIP2
vesting (%)

0%

0%

0%

N/A

N/A

92.8%

100%

100%

100%

100%

97.5%

N/A

2022/23 to 2023/24% change

2.	Executive Directors were last granted ESOS (market value share options) and SELTIS (nil-cost options) in June 2014. PSP awards were granted from
June 2014 to June 2022. LTIP awards have been granted since September 2023.
3.	2023/24 financial year: remuneration shown separately for Ian Barkshire who was CEO from 1 April 2023 to 1 October 2023 and Richard Tyson who
was CEO from 1 October 2023 to 31 March 2024.

Ratio of Chief Executive Officer pay to that of employees
The Chief Executive Officer to employee pay ratio for 2023/24 and prior financial years is set out below:
Financial year

2019/20 to 2020/21% change

Benefits

SalaryBenefits

Bonus

SalaryBenefits

Bonus

SalaryBenefits

Bonus

Richard Tyson1

N/A

N/A

–

N/A

N/A

–

N/A

–

–

N/A

–

–

Ian Barkshire2

N/A

N/A

–

7.1

24.5

15.0

15.0

30.1

2.8

-3.6

-41.3

62.1

Gavin Hill

5.2

-13.7

-8.9

5.0

18.8

15.3

8.5

2.3

-2.8

-4.1

8.2

57.1

5.0

–

–

4.3

–

–

8.0

–

–

-4.3

–

–

N/A

N/A

–

4.3

–

–

8.0

–

–

-3.4

–

–

Neil Carson
Richard Friend

Bonus10

Mary Waldner

7.0

–

–

3.8

–

–

8.3

–

–

-3.8

–

–

Alison Wood4

8.6

100

–

9.3

–

–

N/A

–

–

N/A

–

–

Nigel Sheinwald5

7.0

–

–

N/A

–

–

N/A

–

–

N/A

–

–

ReshmaRamachandran6

N/A

N/A

–

N/A

N/A

–

N/A

–

–

N/A

–

–

Hannah Nichols7

N/A

N/A

–

N/A

N/A

–

N/A

–

–

N/A

–

–

Average
employee pay8

1.73

-11.0

-29.3

10.3

9.01

-4.7

4.24

-8.4

-23.1

-0.7

-6.7

7.0

Method25th percentile

50th percentile

75th percentile2023/24

A

76.8:1

57.7:1

42.6:12022/23

A

66.2:1

49.4:1

36.8:1

2. Ian Barkshire stepped down from the Board on 1 October 2023.

2021/22A

65.3:1

48.5:1

36.3:1

3. Richard Friend stepped down from the Board on 28 July 2023.

2020/21

A

72.6:1

55.0:1

39.8:1

2019/20

A

62.5:1

47.8:1

33.3:1

1.

Richard Tyson joined the Board on 1 October 2023.

4. Alison Wood joined the Board on 8 September 2020.
5. Nigel Sheinwald joined the Board on 22 September 2021.
6. Reshma Ramachandran joined the Board on 1 September 2022.
7.

The aggregated payments made in respect of both of the CEOs who served during the year, and the employees at thepercentiles for the 2023/24 ratio are set out below:

2020/21 to 2021/22% change

Salary93

1.	2016/17 financial year: remuneration shown separately for Jonathan Flint who was CEO from 1 April to 11 May 2016 and Ian Barkshire who was CEO
from 12 May 2016 to 31 March 2017.

2021/22 to 2022/23% change

Directors during
the year ended
31 March 2024

Hannah Nichols joined the Board on 1 January 2024.

8. 	Average employee pay includes all UK employees in service on 31 March 2024 for the 2022/23 to 2023/24 comparison, but excludes those who
were on maternity leave, long-term sick leave and those who started or ended employment within the period.
9. 	The average pay increase across all employees in the UK in 2023/24 was 6.97%.

SalaryTotal payCEO

25th percentile

50th percentile

75th percentile£554,000£32,076£42,699£57,312£2,610,426£34,001£45,261£61,326

The ratios have been calculated in accordance with Option A under the relevant regulations, as this is the most statisticallyaccurate method. The CEO pay is compared to the pay of our UK employees at the 25th, 50th and 75th percentile, calculated
based on full-time equivalent pay data for the full financial year to 31 March 2024. All UK employees employed at the end of
the financial year who had worked the full year have been included, part-time employees have been included and pay has
been converted to a full-time equivalent number by calculating total part-time pay and grossing up to the full-time equivalent
for the role. Accordingly, any employees that left the company or joined during the year have been excluded.
The calculations use the aggregated pay for Richard Tyson and Ian Barkshire as disclosed in the single figure table. The pay
for all UK employees comprises salary, benefits, pension and annual bonus payments due for 2023/24 and includes certain
remuneration elements which were specific to the terms of their joining the company or their retirement, respectively. None of
the employees at the percentiles received share awards.
The CEO pay ratio has increased this year. This is largely as a result of the change of CEO during the year, with Ian Barkshire
stepping down and Richard Tyson taking up the role with effect from 1 October 2023. The calculation includes the pro-rated
annual bonus and the full LTIP FY21 award for Ian Barkshire, as well as certain elements of Richard Tyson’s buyout package,
being the replacement LTIP award which vested in March 2024 and the buyout of his TT electronics annual bonus for 2023
– as well as his pro-rated Oxford Instruments plc annual bonus. As the Committee is regularly apprised of the Remuneration
Policy throughout the company to ensure that decisions in relation to executive pay are considered in the round, the Committee
is satisfied the pay of the employees identified for the quartiles appropriately reflects the employee pay structure in eachquartile and the resulting pay ratios are consistent with the pay, reward and progression policies in place for all employees.

www.oxinst.com

10.	The value of the average employee bonus for the year ended 31 March 2024 (to be paid in July 2024) was not known at the time the Annual Report
was approved and consequently the number included is management’s best estimate of the bonus that will be paid.

Relative importance of the spend on pay
The following table shows the Group’s employee costs relative to dividends:
Year ended
31 March 2024

Year ended
31 March 2023

% change

Employee costs (£m)

155.4

146.4

6.15%

Dividends (£m)

11.4

10.6

7.55%

142

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Financial Statements

Governance

DIRECTORS’ REMUNERATION REPORT continued
Annual Report on Remuneration (B) continued
Statement of shareholder voting (unaudited)

The TSR measure will require significant stock market outperformance.

The resolution to approve the Directors’ Remuneration Policy was passed at the 2023 AGM and received the following votes
from shareholders:

The sustainability measures will: (i) support significant reduction in our Scope 1 and 2 emissions through requiring thecompletion of our intended site heating infrastructure projects at two of our major UK manufacturing sites, which will
represent a notable reduction, estimated at between 17% and 21%; and (ii) achievement of an improvement in female
representation in leadership positions. The Committee notes that the range is the same as the target range set for last years’award. However, this remains a stretching target and it is important that there is sustained achievement against it, rather
than encouraging a spike in a single year. During the year, we plan to broaden the scope of our diversity measure in the wider
organisation and will therefore consider the appropriateness of these when developing the targets for next year’s LTIP award.

Resolution

To approve the Directors’ Remuneration Policy

Votes forVotes against% for% against

Votes marked
as abstain

43,129,297

862,318

98.04

1.96

4,077

The resolution to approve the Annual Report on Remuneration at the 2023 AGM received the following votes fromshareholders:
Resolution

To approve the Annual Report on Remuneration

Votes forVotes against% for% against

Votes marked
as abstain

41,577,906

670,985

98.41

1.59

1,746,801

How the Policy will be applied in 2024/25 (unaudited)
Base salaries
With effect from 1 July 2024, the salary of the CEO will increase by 3% from £570,000 to £587,100 and the salary of the
CFO will increase by 3% from £400,000 to £412,000. These increases are below the average increase awarded across the
UK workforce.

Performance measure

Weighting

Performance targets

Earnings Per Share (EPS)30%

2% pa (25% vesting) to 8% pa (100% vesting) CAGR over three financial years
measured from the 2023/24 financial year end EPS.

Return on Capital
Employed (ROCE)

30%

26% in the final year of the performance period (2026/27 financial year)(25% vesting) to 30% (100% vesting).

Relative Total Shareholder
Return (TSR)

25%Median (25% vesting) to Upper quartile (100% vesting) over three financial years
commencing with the 2024/2025 financial year relative to the companies
comprising the FTSE 250 Index (minus Investment Trusts) at the start of theperformance period.

Sustainability –emissions reduction

7.5%

Make progress towards achieving our accelerated Scope 1 and 2 net zerotargets of 2030, by completing two of our site heating infrastructure projects.

Benefits and pension
Benefits will be in line with the Policy and with those received in 2023/24. Pension contributions will be 6% of salary, which is
the maximum percentage amount payable to the majority of the UK workforce.

Annual bonus
The maximum opportunity under the annual bonus plan for 2024/25 will be 150% of base salary for both the CEO and CFO.
One-third of the bonus payable will be delivered in shares subject to a three-year holding period. A combination of financial(83.3%) and non‑financial strategic (16.7%) metrics will be used to determine the level of payment under the annual bonus for
the CEO and CFO as detailed in the table below:
MeasureWeighting as a
% of maximum

Profit (£m)

50%

Adjusted operating profit margin (%)

16.7%

Cash conversion (%)

16.7%

Strategic objectives

16.7%

For the CEO and CFO, the non-financial strategic objectives are linked to operational improvement and progressing the newstrategic plan, amongst other things.
The Committee has chosen not to disclose, in advance, the performance targets for the forthcoming year as these include
matters which the Committee considers commercially sensitive. Retrospective disclosure of the performance against themwill be made in next year’s Annual Report on Remuneration.

Long‑term incentive awards in respect of the financial year

1 project completed by the final year of the performance period (2026/27
financial year) (50% vesting) to 2 projects completed (100% vesting).
Sustainability – percentage
of females in seniorleadership positions

7.5%

Non‑Executive Directors’ fees
The Committee and the Board, as appropriate, have reviewed the fees for the Chair and Non-Executive Directors and in linewith the Executive Directors, they will increase by 3% for 2024/25, effective from 1 July 2024.

Board Chair
Additional fee for Deputy Chair

The target range for the EPS growth measure has reduced slightly from the ranges applying to prior years’ awards. This
recognises the relatively high 2023/24 profit baseline from where the growth is measured over the next three years. It also
takes into account higher corporation tax which means that EPS growth is forecast to be materially flatter than PBT. Finally,
this takes into account the more challenging market conditions that we anticipate. Similarly, the target range for the ROCE
measure has also been reduced slightly, albeit the Committee recognises that it is still sector leading. We are satisfied thatthese target ranges are appropriately stretching in light of both the business plan and market outlook, as well as the grantlevels under the Policy and anticipate that we should be able to revert to target ranges more in line with historic norms fromnext year.

www.oxinst.com

2023/242024/25% increase£206,467£212,661

3%£5,202£5,358

3%

Basic fee

£57,408£59,130

3%Additional fee for Senior Independent Director£10,000£10,300

3%

Additional fee for Committee Chair£10,000£10,300

3%

Note: The fees shown for 2023/24 and 2024/25 are the annual rates as at 1 July 2023 and 1 July 2024, respectively.

ApprovalThis report was approved by the Committee on 10 June 2024 and has been approved subsequently by the Board forsubmission to shareholders at the Annual General Meeting to be held on 25 July 2024.

The 2024/25 LTIP awards will be over shares with a market value at grant of 200% of salary for the CEO and 175% for the CFO.
Vesting will be subject to the performance conditions as set out below measured over a three-year performance period
commencing 1 April 2024. We believe that the mix of performance conditions will provide a strong and rounded assessmentof the success of the business performance, strategy and purpose, over the period.

35% in the final year of the performance period (2026/27 financial year) (25%vesting) to 40% (100% vesting). Senior leadership is defined as Leadership
Committee, their direct reports and key decision makers.

ALISON WOOD
Chair of the Remuneration Committee
10 June 2024

143

144

Oxford Instruments plc
Annual Report 2024

Overview

SHAREHOLDER INFORMATION
Shareholder enquiries

11 June 2024

Announcement of preliminary results

11 July 2024

Final dividend ex-dividend date

12 July 2024

Final dividend record date25 July 2024

Annual General Meeting

30 July 2024

Final dividend DRIP election date

20 August 2024

Final dividend payment date

Please contact Link Group,
our Registrar, using the below
details, for all enquiries regarding
your shareholding, including
updating your address or othercontact details, direct dividend
payments and amending yourcommunication preferences.

12 November 2024

Announcement of half-year results

Online:28 November 2024

Interim dividend ex-dividend datewww.signalshares.com

29 November 2024

Interim dividend record date17 December 2024

Interim dividend DRIP election deadline

10 January 2025

Interim dividend payment date

31 March 2025

Financial year end

To register to use this site, youwill need your Investor Code
(IVC) which can be foundon your share certificate or
dividend confirmation.

By telephone:

Please note that the above dates are subject to change.

+44 (0) 371 664 0300

Analysis of share register at 31 March 2024
Total numberof holdings

Percentage
of holders

Total numberof shares

Percentage ofissued sharecapital

1,480

76.25

3,601,671

6.22

461

23.75

54,312,121

93.78

By type of shareholder
Individual
Institutions and others

Calls to the above number
are charged at the standard
geographic rate and will vary byprovider. Calls outside the United
Kingdom will be charged at theapplicable international rate.
Lines are open 9.00am–5.30pm,
Monday to Friday excluding public
holidays in England and Wales.

By size of shareholding

By email:

1–500

shareholderenquiries@linkgroup.
co.uk

1,165

60.02

198,0320.34

501–1,000

216

11.13

163,6120.28

1,001–10,000

303

15.61

969,764

1.68

10,001–100,000

159

8.19

5,674,752

9.8

100,001–500,00072

3.71 16,008,799

Over 500,000

26

1.34

1,941

100.00Total

The Directors present the Annual
Report of Oxford Instruments plc for theyear ended 31 March 2024.

Principal activity andbusiness reviews
Oxford Instruments plc (‘OI plc’) is
the ultimate holding company of agroup of subsidiary undertakings (the‘Group’) which is a leading global
provider of technology and expertiseto academic and commercial partners.
The Directors of OI plc are required
to set out in this report a true andfair view of the business of the Groupduring the financial year ended 31
March 2024, the position of the Groupat the end of the financial year anda description of the principal risks
and uncertainties facing the Group.
The information which fulfils theserequirements includes the Operations
Review on pages 26 to 33, the Finance
Review on pages 58 to 69 and thereport on Sustainability on pages 34
to 57, which are incorporated in thisreport by reference. The operations, thestrategic review, the risk management
disclosures, the viability statement, theresearch and development activities
and likely future prospects of the Groupare reviewed in the Strategic Report on
pages 10 to 82.

By post:Results and dividends

27.64

Link Group, Central Square,
29 Wellington Street,
Leeds LS1 4DL

34,898,833

60.26

Company information

57,913,792

100.00Registered office address:

The results for the year are shown in
the Consolidated statement of incomeon page 150. The Directors recommend
a final dividend of 15.9p per ordinary
share, which together with the interim
dividend of 4.9p per ordinary share is a
total of 20.8p per ordinary share for theyear (2023: 19.5p per ordinary share).
Subject to shareholder approval, thefinal dividend will be paid on 20 August2024 to shareholders registered atclose of business on 12 July 2024.

Tubney Woods, Abingdon,
Oxon OX13 5QX

Risks and uncertainties

Company name:
Oxford Instruments plc

Annual General Meeting 2024

Company number:

The 2024 Annual General Meeting of Oxford Instruments plc will be held at theoffice of Ashurst LLP at London Fruit & Wool Exchange, 1 Duval Square, London,
E1 6PW at 11.00am on Thursday 25 July 2024.

00775598

Further details can be found in the Notice of Meeting which has been sent to ourshareholders and which is also available on our website at: www.oxinst.com/
investors-content/annual-general-meeting

Type:
Public Limited Company

Website:www.oxinst.com

Auditor:
BDO LLP, R+, 2 Blagrave Street,
Reading, Berkshire RG1 1AZ

www.oxinst.com

145

Financial Statements

Governance

DIRECTORS’ REPORT

Financial calendar1

1.

Strategic Report

The Board exercises proper andappropriate corporate governanceacross the Group. It ensures that
there are effective systems ofinternal controls in place to manage
shareholders’ interests and theGroup’s assets, including theassessment and the managementof the risks to which the businesses
are exposed, and to monitor andmanage compliance with all the legal
requirements that affect the Group’s
worldwide business activities.

However, such systems are designed to
manage rather than eliminate the risk offailure to achieve business objectives
and can provide only reasonable
and not absolute assurance againstmaterial misstatement or loss.
The Executive Directors report to theBoard on changes in the business andin the external environment which may
affect the risks which the Group faces.
The Executive Directors also provide
the Board with financial information ateach Board meeting. Key performanceindicators are reviewed periodically.
There are a number of risks anduncertainties which may have amaterial effect on the Group. These aredescribed in Principal Risks on pages
73 to 78.

Directors
Biographies of all the Directors at
the date of this report, including
Non‑Executive Directors, are set out
on pages 86 to 88. During the year
ended 31 March 2024 there werea number of changes to the Board,
with Ian Barkshire stepping down as
an Executive Director and CEO on
1 October 2023, Richard Tyson being
appointed as an Executive Director and
CEO with effect from 1 October 2023
and Hannah Nichols joining as a NonExecutive Director on 1 January 2024.

Directors’ conflicts of interest
The Companies Act 2006 allows
Directors of public companies toauthorise conflicts and potential
conflicts of interest, where appropriate.
Only Directors with no interest in thematter under consideration may
participate in the relevant decisionand in doing so they must act in a
way which they consider in goodfaith will be most likely to promote OI
plc’s success. A conflicts policy has
been drawn up, which is reviewed as
appropriate, and a register of conflicts
and potential conflicts is maintained.

Directors’ interests
The beneficial interests of the Directors
in OI plc’s share capital, all in fully
paid up shares at 31 March 2024,
are shown above.
Details of share options for the
Executive Directors are shown in the
Remuneration Report on page 137.

Neil Carson
Richard Tyson

31 March
2024
Shares31 March
2023
Shares

24,000

8,000

–

–

Gavin Hill

4,014

2,707

Mary Waldner

1,000

1,000

Alison Wood––

Nigel Sheinwald––

ReshmaRamachandran––

Hannah Nichols–

N/A

No Director was beneficially interested
in the shares of any subsidiarycompany at any time during the year.
In the year to 31 March 2024, no
Director had a material interest in
any contract of significance with OI
plc or any of its subsidiaries. As of
31 May 2024, there were no changes
to the above shareholdings apart fromfor Gavin Hill who participates in the
Oxford Instruments Share Incentive
Plan and since the year end had
increased his beneficial holding by
15 shares.

Insurance cover andDirectors’ indemnities
For a number of years, the Grouphas purchased insurance to cover its
Directors and Officers against theircosts in defending themselves in legal
proceedings taken against them in thatcapacity, and in respect of damages
resulting from the unsuccessful defenceof any proceedings. In addition, to theextent permitted by UK law, the Group
indemnifies its Directors and Officers forliabilities arising from such proceedings.
Neither the insurance nor the indemnity
provides cover for situations where
the Director has acted fraudulently
or dishonestly.

Share capital
OI plc only has one class of sharecapital, which comprises ordinary
shares of 5p each. All shares forming
part of the ordinary share capital havethe same rights and carry one voteeach. There are no unusual restrictions
on the transfer of a share.
The full rights and obligations attaching
to OI plc’s ordinary shares, as well as
the powers of the Directors, are set out
in OI plc’s Articles of Association, a copyof which is available on OI plc’s website.

146

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

DIRECTORS’ REPORT continued
These can also be obtained from
Companies House or by contacting
the Company Secretary.
During the year to 31 March 2024, theBoard issued 201,284 new shares (2023:
58,053) following the exercise of options
under OI plc’s share option schemes. At
31 March 2024, the issued share capitalof OI plc was 57,913,792 ordinary sharesof 5p each. No shares in OI plc wereacquired by the company itself during
the year (2023: nil). Details of the sharecapital and options or other awards
outstanding as at 31 March 2024 are
set out in Notes 25 and 26, respectively,
to the Financial Statements.

Powers in relation to thecompany issuing or buying
back its own shares
At the 2023 AGM, shareholders
authorised the company to allot
relevant securities: (i) up to a nominal
amount of £962,004 (being one-thirdof OI plc’s issued share capital); and (ii)up to a nominal amount of £1,924,008(being two-thirds of OI plc’s issued
share capital), after deducting fromsuch limit any relevant securities
allotted under (i), in connection with
an offer by way of a rights issue.
A similar resolution will be put toshareholders at the 2024 AGM savethat the second limb of the authority
will be proposed for use in connection
with any pre-emptive offer and not just
an offer by way of rights issue.
In 2023, shareholders also authorised
OI plc to purchase its own shares in
the market up to a limit of 10% of its
issued share capital, being 5,772,026
shares. As noted in the 2023 noticeof meeting, the Directors will seek
to renew this authority at the 2024
AGM by proposing a further special
resolution. This authority will also
be limited to a maximum of 10% of
OI plc’s issued share capital and theresolution will set the minimum andmaximum prices which may be paid.
The Directors will only purchase OI
plc’s shares in the market if they
believe it is in the best interests of OI
plc and shareholders generally andwhere Directors (i) expect that such apurchase would result in an increasein earnings per share, (ii) consider
that OI plc has excess cash, and/or(iii) determine that it is appropriate toincrease OI plc’s gearing.

www.oxinst.com

Disapplication ofpre-emption rights
At the 2024 AGM, OI plc will seek
approval from its shareholders toempower Directors to issue equity
securities or sell treasury sharesfor cash other than to existing
shareholders pro-rata to their holdings
to the fullest extent permitted by theStatement of Principles on Disapplying
Pre-Emption Rights most recently
published by the Pre-Emption Group(‘Statement of Principles’).
In addition to offers or invitations inproportion to the respective numberof shares held, this equates to theability for Directors to issue equity
securities or sell treasury shares forcash up to 10% of OI plc’s issued
share capital for general purposes
and up to a further 10% of OI plc’s
issued share capital to be used inconnection with an acquisition or
specified capital investment of a kind
contemplated by the Statement of
Principles. In each case, the Directors
will seek a power to issue up to afurther 2% of OI plc’s issued sharecapital for the purposes of a ‘followon offer’ (also as contemplated by theStatement of Principles) which would
enable existing retail shareholders toparticipate in relevant equity issues.

These resolutions are similar to those
approved by shareholders at OI plc’s
2023 AGM, save that those resolutions
empowered Directors in relation to
5% of OI plc’s issued share capital
respectively and did not include a
power for Directors to undertake afollow-on offer. The Directors believe
the resolutions being proposed at the2024 AGM reflect market practice.

Research and development
Information on the research anddevelopment activities of the Groupcan be found on page 166.

Branches
Subsidiaries of the company haveestablished branches in a numberof different countries in which
they operate.

Payment of suppliers
The Group does not follow a standard
payment practice but agrees terms
and conditions for its business
transactions with each of its suppliers.
Payment is then made in accordancewith these terms.

Substantial shareholdings
The following are beneficial interests of 3% or more (direct), or of 5% or more(indirect), which have been notified to OI plc, per Chapter 5 of the Disclosure
Guidance and Transparency Rules, of OI plc’s issued ordinary share capital,
the only class of voting capital, at 21 May 2024:
Direct/indirect

Shares
‘000

% of
total

Blackrock Inc

Indirect

6,479,289

11.19

Columbia Threadneedle Investments

Indirect

5,352,239

9.24

Artemis Fund Managers

Indirect

5,100,140

8.81

abrdn Investment Management

Indirect

3,351,204

5.79

Lady KA Wood and the Estateof the late Sir MF Wood

Direct

2,603,030

4.49

Tax strategy

Articles of Association

Employees

The Group’s tax strategy supports thestrategic objectives of the Group andapplies equally to both UK and non-UK
taxes and to all forms of taxation. The
Group pays a significant amount oftax to national and local governments,
including taxes on employment,
corporate taxes on profits, customs
and excise duty on purchases,
withholding taxes and environmental
taxes. We also administer VAT andsimilar sales taxes charged to ourcustomers and withholdings on
payments made to our employees. The
Group’s tax strategy is published on theGroup’s website at www.oxinst.com/
investors-content/tax-strategy.

The company’s Articles of Association
may be amended by a special
resolution at a general meeting of
the shareholders. The current Articles
of Association were adopted byshareholders at the AGM held on
8 September 2020.

The Board recognises that its
employees are fundamental to theGroup’s success. The Group’s aim is toensure there are equal opportunities
for all employees and that there is an
inclusive culture where differences
are valued and people are given theenvironment in which they can do theirbest work. The Sustainability Reporton pages 34 to 57 further describes
how diversity and inclusion is managed
within Oxford Instruments.

Charitable donations
During the year, the Group madecharitable donations of £5,668(2023: £5,590).

Political donations
During the year, the Group made nopolitical donations (2023: nil).

Disclosure of information
to auditor
Pursuant to Section 418(2) of theCompanies Act 2006, the Directors
who held office at the date of approvalof this Directors’ Report confirm that,so far as they are each aware, there is
no relevant audit information of which
OI plc’s auditor is unaware; and each
Director has taken all the steps thathe or she might reasonably have been
expected to have taken as a Director
to make himself or herself aware of
any relevant audit information and toestablish that OI plc’s auditor is awareof that information.

Annual General Meeting
The Notice of the Annual General
Meeting to be held on 25 July 2024
is set out in a letter to shareholders
together with explanatory notes
relating to the resolutions.

External auditor
A resolution to reappoint BDO LLP
as auditor for FY23/24 was passed
at the 2023 Annual General Meeting
and a resolution to reappoint them asauditor for FY24/25 will be proposed atthe 2024 Annual General Meeting on
25 July 2024.

Change of control
arrangements
There are a number of agreementsthat take effect, alter or terminate
upon a change of control of OI plc
following a takeover, such as banking
agreements and OI plc share plans. On
a change of control, OI plc’s committed
credit facilities may be cancelled bylenders by giving not less than threedays’ notice. It is also possible thatpension plan funding arrangements
would need to be changed following
a change of control if that resulted in aweakening of the employer covenant.

Corporate governance
The Board reviews its work on
corporate governance in the
Governance Report on pages 84 to
143. Pages 20 to 21 summarise how weengage with our stakeholders. Pages
90 to 95 include further details of how
we engage with our stakeholders andpage 96 includes our statement inaccordance with Section 172(1) of theCompanies Act 2006.

Financial risk management
Details of the Group’s financial risk
management objectives and policies,
including the exposure to price, credit
and liquidity risk, are set out in Note 23
to the Financial Statements.

It is the policy of Oxford Instruments
plc to give full and fair consideration
to applications for employment fromdisabled persons; to continue, wherever
possible, the employment of membersof staff who may become disabled;
and to ensure that suitable training,career development and promotion of
disabled persons takes place.
For further information regarding
employee engagement, please see‘How we engage with our stakeholders’on pages 90 to 95.

Greenhouse gas emissions
To meet the requirements of theCompanies Act 2006 (Strategic andDirectors’ Report) Regulations 2013,
CO2 emissions are reported on as partof our reporting on greenhouse gas
emissions in Sustainability on pages
36 to 38.

Material events
Apart from the agreement to acquire
FemtoTools AG on 7 June 2024, asdetailed on page 191, there were noother material events since the year
end to report.

147

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

DIRECTORS’ RESPONSIBILITIES
in relation to the Annual Report
The Directors are responsible forpreparing the Report and the Groupand Parent Company Financial
Statements in accordance withapplicable law and regulations.
Company law requires the Directors to
prepare Group and Parent Company
Financial Statements for each financial
year. Under that law they are required
to prepare the Group Financial
Statements in accordance with UKadopted International AccountingStandards and applicable law andhave elected to prepare the Parent
Company Financial Statements inaccordance with UK accounting
standards, including FRS 101 Reduced
Disclosure Framework.
Under company law the Directors
must not approve the Financial
Statements unless they are satisfied
that they give a true and fair view ofthe state of affairs of the Group andParent Company and of their profit orloss for that period. In preparing eachof the Group and Parent Company
Financial Statements, the Directors
are required to:•

select suitable accounting policies
and then apply them consistently;•

make judgements and estimatesthat are reasonable, relevant,reliable and prudent;•

for the Group Financial Statements,
state whether they have been
prepared in accordance with
UK‑adopted International
Accounting Standards;

•

•

•

for the Parent Company Financial
Statements, state whether
applicable UK accounting
standards have been followed,
subject to any material departures
disclosed and explained in
the Parent Company Financial
Statements;
assess the Group and Parent
Company’s ability to continue asa going concern, disclosing, asapplicable, matters related to going
concern; anduse the going concern basis ofaccounting unless they either intend
to liquidate the Group or the Parent
Company or to cease operations,or have no realistic alternative but
to do so.

www.oxinst.com

The Directors are responsible forkeeping adequate accounting records
that are sufficient to show and explain
the Parent Company’s transactions
and disclose with reasonable accuracy
at any time the financial position of the
Parent Company and enable them toensure that its Financial Statementscomply with the Companies Act 2006.
They are responsible for such internal
control as they determine is necessary
to enable the preparation of Financial
Statements that are free from material
misstatement, whether due to fraud or
error, and have general responsibility
for taking such steps as are reasonably
open to them to safeguard the assetsof the Group and to prevent and detectfraud and other irregularities.

We consider the Annual Report, taken
as a whole, is fair, balanced andunderstandable and provides theinformation necessary for shareholders
to assess the Group’s position andperformance, business modeland strategy.
Signed on behalf of the Board

RICHARD TYSON
Chief Executive Officer

GAVIN HILL

Financial
Statements

Chief Financial Officer
10 June 2024

150 Consolidated statement of income

Under applicable law and regulations,the Directors are also responsible forpreparing a Strategic Report, Directors’
Report, Directors’ Remuneration
Report and Corporate GovernanceStatement that comply with that law
and those regulations.

151 Consolidated statement of comprehensive income

The Directors are responsible for the
maintenance and integrity of thecorporate and financial information
included on the company’s website.
Legislation in the UK governing the
preparation and dissemination of
Financial Statements may differ fromlegislation in other jurisdictions.

155 Material accounting policies

Responsibility statementof the Directors in respect of
the annual financial report

204 Independent auditor’s report to themembers of Oxford Instruments plc

We confirm that to the best of ourknowledge:•

the Financial Statements, preparedin accordance with the applicableset of accounting standards, givea true and fair view of the assets,
liabilities, financial position andprofit or loss of the company andthe undertakings included in the
consolidation taken as a whole; and•the Strategic Report/Directors’
Report includes a fair review of thedevelopment and performance ofthe business and the position of
the issuer and the undertakings
included in the consolidation
taken as a whole, together with adescription of the principal risks
and uncertainties that they face.

152 Consolidated statement of financial position
153 Consolidated statement of changes in equity
154 Consolidated statement of cash flows

161 Notes to the Consolidated Financial Statements
192 Parent company statement of financial position
193 Parent company statement of changes in equity
194 Notes to the parent company financial statements

212 Historical financial summary

149

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

CONSOLIDATED STATEMENT OF INCOMECONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 March 2024

Year ended 31 March 2024

Note

2023
Adjusting items(note 2)
£m

Total
£m

Adjusted
£m

Note
Total
£m

470.4

–

470.4

444.7

–

444.7

Cost of sales(228.0)–(228.0)(214.5)–(214.5)Gross profit

242.4

–

242.4

230.2

–

230.2

–

3.3

3.3

–

–

–

(39.1)–(39.1)(35.9)(0.8)(36.7)(74.5)–(74.5)(65.4)–(65.4)

Revenue

1

Adjusted£m2024
Adjusting items(note 2)£m

Other operating income
Research and development

3

Selling and marketing
Administration and shared services(58.7)(14.6)(73.3)(52.9)(10.3)(63.2)

Foreign exchange gain/(loss)

10.2

(0.7)

9.5

4.5

3.0

7.5

80.3

(12.0)

68.3

80.5

(8.1)

72.4

Financial income

6

4.7

–

4.7

2.7

–

2.7

Financial expenditure

7

(1.7)

–

(1.7)

(1.2)

(0.4)

(1.6)

Profit/(loss) before income tax

1

83.3

(12.0)

71.3

82.0

(8.5)

73.5

Income tax (expense)/credit

8(20.3)(0.3)(20.6)(17.0)

2.1(14.9)

Profit/(loss) for the year attributable
to equity shareholders of the parent

63.0(12.3)

50.7

65.0

(6.4)

58.6

Earnings per share

pence

pence

pence

pence

109.0

87.7

112.7

101.6

107.5

86.5

111.3

100.3

Operating profit

Basic earnings per share

10

From profit for the year
Diluted earnings per share
From profit for the year10

The attached notes form part of these Financial Statements.

www.oxinst.com

Profit for the year

2024
£m

2023
£m

50.7

58.6

(5.5)

5.3

(19.4)(38.6)

Other comprehensive (expense)/income:Items that may be reclassified subsequently to Consolidated Statement of Income
Foreign exchange translation differences
Items that will not be reclassified to Consolidated Statement of Income
Remeasurement loss in respect of post-retirement benefits
Tax credit on items that will not be reclassified to Consolidated Statement of Income

24

4.8

9.7

Total other comprehensive expense(20.2)(23.6)

Total comprehensive income for the year attributable to equity shareholders of the parent

30.6

35.0

151

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Oxford Instruments plc
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Overview

Strategic Report

Governance

Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONCONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 March 2024

Year ended 31 March 2024
Note

2024
£m

2023
£m

AssetsNon-current assets

Sharecapital£mSharepremium£m

Otherreserves£m

Translation
reserve£m

Retainedearnings
£m

Total
£m

As at 1 April 2023

2.9

62.6

0.2

12.9

265.4

344.0

–

–

–

–

50.7

50.7

Property, plant and equipment

12

80.5

59.3

Profit for the year

Intangible assets

13

137.9

132.1

Foreign exchange translation differences

–

–

–

(5.5)

–

(5.5)

Right-of-use assets

14

32.4

31.4

1.3

0.5

Remeasurement loss in respect of
post-retirement benefits

–

–

–

–

(19.4)(19.4)Tax credit on items that will not be reclassified
to Consolidated Statement of Income

–

–

–

–

4.8

4.8

Total comprehensive (expense)/income

–

–

–

(5.5)

36.1

30.6

Share-based payment transactions

–

–

–

–

3.0

3.0

Income tax on share-based payment transactions

–

–

–

–

(0.5)

(0.5)

Proceeds from shares issued

–

–

–

–

–

–

Long-term receivables
Derivative financial instruments

22

0.2

0.4

Retirement benefit asset

24

16.1

26.4

Deferred tax assets

8

13.7

12.5

282.1

262.6

Current assets
Inventories

15

108.4

81.4

Trade and other receivables

16

114.7

113.2

1.0

0.5

Dividends

–

–

–

–

(11.4)(11.4)

Total transactions with owners:

–

–

–

–

(8.9)

(8.9)

As at 31 March 2024

2.9

62.6

0.2

7.4

292.6

365.7

As at 1 April 2022

2.9

62.5

0.2

7.6

243.2

316.4

Profit for the year

–

–

–

–

58.6

58.6

Foreign exchange translation differences

–

–

–

5.3

–

5.3

Remeasurement loss in respect of
post-retirement benefits

–

–

–

–

(38.6)(38.6)Tax credit on items that will not be reclassified
to Consolidated Statement of Income

–

–

–

–

9.7

9.7

Total comprehensive income

–

–

–

5.3

29.7

35.0

Share-based payment transactions

–

–

–

–

2.4

2.4

Income tax on share-based payment transactions

–

–

–

–

0.7

0.7

Proceeds from shares issued

–

0.1

–

–

–

0.1

Dividends

–

–

–

–

(10.6)(10.6)

Total transactions with owners:

–

0.1

–

–

(7.5)

(7.4)

2.9

62.6

0.2

12.9

265.4

344.0

Current income tax receivable
Derivative financial instruments

22

2.3

1.6

Cash and cash equivalents

18

97.8

112.7

324.2

309.4

606.3

572.0

Total assets
EquityCapital and reserves attributable to the company’s equity shareholders
Share capital

25

2.9

2.9

Share premium

62.6

62.6

Other reserves

0.2

0.2

Translation reserve

7.4

12.9

Retained earnings

292.6

265.4

365.7

344.0

Liabilities
Non-current liabilities
Bank loans

19

0.9

0.9

Lease payables

14

28.6

26.2

Deferred tax liabilities

8

12.9

7.8

42.4

34.9

Current liabilities
Bank loans and overdrafts

19

13.1

11.6

Trade and other payables

20

166.2

159.4

Lease payables

14

4.8

5.2

7.6

8.1
1.2

Current income tax payables
Derivative financial instruments

22

0.1

Provisions

21

6.4

7.6

198.2

193.1

Total liabilities

240.6

228.0

Total liabilities and equity

606.3

572.0

The Financial Statements were approved by the Board of Directors on 10 June 2024 and signed on its behalf by:

RICHARD TYSON		GAVIN HILL

Director			Director
Company number: 775598
www.oxinst.com

As at 31 March 2023

153

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

CONSOLIDATED STATEMENT OF CASH FLOWS

MATERIAL ACCOUNTING POLICIESYear ended 31 March 2024

Year ended 31 March 2024
Note

2024
£m

2023
£m

Cash flows from operating activities
Profit for the year

50.7

58.6

Adjustments for:
Income tax expense

20.6

14.9

Net financial income

8

(3.0)

(1.1)

Fair value movement on financial derivatives

0.7

(3.0)

WITec post-acquisition gross margin adjustment–

0.5

Impairment of capitalised development costs

13

–

0.8

Amortisation of right-of-use assets

14

5.0

4.6

Depreciation of property, plant and equipment

12

5.3

4.8

Amortisation of intangible assets

13

9.8

10.7

Charge in respect of equity settled employee share schemes

26

Contributions paid to the pension scheme more than the charge to operating profit

3.0

2.4

(8.0)

(11.7)(26.3)(15.6)

Increase in inventories

27

Increase in receivables

27

(2.7)

(19.6)(Decrease)/increase in payables and provisions

27

(2.8)

17.4

Increase in customer deposits

27

7.1

9.2

Cash generated from operations

59.4

72.9

Interest paid

(0.9)

(0.7)

Income taxes paid

(16.1)(5.7)

Net cash from operating activities

42.4

66.5

0.5

0.2

(27.0)(32.3)(13.4)(4.8)

Capitalised development expenditure

(0.7)

(0.6)

Interest received

3.1

1.1

(37.5)(36.4)Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Acquisition of property, plant and equipment
Acquisition of subsidiaries, net of cash acquired11

Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital

–

0.1
(0.5)

Interest paid on lease liabilities

14

(0.8)

Payment of capital element of leases

14

(4.0)

(5.1)

Repayment of borrowings

(1.8)

(0.5)

Dividends paid

(11.4)(10.6)Net cash used in financing activities(18.0)(16.6)

Change in cash and cash equivalents(13.1)

13.5

Cash and cash equivalents at beginning of the year

101.5

87.7

Effect of exchange rate fluctuations on cash held

(2.9)

0.3

85.5

101.5

Cash and cash equivalents at end of the year

18

Comprised of:Cash and cash equivalents as per the Consolidated Statement of Financial Position

18

97.8

112.7

Bank overdrafts

23(12.3)(11.2)

85.5

101.5

www.oxinst.com

Oxford Instruments plc (the ‘Company’) is a company
incorporated and domiciled in the UK.
The Group Financial Statements have been prepared inaccordance with UK adopted International AccountingStandards (IAS) in conformity with the requirements of theCompanies Act 2006 and interpretations issued by the IFRSInterpretations Committee (IFRIC) applicable to companies
reporting under UK adopted IFRS.
The accounting policies set out below have, unlessotherwise stated, been applied consistently to all periods
presented in these Group Financial Statements.
The Financial Statements have been prepared on agoing concern basis based on the Directors’ opinion, after
making reasonable enquiries, that the Group has adequate
resources to continue in operational existence for theforeseeable future.
The Group’s business activities and factors that areconsidered likely to affect its performance and position in the
future are set out in the Strategic Report on pages 10 to 33.
The Finance Review on pages 58 to 69 discloses information
relevant to the Group’s financial position, its cash flows,borrowing facilities and liquidity.
The directors have considered the appropriateness of thegoing concern basis of preparation following a detailed
assessment of the risks to the Group as outlined above, up
to 30 June 2025, being a period of at least 12 months fromapproval of the Report and Financial Statements.
On 19 March 2024 the Group entered into a new multicurrency revolving facility agreement, which is committed
until March 2028 with 15-month and 12-month extension
options at the end of the first and second years respectively.
The facility has been entered into with four banks andcomprises a Euro-denominated multi-currency facility of€95m and a US Dollar denominated multi-currency facilityof $150m. Debt covenants are net debt to EBITDA less than
3.0 times and EBITDA to interest greater than 4.0 times. At
the date of approving these financial statements, the facility
remains undrawn.

Financial Statements(a) Changes in accounting standards
IFRS 17 Insurance Contracts provides consistent principles
for all aspects of accounting for insurance contracts within
the scope of the standard. The standard is effective for years
beginning on or after 1 January 2023 with a requirement torestate comparatives.
The Group has reviewed whether its arrangements meet theaccounting definition of an insurance contract. While some
contracts may transfer an element of insurance risk, they
relate to warranty and service type agreements that areissued in connection with the Group’s sales of its goods orservices and therefore will continue to be measured under
IFRS 15 Revenue from Contracts with Customers and IAS 37
Provisions, Contingent Liabilities and Contingent Assets.
The Directors are not aware of any other contracts where
IFRS 17 would have a material impact on the Consolidated
Financial Statements.
There are no other new standards or interpretations
issued by the IASB that had a significant impact on theConsolidated Financial Statements.
There are no standards or amendments that are not yet
effective and that would be expected to have a material
impact on the Group in the current or future reporting periods
and on foreseeable future transactions.

(b) Significant estimates and judgements
The preparation of Financial Statements requires
management to make judgements, estimates andassumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ fromthese estimates.

Significant judgements
In the opinion of the Group there is one key judgement madein the preparation of the Financial Statements in respect ofwhich taking a different view would have a material impact
on the Financial Statements:

The relatively diverse nature of the Group together with
its current financial strength provides a solid foundation.
In its going concern assessment, the directors consideredseveral scenarios, including base case and downside
scenarios. The assessment is based on Board-approved
budget, incorporating severe but plausible scenarios in
the forecast. These scenarios reflected a 25% reductionin the Group’s performance, a 25% increase in working
capital and a third scenario of incorporating both. In eachscenario the Group’s cash balances remained positive andthe facility remains undrawn throughout the going concern
period to 30 June 2025.

Provision for inventory

Based on this assessment, incorporating a review of current
position, the scenarios, the principal risks and mitigation, theDirectors have a reasonable expectation that the group will
be able to continue operating and meet its liabilities as thefall due over the period to 30 June 2025 and there are nomaterial uncertainties which may cast significant doubt over
its ability to continue as a going concern.

Significant estimates

Provision is made for obsolete, slow moving and defective
stock where there is evidence of impairment, to reducethe carrying value to its net realisable value. This requiresconsideration of several factors including but not limited
to recent usage, expected future demand, new productintroduction plans and likely realisable values to estimate
the excess quantities and net realisable value. The levelof provisioning requires certain estimates regarding future
demand and possible design changes to identify excess
quantities. Amounts provided represent in aggregate theGroup’s best estimate of the levels of provisioning required.

Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Two key areas where estimates have been used andassumptions applied have been identified as follows:

155

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

MATERIAL ACCOUNTING POLICIES continued
Year ended 31 March 2024
Measurement of defined benefit scheme liabilities(d) Consideration of climate change(f) Property, plant and equipment(iii) Acquired intangible assets

The Group recognises and measures costs relating todefined benefit pension schemes in accordance with IAS 19(Revised) Employee Benefits. In applying IAS 19 (Revised)
the costs are assessed in accordance with the adviceof independent qualified actuaries. This requires certain
estimates and assumptions in relation to future changes insalaries and inflation, as well as mortality rates, expected
returns on plan assets and the selection of suitable discountrates. The factors affecting these assumptions are influenced
by wider macroeconomic factors that are largely outside of
the Group’s control. Sensitivity analysis is set out in Note 24.

In preparing the Financial Statements, the Directors haveconsidered the impact of climate change, particularly inthe context of the risks identified in the TCFD disclosure,see pages 40 to 50. There has been no material impact
identified on the financial reporting judgements andestimates. In particular, the Directors considered the impact
of climate change in respect of the following areas:

Property, plant and equipment is stated at historical costless provisions for impairment (see accounting policy k)
and depreciation which, with the exception of freehold land
which is not depreciated and rental assets (see below), is
provided on a straight-line basis over each asset’s estimatedeconomic life. Depreciation is provided based on historicalcost less estimated residual value. The principal estimatedeconomic lives used for this purpose are:An intangible asset acquired with a subsidiary undertaking is
recognised as an intangible asset if it is separable from theacquired business or arises from contractual or legal rights,
is expected to generate future economic benefits and its
fair value can be reliably measured. The asset is amortised
through the Consolidated Statement of Income over its
useful economic life.

Provisions for IP-related claims
Provisions for IP-related claims are recognised in the period
when it becomes probable that there will be a future outflow
of funds resulting from past expectations or events which
can be reasonably estimated. The timing of recognition
requires the application of judgement to existing facts andcircumstances which can be subject to change. Amounts
provided represent the Group’s best estimate of exposure
based on currently available information.
Key assumptions surrounding estimation uncertainty
relate to estimating potential royalty or profit sharing rates
surrounding any product-related intellectual property claims(see Note 21).

Acquisition of First Light Imaging SAS(First Light Imaging)On the acquisition of a business in order to comply with IFRS
3 (Revised) Business Combinations it is necessary to reflect
the assets and liabilities acquired at their fair value. Thisrequires certain estimates and assumptions in relation to,inter alia, the forecast performance of the acquired business,the expected life of certain intangible assets and the likely
future customer base of the business. In order to assist inundertaking this Fair Value exercise, the Group appointed an
external firm of advisors. The exercise is incomplete as at thedate of this report so the fair value adjustments are reported
on a provisional basis. The provisional fair value adjustments
arising from this review are set out in Note 11 on page 171.

(c) Basis of preparation and consolidation
The Financial Statements are presented in Sterling, rounded
to the nearest £0.1m and are prepared on the historical costbasis except as described below under the heading ‘(e)Financial instruments’.
The Group Financial Statements include the accountsof Oxford Instruments plc and its subsidiary companies
adjusted to eliminate intra-Group balances and any
unrealised gains and losses or income and expenses
arising from intra-Group transactions.
Subsidiaries are entities controlled by the Group. Control exists
when the Group is exposed to or has rights to variable returns
from its investment with the investee and has the ability toaffect those returns through its power over the investee. In
assessing control, potential voting rights that are currently
exercisable or convertible are taken into account. The resultsof subsidiary companies are included in the Consolidated
Financial Statements from the date that control commences
until the date that control ceases. The acquisition method isused to account for the acquisition of subsidiaries.

www.oxinst.com•

going concern and viability of the Group;•

cash flow forecasts used in the impairment assessmentsof non-current assets including goodwill; andFreehold buildings, longleasehold land and buildings

50 years•

carrying value and useful economic lives of property,
plant and equipment.

Furniture and fittings

10 years

Machinery and other equipment

5 to 10 years

Computer equipment

4 years

Vehicles4 years

Whilst there is currently no medium-term impact expectedfrom climate change, the Directors are aware of the everchanging risks attached to climate change and will regularly
assess these risks against judgements and estimates madein preparation of the Group’s Financial Statements.

(e) Financial instruments
Financial assets and liabilities are recognised in the Group’s
Consolidated Statement of Financial Position when theGroup becomes a party to the contractual provisions of the
instrument. Forward foreign exchange contracts (derivative
financial instruments) of the Group are used to hedge its
exposure to foreign currency risks arising from operational,
financing and investment activities. The Group does not holdor issue derivative financial instruments for trading purposes.
The Group has chosen not to apply hedge accounting
in respect of these exposures. All derivatives are initiallyrecognised at fair value; attributable transaction costs arerecognised in profit or loss as incurred. Foreign exchange
contracts are classified as ‘fair value through profit and loss’
under IFRS 9. Subsequent to initial recognition, derivatives
are measured at fair value and gains or losses on thesettlement of such derivatives are recognised in operating
expenses. Where such derivatives relate to the following
year’s exposure, any gains or losses resulting from thechange in fair value are recognised as an adjusting item
in operating expenses.
The fair value of forward exchange contracts is their market
price at the Consolidated Statement of Financial Positiondate, being the present value of the forward price. The gainor loss on remeasurement to fair value of forward exchange
contracts is recognised immediately in the Consolidated
Statement of Income.
Contingent purchase consideration is measured at fair value
at the date of acquisition and subsequently carried at fairvalue, with movements recognised in the Consolidated
Statement of Income.
Interest-bearing borrowings are recognised initially at fairvalue less attributable transaction costs. Subsequent toinitial recognition, interest-bearing borrowings are stated
at amortised cost with any difference between cost andredemption value being recognised in the Consolidated
Statement of Income over the period of the borrowing on
an effective interest basis.

Machinery and other equipment, computer equipment
and vehicles are included within the ‘Plant and equipment’subheading in Note 12.
For leasehold improvements, where the length of the leaseis less than the principal estimated economic lives noted
above, the length of the lease is used.

(g) Intangible assets(i) Goodwill
All business combinations are accounted for by applying theacquisition method. Goodwill represents amounts arising on
acquisition of subsidiaries. In respect of business acquisitions
that have occurred since 31 March 2004, goodwill represents
the difference between the cost of the acquisition and thefair value of the assets, liabilities and contingent liabilities
acquired. In respect of acquisitions prior to this date, goodwill
is included on the basis of its deemed cost, which represents
the amount recorded under previous GAAP.
The Group expenses transaction costs associated with
its acquisitions and movements in liabilities relating tocontingent consideration within the Consolidated Statementof Income in conformity with IFRS 3.
Goodwill arising on acquisitions is stated at cost less any
accumulated impairment losses and allocated to cash
generating units that are anticipated to benefit from the
combination. It is not amortised but is tested annually for
impairment (see accounting policy k), or more frequently
when there is an indicator that the unit may be impaired.

(ii) Development costs
Research & Development costs are charged to theConsolidated Statement of Income in the year in which they
are incurred unless development expenditure is applied toa plan or design for the production of new or substantially
improved products, in which case they are capitalised.
The criteria for capitalisation include demonstration of
the technical feasibility of completing a new intangible
asset that will be available for sale and that the asset
will generate probable future economic benefits. Where
expenditure meets the criteria, development costs arecapitalised and amortised through the Consolidated
Statement of Income over their useful economic lives.

(iv) Amortisation
Amortisation of intangible assets is charged to theConsolidated Statement of Income on a systematic basis
in proportion to the use of the assets over their estimateduseful economic lives as follows:
Capitalised development costs

3 to 5 years

Technology-related acquired intangibles

5 to 14 years

Customer-related acquired intangibles

6 months
to 15 years

Development costs acquired intangibles

10 years

Software10 years

Customer-related acquired intangible assets include anumber of different types of asset. For example, the shorterend of the useful economic life relates to the order book of
acquired businesses, whilst the longer useful economic life
relates to assets such as trademarks.

(h) Trade and other receivables
Trade and other receivables are initially recognised at fairvalue and subsequently stated at their amortised costless appropriate provision for impairment. The provision for
impairment of receivables is based on lifetime expectedcredit losses, which is then updated for any reasonable andsupportable forward-looking information and expectations.
Lifetime expected credit losses are calculated by assessing
historic credit loss experience. The movement in the provision
is recognised in the Consolidated Statement of Income.

(i) Inventories
Inventories are stated at the lower of cost and net realisablevalue. Cost includes materials, direct labour, an attributableproportion of production overheads based on normal
operating capacity and all other expenditure incurred inacquiring the inventories and bringing them to their existing
location and condition. Net realisable value is the estimatedselling price in the ordinary course of business, less theestimated costs of completion and selling expenses.
Provision is made for obsolete, slow moving and defective
stock where appropriate in light of recent usage, expected
future requirements, new product introduction plans andlikely realisable values.
As outlined in Note (r) below, the revenue associated withboth the sale and installation of certain complex products is
recognised at the time that the installation is completed. The
net realisable value associated with complex products is
included in finished goods inventories where the installation
has not yet been completed.

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

MATERIAL ACCOUNTING POLICIES continued
Year ended 31 March 2024(j) Cash and cash equivalents
Cash and cash equivalents are carried in the Statement of
Financial Position at amortised cost.
Cash and cash equivalents comprise cash balances and calldeposits and are carried at amortised cost. Bank overdrafts
that are repayable on demand and form an integral part of
the Group’s cash management are included as a componentof cash and cash equivalents for the purpose of theStatement of Cash Flows.

(k) Impairment of non-current assets
All non-current assets are tested for impairment whenever
events or circumstances indicate that their carrying value
may be impaired. Additionally, goodwill is subject to anannual impairment review.
For the purposes of impairment testing, assets are grouped
together into the smallest group of assets that generates
cash flows from continuing use that are largely independentof the cash inflows from other groups of assets.
An impairment loss is recognised in the Consolidated
Statement of Income under the administration and sharedservices heading, to the extent that an asset’s carrying
value, or a cash generating unit’s carrying value, exceeds
its recoverable amount, which represents the higher of its
net realisable value and its value in use. Value in use is thepresent value of the future cash flows expected to be derived
from the asset or from the cash generating unit to which it
relates. The present value is calculated using a discount ratethat reflects the current market assessment of the time valueof money and the risks specific to the asset concerned.
Impairment losses recognised in previous periods for an
asset other than goodwill are reversed if there has beena change in estimates used to determine the asset’s
recoverable amount, but only to the extent that the carrying
amount of the asset does not exceed its carrying amount
had the impairment loss not been recognised in previous
periods. Impairment losses in respect of goodwill are
not reversed.
Impairment losses recognised in respect of cash generating
units are allocated first to reduce the carrying amount ofany goodwill allocated to cash generating units and then to
reduce the carrying amount of the other assets in the unit.

(l) Employee benefits
The Group operates a number of defined benefit and defined
contribution plans which require contributions to be made to
independent trustee-administered funds.

(i) Defined contribution plans
Obligations for contributions to defined contribution pension
plans are recognised as an expense in the Consolidated
Statement of Income as incurred.

(ii) Defined benefit plans
The Group’s net obligation in respect of defined benefit
pension plans is calculated separately for each plan by
estimating the amount of future benefit that current and past
employees have earned in return for their service in priorperiods. That benefit is discounted to determine its present
value and is deducted from the fair value of any plan assets.

www.oxinst.com

Surpluses in schemes are recognised as assets only if they
represent economic benefits available to the Group in the
future. The calculation is performed by a qualified actuaryusing the projected unit credit method.
All actuarial gains and losses in calculating the Group’s net
obligation are recognised in the Consolidated Statement ofComprehensive Income in the year.
The charge to the Consolidated Statement of Income reflects
the current service cost. The interest expense or income iscalculated on the net defined benefit asset by applying thediscount rate to the net defined benefit asset, and is included
within financial expenditure or financial income in theConsolidated Statement of Income respectively.

(iii) Share-based payment transactions
The fair value of equity settled share option programmes ismeasured at grant date and charged to the Consolidated
Statement of Income, with a corresponding increase inequity, on a straight-line basis over the period during which
the employees become unconditionally entitled to theoptions. The fair value of the options granted is measured
using an option valuation model, taking into account theterms and conditions upon which the options were granted.
The amount recognised as an expense is adjusted to reflect
the actual number of share options that vest, except where
forfeiture is only due to market performance conditions not
being met.

(m) Provisions
A provision is recognised in the Consolidated Statementof Financial Position when the Group has a present legal
or constructive obligation as a result of a past event andit is probable that an outflow of economic benefits will be
required to settle the obligation. A provision for warranty
and product-related liability is recognised when theunderlying products are sold. A provision for restructuring is
recognised when the Group has approved a detailed andformal restructuring plan and the restructuring has either
commenced or has been announced publicly.
A provision for onerous contracts is recognised whenthe expected benefits to be derived by the Group from acontract are lower than the unavoidable cost of meeting
its obligations under the contract. A provision for a claim
or dispute is made when it is considered probable that anadverse outcome will occur and the amount of the loss
can be reasonably estimated.
Contractual and other provisions represent the Directors’
best estimate of the cost of settling future obligations
where the Directors, taking into account professional advice
received, assess that it is more likely than not that suchproceedings may be successful.
If the effect is material, provisions are determined bydiscounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the timevalue of money and, where appropriate, the risks specificto the liabilities.

(n) Customer deposits
Customer deposits are classified as contract liabilities andincluded within trade and other payables in the Statement of
Financial Position.
Customer deposits represent the cash payments received
or consideration due from customers prior to the recognitionof revenue in respect of product sales; for example, deposits
received on order (and shipment in the case of complex
products where revenue is not recognised until installation).

(o) Government grants
Grants from governments are recognised at their fairvalue where there is a reasonable assurance that the
grant will be received and the Group will comply with all
attached conditions.
Government grants relating to costs are deferred andrecognised in the Consolidated Statement of Income
over the period necessary to match them with the costs
they are intended to compensate. Government grants
relating to property, plant and equipment are deductedfrom the carrying amount of the asset and are credited
to the Consolidated Statement of Income on a straightline basis over the expected useful economic lives of therelated assets.

(p) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fairvalue less attributable transaction costs. Subsequent toinitial recognition, interest-bearing borrowings are stated
at amortised cost with any difference between cost andredemption value being recognised in the Consolidated
Statement of Income over the period of the borrowings
on an effective interest basis.

(q) Revenue
Revenue is recognised in the Consolidated Statement of
Income when the performance conditions in the contract
with the customer are met.
In most cases where the contract includes the sale of botha product and installation then the sale of the productand the related installation are treated as two separate
performance conditions. This is because the Group considers
that the customer is able to benefit from the product even
if the Group does not supply installation, i.e. it would bepossible for them to arrange installation by a third party.
In such situations, revenue in respect of the product isrecognised when control passes to the customer which isnormally upon shipment of the product. Revenue in respectof the installation is recognised when the customer confirms
acceptance of the installation. Revenue in respect of bothproduct and installation is recognised at a point when it isconsidered the performance conditions are met.
Revenue is allocated between the product and installation
based on the relative standalone selling prices of those
products and installation activities. Where it is difficult toestablish a standalone selling price by market comparator,
the standalone selling price is estimated, where required,by applying the cost plus margin approach.

A receivable is recognised for products when control passes
over to customer, and for installation when the customer
confirms acceptance of the installation, since this is the point
in time that the consideration is unconditional because only
the passage of time is required before the payment is due.
In the case of fixed-price contracts, the customer pays
the fixed amount based on a payment schedule. If theperformance obligations met by the Group exceed thepayment, a contract asset is recognised. If the payments
exceed the performance obligation, a contract liability
is recognised.
In the NanoScience business, which is part of the Research& Discovery segment, certain contracts for the sale ofmore complex systems are deemed to comprise just one
performance condition as customers are unable to realise
the economic benefit from having received the equipment
without the specialist installation. Given the highlyinterdependent nature of the product and installation, thisperformance condition is met, and the revenue recognised,
when the customer confirms acceptance of the installed
product at their premises.
In the Service & Healthcare segment, revenue for fixed term
maintenance and support contracts is recognised over timeusing the output method by determining the proportion of
the elapsed time relative to the contract period. Where theService & Healthcare segment makes asset sales, similar
considerations as those set out for the other segments asoutlined above are applied.
Revenue excludes value added tax and similar sales-basedtaxes and is stated before commission payable to agents
which is recognised in cost of sales.

(r) Income taxes
Income tax on the profit or loss for the year comprises
current and deferred tax. Income tax is recognised in profit orloss except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax
payable in respect of previous years.
Tax positions are reviewed to assess whether a provision
should be made based on prevailing circumstances.
Tax provisions are included within current taxation
liabilities. Deferred tax positions are measured on an
undiscounted basis.
Additional income taxes that arise from the distribution ofdividends are recognised at the same time as the liability
to pay the related dividend.
Where there is uncertainty surrounding an income tax
position, consideration is given to whether the tax authority(with full knowledge of the facts) would probably bemore or less likely to accept the uncertain tax position. If
the conclusion reached is that it is probable that the tax
authority would not accept a tax position a provision is
calculated either as the most likely outcome (where thepossible outcomes are binary or concentrated on one value)or as the expected value (where there is a range of possible
outcomes) depending on which method would provide thebetter prediction for the resolution of the uncertainty.

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Oxford Instruments plc
Annual Report 2024

Overview

MATERIAL ACCOUNTING POLICIES continued
Year ended 31 March 2024

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(s) Leases(t) Segment reporting

1 Segment information

The Group recognises a right-of-use asset and a leaseliability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises theinitial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs todismantle and remove the underlying asset or to restore theunderlying asset or the site on which it is located, less anylease incentives received.

An operating segment is a distinguishable component of
the Group that engages in business activities from which
it may earn revenues and incur expenses, including any
revenues and expenses that relate to transactions with anyof the Group’s other components. Operating components are
combined into aggregated operating segments to the extent
that they have similar economic characteristics. Aggregatedoperating segments’ operating results are reviewed regularly
by the Group’s Board of Directors to make decisions about
resources to be allocated to the segment and to assess
its performance, for which discrete financial information isavailable. Segment results that are reported to the Board
include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.

The Group has nine operating segments. These operating segments have been combined into three aggregated operating
segments to the extent that they have similar economic characteristics, with relevance to products and services, type andclass of customer, methods of sale and distribution and the regulatory environment in which they operate. Each of these threeaggregated operating segments is a reportable segment. The aggregated operating segments are as follows:

The right-of-use asset is subsequently depreciated using thestraight-line method from the commencement date to theearlier of the end of the useful life of the right-of-use asset orthe end of the lease term. The estimated useful lives of rightof-use assets are determined on the same basis as those ofproperty and equipment. In addition, the right-of-use asset
is periodically reduced by impairment losses, if any, andadjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value ofthe lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the leaseor, if that rate cannot be readily determined, the lessee’s
incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the leaseliability comprise fixed payments.
The lease liability is measured at amortised cost using theeffective interest method. It is remeasured when there is achange in future lease payments arising from a change in
an index or rate, if there is a change in the Group’s estimateof the amount expected to be payable under a residual
value guarantee, or if the Group changes its assessment of
whether it will exercise a purchase, extension or termination
option. If such remeasurement is required, it is performed
using the original incremental borrowing rate, unless there
is a change in estimated lease term; in which case it isperformed using a new incremental borrowing rate.
When the lease liability is remeasured in this way, acorresponding adjustment is made to the carrying amountof the right-of-use asset, or is recorded in profit or loss if thecarrying amount of the right-of-use asset has been reduced
to zero.

Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases of machinery thathave a lease term of 12 months or less and leases of lowvalue assets, including IT equipment. The Group recognises
the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.

www.oxinst.com

A reportable segment is an aggregated operating segment
in respect of which revenue or profit exceeds 10% of theGroup total. Discrete financial information is disclosed foreach reportable segment.

•

the Materials & Characterisation segment comprises a group of businesses focusing on applied R&D and commercial
customers, enabling the fabrication and characterisation of materials and devices down to the atomic scale;•the Research & Discovery segment comprises a group of businesses providing advanced solutions that create uniqueenvironments and enable measurements down to the molecular and atomic level which are used in fundamental
research; and•the Service & Healthcare segment provides customer service and support for the Group’s products and the service of thirdparty healthcare imaging systems.

The Group’s internal management structure and financial reporting systems differentiate the three aggregated operating
segments based on the economic characteristics discussed above.
Reportable segment results include items directly attributable to a segment as well as those which can be allocated ona reasonable basis. The operating results of each are regularly reviewed by the Chief Operating Decision Maker, which isdeemed to be the Executive Directors. Discrete financial information is available for each segment and used by the Executive
Directors for decisions on resource allocation and to assess performance. No asset information is presented below as thisinformation is not presented in reporting to the Group’s Executive Directors.
On 9 January 2024, the Group acquired 100% of the issued share capital of First Light Imaging which has been integrated into
the Research & Discovery segment. Further information can be found in Note 11.

Results
Materials &Characterisation£mResearch &Discovery£mService &Healthcare
£m

Total
£m

Total segment revenue

252.2

142.1

76.1

470.4

Segment adjusted operating profit

46.4

13.6

20.3

80.3

Materials &Characterisation£mResearch &Discovery£mService &Healthcare
£m

Total
£m

Total segment revenue

234.5

139.4

70.8

444.7

Segment adjusted operating profit

40.5

18.0

22.0

80.5

2024

2023

Revenue in the Materials & Characterisation and Research & Discovery segments represents the sale of products. Revenue in
the Service & Healthcare segment relates to service income. No individual customer accounts for more than 10% of revenue.
As at 31 March 2024, the Group had unfulfilled performance obligations under IFRS 15 of £301.5m (2023: £319.6m). It is
anticipated that £277.3m (2023: £303.0m) of this balance will be satisfied within one year. The remainder is anticipated to besatisfied in the following financial year.

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
1 Segment information continued

The Group’s revenue by destination of the end user is as follows:

Reconciliation of reportable segment profit
Revenue

2024
£m

2023
£m

UK

30.4

29.4

China

127.4

107.4

Japan

43.5

46.7

USA

111.6

121.2

Germany

35.5

32.1

Rest of Europe

50.3

43.4

Rest of Asia

50.6

47.1

Rest of World

21.1

17.4

470.4

444.7

2024
£m

2023
£m

UK

191.0

189.6

Germany

32.1

34.8

USA

12.5

13.9

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

46.4

13.6

20.3

–

80.3

Intellectual property litigation settlement

–

3.3

–

–

3.3

Adjustments relating to defined benefit pension schemes

–

–

–

(0.4)

(0.4)

Transaction-related costs

–

(1.0)

–

–

(1.0)

(1.7)

–

–

(2.0)

(3.7)

–

(0.4)

–

–

(0.4)

(3.0)

(6.1)

–

–

(9.1)

Fair value movement on financial derivatives

–

–

–

(0.7)

(0.7)

Financial income

–

–

–

4.7

4.7

Non-current assets (excluding deferred tax)

Financial expenditure

–

–

–

(1.7)

(1.7)

41.7

9.4

20.3

(0.1)

71.3

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

2024

Segment adjusted operating profit

Restructuring costs and charges associated withmanagement changes
Intellectual property litigation costs
Amortisation and impairment of acquired intangibles

Profit/(loss) before income tax

2023

Segment adjusted operating profit

40.5

18.0

22.0

–

80.5

Restructuring costs

(0.4)

–

–

–

(0.4)

Release of provision on disposal

–

–

0.4

–

0.4

Intellectual property litigation

–

(0.5)

–

–

(0.5)

Impairment of capitalised development costs

(0.8)

–

–

–

(0.8)

WITec post-acquisition gross margin adjustment

(0.5)

–

–

–

(0.5)

Amortisation and impairment of acquired intangibles

(3.1)

(6.2)

–

–

(9.3)

Fair value movement on financial derivatives

–

–

–

3.0

3.0

Financial income

–

–

–

2.7

2.7

Financial expenditure

–

–

–

(1.6)

(1.6)

Profit before income tax

35.7

11.3

22.4

4.1

73.5

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

Capital expenditure(18.0)

(6.6)

(0.1)

(2.3)

(27.0)

Depreciation of property, plant and equipment

(3.3)

(1.5)

–

(0.5)

(5.3)

Amortisation of right-of-use assets

(2.4)

(0.4)

–

(2.2)

(5.0)

2024

Amortisation and impairment of acquired intangibles

(3.5)

(6.3)

–

–

(9.8)

Capitalised development expenditure

(0.1)

(0.6)

–

–

(0.7)

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

Capital expenditure(28.6)

(2.7)

–

(1.0)

(32.3)

Depreciation of property, plant and equipment

(3.0)

(1.2)

–

(0.6)

(4.8)

Amortisation of right-of-use assets

(2.1)

(0.5)

–

(2.0)

(4.6)

Amortisation and impairment of acquired intangibles

(6.0)

(6.3)

–

–

(12.3)

Capitalised development expenditure

(0.4)

(0.2)

–

–

(0.6)

2023

www.oxinst.com

Japan

6.2

1.9

China

4.0

2.9

Rest of Europe

22.1

6.5

Rest of Asia

0.2

0.2

Rest of World

0.3

0.3

268.4

250.1

2 Adjusting items
In the preparation of adjusted numbers, the Directors exclude certain items in order to assist with comparability between
peers and to give what they consider to be a better indication of the underlying performance of the business. In determining
whether an event or transaction is an adjusting item, the Directors consider quantitative as well as qualitative factors such as
the frequency or predictability of occurrence. Examples of exceptional items include acquisition-related costs, one-time past
service costs on defined benefit pension schemes, and one-time intellectual property litigation costs.
These adjusting items are excluded in the calculation of adjusted operating profit, adjusted profit before tax, adjusted profit for
the year, adjusted EBITDA, adjusted EPS, adjusted cash conversion and adjusted effective tax rate. Details of adjusting items
are given below.
Adjusted EBITDA is calculated by adding back depreciation of property, plant and equipment, amortisation of right-of-use
assets and amortisation of intangible assets to adjusted operating profit, and can be found in the Consolidated Statement of
Cash Flows. The calculation of adjusted EPS can be found in Note 10. Adjusted effective tax rate is calculated by dividing theshare of tax attributable to adjusted profit before tax by adjusted profit before tax. The definition of cash conversion is set out
in the Finance Review.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2 Adjusting items continued

Intellectual property litigation costs

Reconciliation between operating profit and profit before income tax and adjusted profit

These represent one-off legal costs to defend our intellectual property.

2024

Impairment of capitalised development costs

2023

Operatingprofit£m

Profit before
income tax£mOperatingprofit£m

Profit before
income tax£mStatutory measure

68.3

71.3

72.4

73.5

Intellectual property litigation settlement

(3.3)

(3.3)

–

–

–

–

(0.4)

(0.4)

Adjustments relating to defined benefit pension schemes

0.4

0.4

–

–

Transaction-related costs

1.0

1.0

–

–

WITec post-acquisition gross margin adjustment

–

–

0.5

0.5

Restructuring costs and charges associated withmanagement changes

3.7

3.7

0.4

0.4

Intellectual property litigation costs

0.4

0.4

0.5

0.5

–

–

0.8

0.8

Amortisation and impairment of acquired intangibles

9.1

9.1

9.3

9.3

Fair value movement on financial derivatives

0.7

0.7

(3.0)

(3.0)

–

–

–

0.4

Total adjusting items

12.0

12.0

8.1

8.5

Adjusted measure

80.3

83.3

80.5

82.0

Release of provision on disposal

Impairment of capitalised development costs

Unwind of discount in respect of contingent consideration

Adjusted income tax expense
Adjusted profit
Adjusted effective tax rates

63.0

Amortisation and impairment of acquired intangibles
Adjusted profit excludes the non-cash amortisation and impairment of acquired intangible assets and goodwill.

Fair value movement on financial derivatives
Under IFRS 9, all derivative financial instruments are recognised initially at fair value. Subsequent to initial recognition, they
are also measured at fair value. In respect of instruments used to hedge foreign exchange risk and interest rate risk, the Group
does not take advantage of the hedge accounting rules provided for in IFRS 9 since that standard requires certain stringent
criteria to be met in order to hedge account, which, in the particular circumstances of the Group, are considered by the Board
not to bring any significant economic benefit. Accordingly, the Group accounts for these derivative financial instruments atfair value through profit or loss. To the extent that instruments are hedges of future transactions, adjusted profit for the year
is stated before changes in the valuation of these instruments so that the underlying performance of the Group can be moreclearly seen.

Unwind of discount in respect of contingent consideration
Adjusted profit in the prior year excluded the unwind of the discount in respect of the contingent consideration on theacquisition of WITec.

Adjusted income tax expense
Statutory income tax is adjusted for the income tax impact on the adjusting items described above. In the current year,
adjusted income tax also includes a prior year adjustment in relation to deferred tax recognised on the Asylum intangibles.

Reconciliation of changes in cash and cash equivalents to movement in net cash after borrowings(17.0)(20.3)
80.3

During the prior year, the Group reviewed the capitalised development costs to ensure they remained directly related totargeted product or software developments. The one-off non-cash impairment relates to delays in market launch of specificdevelopment projects within the Materials & Characterisation segment.

80.5

24.4%

2024
£m

2023
£m

65.0

Net (decrease)/increase in cash and cash equivalents(13.1)

13.5

20.7%

Effect of exchange rate fluctuations on cash held

(2.9)

0.3

Movement in net cash in the year

(16.0)

13.8

Bank loans at First Light Imaging acquired

(2.2)

–

Repayment of borrowings

1.8

0.5

Intellectual property litigation settlement
This represents one-off settlement income in the Research & Discovery segment from defending our intellectual property.

Release of provision on disposal
The costs in the prior year represent the release of the provision on disposal of the OI Healthcare business in the US in 2020.

Net cash after borrowings at the start of the year

100.2

85.9

Adjustments relating to defined benefit pension schemes

Net cash after borrowings at the end of the year

83.8

100.2

During the year, the Group recognised a one-off charge of £0.4m in respect of removing the pension increase exchange atretirement option for deferred members. This past service cost is reflected in the retirement benefit obligations as shown in
Note 24.

Reconciliation of net cash after borrowings to Statement of Financial Position
2024
£m

2023
£m

Bank loans at First Light Imaging

(0.8)

–

Covid-19 loan at WiTec

(0.9)

(1.3)

Overdrafts(12.3)(11.2)Cash and cash equivalents

97.8

112.7

Net cash after borrowings at the end of the year

83.8

100.2

Transaction-related costs
These represent the costs of one-off charges incurred at the balance sheet date relating to transactional work.

WITec post-acquisition gross margin adjustment
The finished goods and work-in-progress inventories were revalued to fair value, based on selling price less costs to sell.
The adjustments in the prior period relate to the gross margin which would have been earned on post-acquisition sales to
31 March 2023, but which has been absorbed into the acquisition date fair value. This has not occurred, as all such inventory
at the acquisition date had been delivered to customers by 31 March 2023.

Restructuring costs and charges associated with management changes
In the current year, these represent £1.7m of costs associated with the relocation of production facilities within thesemiconductor business and charges of £2.0m incurred in respect of the recruitment of the new CEO and one-off dual-runningcosts associated with this appointment. In the prior year, these represent the costs of one-off restructuring charges within the
Materials & Characterisation segment.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
The average monthly number of people employed by the Group (including Directors and temporary employees) during theyear was as follows:

3 Research and development (R&D)
The total research and development spend by the Group is as follows:

2024
Number

2023
NumberProduction

894

796

Sales and Marketing

555

495

Materials &Characterisation£mResearch &Discovery
£m

Total
£m

28.0

11.1

39.1

–

(0.2)

(0.2)

Research and Development

487

456

Add: amounts capitalised as fixed assets

0.2

–

0.2

Administration and Shared Services

308

280

Less: amortisation and impairment of R&D costs
previously capitalised as intangibles

(0.5)

(0.1)

(0.6)

2,244

2,027

Add: amounts capitalised as intangible assets

0.1

0.6

0.7

Total cash spent on R&D during the year

27.8

11.4

39.2

2024
£’000

2023
£’000

345

250

2024

R&D expense charged to the Consolidated Statement of Income
Less: depreciation of R&D-related fixed assets

5 Auditor’s remuneration

Materials &Characterisation£mResearch &Discovery
£m

Total
£m

26.5

10.2

36.7

– Audit of Financial Statement of subsidiaries pursuant to legislation

757

542

Less: depreciation of R&D-related fixed assets

–

(0.3)

(0.3)

– Audit-related assurance services

50

47

Add: amounts capitalised as fixed assets

–

–

–

– Other assurance services88

Less: amortisation of R&D costs previously capitalised as intangibles

(2.1)

(0.1)

(2.2)

1,160

847

Add: amounts capitalised as intangible assets

0.4

0.2

0.6

Total cash spent on R&D during the year

24.8

10.0

34.8

2024
£m

2023
£m

3.2

1.1

2023

R&D expense charged to the Consolidated Statement of Income

Audit of these Financial Statements
Amounts received by the auditor and its associates in respect of:

Total fees payable to the auditor and its associates

6 Financial income

4 Employee information
Interest receivable

Personnel costs incurred during the year were as follows:
2024
£m

2023
£m

Wages and salaries

131.5

121.9

Social security costs

15.5

17.1

Contributions to defined contribution plans (Note 24)

6.4

6.1

Defined benefit income (Note 24)

(1.0)

(1.1)

Charge in respect of employee share options

3.0

2.4

155.4

146.4

Directors’ emoluments are disclosed in the Remuneration Report on pages 120 to 143 of this Report and Financial Statements.

www.oxinst.com

Interest credit on pension scheme net assets

1.5

1.6

4.7

2.7

2024
£m

2023
£m

7 Financial expenditure

Bank interest payable

0.9

0.7

Interest on lease liabilities

0.8

0.5

–

0.4

1.7

1.6

Unwind of discount on contingent consideration

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Deferred tax

8 Taxation
Income tax expense
2024
£m

2023
£m

Property,plant andequipment£m

Recognised in the Consolidated Statement of Income
Current tax expense
Current year

17.1

10.2

Adjustment in respect of prior years

1.1

0.3

18.2

10.5

Origination and reversal of temporary differences

1.6

5.1

Adjustment in respect of prior years

0.8

(0.7)

2.4

4.4

20.6

14.9

Deferred tax expense

Total tax expense
Reconciliation of effective tax rate
Profit before income tax

71.3

73.5

Income tax using the weighted average statutory tax rate of 25% (2023: 21%)

17.8

15.4

Change in rate at which deferred tax recognised

Tax losses
£m

Other
£m

Total
£m

Balance at 1 April 2022

(0.9)

3.2

(7.8)

(7.0)

6.7

4.1

(1.7)

Recognised in income

(3.1)

0.4

(2.5)

2.0

(1.5)

0.3

(4.4)

Recognised in other comprehensive income

–

–

9.7

–

–

–

9.7

Recognised directly in equity

–

–

0.7

–

–

–

0.7

Effect of movements in foreign exchange rates

–

0.1

–

–

0.3

–

0.4

Balance at 31 March 2023

(4.0)

3.7

0.1

(5.0)

5.5

4.4

4.7

Recognised in income

(3.4)

0.7

1.0

1.4

(2.1)

–

(2.4)

Recognised in other comprehensive income

–

–

2.7

–

–

–

2.7

Recognised directly in equity

–

–

(1.1)

–

–

–

(1.1)

Acquired on business combination

–

–

–

(2.5)

–

–

(2.5)

Effect of movements in foreign exchange rates

(0.1)

(0.1)

(0.3)

–

–

(0.1)

(0.6)

Balance at 31 March 2024

(7.5)

4.3

2.4

(6.1)

3.4

4.3

0.8

0.3

Certain deferred tax assets and liabilities have been offset as follows:

–

1.0

0.4

–

Non-taxable income and expenses

0.7

(1.4)

Adjustment in respect of prior years

1.9

(0.4)

20.6

14.9

Taxation credit recognised directly in other comprehensive income
Current tax – relating to employee benefits

(2.1)

–

Deferred tax – relating to employee benefits

(2.7)

(9.7)

AssetsCurrent tax – relating to share options

(0.6)

–

Deferred tax – relating to share options

1.1

(0.7)

The rate of UK corporation tax increased to 25% from 1 April 2023. The UK deferred tax assets and liabilities have been
calculated based on the enacted rate of 25%.
The Group carries tax provisions in relation to uncertain tax positions arising from the possible outcome of negotiations with
tax authorities. The provision is calculated using the expected value method from a range of possibilities and assumes thatthe tax authorities have full knowledge of the facts. Such provisions reflect the geographical spread of the Group’s operations
and the variety of jurisdictions in which it carries out its activities.

Liabilities

Net

2024
£m

2023
£m

2024
£m

2023
£m

2024
£m

2023
£m

Gross assets/(liabilities)

15.6

15.6

(14.8)(10.9)

0.8

4.7

Offset

(1.9)

(3.1)

1.9

3.1

–

–

Net assets/(liabilities)

13.7

12.5

(12.9)

(7.8)

0.8

4.7

Deferred tax assets have not been recognised in respect of the following items:

Taxation (credit)/charge recognised directly in equity

www.oxinst.com

Intangible
assets£m(0.2)

Transaction costs, deferred consideration and impairments not deductible for tax

Total tax expense

Employeebenefits£m

The deferred tax category of ‘Other’ includes deferred tax recognised on accounting general liability accruals/provisions,deferred revenue and bad debts. Deferred tax is recognised on provisions made against inventory on which tax relief has not
yet been granted.

Effect of:Tax rates other than the weighted average statutory rate

Inventory£m

Tax losses

2024
£m

2023
£m

0.5

0.3

The tax losses and the deductible temporary differences do not expire under current tax legislation. Deferred tax assets
recognised on tax losses relate to gross unrecognised losses of £2.3m (2023: £1.1m). Deferred tax assets have not beenrecognised in respect of these items as it is not probable that future taxable profits will be available in the subsidiaries
concerned against which the Group can utilise the brought forward tax losses.
No deferred tax liability has been recognised in respect of £59.2m (2023: £50.6m) of undistributed earnings of overseas
subsidiaries since the majority of such distributions would not be taxable. In other cases the Group considers that it is able tocontrol the timing of remittances so that any tax is not expected to arise in the foreseeable future.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
9 Dividends

11 Acquisitions
Acquisition of First Light Imaging

The following dividends per share were paid by the Group:
2024
pence

2023
pence

Previous period final dividend

14.9

13.7

Current period interim dividend

4.9

4.6

19.8

18.3

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

Interim dividend
Final dividend

2024
pence

2023
pence

4.9

4.6

15.9

14.9

20.8

19.5

On 9 January 2024, the Group acquired 100% of the issued share capital of First Light Imaging SAS (‘First Light Imaging’)
on a cash-free, debt-free basis for consideration of €18.7m (£16.0m), of which €3.0m (£2.5m) was conditional on trading
performance over a period of 12 months from the acquisition. The conditions for the deferred consideration were meetingcertain revenue, order and margin thresholds. In the calculations below, it has been assumed that these thresholds havebeen met.
The book and provisional fair value of the assets and liabilities acquired is given in the table below. Provisional values havebeen used for all assets and liabilities, including deferred tax, because the initial acquisition accounting is incomplete at thedate of this report. Fair value adjustments have been made to better align the accounting policies of the acquired businesswith the Group accounting policies and to reflect the fair value of assets and liabilities acquired.
Book value£mProvisional
adjustments£mProvisional fair
value
£m

Intangible assets

0.1

10.3

10.4

Property, plant and equipment

0.5

–

0.5

The final dividend for the year to 31 March 2023 of 14.9 pence per share was approved by shareholders at the Annual General
Meeting on 19 September 2023 and was paid on 12 October 2023. The interim dividend for the year to 31 March 2024 of 4.9
pence was approved by a sub-committee of the Board on 13 November 2023 and was paid on 12 January 2024.

Right-of-use assets

0.7

–

0.7

Inventories

1.7

–

1.7

The proposed final dividend for the year ended 31 March 2024 of 15.9 pence per share was not provided at the year end andis subject to shareholder approval at the Annual General Meeting on 25 July 2024. It is expected to be paid on 20 August
2024, to shareholders on the register on the record date of 12 July 2024, with an ex-dividend date of 11 July 2024 and with thelast date of election for the Dividend Reinvestment Plan (DRIP) being 30 July 2024.

Trade and other receivables

2.9

–

2.9

–

(2.6)

(2.6)

Trade and other payables

(2.1)

–

(2.1)

Lease liabilities

(0.7)

–

(0.7)

Bank loans

(2.2)

–

(2.2)

Cash

0.6

–

0.6

Net assets acquired

1.5

7.7

9.2

10 Earnings per share
Basic earnings per ordinary share (EPS) is calculated by dividing the profit attributable to equity shareholders of the parent
by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares held by the Employee
Benefit Trust, which have been treated as if they had been cancelled.

Deferred tax

For the purposes of calculating diluted and diluted adjusted EPS, the weighted average number of ordinary shares is adjusted
to include the weighted average number of ordinary shares that would be issued on the conversion of all potentially dilutive
ordinary shares expected to vest, relating to the company’s share-based payment plans. Potential ordinary shares are only
treated as dilutive when their conversion to ordinary shares would decrease EPS.

Goodwill

5.4

Total consideration

14.6

Net debt acquired

1.6

The following table shows the weight average number of shares used in the calculation and the effect of share options on thecalculation of diluted earnings per share:

Deferred consideration after discounting to transaction date

(2.8)

Net cash outflow relating to the acquisition

13.4

2024
Shares million

2023
Shares million

Weighted average number of shares outstanding

57.9

57.7

Less: weighted average number of shares held by Employee Benefit Trust

(0.1)

–

Weighted average number of shares used in calculation of basic earnings per share

57.8

57.7

Effect of shares under option

0.8

0.7

Number of ordinary shares per diluted earnings per share calculations

58.6

58.4

Basic and diluted EPS are based on the profit for the period attributable to equity shareholders of the parent, as reported
in the Consolidated Statement of Income. Adjusted and diluted adjusted EPS are based on adjusted profit for the period,
as reported in Note 2:2024

Acquisition-related costs in the year of £0.7m were expensed to the Consolidated Statement of Income as an adjusting item in
the administration and shared services cost line. There were no acquisition-related costs in the prior year.
The acquisition contributed revenue of £0.6m, adjusted operating loss of £0.6m and a statutory loss before tax of £0.6m to theGroup’s profit for the prior year.
If the acquisition had occurred on the first day of the year the acquisition would have contributed revenue of £5.7m, adjusted
operating profit of £0.3m and a statutory result before tax of £0.3m in the year.

Acquisition of WITec

2023

£m

Pence

£m

Pence

Profit attributable to equity shareholders of the parent/Basic EPS

50.7

87.7

58.6

101.6

Total underlying adjustments to profit before tax (Note 2)

12.0

20.8

8.5

14.7

Related tax effects

0.3

0.5

(2.1)

(3.6)

Adjusted profit attributable to equity shareholdersof the parent/adjusted EPS

63.0

109.0

65.0

112.7

Diluted basic EPS

86.5

100.3

Diluted adjusted EPS

107.5

111.3

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The goodwill arising is considered to represent the value of the acquired workforce and the value of technology that has notbeen individually fair valued.

On 31 August 2021, the Group acquired 100% of the issued share capital of WITec Wissenschaftliche Instrumente undTechnologie GmbH (‘WITec’) on a cash-free, debt-free basis for consideration of €42m (£36.0m), of which €5m (£4.3m)
was conditional on trading performance over a period of 12 months from the acquisition. The conditions for the deferredconsideration were meeting certain revenue, order and margin thresholds.
In the prior year, contingent consideration of £4.8m was paid based on the performance of the Oxford Instruments WITec
business in the year to 31 August 2022. The difference of £0.5m between contingent consideration provided at acquisition
and that paid in January 2023 was due to an adjustment to the net assets purchased.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
12 Property, plant and equipment

13 Intangible assets
Land andbuildings£mPlant andequipment£mFixtures andfittings£m

Goodwill£m

Customerrelatedacquiredintangibles£mTechnologyrelatedacquiredintangibles£m

Development
costs
acquiredintangibles£m

Development
costsinternallygenerated£m

Software
£m

Total
£m

Total
£m

Cost
Balance at 1 April 2022

21.8

40.4

8.3

70.5

Cost

Additions

24.2

6.0

2.1

32.3

Balance at 1 April 2022

122.6

33.1

98.2

1.8

49.2

4.3

309.2

–

–

–

–

0.6

–

0.6

–

–

–

–

(12.5)–(12.5)

2.0

1.0

2.8

–

–

–

5.8

124.6

34.1

101.0

1.8

37.3

4.3

303.1

Additions – business combinations

5.4

0.2

10.1

–

–

0.1

15.8

Additions – internally generated

–

–

–

–

0.7

0.2

0.9

Disposals

–

–

–

–

(2.8)

–

(2.8)

(0.8)

(0.4)

(1.3)

–

–

–

(2.5)

129.2

33.9

109.8

1.8

35.2

4.6

314.5

22.2

24.8

71.9

1.5

45.2

2.9

168.5

Amortisation and impairment charged

–

1.4

7.8

0.1

2.2

–

11.5

Disposals – other

–

–

–

–

(12.5)–(12.5)

Effect of movements in foreignexchange rates

0.7

0.8

1.9

–

–

0.1

3.5

Balance at 31 March 2023
and 1 April 2023

22.9

27.0

81.6

1.6

34.9

3.0

171.0

Amortisation and impairment charged

–

1.2

7.9

–

0.6

0.1

9.8

Disposals

(0.1)

(3.7)

(0.3)

(4.1)

Additions – internally generated

–

0.4

0.1

0.5

Disposals

Balance at 31 March 2023 and 1 April 2023

45.9

43.1

10.2

99.2

Effect of movements in foreignexchange rates

Additions – business combinations

0.1

0.3

0.1

0.5

Balance at 31 March 2023
and 1 April 2023

Additions

15.8

9.7

1.5

27.0

Disposals

(0.6)

(0.5)

(0.1)

(1.2)

Exchange differences

0.3

0.4

(0.2)

0.5

Balance at 31 March 2024

61.5

53.0

11.5

126.0

Disposals
Exchange differences

Effect of movements in foreignexchange rates

Depreciation and impairment losses
Balance at 1 April 2022

5.5

27.4

5.9

38.8

Depreciation charge for the year

0.4

4.0

0.4

4.8

Disposals

–

(3.7)

(0.3)

(4.0)

Exchange differences

–

0.3

–

0.3

Balance at 31 March 2023 and 1 April 2023

5.9

28.0

6.0

39.9

Depreciation charge for the year

0.5

4.2

0.6

5.3

Disposals

(0.5)

(0.5)

(0.1)

(1.1)

–

1.4

–

1.4

5.9

33.1

6.5

45.5

Exchange differences
Balance at 31 March 2024
Carrying amounts

Balance at 31 March 2024
Amortisation and impairment losses
Balance at 1 April 2022

–

–

–

–

(2.8)

–

(2.8)

59.3

Effect of movements in foreignexchange rates

(0.3)

(0.4)

(0.6)

(0.3)

0.1

0.1

(1.4)

80.5

Balance at 31 March 2024

22.6

27.8

88.9

1.3

32.8

3.2

176.6

Balance at 1 April 2022

100.4

8.3

26.3

0.3

4.0

1.4

140.7

Balance at 31 March 2023
and 1 April 2023

101.7

7.1

19.4

0.2

2.4

1.3

132.1

Balance at 31 March 2024

106.6

6.1

20.9

0.5

2.4

1.4

137.9

Balance at 1 April 2022

16.3

13.0

2.4

31.7

Balance at 31 March 2023 and 1 April 2023

40.0

15.1

4.2

Balance at 31 March 2024

55.6

19.9

5.0

Included within land and buildings are assets under construction with additions in the year of £12.2m and a carrying amountof £33.2m (2023: £31.3m).

Carrying amounts

During the year the Group made impairments of £nil (2023: £0.8m) in respect of capitalised development costs. Further
information can be found in Note 1.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
13 Intangible assets continued

Key assumptions

The following intangible assets are considered material by the Directors as they represent 98% (2023: 97%) of total acquired
intangible assets:

The key assumptions are those regarding discount rates and growth rates.

2024

The growth rates are at or below the Group’s view on long-term trends within its markets. Changes in selling prices and direct
costs are based on past practices and expectations of future changes in the market.

2023

£m

Amortisation
period years

Remainingamortisation
period years

£m

3.9

15.0

4.8

4.7

– Product related

7.3

12.0

1.8

11.9

– Software related

–

10.0

–

0.9

Trademarks – WITec

2.0

10.0

7.6

2.3

Technology, know–how and patents – WITec

2.4

5.0

2.6

3.6

Trademarks – First Light Imaging

0.2

2.0

1.8

–

– OCAM

0.3

12.0

11.8

–

– C-RED

9.3

14.0

13.8

–

Technology, know–how and patents – Asylum

1.0

12.0

0.7

2.4

Trademarks – Andor
Technology, know–how and patents – Andor:

Technology, know–how and patents – First Light Imaging:

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (CGUs) that are expected
to benefit from that business combination. The carrying amount of goodwill was allocated to individual CGUs as follows:
2024
£m

2023
£m

Materials & Characterisation
NanoAnalysis

9.9

The post-tax weighted average costs of capital used for Materials & Characterisation and Research & Discovery inimpairment testing are 13.1%-13.6% (2023: 12.8%-13.3%) and 13.1%-13.6% (2023: 12.8%-13.3%) respectively, in line with therisk associated with each of the business segments. Management has estimated these discount rates by reference to pastexperience and an industry average weighted cost of capital as adjusted for appropriate risk factors reflecting current
economic circumstances and the risk profiles of each CGU.

Sensitivity analysis
The Group’s estimate of impairments are most sensitive to changes in the discount rate and forecast growth rate. Sensitivity
analysis has been carried out by reference to both of these assumptions. This demonstrated that a 460 basis point increasein the discount rate would be required in order to eliminate the headroom of £27.1m in the recently acquired WITec business– along with a 20% deterioration from the five-year forecast. Similarly, a reduction in the growth rate to -6.2% – again, alongwith a 20% deterioration from the five-year forecast, would be required in order to result in an impairment in that business. No
reasonably possible change in assumptions would result in an impairment in the other businesses.

14 Leases
The Group leases a number of properties in the jurisdictions from which it operates. In some jurisdictions it is customary forlease contracts to provide for payments to increase each year by inflation and in others to be reset periodically to market
rental rates. In some jurisdictions’ property leases, the periodic rent is fixed over the lease term.
The Group also leases certain items of plant and equipment. In some contracts for services with distributors, those contracts
contain a lease of vehicles. Leases of plant, equipment and vehicles comprise only fixed payments over the lease terms.
The Group sometimes negotiates break clauses in its property leases. On a case-by-case basis, the Group will consider
whether the absence of a break clause would expose the Group to excessive risk. Typically factors considered in deciding tonegotiate a break clause include:•

the length of the lease term;

10.0

•

the economic stability of the environment in which the property is located; andwhether the location represents a new area of operations for the Group.

Magnetic Resonance

2.3

2.3

•

WITec

21.0

21.5

The Group leases assets including land and buildings, vehicles and machinery. Information about leases for which the Groupis a lessee is presented below.

Andor

66.7

61.2

NanoScience

6.7

6.7

106.6

101.7

Research & Discovery

Right-of-use assets

In the current year, Andor includes a provisional goodwill amount of £5.4m relating to the acquisition of First Light Imaging as
shown in Note 11. All other movements in the year relate to changes in exchange rates.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
Accounting standards require an impairment test to be carried out by determining the recoverable amount of each CGU whichcontains goodwill. The recoverable amount is calculated as the higher of the fair value less costs to sell or the value in use of the
CGU. In the Group’s case, the recoverable amount is based on value in use calculations. Value in use is calculated by discounting
expected future cash flows and in particular Board-approved five-year cash flow forecasts, prepared by the management ofeach CGU and reviewed and amended by Group management as necessary, together with 2.5% per annum growth for thesubsequent 20 years. This rate was considered to be at or below long-term market trends for the Group’s businesses.

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Property leases£mOther leases
£m

Total
£m

Cost
Balance at 1 April 2022

25.0

2.6

27.6

Additions

17.4

0.8

18.2

Modifications

(1.0)

–

(1.0)

Disposals

–

(0.5)

(0.5)

Exchange differences

1.1

0.1

1.2

Balance at 31 March 2023

42.5

3.0

45.5

Additions – business combinations

0.7

–

0.7

Additions

5.8

0.2

6.0

Disposals

(1.1)

(0.2)

(1.3)

Exchange differences

(1.5)

(0.1)

(1.6)

Balance at 31 March 2024

46.4

2.9

49.3

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Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
14 Leases continued

15 Inventories
Property leases£mOther leases
£m

Total
£m

Balance at 1 April 2022

8.4

1.3

9.7

Amortisation charge for the year

4.1

0.5

4.6

Disposals

–

(0.5)

(0.5)

Exchange differences

0.3

–

0.3

Balance at 31 March 2023

12.8

1.3

14.1

Amortisation and impairment losses

2024
£m

2023
£m

Raw materials and consumables

59.0

39.8

Work in progress

27.3

23.5

Finished goods

22.1

18.1

108.4

81.4

Amortisation charge for the year

4.5

0.5

5.0

Disposals

(1.6)

(0.1)

(1.7)

The amount of inventory recognised as an expense was £182.4m (2023: £172.8m). In the ordinary course of business, theGroup makes impairment provisions for slow-moving, excess and obsolete inventory as appropriate. Inventory is stated after
charging impairments of £1.2m in the current period (2023: £1.3m). In the current year, £nil (2023: £nil) was reversed relating toprevious impairments. Impairments are included within gross profit.

Exchange differences

(0.5)

–

(0.5)

Inventory carried at net realisable value is £0.2m (2023: £1.7m).

Balance at 31 March 2024

15.2

1.7

16.9

16 Trade and other receivables

Carrying amounts
Balance at 1 April 2022

16.6

1.3

17.9

Balance at 31 March 2023 and 1 April 2023

29.7

1.7

31.4

Balance at 31 March 2024

31.2

1.2

32.4

Lease payables

Trade receivables

2024
£m

2023 as restated1
£m

88.5

91.3

Less provision for impairment of receivables

(3.6)

(3.5)

Net trade receivables

84.9

87.8

Accrued income

11.7

9.4

Prepayments

9.9

6.6

Other receivables

8.2

9.4

114.7

113.2

2024
£m

2023
£m

Balance at beginning of year

31.4

18.4

Additions – business combinations

0.7–

Additions

6.0

18.1

–

(1.0)

Payments made (cash flows from financing activities)

(4.8)

(5.6)

Interest charge

0.8

0.5

Trade receivables are non-interest-bearing. Standard credit terms provided to customers differ according to business andcountry and are typically between 30 and 60 days.

Effect of movements in foreign exchange rates

(0.7)

1.0

The maximum exposure to credit risk for trade and other receivables plus accrued income, by geographic region, was:

33.4

31.4

Amounts falling due after more than one year

28.6

26.2

Amounts falling due in less than one year

4.8

5.2

Modifications

Amounts recognised in Consolidated Statement of Income

1.	The trade receivable and accrued income amounts in the table above have been restated to correct an amount recognised within revenue
which had not been invoiced to the customer. As a result, at 31st March 2023 trade receivables have reduced by £4.6m, and accrued income
has increased by £4.6m.

2024
£m

2023
3m

UK

11.6

17.5

China

16.1

16.2

Japan

15.5

15.8

USA

24.3

29.8

Germany

6.4

7.4

2024
£m

2023
£m

Interest on lease liabilities

(0.8)

(0.5)

Rest of Europe

16.1

10.6

Amortisation of right-of-use assets

(5.0)

(4.6)

Rest of Asia

10.4

6.3

Rest of World

4.4

3.0

104.8

106.6

Amounts recognised in Consolidated Statement of Cash FlowsThe total cash outflow for leases in the year ended 31 March 2024 was £4.8m (2023: £5.6m).

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Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
16 Trade and other receivables continued

18 Cash and cash equivalents

The ageing of financial assets comprising net trade receivables and other receivables plus accrued income at the reporting
date was:
2024
£m

2023
£m

Current (not overdue)

54.7

63.1

Less than 31 days overdue

20.5

18.8

More than 30 but less than 91 days overdue

15.2

10.8

More than 90 days overdue

14.4

13.9

104.8

106.6

2024
£m

2023
£m

3.5

3.6

Increase/(decrease) in loss allowance recognised in theConsolidated Statement of Income during the year

0.1

(0.1)

Balance at end of year

3.6

3.5

The loss allowance is recognised in the administration and shared services line in the Consolidated Statement of Income.

17 Contract assets and liabilities
Contract
asset

2023 as restated1
Contract
asset

Contract liability

Cash balances

97.8

112.7

Bank overdrafts (Note 19)(12.3)(11.2)Cash and cash equivalents in the Consolidated Statement of Cash Flows

85.5

101.5

2024
£m

2023
£m

0.4

–

19 Borrowings

Bank loans at First Light Imaging

The movement of the Group’s expected credit losses provision in respect of trade receivables and other receivables plus
accrued income are as follows:

2024

2023
£m

Current

In the current year £0.2m (2023: nil) of the provision against trade receivables and other receivables plus accrued income
relates to balances less than 90 days overdue. The remaining balance relates to balances more than 90 days overdue.

Balance at start of year

2024
£m

Contract liability

Covid-19 loan at WITec

0.4

0.4

Bank overdrafts

12.3

11.2

At the end of the year

13.1

11.6

2024
£m

2023
£m

Bank loans at First Light Imaging

0.4–

Covid-19 loan at WITec

0.5

0.9

At the end of the year

0.9

0.9

Non-current

On 19 March 2024, the Group entered into a new multi-currency revolving facility agreement, which is committed until March2028 with 15-month and 12-month extension options at the end of the first and second years respectively. The facility has
been entered into with four banks and comprises a euro-denominated multi-currency facility of €95m and a US dollar
denominated multi-currency facility of $150m. Debt covenants are net debt to EBITDA less than 3.0 times and EBITDA tointerest greater than 4.0 times.

Accruedincome£m

Customer
deposits£m

Deferredincome£mAccruedincome£m

Customer
deposits£m

Deferredincome£mBalance at 1 April

9.4(52.1)(21.3)

4.2(41.3)(21.2)

Acquired balances

–

(0.4)

(0.7)

–

–

–

Transfers in the period from contract assets
to trade receivables

Bank overdrafts reflect the aggregated overdrawn balances of Group companies (even if those companies have otherpositive cash balances). The overdrafts are held with the Group’s relationship banks.

(9.4)

–

–

(4.2)

–

–

The Group’s uncommitted overdraft facilities at 31 March 2024 were £18.3m (2023: £18.8m).

Amounts included in contract liabilities thatwere recognised as revenue during the period

–

48.5

21.3

–

38.6

21.2

11.7

–

–

9.4

–

–

Excess of revenue recognised over cash (or rights
to cash) being recognised during the period
Cash received in advance of performance andnot recognised as revenue during the period
Balance at 31 March

A reconciliation of the Group’s borrowings balances is shown below.
2024
£m

2023
£m

Balance at the beginning of the year

12.5

10.5

–

(54.4)(22.2)–(49.4)(21.3)

Increase in borrowings (from acquisition of First Light Imaging)

2.2

–

11.7

(58.4)(22.9)

9.4(52.1)(21.3)

Repayment of borrowings (cash flow from financing activities)

(1.8)

(0.5)

1. Details of restatement of prior year numbers can be found in note 16.

Contract assets and contract liabilities are included within trade and other receivables and trade and other payables
respectively on the face of the Consolidated Statement of Financial Position.
Payment terms for the sale of large goods typically require payment of a deposit on order, with the remaining payments dueon shipment, and in some cases installation. For lower value goods, payment is typically required at shipment. Maintenanceand service contracts are generally paid in full at inception. There is no financing component in the arrangements, andcontracts are for specified, pre-agreed amounts with no variable element.

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The Group’s undrawn committed facilities available at 31 March 2024 were £200.2m, comprising the undrawn portion of theGroup’s £200.2m revolving credit facilities.

Increase/(decrease) in bank overdrafts

1.1

2.5

Interest charged

0.9

0.7

Interest paid

(0.9)

(0.7)

At the end of the year

14.0

12.5

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
20 Trade and other payables

22 Financial instruments
2024
£m

2023
£m

Trade payables

32.6

30.3

Customer deposits

58.4

52.1

Social security and other taxes

6.3

6.1

Accrued expenses

39.3

44.9

Deferred income

22.9

21.3

Other payables

6.7

4.7

166.2

159.4

Fair values of financial assets and liabilities
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including theirlevels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities notmeasured at fair value if the carrying amount is a reasonable approximation of fair value.
2024
Carrying
amount£m

2

2.5

2023 as restated1, 2
Fair value£m

Carrying
amount£m

Fair value
£m

2.5

2.0

2.0

Financial assets measured at fair value
Derivative financial assets:– Foreign currency contracts
Financial assets measured at amortised cost

21 Provisions for other liabilities and charges

Long-term receivables

1.3

0.5

Trade receivables

84.9

87.8

Other receivables and accrued income

15.1

13.0

Cash and cash equivalents

97.8

112.7

Warranties£mIP-related claims
£m

Other
£m

Total
£m

Balance as at 1 April 2023

3.6

0.6

3.4

7.6

Provisions made during the year

3.5

–

1.3

4.8

Provisions used during the year

(1.8)

–

(1.3)

(3.1)

Provisions released during the year

(2.1)

–

(0.7)

(2.8)

Financial liabilities measured at fair value

–

–

(0.1)

(0.1)

Derivative financial liabilities:

Balance as at 31 March 2024

3.2

0.6

2.6

6.4

– Foreign currency contracts

Amounts falling due before one year

3.2

0.6

2.6

6.4

–

–

–

–

Exchange differences

Fair value
hierarchy
£m

2

(0.1)

(0.1)

(1.2)

(1.2)

Financial liabilities measured at amortised cost
Trade and other payables(78.6)(79.9)

Bank overdrafts(12.3)(11.2)

Warranty provisions

Borrowings

(1.7)

(1.3)

Product warranty provisions reflect commitments made to customers on the sale of goods in the ordinary course of businessand included within the Group companies’ standard terms and conditions. Warranty commitments typically apply for a
12-month period. The provision represents the Directors’ best estimate of the Group’s liability based on past experience.

Lease payables(33.4)(31.4)

Amounts falling due after more than one year

Intellectual property-related claims

1.	The other receivables and accrued income and trade and other payables balances in the table above, as at 31 March 2023, have been restated toremove the tax-related balances which do not meet the accounting definition of financial assets and liabilities. As a result, at 31 March 2023, otherreceivables and accrued income were reduced by £5.8m, while trade and other payables were reduced by £6.1m.

The company has on occasion been required to take legal or other actions to defend itself against proceedings brought byother parties. Provisions are made for the expected costs associated with such matters, based on past experience of similar
items and other known factors, taking into account professional advice received, and represent the Directors’ best estimate of
the likely outcome. The timing of utilisation of these provisions is frequently uncertain, reflecting the complexity of issues andthe outcome of various court proceedings and negotiations. Contractual and other provisions represent the Directors’ best
estimate of the future cost of settling obligations arising from past activity and reflect the Directors’ assessment of the likely
settlement method, which may change over time. However, no provision is made for proceedings which have been brought byother parties against Group companies unless the Directors, taking into account professional advice received, assess that it
is more likely than not that such proceedings may be successful. In respect of the provision for IP-related claims the range ofpossible outcomes is between £nil and £0.6m.

2. Details of restatements of prior period numbers for trade receivables and other receivables and accrued income can be found in note 16.

Other provisions

Trade and other receivables/payables

Other provisions relate to various obligations including obligations in respect of onerous contracts, product-related liabilities,
dilapidation provisions and provisions for other claims.

For receivables/payables with a remaining life of less than one year, the carrying amount is deemed to reflect the fair value.
All other receivables/payables are discounted to determine their fair value. Advances received are excluded from otherpayables above as these are not considered to be financial liabilities. Tax-related receivables and payables are excluded
from the above table as these are not considered to be financial assets and liabilities.

The following summarises the major methods and assumptions used in estimating the fair values of financial instruments
reflected in the above table.

Derivative financial instruments
Derivative financial instruments are marked-to-market using market prices.

Fixed and floating rate borrowings
The fair value of fixed and floating rate borrowings is estimated by discounting the future contracted principal and interest
cash flows using the market rate of interest at the reporting date.

Lease payables
The lease liability is measured at amortised cost using the effective interest method.

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Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
22 Financial instruments continued

Credit risk

Fair value hierarchy

Credit risk arises because a counterparty may fail to perform its obligations. The Group is exposed to credit risk on financial
assets such as cash balances, derivative financial instruments, accrued income, trade and other receivables. The Group’s
credit risk is primarily attributable to its trade receivables and cash balances. The amounts recognised in the Consolidated
Statement of Financial Position are net of expected credit losses, which are estimated by the Group’s management basedon the Group’s historical experience of losses, along with consideration of any reasonably and supportable forward-looking
information and expectations. Due to its wide geographic base and large number of customers, the Group is not exposed
to material concentrations of credit risk on its trade receivables. The Group’s experience of credit loss is minimal, which has
and continues to be mitigated through receiving payment in advance of delivery or using trade guarantees provided by theGroup’s relationship banks. In the unusual event of a particular issue with a particular customer, a specific provision will bemade if appropriate. Trade receivables are subject to credit limits and control and approval procedures in the operatingcompanies. There has been no material change in the Group’s experience of credit losses over the reporting period.

The table above gives details of the valuation method used in arriving at the fair value of financial instruments. The different
levels have been identified as follows:– Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
– Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly(ie as prices) or indirectly (ie derived from prices).
– Level 3: inputs for the asset or liability that are not based on observable market data.
There have been no transfers between levels during the year.

23 Financial risk management
The Group’s multinational operations and debt financing expose it to a variety of financial risks. In the course of its business,
the Group is exposed to foreign currency risk, interest rate risk, liquidity risk, commodity risk and credit risk. Financial risk
management policies are set by the Board of Directors. These policies are implemented by a central treasury function thathas formal procedures to manage foreign exchange risk, interest rate risk and liquidity risk, including, where appropriate, theuse of derivative financial instruments. Commodity risk is managed locally by the operating businesses. The Group has clearly
defined authority and approval limits.
In accordance with its Treasury Policy, the Group does not hold or use derivative financial instruments for trading or
speculative purposes. Such instruments are only used to manage the risks arising from operating or financial assets or
liabilities or highly probable future transactions.

Credit risk associated with cash balances and derivative financial instruments is managed by transacting with financial
institutions with high-quality credit rating. In particular, a Board-approved policy sets out guidelines for which categories of
institutions may be used and the maximum amount which may be invested with each institution within a particular category.
Accordingly, the Group’s associated credit risk is limited. The Group has no significant concentration of credit risk. The Group’s
maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial
instruments, in the Group Consolidated Statement of Financial Position.

Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk by
type of asset at 31 March 2024 is as shown below:2024£m2023 as restated1£mLong-term receivables

1.3

0.5

Trade receivables

84.9

87.8

Other receivables and accrued income

15.1

13.0

Cash and cash equivalents

97.8

112.7

The Group uses derivative financial instruments to hedge its exposure to fluctuations in foreign exchange rates. In
common with a number of other companies, the Group has decided that the additional costs of meeting the extensive
documentation requirements of IFRS 9 to apply hedge accounting to derivative financial instruments used for hedging
exposure to foreign currency and interest rate volatility cannot be justified. Accordingly, the Group does not use hedge
accounting for such derivatives.

Foreign currency risk
Foreign currency risk arises both where sale or purchase transactions are undertaken in currencies other than the respectivefunctional currencies of Group companies (transactional exposures) and where the results of overseas companies areconsolidated into the Group’s reporting currency of Sterling (translational exposures). The Group has operations around theworld which record their results in a variety of different local functional currencies. In countries where the Group does not haveoperations, it invariably has some customers or suppliers that transact in a foreign currency. The Group is therefore exposed tothe changes in foreign currency exchange rates between a number of different currencies but the Group’s primary exposuresrelate to the US Dollar, the Euro and the Japanese Yen. To reduce uncertainty, the Group maintains a rolling hedge of forward
contracts equivalent to 80% (2023: 80%) of the exposure expected to arise over the following 12 months. The remaining 20%
is sold on the spot market. The fair value of outstanding currency contracts recognised as a liability as at 31 March 2024
amount to £0.1m (2023: £1.2m) and those recognised as an asset amount to £2.5m (2023: £2.0m).

Derivative financial instruments

Movements in the fair value of derivative financial instruments are recognised in the Consolidated Statement of Income
immediately. However, in order to facilitate a more meaningful comparison of the Group’s performance year-on-year,
the elements of these movements that relate to hedges in respect of future sales are treated as an adjusting item in thecalculation of adjusted earnings (Note 2).
The Group’s translational exposures to foreign currency risks can relate both to the Consolidated Statement of Income andnet assets of overseas subsidiaries. The Group’s policy is not to hedge the translational exposure that arises on consolidationof the Consolidated Statements of Income of overseas subsidiaries.

Interest rate risk
Interest rate risk comprises both the interest rate price risk that results from borrowing at fixed rates of interest and also theinterest cash flow risk that results from borrowing at variable rates. The Group’s policy is to use a mixture of revolving shortand medium-term floating rate debt underpinned by longer-term fixed rate debt. The short and medium-term floating rate
debt provides flexibility to reduce debt levels as appropriate. The longer-term fixed rate debt provides stability and costcertainty to the Group’s financing structure.

Liquidity risk
Liquidity risk represents the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing this risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to theGroup’s reputation. The Group manages this risk by maintaining adequate committed lines of funding from high-quality
lenders. The facilities committed to the Group as at 31 March 2024 are set out in Note 19.

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2.5

2.0

201.6

216.0

1. Details of restatements of prior period numbers for trade receivables and other receivables and accrued income can be found in note 16.

The maximum exposure to credit risk for trade receivables is discussed in Note 16.
Other receivables include £4.8m (2023: £5.8m) in respect of VAT and similar taxes which are not past due date.

Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order toprovide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce thecost of capital.
The Board’s long-term objective is to have an efficient capital structure by maintaining a balance between the higher returns
that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.
This is monitored by reference to the ratio of net debt to earnings before interest, tax, depreciation and amortisation (EBITDA)
and the Board has set itself internal limits, which are well inside any covenants the Group has with lenders. The Group
maintains the right to purchase its own shares in the market; the timing of these purchases would depend on market prices.
Buy and sell decisions are made on a specific transaction basis by the Board.
Each year the Board carefully considers the appropriate level of dividend payments. In doing this, the Board looks toincrease dividends in line with underlying earnings, although the Board will also take into account other considerations in
its decision-making process. The Board does not have a policy to pay a fixed dividend yield or to maintain a fixed rate ofdividend cover but assesses both of these metrics in line with sustained earnings growth.
The Board encourages employees to hold shares in the company. As well as various share option plans (full details of which
are given in Note 26), from April 2008 all UK employees have been offered the opportunity to take part in a Share Incentive
Plan (SIP). Under this plan, employees are able to invest up to £1,800 each tax year in shares in the company. The company
awards one additional free share (a matching share) for every five shares bought by each employee.
There were no changes to the Group’s approach to capital management during the year. Neither the company nor any of its
subsidiaries are subject to externally imposed capital requirements.

183

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
23 Financial risk management continued
Maturity of financial liabilities

2024
Carrying
amount£m

Contractual
cash flows£m

Due within
one year£m

Due one to
five years£m

Due more than
five years£mForeign exchange contracts

(0.1)

0.1

0.1

–

–

Trade and other payables(78.6)

78.6

78.6

–

–

Bank overdrafts(12.3)

12.3

12.3

–

–

Borrowings

(1.7)

1.7

1.2

0.5

–

Lease payables(33.4)

36.8

5.3

17.3

14.2

(126.1)

129.5

97.5

17.8

14.2

2024

1% increase ininterest rates£m

10% weakening
in Sterling£m

10% strengthening
in Sterling£m

Impact on adjusted profit (Note 2)

0.9(15.4)

15.5

Impact on reported profit

0.9(12.2)

12.2

Impact on equity

0.7(11.6)

11.6

1% increase ininterest rates£m

10% weakening
in Sterling£m

10% strengthening
in Sterling£m

Impact on adjusted profit (Note 2)

0.9(10.2)

10.2

Impact on reported profit

0.9

(7.5)

7.5

Impact on equity

0.8

(6.1)

6.1

2023

Carrying
amount£m

Contractual
cash flows£m

Due within
one year£m

Due one to
five years£m

Due more than
five years£mForeign exchange contracts

(1.2)

1.2

1.2

–

–

Trade and other payables(79.9)

79.9

79.9

–

–

The Group operates a defined benefit plan in the UK. The plan offers pensions in retirement and death in service benefit tomembers. Pension benefits are related to members’ final salary at retirement and their length of service. The scheme has
been closed to new members since 2001 and closed to future accrual since 2010.

Bank overdrafts(11.2)

11.2

11.2

–

–

The amounts recognised in the Consolidated Statement of Financial Position are:Borrowings

(1.3)

1.3

0.4

0.9

–

Lease payables(31.4)

31.4

4.5

13.8

13.0

(125.0)

125.0

97.2

14.7

13.0

2023

Carrying amount2024£m

Carrying amount2023£m

24 Retirement benefit obligations

2024
£m

2023
£m

Present value of funded obligations

223.6

225.1

Fair value of plan assets(239.7)(251.5)(16.1)(26.4)

Recognised asset for defined benefit obligations

The reconciliation of the opening and closing balances of the present value of the defined benefit obligation is as follows:

Variable rate instruments
Cash and cash equivalents

97.8

112.7

Bank overdrafts(12.3)(11.2)

–

–

(1.7)

(1.3)

Fixed rate instruments

Benefit obligation at the beginning of the year

2024
£m

2023
£m

225.1

300.0

Past service cost

0.4–

Interest on defined benefit obligation

10.5

8.2

Benefits paid

(11.0)(12.3)

Sensitivity analysis

Remeasurement (gain)/loss on obligation(1.4)(70.8)The Group has estimated the impact on the Consolidated Statement of Income and on equity of the following changes inmarket conditions at the balance sheet date:

Benefit obligation at the end of the year

223.6

225.1

Financial assets
Bank loans•

one percentage point increase in interest rates;•

ten percentage point weakening in the value of Sterling against all currencies; and•ten percentage point strengthening in the value of Sterling against all currencies.

The sensitivities above represent the Directors’ view of reasonably possible changes in each risk variable, not worst-casescenarios or stress tests. The outputs from the sensitivity analysis are estimates of the impact of market risk assuming that the
specified changes occur at the year end and are applied to the risk exposures at that date. Accordingly, they show the impact
on the balance sheet of an instantaneous shock. The calculations include all hedges in place at the year end.
Actual results in the future may differ materially from these estimates due to commercial actions taken to mitigate
any potential losses from such rate movements, to the interaction of more than one sensitivity occurring and to further
developments in global financial markets. As such, this table should not be considered as a projection of likely future
gains and losses.

www.oxinst.com

The reconciliation of the opening and closing balances of the present value of the fair value of plan assets is as follows:
2024
£m

2023
£m

Fair value of plan assets at the beginning of the year

251.5

351.7

Interest on plan assets

12.0

9.8

Contributions by employer

8.5

12.2

Benefits paid

(11.0)(12.3)

Administrative expenses

(0.5)

(0.5)

Actual return on assets excluding interest income(20.8)(109.4)

Fair value of plan assets at the end of the year

239.7

251.5

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
24 Retirement benefit obligations continued

The table below shows the sensitivity of the Consolidated Statement of Financial Position to changes in the significant
pension assumptions:Defined contribution schemes
In the UK, employees are offered participation in the defined contribution Oxford Instruments Stakeholder Plan. The company
contribution rate and employee contribution rate varies between grades and whether the individual had previously been in
the defined benefit scheme. The company contribution ranges between 4% and 14% of base salary. The Group also operates
a 401k defined distribution plan in the US. Details of pension schemes contributions made in respect of Directors can be foundin the Remuneration Report.
The expense recognised in the Consolidated Statement of Income is:

2024
£m

Discount rate(-0.1% p.a.)£m

Inflation rate(+0.1% p.a.)£mLife expectancy(+one year)£m

Present value of funded obligations

223.6

226.5

225.9

231.0

Fair value of plan assets(239.7)(239.7)(239.7)(239.7)(16.1)(13.2)(13.8)(8.7)

Surplus
2024
£m

2023
£m

Total defined benefit income

(1.0)

(1.1)

Contributions to defined contribution schemes

6.5

6.2

5.5

5.1

The valuation of defined benefit liabilities is most sensitive to changes in the discount rate, inflation rate and mortality
rate. The sensitivities have been calculated by running the liability calculations in full using the alternative assumptions.
In each case, only the indicated assumption has changed by the amount stated. For the inflation sensitivity, the impact
on the assumptions that are based on RPI inflation, such as CPI inflation and the inflation-linked pension increases, hasbeen included.

Defined benefit scheme – UK
Pension costs are recorded in the following lines in the Consolidated Statement of Income:
2024
£m

2023
£m

Cost of sales

2.1

1.7

Research and development

1.6

1.5

Selling and marketing costs

1.3

1.4

Administration and shared services

2.0

Financial income

A full actuarial valuation of the UK plan was carried out as at 31 March 2021 which, for reporting purposes, has been updated
to 31 March 2024 by a qualified independent actuary.
The major assumptions used by the actuary for the purposes of IAS 19 were (in nominal terms):
2024
%

2023
%

Discount Rate

4.8

4.8

2.1

Rate of increase in pensions in payment (‘3LPI’)

2.2

2.3

(1.5)

(1.6)

Rate of increase in pensions in payment (‘5LPI’)

2.9

3.0

5.5

5.1

Rate of inflation (‘CPI’)

2.3

2.4

Rate of inflation (‘RPI’)

3.0

3.2

91% of S2PA tables(93% for females) future
improvement in line with CMI
2022 with 1.25% long-term trend

97% of S2PA tables(99% for females) future
improvement in line with CMI
2021 with 1.25% long-term trend

The Group has agreed a basis for deficit recovery payments with the trustees of the UK pension scheme. The deficit
recovery payments are payable through to and including 2026 and will rise by approximately 3% per annum. The annual
deficit recovery payment was £8.5m (2023: £8.2m) for the financial year. In the prior year, the Directors decided to make an
additional one-off payment of £4.0m to the UK pension scheme to reduce the Group’s exposure.
In 2018 the trustees of the UK defined benefit scheme, in consultation with the company, reduced its exposure to on-risk
assets (a portfolio of market-focused asset classes, the majority being equities) with a corresponding increase in its liabilitydriven investments, with the objective of steering a more stable journey to being fully funded. The pension fund’s gross
exposure to on-risk assets fell from 85% to 45%; the majority of transactions required to make this change were completed
in February 2018. As a result, the level of risk inherent in the investment strategy is now significantly lower than previously, in
addition to a substantial reduction in funding level volatility. Following investment outperformance and contributions made by
the Group in the year to 31 March 2022 the allocation to on-risk assets has been further reduced to 35%, with a view to further
reduction in funding level volatility.
The Group has considered the requirements of IFRIC 14. The terms of the scheme give the Group the right to recover any
surplus assets on the scheme upon wind-up and therefore management has concluded that there is no impact on theamounts recognised in respect of retirement benefit obligations, i.e. there is no need to apply the ‘asset ceiling’.

Mortality – pre and post-retirement

As at 31 March 2024 the weighted average duration of the defined benefit obligations was 13 years (2023: 13.5 years).
The mortality assumptions imply the following expected future lifetime from age 65:
2024
years

2023
years

Pre-retirement – males

23.2

23.2

Pre-retirement – females

25.3

25.3

Post-retirement – males

21.8

21.9

Post-retirement – females

23.8

23.8

The Group expects to contribute approximately £8.7m to the UK defined benefit plan in the next financial year.
The assumptions have been chosen by the Directors from a range of possible actuarial assumptions, which, due to thetimescales covered, may not be borne out in practice.

Remeasurement gains and losses shown in the Consolidated Statement of Comprehensive Income:
2024
£m

2023
£m

(20.8)(109.4)(5.4)(10.3)– Financial

3.1

78.3

– Demographic

3.7

2.8

(19.4)(38.6)

Actual return on assets excluding interest income
Experience loss on scheme obligations
Changes in assumptions underlying the present value of scheme obligations:

Actuarial losses recorded in the Statement of Comprehensive Income

www.oxinst.com

187

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
24 Retirement benefit obligations continued

26 Share option schemes

The assets in the plan were:

Share Incentive Plan (SIP)
2024
£m

2023
£m

7.5

62.9

Corporate and Emerging Market Bonds

22.9

22.1

Gilts

174.3

113.5

–

5.4

Insurance-linked funds

5.8

12.2

Credit and global loan funds

0.1

0.1

Hedge funds

24.3

25.5

Cash

4.8

9.8

239.7

251.5

Equities

Property

Where assets have no observable market price a valuation will be provided by the fund manager. The scheme’s investment
manager will accept that valuation if it is within the expected range of performance. Otherwise, the investment manager willquery the valuation with the fund manager. Complex financial instruments are valued by the scheme’s investment manager
who uses financial models which take as their input the characteristics of the instrument and observable market data suchas swap rates.
The UK pension scheme implements a liability hedge strategy which is designed to protect the scheme’s funding level fromchanges in gilt yields and inflation expectations. The liability hedge strategy consists of a portfolio of gilts, gilt derivatives,interest rate and inflation swaps. At 31 March 2019, the liability hedge strategy fully covered the scheme’s liabilities fromchanges in gilt yields and inflation expectations. However, this is not a precise match for the IAS 19 defined benefit obligation,
which is based on corporate bond yields rather than gilt yields.

Long-Term Incentive Plan (LTIP)
Under the LTIP awards of nominally priced options of £0.05, conditional share awards or cash conditional awards may bemade annually to certain senior managers.
Subject to vesting based on the achievement of performance targets and the rules of the LTIP, options granted under theplan may have a life of ten years, including a vesting period of three years. Subject to vesting based on performance and therules of the LTIP, conditional share awards and cash conditional awards will vest appropriately three years after the award
date. Awards were valued using the Black-Scholes option pricing models with the exception of options relating to the total
shareholder return tranche which were valued using Stochastic option-pricing models. Under the LTIP, Richard Tyson was
granted two awards of nominally priced options of £0.05, which comprised part of the buy-out arrangements to replace the2021 and 2022 LTIP awards from his previous employer, TT Electronics plc, which lapsed in connection with his joining thecompany. Further information can be found in the Directors’ Remuneration Report on page 136.
Share option schemes that have been discontinued but for which options were outstanding at the year end include the following:

Performance Share Plan (PSP)
Under the PSP, awards of nominally priced options of £0.05 were made annually to certain senior managers. The last grants
were made under this scheme in 2022. Awards to persons other than the Executive Directors may also be referred to as
Medium Term Incentive Plan awards (‘MTIP’). Subject to vesting based on the achievement of performance targets and therules of the PSP, awards may have a life of ten years, including a vesting period of a minimum of three years. Options werevalued using the Black-Scholes option-pricing models.

Executive Share Option Scheme (ESO)

25 Capital and reserves
Issued and fully paid ordinary shares:

At the beginning of the year
Issued for cash
At the end of the year
2024
Number of shares

2024
Numberof shares

2023
Numberof shares

57,712,508

57,654,455

201,284

58,053

57,913,792

57,712,508

2023
£m

Number of shares£m

Allotted, called up and fully paid
Ordinary shares of 5 pence each

UK employees may be eligible to participate in the Group’s HM Revenue and Customs-approved SIP. Participating employees
may make a cash contribution to the SIP of up to £1,800 each year. The Group contributes a further amount equal to 20% of
the employee’s contribution. Independent trustees then purchase partnership and matching shares in the market on behalfof the employees. Subject to the rules of the SIP, matching shares may be withdrawn without forfeiture after they have been
held for three years’, provided the participant has remained an employee. On a similar basis, shares can be withdrawn taxfree after five years’ service.

57,913,792

2.9

57,712,508

2.9

Under the ESO awards of approved options, unapproved options and share appreciation rights were made annually to certain
senior managers. The last grants were made under this scheme in 2016. The exercise prices were determined according
to the mid-market closing share price on the day before the date of grant. Subject to vesting based on the achievement of
performance targets and the rules of the ESO, awards may have a life of ten years, including a vesting period of a minimum of
three years. Options were valued using the Black-Scholes option-pricing models.

Performance conditions
Awards under the ESO, PSP and LTIP schemes may be or may have been subject to the achievement of certain performance
conditions. The performance conditions applicable for the Executive Directors of Oxford Instruments plc, can be found in the
Directors’ Remuneration Report on pages 120 to 143.
Administrative expenses include a charge of £3.0m (2023: £2.4m) in respect of the cost of providing share-based
remuneration. The cost of share awards is calculated by estimating the fair value of the award at grant date and spreadingthat amount over the vesting period after adjusting for an expectation of non-vesting.
For awards granted in the years ended 31 March 2024 and 2023, the fair value and the assumptions used in the calculation
are as follows:

The holders of the ordinary shares are entitled to receive dividends as declared, a proportionate amount of capital on awinding up of the company and one vote per share at meetings of the company.
Other reserves comprise the capital redemption reserve, which represents the nominal value of shares repurchased and thencancelled during the year ended 31 March 1999.
The foreign exchange translation reserve comprises all foreign exchange differences arising since 1 April 2004 from thetranslation of the Group’s net investments in foreign subsidiaries into Sterling.

LTIP: CEO
November
2023

LTIP CFO
September
2023

LTIP: Options
September
2023

LTIP:
Conditional
Shares
September
2023

PSP: MTIP
June 2022

PSP June
2022

Weighted average fairvalue of options granted£16.99£11.04£13.38£18.19£19.09£21.16£18.86£18.86

Share price at grant date

£20.55£20.55£20.55£21.75£21.75£21.75£19.40£15.80Exercise price

£0.05

£0.05

£0.05

£0.05

£0.05

£0.05

£0.05

£0.05

Expected volatility

41.3%

31.5%

30.9%

40.5%

40.5%

n/a

47.3%

47.3%

Expected option life

3 years

0.5 years

1.5 years

3 years

3 years

3 years

3 years

3 years

–

–

–

–

0.9%

0.9%

0.9%

0.9%

4.4%

5.3%

4.9%

4.4%

4.4%

n/a

2.1%

2.1%

Expected dividend yieldRisk-free interest ratewww.oxinst.com

LTIP CEOLTIP CEObuy-out 2021 buy-out 2022
NovemberNovember
2023
2023

189

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
26 Share option schemes continued

28 Commitments and contingencies

Movements in the share option schemes during the year were as follows:

The Group has entered into agreements in respect of the new Severn Beach site for its Plasma Technology business. At 31
March 2024 commitments for future expenditure are £8.0m (2023: £5.6m) and include capital expenditure, fit-out costs, plantand machinery, furniture and computer equipment.

Executive Share
Option Scheme

Performance
Share Plan

Long-Term
Incentive Plan

In an international group of companies, a variety of legal claims arise from time to time. The Board, having taken legal advice,
is of the opinion that any ongoing actions and investigations will not have a material impact on the Group’s financial position.

Numberof shares

Weighted
average
exercise price

Numberof shares

Weighted
average
exercise price

Numberof shares

Weighted
average
exercise price

137,278£8.83

741,768

£0.05

–

–

29 Related parties

Granted––163,687

£0.05

–

–

Forfeited––(4,989)

£0.05

–

–

All transactions with related parties are conducted on an arm’s length basis and in accordance with normal business terms.
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.

Exercised(8,163)£8.80(52,260)

£0.05

–

–

Lapsed(3,446)£9.44(19,830)

£0.05

–

–

125,669£8.82

828,376

£0.05

–

–

Granted

–

–

–

–

216,207£0.05

Forfeited––(25,533)

£0.05

–

–

Exercised(18,623)£8.93(180,018)

£0.05

–

–

Lapsed(8,317)£10.28

(318)

£0.05

(15,635)£0.05

Outstanding at 31 March 2024

98,729£8.68

622,507£0.05

200,572£0.05

Exercisable at 31 March 2024

98,729£8.68

362,419£0.05

12,237£0.05

Exercisable at 31 March 2023

125,669£8.82

402,140

£0.05

–

–

Outstanding at 1 April 2022

Outstanding at 31 March 2023

The weighted average remaining contractual life for the share options as at 31 March 2024 was one year (2023: one year).
The total consideration received from exercise of options in the year was £0.0m (2023: £0.1m).

27 Working capital movements
Reconciliation of movements in working capital
Inventories£mReceivables1£m

Payables andprovisions1£m

Customer
Deposits
£m

Total
£m

As at 1 April 2022

65.3

95.8

(107.5)(41.3)

12.3

Working capital movement

15.6

19.6

(16.9)(9.2)

9.1

WITec-related flows

–

–

5.3

–

5.3

Exchange differences

0.5

0.3

–

(1.6)

(0.8)

FV movement on financial derivatives

–

–

3.0

–

3.0

As at 31 March 2023 and 1 April 2023

81.4

115.7

(116.1)(52.1)

28.9

Working capital movement

26.3

2.7

2.8

(7.1)

24.7

First Light Imaging-related flows

1.9

2.9

(5.0)

(0.4)

(0.6)

Exchange differences

(1.2)

(2.8)

4.7

1.2

1.9

–

–

(0.7)

–

(0.7)

108.4

118.5

(114.3)(58.4)

54.2

1. Receivables and payables include derivative financial instruments.

www.oxinst.com

2023
£m

Short-term employee benefits

4.8

4.2

Post-employment benefits

0.2

0.1

Share-based payment charges

2.6

1.8

Total

7.6

6.1

Key management personnel include the Executive Directors and the Management Board.
Short-term employee benefits comprise salary and benefits earned during the year and bonuses awarded for the year.

Acquisition of FemtoTools AG

The weighted average share price at the time of exercise of the options was £23.42 (2023: £22.03).

As at 31 March 2024

2024
£m

30 Subsequent events

The number and weighted average exercise prices of those options are as follows:

FV movement on financial derivatives

The remuneration of key management personnel is as follows:

On 7 June 2024, the Group agreed to purchase 100% of the share capital of FemtoTools AG for an initial consideration of
CHF 17m, subject to certain closing conditions which are expected to be satisfied within four weeks of signing these financial
statements. Additional consideration of up to CHF 7m is conditional on trading performance over a period of 33 months.

191

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Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

PARENT COMPANY STATEMENT OF FINANCIAL POSITIONPARENT COMPANY STATEMENT OF CHANGES IN EQUITY

As at 31 March 2024

Year ended 31 March 2024

Notes

2024
£m

2023
£m

AssetsNon-current assets

As at 1 April 2023

Intangible assets

d

1.2

1.3

Profit for the year

Tangible assets

c

0.6

0.4

Other comprehensive expense:

0.1

0.1

Right-of-use assets
Investments in subsidiary undertakings

e

356.9

324.6

Trade and other receivables

f

3.0

41.8

Derivative financial instruments

0.2

0.4

Retirement benefit asset

3.7

6.0

2.1

2.3

367.8

376.9

Deferred tax assetsi

Current assets
Trade and other receivables

f

48.3

20.2

Derivative financial instruments

2.5

7.8

Cash and cash equivalents

34.1

62.4

84.9

90.4

452.7

467.3

Total assets
EquityCapital and reserves attributable to the company’s equity shareholders

Sharecapital£mSharepremium
account£m

CapitalRedemption
Reserve£m

Otherreserves£m

Retainedearnings£m

Total
shareholders’equity
£m

2.9

62.6

0.1

7.6

286.4

359.6

1.8

1.8

(3.3)

(3.3)

–

–

–

–

– Remeasurement of defined benefit liability, net of tax
Total comprehensive expense for the year

–

–

–

–

(1.5)

(1.5)

– Share options awarded to employees

–

–

–

–

1.9

1.9

– Share options awarded to employees of subsidiaries

–

–

–

–

1.1

1.1

– Tax charge in respect of share options

–

–

–

–

(0.3)

(0.3)

– Proceeds from shares issued

–

–

–

–

–

–

– Dividends paid

–

–

–

–

(11.5)(11.5)

As at 31 March 2024

2.9

62.6

0.1

7.6

276.1

349.3

As at 1 April 2022

2.9

62.5

0.1

7.6

271.7

344.8

29.1

29.1

(6.6)

(6.6)

Profit for the year
Other comprehensive income:

–

–

–

–

– Remeasurement of defined benefit liability, net of tax
Total comprehensive income for the year

–

–

–

–

22.5

22.5

1.4

1.4

– Share options awarded to employees

–

–

–

–

Share capital

2.9

2.9

– Share options awarded to employees of subsidiaries

–

–

–

–

1.0

1.0

Share premium

62.6

62.6

– Tax credit in respect of share options

–

–

–

–

0.4

0.4

Capital redemption reserve

0.1

0.1

– Proceeds from shares issued

–

0.1

–

–

–

0.1

Other reserves

7.6

7.6

– Dividends paid

–

–

–

–

(10.6)(10.6)

276.1

286.4

2.9

62.6

0.1

7.6

286.4

359.6

349.3

359.6

Retained earnings

As at 31 March 2023

Details of issued, authorised and allotted share capital are included in Note 25 to the Group Financial Statements.
Liabilities

Details of the Group’s share option schemes are included in Note 26 to the Group Financial Statements.

Non-current liabilities
Derivative financial instruments

–

–

–

–

2.6

0.2

–

0.4

Current liabilities
Bank overdraftshCorporation tax
Derivative financial instruments
Trade and other payables

g

2.3

7.2

98.5

99.9

103.4

107.7

Total liabilities

103.4

107.7

Total liabilities and equity

452.7

467.3

The company’s profit for the financial year was £1.8m (2023: £29.1m). Other comprehensive expense in the year was £3.3m(2023: expense of £6.6m). The expense will not subsequently be reclassified to statement of income.
The Financial Statements were approved by the Board of Directors on 10 June 2024 and signed on its behalf by:

RICHARD TYSON		GAVIN HILL

Director			Director
Company number: 775598

www.oxinst.com

Details of the Group’s defined benefit pension scheme are included in Note 24 to the Group Financial Statements.
Details of dividends paid are included in Note 9 to the Group Financial Statements.
Other reserves relates to premium on shares issued as part of acquisitions made in the year to 31 March 1987.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
Year ended 31 March 2024(a) Accounting policies

Non-derivative financial instruments

Basis of preparation

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings,
and trade and other payables. Trade and other receivables are recognised initially at fair value. Subsequent to initialrecognition they are measured at amortised cost using the effective interest method, less any impairment losses.

Oxford Instruments plc is a company incorporated and domiciled in the UK. These Financial Statements have been preparedin accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) on the historical cost basis,
except that derivative financial instrument are stated at their fair value.

Trade and other payables

In preparing these Financial Statements, the company applied the recognition, measurement and disclosure requirements
of international accounting standards in conformity with the requirements of the Companies Act 2006.

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured atamortised cost using the effective interest method.

In these Financial Statements, the company has applied the exemptions available under FRS 101 in respect of thefollowing disclosures:

Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.

•

a cash flow statement and related notes;

Interest-bearing borrowings•

comparative period reconciliations for share capital, tangible fixed assets, intangible assets and investment properties;•

disclosures in respect of transactions with wholly owned subsidiaries;•

disclosures in respect of capital management;Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initialrecognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment
losses. Details of the Group’s interest-bearing borrowings are included in Note 19 to the Group Financial Statements.

•

the effects of new, but not yet effective, accounting standards; andIntra-Group lending•

disclosures in respect of the compensation of key management personnel.

The company has lent funds to and from its UK subsidiaries on interest-free terms. These amounts are repayable on demand.
They are stated at cost less any impairment losses.

As the consolidated Financial Statements of Oxford Instruments plc include the equivalent disclosures, the company has also
taken the exemptions under FRS 101 available in respect of the following disclosures:•

IFRS 2 Share-based Payments in respect of Group settled share-based payments; and•certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument
Disclosures.

As permitted by Section 408 of the Companies Act 2006, a separate statement of income for the company has not been
included in these Financial Statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented inthese Financial Statements.

Going concern
The Financial Statements have been prepared on a going concern basis, based on the Directors’ opinion, after making
reasonable enquiries, that the company has adequate resources to continue in operational existence for the foreseeable
future. The going concern of the parent company is intrinsically linked with the Group, which it heads. Further details on theGroup’s going concern can be found on pages 69 and 79 to 81.

Taxation
Income tax on the statement of income for the year comprises current and deferred tax. Income tax is recognised instatement of income except to the extent that it relates to items recognised directly in equity, in which case it is recognisedin equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for taxation purposes. The following temporary differences are notprovided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting
nor taxable profit; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount ofassets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax
benefit will be realised. Deferred tax assets are measured on an undiscounted basis.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend.

www.oxinst.com

Derivative financial instruments
The company’s accounting policies for financial instruments are the same as the Group’s accounting policies under IFRS,
namely IAS 32 Financial Instruments: Presentation, IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.
These policies are set out in accounting policy ‘(e) Financial instruments’ in the Group accounting policies, on page 156.

Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Where parts ofan item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets.
Depreciation is charged to the statement of income on a straight-line basis over the estimated useful lives of each part of an
item of tangible fixed assets. The estimated useful lives are as follows:•

Computer equipment– 4 years•

Furniture and fittings– 4 years

Depreciation methods, useful lives and residual values are reviewed at each statement of financial position date.

Intangible assets
Intangible assets represents internally developed software. Amortisation is charged to the statement of income on a straightline basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets are amortisedfrom the date they are available for use. The estimated useful lives are as follows:
Software – 10 years

Impairment excluding deferred tax assets
Financial assets (including trade and other receivables)
Trade and other receivables are initially recognised at fair value and subsequently stated at their amortised cost lessappropriate provision for impairment. The provision for impairment of debtors is based on lifetime expected credit losses,
which is then updated for any reasonable and supportable forward-looking information and expectations. Lifetime expectedcredit losses are calculated by assessing historic credit loss experience. The movement in the provision is recognised in thecompany’s statement of income.

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Overview

Strategic Report

Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(a) Accounting policies continued

Termination benefits

Non-financial assets

Termination benefits are recognised as an expense when the company is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, orto provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits forvoluntary redundancies are recognised as an expense if the company has made an offer of voluntary redundancy, it isprobable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable
more than 12 months after the reporting date, then they are discounted to their present value.

The carrying amounts of the company’s non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs tosell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purposeof impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets thatgenerates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups ofassets (the ‘cash generating unit’ or CGU).
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in statement of income. Impairment losses recognised in respect of CGUs are allocated firstto reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the otherassets in the unit (group of units) on a pro-rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does notexceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss
had been recognised.

Employee benefits
Defined contribution plans
A defined contribution plan is a post employment benefit plan under which the company pays fixed contributions into aseparate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions todefined contribution pension plans are recognised as an expense in the statement of income in the periods during which
services are rendered by employees.

Defined benefit plans
A defined benefit plan is a post employment benefit plan other than a defined contribution plan. The company’s net obligationin respect of defined benefit pension plans is calculated by estimating the amount of future benefit that employees haveearned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, andthe fair value of any plan assets (at bid price) is deducted. The company determines the net interest on the net defined benefit
liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of
the annual period to the net defined benefit liability/(asset).
The discount rate is the yield at the reporting date on bonds that have a credit rating of at least AA that have maturity dates
approximating the terms of the company’s obligations and that are denominated in the currency in which the benefits are
expected to be paid. Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return onplan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The company recognises them
immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit
expenses in statement of income. The calculation of the defined benefit obligations is performed by a qualified actuary using
the projected unit credit method. When the calculation results in a benefit to the company, the recognised asset is limited tothe present value of benefits available in the form of any future refunds from the plan or reductions in future contributions andtakes into account the adverse effect of any minimum funding requirements.
The company is the sponsoring employer of a Group-wide defined benefit pension plan. The net defined benefit cost of theplan is charged to participating entities on the basis of the proportion of scheme membership attributable to each legal entity
at the reporting date. The contributions payable by the participating entities are determined using an agreed ratio which has
been in place for approximately ten years.

Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans
if the company has a present legal or constructive obligation to pay this amount as a result of past service provided by theemployee and the obligation can be estimated reliably.

www.oxinst.com

Share-based payment transactions
The grant date fair value of share-based payments awards granted to employees is recognised as an employee expense,with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to theawards. The fair value of the awards granted is measured using an option valuation model, taking into account the terms
and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual
number of awards for which the related service and non-market vesting conditions are expected to be met, such that theamount ultimately recognised as an expense is based on the number of awards that do meet the related service and nonmarket performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
Where the company grants options over its own shares to the employees of its subsidiaries, it recognises, in its individual
Financial Statements, an increase in the cost of investment in its subsidiaries equivalent to the equity settled share-based
payment charge recognised in its consolidated Financial Statements with the corresponding credit being recognised directlyin equity. Amounts recharged to the subsidiary are recognised as a reduction in the cost of investment in subsidiary. If theamount recharged exceeds the increase in the cost of investment, the excess is recognised as a dividend.

Short-term leases and leases of low-value assets
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery thathave a lease term of 12 months or less and leases of low-value assets, including IT equipment. The company recognises thelease payments associated with these leases as an expense on a straight-line basis over the lease term.

Foreign currencies
The company enters into forward exchange contracts and options to mitigate the currency exposures that arise on sales andpurchases denominated in foreign currencies. Transactions in foreign currencies are converted into Sterling at the rate rulingon the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates
ruling at the statement of financial position date. Exchange profits and losses arising from the above are dealt with in thestatement of income.

Investments
Investments in subsidiaries are stated at cost, less any provision for impairment, where appropriate.

Dividends on shares presented within Shareholders’ funds
Dividends unpaid at the statement of financial position date are only recognised as a liability at that date to the extent thatthey are appropriately authorised and are no longer at the discretion of the company. Unpaid dividends that do not meetthese criteria are disclosed in the notes to the Financial Statements.

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Overview

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Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(b) Profit for the year(d) Intangible assets
Software£m

The company’s profit for the financial year was £1.8m (2023: £29.1m). Other comprehensive expense in the year was £3.3m(2023: expense of £6.6m). The expense will not subsequently be reclassified to statement of income.
Cost

The auditor’s remuneration comprised £345,000 (2023: £250,000) for the statutory audit.
The average number of people employed by the company (including Directors) during the year was 84 (2023: 79). All these
individuals were involved in administration.
The aggregate payroll costs (including Directors) of these people were as follows:

Balance at 1 April 2023 and 31 March 2024
Depreciation and impairment losses
Balance at 1 April 2023

1.8

Charge for year

0.1

Balance at 31 March 2024

1.9

2024
£m

2023
£m

Wages and salaries

9.3

7.3

Social security costs

1.4

1.5

Net book value

Other pension costs

0.4

0.3

Balance at 1 April 2023 and 31 March 2024

11.1

9.1

The share-based payment charge was £1.9m (2023: £1.4m). Details of the Group’s share option schemes are included in Note
26 to the Group Financial Statements.

3.1

1.2

(e) Investments
Investments
in subsidiary
undertakings£m

Full details of the emoluments paid to Directors can be found in the Remuneration Report on pages 120 to 143.
Cost or valuation(c) Tangible fixed assets

Balance at 1 April 2023
Furnitureand fittings£mComputerequipment
£m

Total
£m

Balance at 1 April 2023

0.1

1.7

1.8

Additions

0.1

0.3

0.4

Impairment

Disposals

0.0

0.0

0.0

Balance at 1 April 2023 and 31 March 2024

Balance at 31 March 2024

0.2

2.0

2.2

Cost

Depreciation

Expense in respect of share options transferred to subsidiary undertakings

1.1

Additions

31.2

Balance at 31 March 2024

375.6

18.7

Net book value
Balance at 31 March 2023

324.6

Balance at 31 March 2024

356.9

Balance at 1 April 2023

0.0

1.4

1.4

Charge for year

0.1

0.1

0.2

Disposals

0.0

0.0

0.0

During the year the company contributed intercompany receivable balances in exchange for an issue of shares in its
subsidiary, Oxford Instruments Overseas Holdings Limited.

Balance at 31 March 2024

0.1

1.5

1.6

Related undertakings of the GroupThe following disclosure is provided in accordance with Section 409 of the Companies Act 2006.

Net book value
Balance at 31 March 2023

0.1

0.3

0.4

Balance at 31 March 2024

0.1

0.5

0.6

As of 31 March 2024, the companies listed below and on the following pages are indirectly held by Oxford Instruments plc
except for Oxford Instruments Industrial Products Holdings Limited, Oxford Instruments Nanotechnology Tools Holdings
Limited and Oxford Instruments Overseas Holdings Limited, which are all 100% directly owned by Oxford Instruments plc.
The financial year end of each company is 31 March unless otherwise indicated.
All subsidiary undertakings are controlled by the Group and their results are fully consolidated in the Group’s
financial statements.

www.oxinst.com

343.3

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Overview

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Governance

Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(e) Investments continued
Subsidiaries
Address

Ownership interest% ofclass held

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares100

Oxford Instruments Nanotechnology Tools
LimitedTubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

100

Oxford Instruments Nordiska AB

C/o TMF Sweden AB, Sergels Torg 12, 111 57,
Stockholm, Sweden

Shares100

Address

Ownership interest% ofclass heldAndor Technology Limited

7 Millennium Way, Springvale Business Park,
Belfast, NI, BT12 7AL

Ordinary shares100

Oxford Instruments Nanotechnology Tools
Holdings LimitedAndor Technology, Inc.

300 Baker Avenue, Suite 150, Concord MA 01742,
United States

Common stock100

Bitplane AG

Zurcherstrasse 6, 8952 Schlieren, Switzerland

Ordinary sharesCompany name

Note

Company name

Note

4

Preference sharesFirst Light Imaging Corporation

51209 Orange Street, Wilmington DE 19801,
United States

Common stock100

Oxford Instruments Overseas Holdings 2008
Limited4

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

First Light Imaging Pte. Ltd.

5, 6

541 Orchard Road, #09-01 Liat Towers,
238881, Singapore

Ordinary shares100

Oxford Instruments Overseas Holdings
Limited4

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

Europarc Sainte Victoire Bâtiment 5, Route deValbrillant Le Canet, 13590 Meyreuil France

Ordinary shares100

Oxford Instruments Overseas MarketingGmbH

Borsigstrasse 15a, 65205, Wiesbaden, Germany

Ordinary shares

100

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
England100

Ordinary shares

Oxford Instruments Overseas Marketing
LimitedOrdinary shares

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOxford Instruments Private Limited

100

300 Baker Avenue, Suite 150, Concord MA 01742,
United States

Common stock100

Messrs Tan Rajah & Cheah, 80 Raffles Place,#58-01 UOB Plaza 1, 048624, Singapore

Ordinary shares

Oxford Instruments America Inc

Oxford Instruments SAS

1007416 Hollister Avenue, Santa Barbara, CA 93117,
United States

Common stock100

9 Avenue du Canada, Immeuble ‘Le Méridien’,
91940 Les Ulis, France

Ordinary shares

Oxford Instruments Asylum Research Inc

Ordinary shares

100

Technopolis Innopoli 1, Tekniikantie 12, Espoo,
02150, Finland

100

C/O ECOVIS, Suite 7, 13 Hickson Road, Dawes
Point, New South Wales, Australia

Oxford Instruments
Technologies Oy

Ordinary shares

Oxford Instruments Australia Pty Limited

100

Floor 1, Building 60, 461 Hongcao Road, Xuhui
District, Shanghai, China

100

Ordinary shares

Oxford Instruments Technology (Shanghai)
Co. Ltd

Registered capital

PO Box 175, Frances House, Sir William Place,
St Peter Port, GY1 4HQ, Guernsey

Ordinary shares

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
England100

Borsigstrasse 15a, 65205, Wiesbaden, Germany

Oxford Instruments
UK 2013 Limited

Ordinary shares

Oxford Instruments GmbH
Oxford Instruments Holdings 2013 Inc

300 Baker Avenue, Suite 150, Concord MA 01742,
United States

Common stock100

Oxford Instruments X-Ray Technology Inc

360 El Pueblo Road, Scotts Valley CA 95066,
United States

Common stock

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

Spectral Applied Research Inc

199 Bay Street, Suite 5300, Commerce Court
West, Toronto ON M5L 1B9, Canada

Common shares100

Oxford Instruments Holdings GmbH

Borsigstrasse 15a, 65205, Wiesbaden, Germany

Ordinary shares

100

WITec (Beijing) Scientific Technology Co. Ltd.

3

Registered capital

100

Oxford Instruments India
Private Limited

Plot No. A-279, Ground Floor Road No. 16A,
Ambica Nagar, Wagle Industrial Estate, Thane(West), Thane, MH, 400604, India

Equity shares

100

Unit 1307A, Air China Plaza Tower 1, No. 36
Xiaoyun Road, Chaoyang District, 100027, Beijing,
China

WITec Pte. Ltd.

3

25 International Business Park, #03-59A German
Centre, 609916, Singapore

Ordinary shares

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares

100

Lise-Meitner-Str. 6, D-89081 Ulm, Germany

Ordinary shares100

Oxford Instruments Industrial Products
LimitedTubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary shares100

Oxford Instruments Italia s.r.l.,Via Della Chiusa 15, 20123, Milan, Italy

Capital stock100

Oxford Instruments KK

Sumitomo Fudosan Osaki Twin Building East,
5-1-18 Kita-Shinagawa, Shinagawa-ku, Tokyo,
141-0001, Japan

Ordinary shares

100

Tubney Woods, Abingdon, Oxon, OX13 5QX,
EnglandOrdinary sharesFirst Light Imaging SAS

Oxford Instruments AFM Limited

Oxford Instruments Funding Limited

Oxford Instruments Holdings Europe Limited

Oxford Instruments Industrial Products
Holdings Limited

4

1

4

4

Preference shares

WITec Wissenschaftliche Instrumente undTechnologie GmbH

1. UK tax resident.
2. Dormant entity.
3. Financial year end is 31 August.
4.	Entity to take advantage of s479A Companies Act 2006 (S479A) audit exemption for the year ending 31 March 2024. Oxford Instruments plc will
issue a guarantee pursuant to S479A in relation the liabilities of the entity.
5. Financial year end is 31 December.
6. Voluntary strike-off in progress

Oxford Instruments Molecular Biotools
Limitedwww.oxinst.com

2

4

100

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Overview

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Financial Statements

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
continued(f) Trade and other receivables(i) Deferred tax asset
2024
£m

2023
£m

Amounts falling due after one year:
Amounts owed by subsidiary undertaking

3.0

41.8

Amounts falling due within one year:
Amounts owed by subsidiary undertaking

43.1

18.5

Other receivables

1.1

0.3

Prepayment and accrued income

4.1

1.4

48.3

20.2

2024
£m

2023
£m

Balance at 1 April

2.3

0.1

Statement of income debit

0.1

(0.8)

Other comprehensive income credit

(0.3)

3.0

Balance at 31 March

2.1

2.3

The amounts of deferred tax assets are as follows:
Recognised
2024
£m

2023
£m

Amounts owed by subsidiary undertakings are interest-free, unsecured and repayable on demand.

Excess of depreciation over corresponding capital allowance

0.2

0.4

The company has no immediate intention to recall £3.0m (2023: £41.8m) of these balances in the short term and so theseamounts are classified as amounts falling due after more than one year.

Employee benefits – pension and share scheme

1.9

1.9

2.1

2.3

(g) Trade and other payables
2024
£m

2023
£m

Trade payables

3.0

0.3

Amounts owed to subsidiary undertaking

82.5

85.7

Tax, social security and sales-related taxes

2.3

1.7

Accruals and deferred income

10.7

12.2

98.5

99.9

Amounts falling due within one year:

Amounts owed to subsidiary undertakings are interest-free and repayable on demand.

(h) Bank overdraft
2024
£m

2023
£m

Current
Bank overdraft

2.6

0.2

At the end of the year

2.6

0.2

The company recognises deferred tax assets only to the extent that there will be suitable taxable profits from which the future
reversal of the underlying timing differences can be deducted.
The rate of UK corporation tax increased to 25% from 1 April 2023. The UK deferred tax assets and liabilities have been
calculated based on the enacted rate of 25%.

(j) Pension commitments
The company and its employees contribute to the Oxford Instruments Pension Scheme (‘the Scheme’), a defined benefit
pension scheme, which offers pensions in retirement and death in service benefit to members. Pension benefits are related tomembers’ final salary at retirement and their length of service.
The Scheme was closed to new members from 1 April 2001. Since this date, new employees have been invited to join the
Oxford Instruments Stakeholder Plan, a defined contribution scheme. The Scheme is also closed to future accrual.
The Oxford Instruments Group policy for charging net defined benefit costs to participating entities states that member costs
are charged directly to a participating company if that member is also an employee of said participating company. The costsof scheme members that are no longer employees of any participating company or directly affiliated with a Group company
are allocated on the basis of the participating company’s scheme members as a percentage of the total scheme membersthat are also employees of participating companies.
The policy for determining contributions to be paid by participating companies is the same as that for charging net defined
benefit costs.
Details of the scheme, its most recent actuarial valuation and its funding can be found in Note 24 to the Group Financial
Statements. The contributions paid by the company to the Oxford Instruments Pension Scheme were £2.0m (2023: £2.8m). The
company’s share of the retirement benefit asset was £3.7m (2023: £6.0m).

(k) Guarantees
The company has given a guarantee to the pension scheme in respect of the liability of its UK subsidiaries to the pension
scheme. The guarantee is for the excess of 105% of the liabilities of the scheme, calculated on the basis of Section 179 of thePensions Act 2004, over the assets of the scheme.
The company and its UK subsidiaries have entered into a cross-guarantee for £10.0m (2023: £10.0m) in respect of bankoverdraft facilities, of which £nil (2023: £nil) was drawn at the year end.

(l) Commitments
At 31 March 2024, capital commitments contracted were £nil (2023: £nil) and authorised were £nil (2023: £nil).

(m) Related party transactions
The company has a related party relationship with its Directors and Executive Officers and with its wholly owned
subsidiary companies.
Transactions with key management personnel are disclosed in the Remuneration Report on pages 120 to 143. There wereno other significant transactions with key management personnel in either the current or preceding year.

www.oxinst.com

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Financial Statements

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF OXFORD INSTRUMENTS PLC
Opinion on the financial statements
In our opinion:•

the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 March 2024 and of the Group’s profit for the year then ended;•

the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;•

the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and•the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Oxford Instruments plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 March 2024 which comprise the Consolidated Statement of Income, the Consolidated Statementof Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity,
Consolidated Statement of Cash Flows, Parent Company Statement of Financial Position, Parent Company Statement of
Changes in Equity and notes to the financial statements, including a summary of material accounting policies. The financial
reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK
adopted international accounting standards. The financial reporting framework that has been applied in the preparation of
the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial
Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothingmaterial to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.

Overview
Coverage

94% (2023: 99%) of Group revenue
85% (2023: 94%) of Group total assets

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion. Our audit opinion is consistent with the additional report to the audit committee.

Independence
Following the recommendation of the audit committee, we were appointed by the Board of Directors on 4 March 2020
to audit the financial statements for the year ended 31 March 2021 and subsequent financial periods. The period of total
uninterrupted engagement is four years, covering the years ended 31 March 2021 to 31 March 2024. We remain independentof the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of thefinancial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we havefulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by thatstandard were not provided to the Group or the Parent Company.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the
Parent Company’s ability to continue to adopt the going concern basis of accounting included:•

Evaluating the Directors’ method of assessing going concern including the relevance and reliability of underlying data
used to make the assessment, and whether assumptions and changes to assumptions from prior years are appropriate
and consistent with each other.

•Considering the adequacy of the Group’s banking facilities and ability to meet key financial covenants.

•

Testing the arithmetic accuracy of the model, challenging the assumptions applied and where possible agreeing themodel to supporting documentation, including order books.

•

Considering the appropriateness of the downside scenarios and challenging the Directors on the completeness and levelof downside assumptions based on our industry knowledge.

•

Review of the Directors’ downside scenario modelling forecasts, modelling scenarios to covenants and consideration of thelikelihood of occurrence and feasible actions to increase headroom.

•

Reviewing the period assessed by the Directors ensuring that it meets the requirements of the applicable accounting
standards, and challenging the Directors on whether there are any future events falling outside of the period consideredthat may impact the assessment completed.

•

Reviewing the adequacy and appropriateness of disclosures in the financial statements regarding the going
concern assessment.

•

Comparing the level of available financial resources with the Group’s financial forecasts, including taking account of
reasonably possible (but not unrealistic) adverse effects that could arise from risks, both individually and collectively,
relating to the Group.

www.oxinst.com

2024

Key audit matters

2023

Revenue recognition
Inventory provisioning
Materiality

Basis for opinion

95% (2023: 91%) of Group profit before tax (PBT)–Group financial statements as a whole£3.5m (2023: £3.68m) based on 5% (2023: 5%) of Profit before tax

An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk ofmanagement override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
For the Group audit we determined the individual components on which the scope of our work would be undertaken, and foreach of these components we then determined whether they are significant, non-significant full scope, or other in-scope withspecified procedures. We considered that a component is significant if it either represents over 15% of Group revenues, 15% of
PBT, or significant by risk. A full scope audit was undertaken for the significant components, along with certain components
which had full scope local statutory reporting requirements. This provided total coverage of 54% of revenues and 56% of PBT,
of which 32% and 49% respectively was performed by the Group engagement team, with the remainder performed by local
BDO member firms. Full scope procedures provided coverage of 62% across total Group assets. Specific procedures, including
revenue testing, were performed on the other in scope components representing 40% of Group revenues and 39% of PBT, ofwhich 22% and 26% respectively was performed by the Group engagement team. Specified procedures provided coverage of
23% across total Group assets.
We have scoped in and classified four components as significant, all of which are in the UK and Northern Ireland. Four othercomponents have been scoped in, including the Parent company in the UK, with the others being in the UK, Germany andJapan. All these have been audited under full scope audit procedures. In addition, there are seven other in-scope components
where specified audit procedures have been undertaken.
The three significant UK components, and the Parent company were audited by the Group engagement team, with thefourth significant component undertaken by a BDO member firm in Belfast. The Group engagement team also performed
the specified procedures on the US component. In addition, the BDO member firm in Belfast performed specified procedureson three of the other in-scope components. Local BDO member firms performed the audit work on the remaining two fullscope components (Germany and Japan), in addition to the two other specified procedures components. The remaining
two components have been subject to specified audit procedures using Group materiality by the Group engagement team.
All other components were scoped in for analytical review procedures performed by the Group audit team to confirm ourconclusion that there were no significant risks of material misstatement of the aggregated financial information.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

INDEPENDENT AUDITOR’S REPORT continued
TO THE MEMBERS OF OXFORD INSTRUMENTS PLC
Our involvement with component auditors

Key audit matter

For the work performed by component auditors, we determined the level of involvement needed in order to be able toconclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial
statements as a whole. Our involvement with component auditors included the following:

Revenue recognition

The Group team instructed the component auditors with specific focus on the significant risk areas to be covered, including
the Key Audit Matter (Revenue) detailed below. The component’s materiality was set by the Group audit team, having regards
to the size and risk of the specific component in relation to the Group as a whole. The audit work by the Group engagement
team, as well as the component auditors, was performed on-site and remotely.

(Revenue £470.4 million;
2023: £444.7 million)
Refer to para (q)(accounting policy)
and note 1 (financial
disclosures).

The Group audit team visited the significant component site in Belfast and had remote calls with component management
and local audit teams in Japan and Germany. For all significant and other in scope locations not audited by the Group team,regular remote calls were undertaken through the planning, execution and completion stages of the work, where findings
were discussed, remote reviews of component auditors’ files were performed, and additional work was undertaken asnecessary by the component auditor.

Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements
included:
Enquiries and challenge of management and those charged with governance to understand the actions they have taken
to identify climate-related risks and their potential impacts on the financial statements and to adequately disclose climaterelated risks within the annual report;•

Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climatechange affects this particular sector;•

Involvement of climate-related specialist in evaluating managements risk assessment; and•Review of the minutes of Audit and Risk Committee meetings and Sustainability Committee meetings and other papers
related to climate change and performed a risk assessment as to how the impact of the Group’s commitment as set out in
the TCFD Report may affect the financial statements and our audit.

We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives andcommitments, have been reflected, where appropriate, in the Directors’ going concern assessment and viability assessment.
We also assessed the consistency of management’s disclosures included as Other Information in the TCFD Report and with
our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted byclimate-related risks and related commitments.

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of ouraudit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters.

Given the nature of the products’
varying INCO terms and installation
arrangements, across the various
divisions, there are manual procedures
involved in determining when control
has passed, and therefore revenue
recognised, which is assessed by two
factors: when INCO terms have been
met and when the installation elementof the sale has been completed.
Therefore, because there is a manual
assessment, there is judgement andthe ability to manipulate revenue
cut-off, leading this to be a key audit
matter.

Climate change•

How the scope of our audit addressed the key audit matter

Our procedures included:
Testing, on a sample basis, whether specificproduct revenue transactions around the year end,
including those within deferred and accrued income
balances at the year end, had been recognised in theappropriate period.
Each item was tested by assessing the nature of
products and the terms of sale within the associatedcontracts. Revenue recognition was tested byconfirming relevant INCO terms to supporting
evidence, including installation acceptances orshipping/delivery dates to carrier, as appropriate.
Testing, on a sample basis, credit notes issued after
the year-end, for evidence that related revenue forthe year under audit should be reduced.
Key observations:
Nothing has come to our attention which suggests
that, in all material respects, revenue has beenrecognised in the incorrect period.

Inventory provisioning(Inventories: £108.4
million (2023: £81.4
million)Refer to para (b andi) (accounting policy)
and note 15 (financial
disclosures).

During our audit, we identified inventory
provisioning as a key audit matter
due to the inherent complexity of thegroup’s inventory provision calculations
and the significant judgments madeby management in determining theappropriate level of provision required.
The complexity in inventory
provisioning for this manufacturing
Group arises from a variety of factors,
including the diverse range of products,
and the estimation processes required
to assess potential obsolescence.
Slow-moving and obsolete inventory
provision is generally systemgenerated and determined withrespect to the ageing of inventory
and forecast demand/usage. The
provision percentage for raw materials
in particular is significant in thesubsidiaries that produce products atgreater volumes.
Whilst historically the annual
movement in provisions held overinventory are low, the amounts
cumulatively held on the statement offinancial position are significant, andtherefore any changes in assessments
over valuations could have a material
income statement impact.

We critically reviewed and challenged theassumptions and methodologies used bymanagement in the calculation of inventory
provisions, including an assessment of historical data
and trends.
We critically challenged management’s assessmentof those provisions by performing our own standback procedures. These included discussions withengineers and other members outside of the financeteam, to determine any changes in the status of eachof the inventory lines, including obsolescence.
We have assessed the completeness over theseprovisions, by reviewing the subsequent sale offinished items held within year-end inventory, andreviewed items held within raw materials to ensurethat they are still used within the business, and to
consider whether there is evidence that an inventory
provision is required. Where we have become awareof changes in the pattern of customer orders throughour inquiries and other procedures performed, we
have challenged management as to whether thesechanges in circumstances may indicate additional
provisions required.
We performed a retrospective review of the prior year
inventory provisions held by the group, to assess thereasonability of the estimation process.
In addition to all of the procedures above, for certain
components where ageing is used to calculate
provisions, we have reviewed inventory provisions
made by management, agreeing the invoice date
which was used to calculate the age of inventory tosupplier invoices and recalculated the provisions tocorroborate the appropriateness of those provisions.
Key observations:
Based on the work performed, we consider theinventory provision assessed by management to bereasonable.

www.oxinst.com

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208

Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

INDEPENDENT AUDITOR’S REPORT continued
TO THE MEMBERS OF OXFORD INSTRUMENTS PLC
Our application of materiality

Corporate governance statement

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.

The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that partof the Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below theselevels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, andthe particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performancemateriality as follows:
Group financial statements

Rationale for thebenchmark applied

The Directors’ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on page 81; and•The Directors’ explanation as to their assessment of the Group’s prospects, the period thisassessment covers and why the period is appropriate set out on page 81.

•

Directors’ statement on fair, balanced and understandable set out on page 148;

2023
£m

2024
£m

2023
£m

•

Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 72;

3.5

3.68

3.15

3.31

•

5% of Profit
before tax

5% of Profit
before tax

90% of groupmateriality

90% of groupmateriality

The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on pages 70–78; and•The section describing the work of the audit committee set out on pages 110–116.

As a trading Group, profit before tax is considered
to be the most relevant GAAP measure for theusers of the financial statements.

Performance materiality

2.28

2.39

Basis for determining
performance materiality

65% of materiality

65% of materiality

Rationale for thepercentage applied for
performance materiality

•

2024
£m

Materiality
Basis for determining
materiality

Parent company financial statements

Going concern andlonger-term viability

Other Code provisions

Set at 90% (2023: 90%) of group materiality
given the assessment of the components
aggregation risk.
2.04

2.15

65% of materiality 65% of materiality

We set performance materiality taking into account our assessment of the control environment,
the history of misstatements, along with management’s attitude to proposed adjustments.

Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by theCompanies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report andDirectors’ report

Component materiality
We set materiality for each component of the Group based on a percentage of between 30% and 90% (2023: 30% and 90%)of Group materiality dependent on the size and our assessment of the risk of material misstatement of that component.
Component materiality ranged from £1.1m to £3.15m (2023: £1.0m to £3.31m). In the audit of each component, we further
applied performance materiality levels of 65% (2023: 65%) of the component materiality to our testing to ensure that the riskof errors exceeding component materiality was appropriately mitigated.

Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £80,000 (2023:£80,000) and £70,000 (2023: £70,000) for the group and parent company financial statements, respectively. We also agreed
to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

In our opinion, based on the work undertaken in the course of the audit:•

the information given in the Strategic report and the Directors’ report for the financial year forwhich the financial statements are prepared is consistent with the financial statements; and•the Strategic report and the Directors’ report have been prepared in accordance withapplicable legal requirements.

In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material misstatements in
the Strategic report or the Directors’ report.
•

Matters on which weare required to reportby exception

We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:•adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or•the Parent Company financial statements and the part of the Directors’ remuneration report tobe audited are not in agreement with the accounting records and returns; or•certain disclosures of Directors’ remuneration specified by law are not made; or•

we have not received all the information and explanations we require for our audit.

Other information
The Directors are responsible for the other information. The other information comprises the information included in the Report
and Financial Statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the courseof the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

www.oxinst.com

In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.

Directors’ remuneration

Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities statement, the Directors are responsible for the preparation of thefinancial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basisof accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or haveno realistic alternative but to do so.

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Oxford Instruments plc
Annual Report 2024

Overview

Strategic Report

Governance

Financial Statements

INDEPENDENT AUDITOR’S REPORT continued
TO THE MEMBERS OF OXFORD INSTRUMENTS PLC
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in linewith our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. These
procedures were incorporated into our instructions to the component auditors for the material and significant components not
audited by the Group engagement team, and the results included as part of our review of their work. The extent to which ourprocedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations
Based on:•Our understanding of the Group and the industry in which it operates;•

Discussion with management, in-house legal counsel, internal audit and those charged with governance; and•Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations,

we considered the significant laws and regulations to be the Companies Act 2006, the relevant tax legislation, Listing Rules,
along with the relevant financial reporting framework (UK adopted international accounting standards, United Kingdom
Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom
Generally Accepted Accounting Practice)).
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on
the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified
such laws and regulations to be the health and safety legislation, bribery legislation, modern slavery and data protection.

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls,
revenue recognition and key areas of estimation uncertainty or judgement.
Our procedures in respect of the above included:•

Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting
documentation;•

Assessing significant estimates made by management for bias in particular in respect of the inventory provisioning,
intangible assets impairment review, and assumptions used in determining the defined benefit pension liability; and•In response to the risk of fraud in revenue recognition, the procedures set out in the key audit matters section above.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members,
including component engagement teams, who were all deemed to have appropriate competence and capabilities, andremained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. For component
engagement teams, we also reviewed the result of their work performed in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising thatthe risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members thosematters we are required to state to them in an auditor’s 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 Parent Company and the Parent Company’s members asa body, for our audit work, for this report, or for the opinions we have formed.

Our procedures in respect of the above included:•

Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws andregulations;•

Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws andregulations;•

Review of financial statement disclosures and agreeing to supporting documentation;

Reading, United Kingdom•

Involvement of tax specialists in the audit; and11 June 2024•

Review of legal expenditure accounts to understand the nature of expenditure incurred.

Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:•

Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;•

Obtaining an understanding of the Group’s policies and procedures relating to:– Detecting and responding to the risks of fraud; and– Internal controls established to mitigate risks related to fraud.

•

Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;•

Enquiry of management, in-house legal counsel and internal audit concerning actual and potential litigation and claims;•

Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;•

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud; and•Considering remuneration incentive schemes and performance targets and the related financial statement areas
impacted by these.

www.oxinst.com

SANDRA THOMPSON (SENIOR STATUTORY AUDITOR)
For and on behalf of BDO LLP, Statutory Auditor

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

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Oxford Instruments plc
Annual Report 2024

HISTORICAL FINANCIAL SUMMARY

Consolidated Statement of Income

2020
£m

2021
£m

2022
£m

2023
£m

2024
£m

Revenue from continuing operations

317.4

318.5

367.3

444.7

470.4

Adjusted operating profit from continuing operations1

50.5

56.7

66.3

80.5

80.3

Intellectual property litigation settlement

–

–

–

–

3.3

Transaction related costs

–

(0.4)

(0.4)

–

(1.0)

Release of provision on disposal

–

–

–

0.4

–

0.6

–

–

–

(0.4)

–

–

(1.7)

(0.5)

–

Adjustments relating to defined benefit pension schemes
WITec post-acquisition gross margin adjustment

Cash flows from continuing operations

2020
£m

2021
£m

2022
£m

2023
£m

2024
£m

Net cash from operating activities

55.2

42.0

49.1

66.5

41.6

Net cash generated from/(used in) investing activities

6.0

(5.1)

(45.6)(36.4)(36.7)Net cash used in financing activities(11.4)(30.5)(15.7)(16.6)(18.0)Net increase/(decrease) in cash equivalentsfrom continuing operations

49.8

6.4

(12.2)

13.5(13.1)Per ordinary share

pence

pence

pence

pence

pence

Earnings – continuing

55.9

72.8

67.1

101.6

87.7

Adjusted earnings

70.2

78.6

94.3

112.7

109.0

–

17.0

18.1

19.5

20.8

Employees

NumberNumberNumberNumberNumberAverage number of employees

1,585

1,619

1,878

2,027

2,244

1

Restructuring costs and charges associated withmanagement changes

(0.2)

–

–

(0.4)

(3.7)

–

–

–

(0.5)

(0.4)

Impairment of inventory

(0.4)

–

–

–

–

Profit on disposal of associate

6.5

–

–

–

–

Impairment of capitalised development costs

(7.1)

(1.3)

–

(0.8)

–

Amortisation and impairment of acquired intangibles

(8.7)

(8.4)

(9.5)

(9.3)

(9.1)

Fair value movement on financial derivatives

(1.4)

6.4

(6.4)

3.0

(0.7)

Operating profit from continuing operations

39.8

53.0

48.3

72.4

68.3

Net financing (costs)/income

(1.0)

(0.8)

(0.7)

1.1

3.0

Profit before taxation from continuing operations

38.8

52.2

47.6

73.5

71.3

Income tax expense(6.8)(10.4)(9.0)(14.9)(20.6)

Profit for the year from continuing operations

32.0

41.8

38.6

58.6

50.7

Adjusted profit before tax from continuing operations

49.5

55.9

65.9

82.0

83.3

21.8

21.1

31.7

59.3

80.5

Intellectual property litigation costs

Dividends

1.	Adjusted numbers are stated to give a better understanding of the underlying business performance. Details of adjusting items can be found in
Note 2 to the Group Financial Statements.

Consolidated Statement of Financial Position

Property, plant and equipment
Right-of-use assets

8.2

7.3

17.9

31.4

32.4

Intangible assets

135.5

122.6

140.7

132.1

137.9

Investment in associate

–

–

–

–

–

Long-term receivables

–

–

–

0.5

1.3

Deferred and current tax

2.7

3.9

(5.4)

(2.9)

(5.8)

Inventories

58.8

58.7

65.3

81.4

108.4

Trade and other receivables

72.0

76.0

95.8

115.2

117.2

Trade and other payables(128.6)(121.4)(141.0)(160.6)(166.3)

(2.1)

(2.6)

(3.5)

(5.2)

(4.8)

Net assets excluding net cash

168.3

166.6

201.5

251.2

300.8

Cash and cash equivalents

119.5

128.0

96.4

112.7

97.8

Bank overdrafts(24.1)(30.4)(8.7)(11.2)(12.3)

Bank borrowings(27.9)

–

(1.8)

(1.3)

(1.7)

Net cash

67.5

97.6

85.9

100.2

83.8

Lease payables

(6.5)

(4.9)

(14.9)(26.2)(28.6)

Provisions

(8.4)

(9.4)

(7.8)

(7.6)

(6.4)

Retirement benefit obligations

30.7

16.3

51.7

26.4

16.1

Net assets employed/capital and reserves
attributable to the company’s equity holders

251.6

266.2

316.4

344.0

365.7

Lease payables

www.oxinst.com

CBP00019082504183028

Printed by a CarbonNeutral® Company certified to ISO 14001 environmental
management system.
Printed on material from well-managed, FSC® certified forests and othercontrolled sources.
100% of the inks used are HP Indigo ElectroInk which complies with RoHS legislationand meets the chemical requirements of the Nordic Ecolabel (Nordic Swan) for
printing companies, 95% of press chemicals are recycled for further use and, on
average 99% of any waste associated with this production will be recycled and theremaining 1% used to generate energy.
The paper is Carbon Balanced with World Land Trust, an international conservation
charity, who offset carbon emissions through the purchase and preservation ofhigh conservation value land. Through protecting standing forests, under threatof clearance, carbon is locked-in, that would otherwise be released.

Oxford Instruments plc
Tubney Woods,
Abingdon,Oxfordshire.
OX13 5QX.
t: +44(0)1865 393200
e: investors@oxinst.com
www.oxinst.com