Oxford Instruments plc

Announcement of half-year results for the six months to 30 September 2023
Leading positions in structural growth markets drove revenue, profit and order book increases
Oxford Instruments plc, a leading provider of high technology products and systems for industry and research, today (14 November2023) announces its interim results for the six months to 30 September 2023.

Adjusted1
Revenue
Adjusted operating profit
Adjusted operating profit margin
Adjusted profit before taxation
Adjusted basic earnings per share
Normalised cash conversion2
Net cash3

Half year toHalf year to
30 September 30 September
2023
2022
£209.7m£200.5m£36.5m£36.8m17.4%
18.4%£37.5m£37.3m
49.4p
50.8p
41%
65%
£79.1m£97.1mStatutory
Revenue
Operating profit
Operating profit margin
Profit before taxation
Basic earnings per share
Dividend per share for the year

Half year toHalf year to
30 September 30 September
2023
2022
£209.7m£200.5m£28.6m£26.3m13.6%
13.1%£29.6m
£26.6m
38.6p
35.9p
4.9p
4.6p

% change
reported+4.6%(0.8%)(100bps)+0.5%(2.8%)

constant
currency4
+7.5%
+6.5%
(20bps)% change
reported
+4.6%
+8.7%
+50bps+11.3%+7.5%+6.5%

Financial highlights
•
•
•
•
•
•
•

Revenue growth of 7.5% at constant currency driven by particularly good growth in Research & Discovery.
Constant currency growth in order book of 10% to £332m following positive book-to-bill of 1.07.
Orders slightly down (2.3%) at constant currency against strong comparator period (2022: up 18.7%).
Adjusted operating profit of £36.5m (2022: £36.8m), growth of 6.5% at constant currency.
Constant currency adjusted operating profit margin of 18.2% was broadly in line with last year (2022: 18.4%), reflecting aslightly increased gross margin offset by investments in the period; reported margin at 17.4% after currency headwind.
Normalised cash conversion of 41% reflects an adjustment for capital expenditure on capacity expansion and inventory buildup ahead of transfer of operations to new facility and is expected to return to historic rates in the second half.
Growth in interim dividend of 6.5% to 4.9p.

Strategic and operational highlights
•
•

•
•
•
•

Leading positions in key markets in Healthcare & Life Science, Semiconductor (with a high proportion to compound
semiconductor) and Advanced Materials driving good book-to-bill and 7.5% constant currency revenue growth.
Strong revenue growth in Healthcare & Life Science (+22% at constant currency) and Advanced Materials (+12%); our robust
performance in Semiconductor & Communications (+2%) demonstrates our resilience within the cyclical semiconductor
market.
Revenue growth primarily driven by Europe and Asia. Strong constant currency revenue growth of 18% in China, where wehave begun to pivot to a broader customer base, as demonstrated by order growth of 4% at constant currency.
Strong customer demand for our leading product portfolio which supports Advanced Materials research and our latest optical
microscopy systems and imaging software for the Healthcare & Life Science market.
Strong double-digit growth to academic customers across our markets, offsetting slower phasing of orders fromsemiconductor and quantum commercial customers.
Investment in infrastructure to support future growth: new £75m state-of-the-art facility for compound semiconductor systems
in Bristol; beginning £15m extension of production capacity in Belfast to meet growing Life Science demand. Continued
investment (£2m in H1) in operational and IT capabilities to drive process and cost efficiencies.

Summary and outlook
Richard Tyson, Chief Executive Officer of Oxford Instruments plc, said:“This is a very robust set of results for Oxford Instruments. Our focus on specialist niches within structural growth markets has
supported strong revenue and adjusted operating profit growth at constant currency (7.5% and 6.5% respectively), and our positive
book-to-bill of 1.07 and order book growth of 10% demonstrates continued strong global demand for our leading products and services.
“We enter the second half with a strong order book and a good pipeline, remaining mindful of the current macroeconomic and politicalclimate. Our operational improvement programme is expected to support an increase in production, underpinning our confidence in an
improvement in second half trading, with our normal seasonal second half weighting. Our expectations for the full year trading
performance are unchanged.

“Having joined Oxford Instruments six weeks ago, I have been busy getting to know the business. I have already spent a considerable
amount of time meeting our people and customers, and immersing myself in the business. These early meetings have reinforced myreasons for joining and the key strengths which drive Oxford Instruments’ leading position in the marketplace. These include
differentiated, innovative and value-add technologies, outstanding colleagues with deep expertise, and leading positions in structural
growth markets.
“Oxford Instruments has made progress over recent years in becoming more commercial, with increased customer intimacy and endmarket focus. This remains an important strategic focus, with further opportunity to enhance the Group’s customer interface and new
product development.
“I believe there is a substantial opportunity to pair this with enhanced operational performance and effectiveness to deliver even better
outcomes for customers, together with margin expansion and attractive, sustainable growth. Our strong financial position also supports
the current elevated levels of organic investment for future growth and our ability to selectively make acquisitions to augment thatgrowth.
“The Group is in a strong position with exciting prospects. We will continue to build on Oxford Instruments’ excellent reputation amongst
the world’s leading companies and scientific research communities. I look forward to working with the team to build on these strong
foundations”
Notes
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 can be found in the finance review and Note 2.

2.

Normalised cash conversion measures the percentage of adjusted cash from operations to adjusted operating profit, as set out in the financereview.

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 ourhedging programme.

The financial information in this preliminary announcement has been prepared in accordance with UK adopted international accounting
standards and IAS 34 interim financial reporting. The Group has applied all accounting standards and interpretations issued relevant to
its operations and effective for accounting periods beginning on 1 April 2023. The IFRS accounting policies have been appliedconsistently to all periods.
LEI: 213800J364EZD6UCE231
Oxford Instruments management will present its interim results in a webcast available for on-demand viewing from 08.00 UK today(Tuesday 14 November 2023) at www.oxinst.com/investors-content/financial-reports-and-presentations.

Enquiries:
Oxford Instruments plc

Tel: 01865 393200

Richard Tyson, Chief Executive Officer; Gavin Hill, Chief Financial Officer

Julian Wais, Head of Investor Relations

Tel: 07720 999764
Julian.wais@oxinst.com

MHP Group

Tel: 020 3128 8100

Tim Rowntree/Katie Hunt/Eleni Menikou/Veronica Farahoxfordinstruments@mhpc.com

Notes to Editors
About Oxford Instruments plc
Oxford Instruments designs, supplies and supports high-technology products and systems which allow the world's leading companies andscientific research communities to image, analyse and manipulate materials down to the atomic and molecular level. The Group's products
and services help its customers to accelerate R&D, increase manufacturing productivity and make ground-breaking discoveries across its
key market segments: Semiconductor & Communications, Advanced Materials, Healthcare & Life Science, Energy & Environment andQuantum Technology.
Innovation is the driving force behind Oxford Instruments' growth and success, supporting its core purpose to enable a greener, healthier,more connected advanced society. Founded in 1959 as the first technology business to be spun out from Oxford University, Oxford
Instruments is now a global company listed on the FTSE250 index of the London Stock Exchange (OXIG). Its customer-centric, marketfocused strategy creates competitive advantage through understanding the technical and commercial challenges in markets with longterm structural growth drivers.
For more information, visit www.oxinst.com
Chief Executive Officer’s Review

As I write for the first time as Chief Executive Officer, having joined Oxford Instruments at the start of October, I am pleased to report on
the Group’s robust performance in the half year to 30 September 2023.
The company’s strategic focus on structural growth markets, together with the strength and differentiation of the product portfolio, hasdriven growth in revenue and adjusted operating profit in a challenging macroeconomic landscape and provides a strong platform for
future growth. Demand is strong across each of our end markets and geographies despite these macro headwinds, with revenue growthacross our three sectors, and a positive book-to-bill giving good visibility to the year end and beyond.
The Group’s adjusted operating margin has remained broadly flat on a constant currency basis, despite our ongoing elevated levels ofinvestment in people, infrastructure and operations as we position the business to capitalise on future demand for our products andservices. There continues to be a range of opportunities for organic investment in operating infrastructure and systems that can deliver
enhanced future performance for the Group, our customers, and shareholders.
Value-added products for diversified markets underpinning resilience
Our leading positions in six structural growth end markets, combined with the breadth of our offer, global footprint and reach into bothacademic and commercial markets, provide Oxford Instruments with the ability to adapt and grow through varying economic cycles
within markets and geographies. Our differentiated, value-adding products accelerate our customers’ progress across the technology
development and production cycle from fundamental research to commercial R&D and high-volume production, providing further
resilience to macroeconomic uncertainty.
These strengths are evident in the performance in the half, where Group revenue growth at constant currency was driven by particularly
strong performances in Healthcare & Life Science (+22%), Advanced Materials (+12%) and Research & Fundamental Science (+12%).
Semiconductor & Communications performance was robust (+2%), reflecting its resilient positioning within the broader, more cyclicalmarket. Energy & Environment was slightly down (-4%) as was Quantum Technology (-8%), with the quantum market typically subject tolumpiness due to the value of systems and phasing of orders.
In the first half we achieved notable growth in revenue from academic customers across all key segments, reflecting increased global
investment in our markets, as these are closely aligned with national scientific priorities. This investment aims to drive progress in arange of areas from life sciences to greener technologies and advanced materials, as well as enhanced semiconductor capabilities. Thishas mitigated a lengthening of commercial order cycles in some markets, particularly semiconductor, which has resulted in first halforders slightly lower than last year. Overall, a positive book-to-bill ratio in the first half resulted in a 10% increase in our order book.
Robust financial performanceGroup
Orders
Revenue
Adjusted operating profit
Adjusted operating margin

Half year to
30 September 2023
£224.3m£209.7m£36.5m17.4%

Reported growthvs half year to
30 September 2022
(4.7%)+4.6%(0.8%)(100bps)

Constant currency growthvs half year to
30 September 2022
(2.3%)+7.5%+6.5%(20bps)Reported revenue for the period was £209.7m (2022: £200.5m), representing growth of 7.5% on a constant currency basis.
Strong revenue growth from academic customers resulted in a shift in the relative proportion of sales between academic andcommercial customers, with a 55%/45% split in favour of academic customers versus 49%/51% in the comparative period in 2022.
On a constant currency basis growth was primarily driven by Research & Discovery, up 17.7% to £66.6m (H1 2022: £58.1m). Materials& Characterisation revenue grew by 3% to £109.3m (H1 2022: £108.7m). Service & Healthcare revenue was up 4.2% to £33.8m (2022:£33.7m).
Asia, our largest geographic market, representing 48% of Group revenue, has performed strongly, with 9% constant currency revenue
growth. This is largely due to 18% constant currency revenue growth in China, where we are entering new and adjacent markets, andwhere the Chinese government is increasing investment in green technologies, semiconductor and healthcare. We have begun to pivot
towards markets within China which are less impacted by UK export licence restrictions, generating order growth and a healthy orderbook and ongoing pipeline. Revenue growth in Europe and Asia more than offset a decline in North American revenues due to delays in
the conversion of pipeline opportunities into orders.
Structurally growing and resilient end markets
Our resilience has been further borne out by our positive performance in the Semiconductor & Communications market (27% ofrevenue), where constant currency revenue is up 2% on last year, reflecting strong growth in compound semiconductor applications(which represent more than 60% of our activity in the semiconductor market) and commercial R&D. We are seeing strong revenue
growth across a range of advanced compound semiconductor applications, including power semiconductors, augmented and virtual
reality applications, as well as strong academic sales into central facilities and R&D clean rooms as universities invest in the latest
technology to enable them to explore new applications. Our strengths in the advanced compound semiconductor market more thanoffset the widely noted softening in mainstream silicon semiconductor production markets.
Our biggest growth areas in the half year have been in Healthcare & Life Science (21% of revenue) and Advanced Materials (33% ofrevenue). In Healthcare & Life Science we have delivered strong direct sales of our microscopy portfolio (notably our new flagshipbenchtop microscope BC43, which has made high quality, affordable imaging capabilities accessible to a range of new audiences). We
have also made significant sales of our key technologies, including BC43, into original equipment manufacturing (OEM) partners, andhave seen continued demand for our Imaris imaging software, which has now added a dedicated neuroscience edition. Revenue for
Healthcare & Life Science is up 22% at constant currency.

In Advanced Materials, growing numbers of customers are using our technology to understand how materials perform in both academic
and commercial settings. The breadth of techniques we offer enables customers to characterise and precisely measure the properties
and behaviour of materials and devices.
Customers choose our products to accelerate their progress in optimising and improving existing materials such as steel and aluminium,
as well as to help them develop the new advanced materials needed to deliver a sustainable future. This has resulted in continuing
strong demand for our imaging and analytical products, and 12% revenue growth for this segment.
Energy and Environment (10% of revenue) provides a significant market opportunity as our products have a key role to play in delivering
a greener future, from helping scientists understand the impacts of pollution to helping manufacturers to design more efficient energy
storage. Revenue for this sector was behind a strong comparator period, but demand remains strong, with order growth of 8.8% atconstant currency.
In Quantum Technology (6% of revenue), we are playing an important role in supporting the transition from fundamental research to thecommercialisation of quantum computing. Key developments in the half include the installation of our equipment to support commercial
quantum computers in datacentres in Japan and the UK, with related service contracts to support 24/7 uptime. Phasing of installations
has resulted in lower revenue in the half, but with a strong pipeline we anticipate a stronger second half.
Research & Fundamental Science, our smallest segment (4% of Group revenue), has performed strongly in the half, with 11.7%
constant currency growth versus the corresponding period in 2022.
Adjusted operating profit grew by 6.5% at constant currency. Despite our significant investment in infrastructure, operations and people,
we have delivered margin broadly in line with the corresponding period in 2022 at 18.2% (-20bps).
Demand for our products and services remains strong across each of our end markets and geographies, and a positive book-to-bill of
1.07 in the first half resulted in a closing order book of £332m (constant currency growth of 10%).
Orders were slightly down (2.3%) on a strong comparator period at constant currency, largely due to lengthening order cycles incommercial markets and other external factors, including extended lead times for the third-party electron microscopes for which we
provide key analytical equipment.
Investing for sustainable growth
We continue to invest significantly in infrastructure and systems, together with reinforcing key teams to support the ongoing growth ofour business. This is in addition to our longstanding prioritisation of investment in R&D, set out below.
Our focus in this area is on enhancing productivity, continuing to shorten lead times and boosting capacity, to put us in the best possible
position to support demand and enhance our returns.
Our most significant current infrastructure investments are in our UK manufacturing hubs, with the creation of a £75m purpose-built
compound semiconductor fabrication facility, outside Bristol, and an additional facility for Andor Belfast (at a cost of £15m), bothdesigned to ensure we can meet the growing global demand for our products.
The Bristol facility, on track to be fully operational in Q1 2024, will double our production capacity in the growing compound
semiconductor market, with state-of-the-art manufacturing facilities including increased cleanroom space and advanced laboratories.
The facility has been designed to the ‘very good’ environmental specification through BREEAM, the leading certification system forsustainable buildings, with heat source pumps and a solar array.
In Belfast, the purchase of a building adjacent to our current site will unlock substantial growth in production capacity and facilitate
improved production workflows for our scientific cameras, microscopy and optical spectrometer products to meet heightened demand.
As with the Bristol site, sustainable principles will drive the choices made for the fit out, which is underway, and is expected to take 24months, with completion in autumn 2025.
A further development in the half was the consolidation of two Tokyo sites to a new, highly sustainable, certified 4-star DBJ(Development Bank of Japan) green building.
Ongoing investment in systems and operations (£2m in this half year) includes the rollout of our new customer relationship management
platform, which is supporting market intimacy and the delivery of our nurture, land and expand approach by enhancing our ability toleverage synergies across sales, marketing and service teams. Parallel investments in IT and financial systems are designed to unlock
efficiencies and enhance our productivity. We are also focusing on delivering operational improvements to ensure our production
processes are seamless and efficient, and strengthening and consolidating our supply chain.
Headcount developments in the half include the recruitment of additional service engineers and within our customer contact centres toensure customers have ready access to in-person support in regions where we have a geographically disparate installation base, suchas China.
Continuous market-led innovation
Innovation remains central to Oxford Instruments’ priorities. In order to maintain a strong product pipeline and retain our leading edge inour chosen markets, we make significant investment in our own research and development. We have invested £19.7m in R&D over thehalf, representing 9.4% (2022: 8.7%) of revenue.
New product launches have included a new materials analysis instrument with the ability to collect and analyse data in a matter ofminutes which would previously take hours; a compact dilution refrigerator with a price point and small footprint which make it
accessible to a wide range of laboratories, and an extension to our compound semiconductor atomic layer deposition range foradvanced quantum, photonics and electronics applications.
Each new product has its own drivers, but all have been developed based on our intimate understanding of our markets and built toaddress the challenges faced by our customers.

A talented and engaged team
Having joined Oxford Instruments six weeks ago, I have been busy getting to know the business. I have already spent a considerable
amount of time meeting our people and customers. These meetings have reinforced my reasons for joining and the key strengths which
drive Oxford Instruments’ leading position in the marketplace. These include differentiated, innovative and value-add technologies,
outstanding colleagues with deep expertise, and leading positions in structural growth markets.
I have been extremely impressed by the talent, passion and commitment demonstrated by my new colleagues, and I am grateful for thewarm welcome they have given me. Oxford Instruments’ people are highly motivated and very able, and I am very confident in our ability
to drive the business forward together. I am delighted to record that our recent annual engagement survey, completed in September,recorded a positive engagement score of 78%, and that well over three quarters of employees shared their views, which we are now
taking on board.
This year has seen the expansion of our network of employee impact groups, to include a focus on neurodiversity. We are also making
positive progress on our push to increase the number of women in leadership roles and, on a related note, have now met therecommendations of the FTSE Women Leaders review, with women now holding three of the seven positions on our Board.
I look forward to continuing to build on the excellent progress made to date. Driving a positive company culture, in which engaged
employees understand how they contribute to our strategy and purpose, and feel able to deliver their best, is one of my central priorities.
I am delighted to have such strong foundations from which to build.
Dividend
As a result of the Group’s robust trading performance, the Board is declaring an interim dividend of 4.9p per share, up 6.5% (2022: 4.6p
per share).
Outlook
We enter the second half with a strong order book and a robust pipeline, remaining mindful of the current macro environment. Ouroperational improvement programme is expected to support an increase in production, supporting our confidence in an improvement insecond half trading, with our normal seasonal second half weighting. Our expectations for the full year trading performance areunchanged.
Having joined Oxford Instruments six weeks ago, I have been busy getting to know the business. I have already spent a considerable
amount of time meeting our people and customers.
Oxford Instruments has made significant progress over recent years in becoming more commercial, with increased customer intimacy
and end-market focus. This remains an important strategic focus. I believe there is a substantial opportunity to pair this with enhanced
operational effectiveness to deliver even better outcomes for customers, together with margin expansion and attractive, sustainablegrowth for shareholders. Our strong financial position also supports continued investment for organic growth and to make selective
acquisitions to augment that growth.
I believe the Group is in a strong position with exciting prospects. We will continue to build on Oxford Instruments’ excellent reputation
amongst the world’s leading companies and scientific research communities. I look forward to working with the team to build on thesestrong foundations.

Richard Tyson
Chief Executive Officer
13 November 2023

Operations review
Materials & Characterisation

The Materials & Characterisation sector has a broad customer base across a wide range of applications for:••

Imaging and analysis of materials down to the atomic level (across our Asylum Research, NanoAnalysis, Magnetic
Resonance and WITec businesses), where our leading product performance, ease of use and advanced analytics
enhance our customers’ capabilities, provide actionable insights and increase their productivity. Our portfolio ofmaterials analysis solutions (including X-ray, electron and magnetic resonance analysis systems and atomic force
and Raman microscopes) enable the measurement of the structures, composition and critical properties that define
the modern world.
The manufacture of semiconductor devices and structures, where our Plasma Technology business’ portfolio ofadvanced etch and deposition process systems enables our customers to create and manipulate materials withatomic scale accuracy to manufacture advanced compound semiconductor devices.

With a strong focus on accelerating our customers’ applied R&D, our products and services in this sector enable thedevelopment of new devices and next generation higher performing materials, as well as enhancing productivity in advanced
manufacturing, quality assurance (QA) and quality control (QC).
Key highlights
Half year to
30 September
2023

Half year to
30 September
2022% reported
growth% constantcurrency1
growthOrders£117.0m£135.4m(13.6%)(11.4%)

Revenue£109.3m£108.7m

+0.6%

+3.1%

Adjusted2 operating profit£17.4m£18.9m

(7.9%)+0.5%

Adjusted2 operating margin

15.9%

17.4%

Statutory operating profit£15.9m£17.2mStatutory operating margin

14.5%

15.8%

1.
2.

For definition refer to note on page 2.
Details of adjusting items can be found in Note 2 to the half- year financial statements.

Operational, strategic and regional progress
The Materials & Characterisation sector has performed robustly in the half year to September, with revenue and order book growthdemonstrating our resilience in a challenging macroeconomic backdrop. Revenue grew by 3% at constant currency, with strong growthin Advanced Materials markets, and with Semiconductor & Communications broadly in line with last year. Together these customer
segments account for more than three quarters of the sector’s revenue.
Regionally, Asia has performed particularly strongly, with double digit revenue growth at constant currency, including 23% growth inChina, where the easing of Covid restrictions and a reduction of supply chain shortages have further contributed to our growth. Revenue
in Europe is broadly in line with last year, while in North America, phasing held back first half revenue.
Orders for the sector remain ahead of revenue, with a book-to-bill of 1.07 including strong double-digit growth to academic customers
across all our markets. We have seen a lengthening in the purchasing cycle from commercial customers, leading to a softening inindustrial orders in Semiconductor and Advanced Materials despite a healthy pipeline. Long lead times for electron microscopes, which
are manufactured by third parties, have also impacted the phasing of orders for our electron microscope analytical solutions which arebought as accessories for these devices. This resulted in orders for the sector being 11.4% behind a strong comparator period atconstant currency (2022: £135.4m).
Adjusted operating profit was £17.4m (2022: £18.9m) after the investment in our new Bristol facility, and significant investment tosupport increased productivity. This, together with a currency headwind, was reflected in the margin of 15.9% (2022: 17.4%), which was
50bps lower at constant currency.
The growth of revenue from academic customers reflects increased government spending into our markets, as institutes anduniversities seek to advance progress on greener technologies and advanced materials R&D, as well as increased semiconductor
capabilities.
Key strategic developments in the half include continued expansion of our compound semiconductor solutions to commercial customers
and some notable wins to new tier 1 key accounts. The ongoing fit out of our new purpose-built compound semiconductor facility outside
Bristol, UK, is proceeding as expected. The site comprises a state-of-the-art manufacturing area, with increased clean-room space andadvanced laboratories, and will enable a significant ramping up in the development of leading-edge technologies. We have moved a firstcohort of office-based staff to the new building, and production trials are now taking place. We anticipate completing the full transition to
the new facility in Q1 2024, which will double production capacity.
We continue to derive significant benefit from the successful integration of our WITec Raman microscopy business (acquired in August2021), and from increased collaboration across our materials analysis portfolio, expanding customer and regional reach and deepening
our market intimacy. Together, these positive developments are driving double digit order and revenue growth for WITec, and supporting
the wider Materials & Characterisation sector.
Semiconductor & Communications (41% of revenue)

Semiconductor & Communications applications continue to represent the largest proportion of revenue in the Materials &Characterisation sector. This is due to our broad reach across both the rapidly growing compound semiconductor market and themainstream silicon chip market and consumer electronics markets, and our ability to support customers at every stage from early
academic research and development to high volume commercial production.
Revenue from compound semiconductor applications and applied R&D in the silicon market has been strong in the first half, more thanoffsetting the ongoing softness in silicon chip markets we indicated at full year 2022/23. This resulted in a slight increase in revenue on
the prior year overall. The breadth of our offering across the compound and silicon markets, and through the R&D, production andquality control cycle, provides us with additional resilience in the cyclical semiconductor market.
Our Plasma Technology compound semiconductor business, which accounts for over 60% of the Group’s semiconductor revenue,
develops and supplies the equipment and processes used to make the semiconductor wafers and devices which support today’s hightechnology applications, and the development of next generation technology. These applications include power devices, 5G connectivity,
truly wireless charging, augmented reality and the energy-efficient chips used in data centres, which are vital to support the rapid growthin communications and projected increases by data-hungry AI applications.
Our role ranges from early-stage academic R&D to volume manufacturing, yield and quality control, enabling the production of highquality, high yield wafers. A particular area of strength, and source of pricing power, is our ability to improve outcomes for the layers
within structures and devices which have the biggest impact on performance and yield.
Elsewhere in the sector, customers across academia and industry continue to choose our analysis tools to image and analyse theproperties and performance of both silicon and compound devices at the atomic scale, supporting R&D, quality control and defectanalysis. This accounts for the remaining proportion of our semiconductor revenue. Here, demand has been softer into metrology anddefect review, but remains strong in applied R&D, further demonstrating the resilience provided by the breadth of our offering.
We continue to expect sustained demand, with a strong pipeline for commercial customers, and with orders from academic customers
growing, as higher levels of government funding enable investment in central clean room facilities and the latest analytical equipment.
Advanced Materials (36% of revenue)
We are capitalising on the widespread appetite to understand and improve the properties of materials across a multitude of markets, todevelop new materials to address the challenges of today and tomorrow through our advanced materials analysis tools. Our ability toimage and analyse down to the nanoscale enables manufacturers to control the quality of today’s advanced materials, and scientists togain unparalleled insights into the materials they study, from long-standing but ever-evolving materials such as steel and concrete tonewer materials such as graphene.
Our revenue growth of 10% at constant currency, reflects the breadth of use for our leading product ranges. Growth in the half has comeprimarily from academic customers, as university research departments invest in the latest high-end analytical equipment for theirservice labs and core facilities to study the properties of new and existing materials. The ease of use and range of capabilities of ourequipment and software lend themselves particularly well to these settings.
Sustainability drivers remain strong in this segment, with an increase in research and development into structural materials such as
steel and concrete, which together account for some 15% of global carbon emissions. Customer are using our equipment to develop
and deploy greener alternatives, such as lighter, stronger and lower carbon steels, superalloys and concrete, without compromising
performance.
We have seen strong revenue growth related to so-called two-dimensional (2D) materials, such as graphene, which can be just one
atom deep. Many times stronger than steel, electrically conductive and incredibly lightweight and flexible, graphene has the potential to
be deployed in a multitude of areas from drug delivery and implants to next generation electronics, composites and energy storage.
Other 2D materials are also being explored for their abilities as insulators and transistors.
Our products also play a crucial role in understanding the properties of polymers, used in a multitude of products from tyres to fabrics
and medical implants. Our analytical tools – in particular our atomic force microscopes – help scientists in commercial and academic
settings to measure and tune the fundamental properties of strength, viscosity, adhesion and hardness to optimise performance for
specific applications.
Energy & Environment (15% of revenue)
Our ability to help customers understand the impacts of pollution and climate change and to develop effective solutions for a greener
future is a key driver of growth. Customers use our analytical tools to support their work in a range of areas, from renewable energy
generation and storage to pollution prevention, as well as the sourcing of the minerals needed across a range of applications.
As an example, our tailored support at every stage of the battery life cycle from raw materials and R&D to quality control and failure
analysis is a key contributor to revenue in this sector. With a broad range of techniques across our imaging and analysis portfolio we
accelerate customers’ understanding of the fundamental chemistry and mechanisms affecting battery capacity, charging rate andlifetime, as well as supporting quality control and defect review.
We are also seeing strong demand in environmental applications for our analysis tools and software, as customers seek to understandand address airborne causes of pollution, and pollutants of water such as microplastics, fats, oils and greases.
Revenue for the segment was down 2% at constant currency.
Healthcare & Life Science (5% revenue), Research and Fundamental Science (2% revenue) and Quantum Technology (1% ofrevenue)While these segments contribute a relatively small percentage of overall revenue, the Materials & Characterisation sector is active in all
three, and benefits from synergies with the Research & Discovery sector. We continue to drive order and revenue growth into Life
Science applications as we build our market intimacy and increasingly tailor our solutions to address this market. Our portfolio of atomic
force microscopes and Raman imaging systems can provide unique insights into real time biological functions, the health of cells andtissue as well as the efficacy of new medicines.
We have seen double digit revenue growth In Research & Fundamental Science as universities deploy our equipment to accelerate
their research.
In Quantum Technology, customers are using our compound semiconductor processing systems to manufacture and characterise thequantum chips (known as qubits) which are the units which store information in quantum computers. Our analytical tools are also
deployed to optimise the performance of these devices.

Research & Discovery
The sector comprises our Andor Technology, NanoScience and X-Ray Technology businesses. It provides advanced solutions
and unique environments that enable imaging and analytical measurements down to the atomic and molecular level, as wellas ultra-low temperature and high magnetic field environments. These are used across scientific research and applied R&D,
and commercial applications. Our leading-edge technologies play a key role across a range of fields, from accelerating
developments in medicine and material science to facilitating the growing commercialisation of quantum technology.
Key highlights

Half year to
30 September
2023

Half year to
30 September
2022% reported
growth% constantcurrency1
growthOrders

£67.8m£62.8m

+8.0%+10.0%

Revenue£66.6m£58.1m

+14.6%+17.7%

Adjusted operating profit

£9.6m

£7.0m

+37.1%+44.3%

Adjusted2 operating margin

14.4%

12.0%

Statutory operating profit

£5.6m

£3.9m

Statutory operating margin

8.4%

6.7%

2

1.
2.

For definition refer to note on page 2.
Details of adjusting items can be found in Note 2 to the full year financial statements.

Operational, strategic and regional progress
The Research & Discovery segment delivered an excellent performance in the half, with strong constant currency growth in orders (up10%), revenue (up 17.7%), adjusted operating profit (up 44.3%) and margin (up 240bps). Growth has primarily been driven by strong
sales and demand for our optical microscopy, scientific camera, and optical spectroscopy products. The Healthcare & Life Science
sector has seen particularly strong growth, with revenue up 27% due to strong sales of our microscopy portfolio, as well as sales of our
key technologies into original equipment manufacturing (OEM) partners, driving reach into wider life science markets. We have also
seen strong double digit revenue growth into Advanced Materials applications as customers use our analytical and imaging equipment
to investigate the properties of a wide range of materials.
Orders and revenue have grown at constant currency across all key regions and territories, including China. Our focus on attractive
markets and the success of recently launched products have supported strong constant currency revenue growth in Europe (35%), theUS (14%) and Japan (75%). Within China our focus has been on growing our revenue in Healthcare, Advanced Materials and Energy &Environment applications. This, together with the end of Covid-related lockdowns, has supported our strong performance. Within China,
our pivoted focus into Healthcare & Life Science and Advanced Material applications has more than offset the previously reported,
ongoing headwinds of export licence restrictions, particularly for Quantum and Astronomy markets.
Adjusted constant currency operating profit and margin have grown by 44% and 280bps respectively. Growth has been driven byincreased demand for our leading products, partially offset by increased investment in operational capacity in our Belfast facility.
In common with Materials & Characterisation, we have seen strong growth to academic customers across the segment, as governments
and universities invest in our systems to equip central imaging facilities. However, OEM orders and significant investments bycommercial customers for our optical microscopy and X-ray products have also seen strong single digit growth to industrial accounts.
As revenue is only recognised for our large cryogenics and high-field magnet systems once they have been installed, we expect astronger performance in the second half of the year than the first, given our strong pipeline and several key anticipated orders to Tier 1commercial customers.
Continued strong operational performance across our X-Ray tube business has driven strong order, revenue and profit growth in thehalf. The performance is supported by increasing end market demand across a range of end applications and with the market-leading
performance, quality, and operational lifetime of our X-ray sources, cementing a strong performance for the half and ongoing positive
momentum.

We are making significant investment in people and processes, boosting production capacity and operational effectiveness across thesector, to support the growing demand for our products and services. In particular, as demand grows for our optical microscopes andscientific cameras, we are investing £15m in the purchase and fit out of an additional building, adjacent to our existing Andor Belfast
site, to boost our operational capacity. The site expansion will significantly enhance our production and R&D capacity, allowing us tomeet demand from our growing customer base once operational in autumn 2025. Further developments in the half include the launch of
our compact, fast turnaround ProteoxS dilution refrigerator for physics applications including Quantum. The unit has a smaller footprint
and lower cost than other refrigerators in the market, while offering reliable low temperatures, making it accessible to a wider range of
research laboratories and budgets.
We are pleased to note that all three Nobel Prize winners for science in 2023 (Medicine, Chemistry and Physics) used our equipment intheir groundbreaking research.
Healthcare & Life Science (44% of revenue)
Our equipment and software play a key role in accelerating progress towards a healthier society, as academic researchers, scientists
and pharmaceutical companies seek to better understand fundamental disease mechanisms at a molecular and cellular level in order todesign more effective treatments.
We are seeing continued growth in the Healthcare & Life Science segment, the largest contributor to revenue in the Research &Discovery sector. Revenue is up more than 25% in the half year, with strong sales of our BC43 benchtop microscope and growth insales of our dedicated analytical and visualisation Imaris software solutions. Good order growth and a strong pipeline give confidence
for a continuing strong performance.
Positive momentum has continued for our advanced microscopy solutions and dedicated analytical software, with the first integrations of
our BC43 benchtop microscope into OEMs’ equipment, which is used to access a broader range of life science applications. We havelaunched a new dedicated Neuroscience edition of our Imaris software with AI-powered neuron visualisation capabilities, which isenabling the acceleration of research into dementia and depression, by supporting understanding of brain structure and functions.
Advanced Materials (28% of revenue)
We have a dedicated focus on building market share for advanced materials applications across our portfolio of spectrographs, scientificcameras, X-ray sources and specialised cryogenic and high magnetic field systems, with the benefit of synergies with Materials &Characterisation. This has resulted in strong double-digit order and revenue growth for this segment. Customers use our equipment tosupport their understanding of the fundamental properties of new materials, to enhance the capabilities of existing materials, and inquality assurance and quality control applications.
Quantum Technology (16% of revenue)
Revenue in the Quantum Technology segment has grown by 6% in the half, as we collaborate with universities, quantum computing
start-ups and major tier 1 communication companies. Strong sales into Europe, Japan and the US have more than offset the expected
revenue reductions from China due to export licence restrictions.
Oxford Instruments has a key role to play in this rapidly growing sector, which continues to evolve from the research laboratory to drive
practical applications. Quantum computers are already used in commercial applications from chemistry to logistics and finance. The
future impact of quantum is expected to be even more significant, with the potential to help tackle climate change and transform ourability to develop revolutionary medicines. We are particularly well placed to benefit from the shift from pure science to mainstream
applications, given our ability to support a number of areas, including cryogenics, quantum laser applications and (in our Materials &Characterisation sector) the fabrication of qubits.
With a strong opportunity pipeline, we anticipate orders strengthening following a slower start in the first half.
Research & Fundamental Science (7% of revenue)
We have seen strong order and revenue growth into this sector, particularly in the fields of fluid and plasma dynamics, where customers
are deploying our highly specialised high speed scientific cameras to capture the evolving dynamics of physical processes, such as
fusion reactions at sub nanosecond intervals. In astronomy, we are building market share in Europe and North America throughoptimised solutions for large sky surveys, including exoplanet detection and near-earth asteroid detection, and atmospheric research.
Semiconductor & Communications (3% of revenue) and Energy & Environment (2% of revenue)
We continue to see good demand for our technologies in these markets. This is primarily from researchers looking at the fundamental
properties and disruptive use of new materials in these markets.

Service & Healthcare
The Service & Healthcare sector comprises the Group’s servicing and support offering related to Oxford Instruments’ own products, andthe support and service of third-party MRI scanners in Japan. We offer tailored support packages for all our products, delivered by aglobal 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

Half year to
30 September
2023

Half year to
30 September
2022% reported
growth% constantcurrency1
growthOrders£39.5m£37.1m

+6.5%+10.5%

Revenue£33.8m£33.7m

+0.3%

+4.2%

Adjusted operating profit£9.5m£10.9m(12.8%)(7.3%)

Adjusted2 operating margin

28.1%

32.3%

Statutory operating profit£9.5m£11.3mStatutory operating margin

28.1%

33.5%

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.

Operational and strategic progress
The Service & Healthcare sector has made steady progress in the period. Revenue grew by 4% at constant currency, with 11% order
growth and a 35% year-on-year increase in the order book demonstrating growing demand for our services products, including
subscriptions. Operating profit and margin were down in the half due to investment in capabilities and infrastructure to support further
growth, as well as some elevated costs in the period for liquid helium required to support our MRI customers in Japan. Specific areas ofincreased investment include additional service engineers and customer care centre staff, and costs associated with our new Groupwide CRM and field management platform, which is already generating more opportunities and an improved customer experience.
We have seen strong revenue growth to academic customers in Service & Healthcare, as increasing numbers of customers take out
point-of-sale service contracts for our benchtop systems, and as sales of our tailored life science packages for our Imaris imaging
software continue to grow. Sales to academic customers accounted for 49% of revenue in the half, with the share of academic sales up
six percentage points versus the prior year. Commercial sales were broadly in line with the prior year.
We continue to deliver double digit order growth for service related to our own products through the provision of a wider range of tailoredand digital offerings. Our servicing of third-party MRI imaging equipment in Japan continues to deliver excellent support to our customer
base, with growth in both orders and revenue.
Regionally, constant currency revenue was slightly up across all three key markets (North America, Asia and Europe), with growth strongest in Asia,
up 5%. We have seen significant growth in orders in Europe and Asia, largely driven by growth in Japan and China.
Our service and support strategy is focused on three key pillars:•••

increased tailoring of our service offerings to specific end applications and customer types;
the delivery of seamless customer service at every stage of the product life cycle;
the development of global processes which can be delivered via a hybrid service approach, both in region and digitally.

As we increase our portfolio and the scope of our services, our range of support packages has expanded to meet the needs andbudgets of our customers. This allows customers to maximise their capabilities, enhance their productivity and receive immediate help
and support when needed throughout the lifetime of our systems. Our depth of sector knowledge is a key differentiator, with our market
intimacy and deep scientific expertise enabling us to develop products appropriate to each end application and customer type.
We have continued to invest in extending our regional teams and spares capacity to provide shorter lead times for in-person support
and training visits, as well as continuing to develop our digital and remote support offerings. We are focusing on increasing ourcustomers’ productivity by diagnosing and resolving issues in hours, through our virtual reality and digital toolkit. This reduces the needfor engineer visits, improving efficiency and reducing our carbon footprint. We continue to design more advanced capabilities into our
products, including increased data analytics which have unlocked new revenue streams for remote health checks and systemcalibration.
We have also continued to focus on the third element of our strategy, developing standard infrastructure and processes globally which
are implemented by our regional services teams. This includes cross-training service engineers to service multiple products. The
benefits of this approach include cost efficiencies from best-practice procedures, deeper local customer intimacy and improved
response times.
In parallel with our investment in people, we are implementing a project to complete our business systems customer suite, with theimplementation of the new Group-wide CRM for marketing, sales and service referenced above. The sales element of the CRM, whichis already live, is improving lead follow up, while the full system, once complete, will support the effective running of our Services
function through standardisation and simplification.
Overall, the Service & Healthcare sector remains on a strong upward trajectory, with significant ongoing opportunities to support
revenue growth and margin expansion.

Finance review

Oxford Instruments uses certain alternative performance measures to help it effectively monitor the performance of the Group as
management believes that these represent a more consistent measure of underlying performance. Adjusted items exclude theamortisation of acquired intangible assets; acquisition items; profit or loss on disposal of operations; other significant non-recurring
items; and the mark-to--market movement of financial derivatives. All of these are included in the statutory figures. Note 2
provides- further analysis of the adjusting items in reaching adjusted profit measures. Definitions of the Group’s material alternative
performance measures, along with reconciliation to their equivalent IFRS measure, are included within the finance review.
The Group trades in many currencies and makes reference to constant currency numbers to remove the impact of currency effects inthe year. These 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 ofour hedging programme.
Summary
Reported orders in the period decreased by 4.7% to £224.3m (2022: £235.3m), a decrease of 2.3% at constant currency, against astrong comparator period. At the end of the period, the Group’s order book stood at £331.7m (30 September 2022: £315.7m). The orderbook increased by 5.1% on a reported basis and 10.1% at constant currency with a book-to-bill in the period of 1.07 times (2022: 1.17
times).
Revenue increased by 4.6% to £209.7m (2022: £200.5m). Revenue, excluding currency effects, increased by 7.5%, with the movementin average currency exchange rates over the year reducing reported revenue by £5.9m. We would expect the second half of thefinancial year to benefit from the normal seasonal bias.
Adjusted operating profit excluding currency effects, increased by 6.5%. However, due to a currency headwind of £2.7m, adjusted
operating profit decreased by 0.8% to £36.5m (2022: £36.8m). Excluding currency impacts, the adjusted operating margin decreased by
20 basis points to 18.2% reflecting a slightly increased gross margin offset by investment in ERP systems and operational capability tosupport future growth and deliver process efficiencies. Including currency, the adjusted operating margin decreased by 100 basis points
to 17.4% (2022: 18.4%).
Statutory operating profit of £28.6m (2022: £26.3m) increased by 8.7%. This includes amortisation of acquired intangibles of £4.6m(2022: £4.3m) and a charge of £2.4m (2022: £6.1m) relating to the movement in the mark-to-market valuation of uncrystallised currency
hedges for future years. We also recognised non-recurring costs of £0.9m (2022: £0.1m).
Adjusted profit before tax grew by 0.5% to £37.5m (2022: £37.3m), representing a margin of 17.9% (2022: 18.6%). Statutory profit
before tax grew by 11.3% to £29.6m (2022: £26.6m). This represents a margin of 14.1% (2022: 13.3%).
The adjusted effective tax rate increased to 24.0% (2022: 21.4%), following the increase in the UK corporation tax rate in April 2023. As
a result, adjusted basic earnings per share fell by 2.8% to 49.4p (2022: 50.8p). Basic earnings per share were 38.6p (2022: 35.9p), an
increase of 7.5%.
As expected, cash generated from operations was lower at £7.4m (2022: £26.6m). This represents negative cash conversion of 21%(2022: +47%). As we prepare for the move of operations to the new compound semiconductor facility in Bristol in the third quarter, wehave built inventory to enable us to supply customers, as well as continuing to incur ongoing capital expenditure related to the new site.
In addition, the previously reported significant increase in export licence delays and refusals have also led to higher inventories, as well
as a need to refund previously received customer deposits.
Excluding these items, cash conversion on a normalised basis was 41% (2022: 65%). We expect an improvement in cash conversion in
the second half and anticipate it to be more in line with historic conversion rates. Net cash after borrowings fell from £100.2m as at
31 March 2023 to £79.1m on 30 September 2023.
Our revolving credit facility remains undrawn, leaving approximately £109m of committed facilities. This represents total headroom ofjust under £190m, including net cash on the balance sheet.

Income statement
The Group’s income statement is summarised below.

Revenue
Adjusted operating profit

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m
209.7
200.5
36.5

36.8

Change+4.6%(0.8%)

Amortisation of acquired intangible assets

(4.6)

(4.3)

Non-recurring items

(0.9)

(0.1)

Mark-to-market of currency hedges

(2.4)

(6.1)

Statutory operating profit

28.6

26.3

Net finance income

1.0

0.3

Adjusted profit before taxation

37.5

37.3

+0.5%

Statutory profit before taxation

29.6

26.6

+11.3%

Adjusted effective tax rate

24.0%

21.4%

Effective tax rate

24.7%

22.2%

Adjusted earnings per share – basic

49.4p

50.8p

(2.8%)

Earnings per share – basic

38.6p

35.9p

+7.5%

Dividend per share (total)

4.9p

4.6p

+6.5%

1.

+8.7%

Net finance costs for 2022 include a non-recurring charge of £0.2m against the unwind of discount on WITec contingent consideration.

Revenue and orders
Total reported orders fell by 4.7% (-2.3% at constant currency) to £224.3m. In Materials & Characterisation, reported orders were lower
by 13.6% (-11.4% at constant currency). This was against a comparator period of very strong growth of just under 26% at constantcurrency. In the period we saw macroeconomic concerns leading to a delay in placing orders across industrial markets and we are in
the process of pivoting our pipelines towards customers who are less susceptible to export licence concerns. In Research & Discovery,
we saw good growth in orders for our optical imaging and microscopy products, and some large OEM framework orders for X-Ray
Technology. As a result, reported orders grew by 8.0% (+10.0% at constant currency) for the segment. Service & Healthcare orders
increased by 6.5% (+10.5% at constant currency).
Reported revenue of £209.7m (2022: £200.5m) increased by 4.6% (+7.5% at constant currency). For Materials & Characterisation,
reported revenue grew by 0.6% (+3.1% at constant currency) as shipments of our electron microscope analysers fell marginally against
a strong comparator period and we saw a significant rise in export licence delays for these products, which has led to the build-up of alarge amount of finished goods awaiting export approval. Despite an increase in UK export licence rejections to China, we have seen agood increase in shipments of semiconductor processing systems.
Good demand for our Life Science products, alongside an improvement in operational execution, has driven reported revenue growth in
Research & Discovery of 14.6% (+17.7% at constant currency). We have also had good demand from OEMs for our X-Ray tubes.
Revenue growth from the service of our products supported reported growth of 0.3% (+4.2% at constant currency) for Service &Healthcare.
The book-to-bill ratio (orders received to goods and services billed in the period) for the year was 1.07 times (2022: 1.17 times).
Geographic revenue growth
Half year toHalf year toHalf year toHalf year to
30 September 30 September 30 September 30 September
2023
2023
2022
2022
£m

£m

% of total£m% of total£m% growth% growth atconstant
currency

Europe

48.9

24%

43.4

22%

+5.5

12.7%

12.2%

North
America
Asia

54.6

26%

58.3

29%

(3.7)

(6.3%)(2.9%)

101.6

48%

97.2

48%

+4.4

4.5%

8.7%

4.6

2%

1.6

1%

+3.0

+188%

+188%

209.7

100%

200.5

100%

+9.2

4.6%

7.5%

Rest of World

ChangeOn a geographical basis, revenue grew by 12.7% in Europe (+12.2% at constant currency), supported by additional deliveries ofsemiconductor process systems and optical and microscopy products. Orders grew by 9.9% at constant currency, supported by gooddemand for our semiconductor processing systems and some large OEM orders for our X-Ray tubes.
Revenue for North America was lower by 6.3% on a reported basis and down 2.9% at constant currency. We experienced a lengtheningof commercial order cycles. In addition, unfavourable phasing of academic budgets for our semiconductor processing tools contributed
to a weaker first half for the region. These issues also contributed to a decline in constant currency orders of 8.1%, although pipelines
remain strong across our end markets.
Asia remains our largest region by revenue, with China constituting 64% of regional revenue and 31% of total Group revenue, following
strong order intake in the previous financial year. Asia delivered revenue growth of 4.5% (+8.7% at constant currency) with strongdemand for our atomic force microscopes, optical and microscopy products, and semiconductor processing tools. Orders for the region
fell by 5.3% at constant currency, due to a lower number of orders from Japan and Korea, partially offset by a small amount of growth inChina. Orders for China constituted 26% of Group orders in the half year.
The total reported order book grew by 5.1% (10.1% at constant currency) to £331.7m compared to 30 September 2022. The order book,at constant currency, compared to 30 September 2022, increased by 6.8% for Materials & Characterisation, with strong growth acrossall constituent businesses. Research & Discovery grew by 5.4% at constant currency, with good demand for our imaging andmicroscopy products and X-Ray tubes. The Service & Healthcare order book grew by 35.1% at constant currency as we continue tofocus on the service of our own products.
Materials &Characterisation
108.7

Research &Discovery
58.1

Service &Healthcare
33.7

Total
200.5

3.4

10.3

1.4

15.1

Revenue at constant currency: 2023/24

112.1

68.4

35.1

215.6

Currency

(2.8)

(1.8)

(1.3)

(5.9)

Revenue: HY 2023/24

109.3

66.6

33.8

209.7

Revenue growth: reported

0.6%

14.5%

0.3%

4.6%

Revenue growth: constant currency

3.1%

17.7%

4.2%

7.5%

£m
Revenue: HY 2022/23
Constant currency growth

Gross profit
Gross profit grew by 6.6% to £111.0m (2022: £104.1m), representing a gross profit margin of 52.9%, an increase of 100 basis points
over last year.
Adjusted operating profit and margin
Adjusted operating profit excluding currency effects, increased by 6.5%. However, due to a currency headwind of £2.7m, reported
adjusted operating profit decreased by 0.8% to £36.5m (2022: £36.8m). Excluding currency impacts, the adjusted operating margindecreased by 20 basis points to 18.2% as we continue to invest in ERP systems and operational capability to support future growth anddeliver process efficiencies. Including currency impacts, the adjusted operating margin decreased by 100 basis points to 17.4% (2022:
18.4%).
Reported Materials & Characterisation adjusted operating profit decreased by 7.9% (+0.5% at constant currency) with reported margin
falling 150 basis points to 15.9% (2022: 17.4%). Fewer shipments of our electron microscope analysers against a strong comparative
period were offset by higher revenue from our semiconductor processing tools.
Within Research & Discovery our imaging and microscopy business has grown well, supported by good demand, an improvement in
operational execution and an alleviation of prior year supply chain disruption. Profit growth in our imaging and microscopy business waspartially offset by a slower than expected improvement in operational output of our standard cryogenic and magnet systems, due in partto a diversion of resources to completing the last of the more complex bespoke systems. The segment recorded growth in reported
profit of 37.1% (+44.3% at constant currency) and an improvement in margin to 14.4%, representing growth of 240 basis points.
Service & Healthcare reported adjusted operating profit fell by 12.8% (7.3% at constant currency); primarily due to an increase in helium
and parts prices within our Japan MRI business.
Currency effects for the Group (including the impact of transactional currency hedging) depressed reported adjusted operating profit
by £2.7m, primarily due to a depreciation of the Japanese Yen against Sterling.

£m
Adjusted operating profit: 2022/23
Constant currency growthMaterials &Characterisation
18.9

Research &Discovery
7.0

Service &Healthcare
10.9

Total
36.8

0.1

3.1

(0.8)

2.4

Adjusted operating profit at constant currency: 2023/24

19.0

10.1

10.1

39.2

Currency

(1.6)

(0.5)

(0.6)

(2.7)

Adjusted operating profit: 2023/24

17.4

9.6

9.5

36.5

Adjusted operating margin1: 2022/23

17.4%

12.0%

32.3%

18.4%

Adjusted operating margin : 2023/24

15.9%

14.4%

28.1%

17.4%

Adjusted operating margin (constant currency): 2023/24

16.9%

14.8%

28.8%

18.2%

1
1

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

Statutory operating profit and margin
Statutory operating profit grew by 8.7% to £28.6m (2022: £26.3m), representing an operating profit margin of 13.6%. Growth in statutory
operating profit is supported by a lower mark-to-market charge on financial derivatives.
Adjusting items
Amortisation of acquired intangibles of £4.6m (2022: £4.3m) relates to intangible assets recognised on acquisitions, being the value oftechnology, customer relationships and brands. Non-recurring items within operating profit were £0.9m in the period.
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’s 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 forthe following twelve months and, subject to pricing, up to 20% of exposures for the next six months. The Group has decided that theadditional 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 for these derivatives.
Net movements on mark-to-market derivatives in respect of transactional currency exposures of the Group in future periods aredisclosed in the income statement as foreign exchange and excluded from our calculation of adjusted profit before tax. In the half year
this amounted to a charge of £2.4m (2022: £6.1m charge). The small increase in the net asset for derivative financial instruments from
31 March 2023 reflects: (i) the crystallisation of forward contracts that were hedging the first half of this financial year, which arerecognised in adjusted operating profit, and; (ii) an uncrystallised movement in the mark-to-market valuation of forward contracts at thebalance sheet date on forward contracts that will mature over the next 18 months.
Net finance costs
The Group’s recorded net interest income was higher at £1.0m (2022: £0.5m), due to an increase in interest rates earned on our cash
balances.
Adjusted profit before tax and margin
Adjusted profit before tax increased by 0.5% to £37.5m (2022: £37.3m). The adjusted profit before tax margin of 17.9% (2022: 18.6%)
was lower than last year largely due to currency effects.

Reconciliation of statutory profit before tax to adjusted profit before tax
Statutory profit before tax

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m
29.6

26.6

Amortisation of acquired intangible assets

4.6

4.3

Non-recurring items (Note 2)

0.9

0.3

Mark-to-market of currency hedges

2.4

6.1

Adjusted profit before tax

37.5

37.3

Add back:

Statutory profit before tax and margin
Statutory profit before tax increased by 11.3% to £29.6m (2022: £26.6m). The statutory profit before tax margin of 14.1% (2022: 13.3%)
was above last year, principally due to the lower charge from the mark-to-market valuation movement on financial derivatives.

Taxation
The adjusted tax charge of £9.0m (2022: £8.0m) represents an effective tax rate of 24.0% (2022: 21.4%); the increase being primarily
due to the increase in the UK corporation tax rate from 1 April 2023. The tax charge of £7.3m (2022: £5.9m) represents an effective tax
rate of 24.7% (2022: 22.2%). The increase is due to the rise in the UK corporation tax rate and a small increase in non-deductible costs.
The half-year tax rate has been calculated based on the expected effective tax rate for the year of 24.2% (having made certain
assumptions about where profits will arise).
Earnings per share
Adjusted basic earnings per share decreased by 2.8% to 49.4p (2022: 50.8p) primarily due to the higher effective tax rate; adjusted
diluted earnings per share fell by 3.0% to 48.7p (2022: 50.2p). Basic and diluted earnings per share increased by 7.5% to 38.6p (2022:

35.9p) and 38.1p (2022: 35.4p) respectively, with the mark-to-market movement on financial derivatives offsetting the rise in theeffective tax rate.
The number of basic weighted average shares remained at 57.7m (2022: 57.7m). Issuance of new shares to satisfy share option
exercises will result in an increase in the number of shares in the second half of the year.
Currency
The Group faces transactional and translational currency exposure, most notably against the US Dollar, Euro and Japanese Yen.
For the half year, approximately 17% of Group revenue was denominated in Sterling, 55% in US Dollars, 19% in Euros, 7% in Japanese
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 eachcompany prepares its local accounts.
The Group’s foreign currency exposure for the half year is summarised below.

Revenue
36.5

Adjusted
operatingprofit(49.4)US Dollar

114.3

57.9

Euro

40.7

14.7

Japanese Yen

15.1

12.4

Chinese Renminbi

2.4

0.8

Other

0.7

0.1

209.7

36.5

£m (equivalent)
Sterling

The Group maintains a hedging programme against its net transactional exposure using internal projections of currency tradingtransactions expected to arise over a period extending from 12 to 24 months. As at 30 September 2023, the Group had currency
hedges in place extending up to 18 months forward.
For the full year 2023/24, our assessment of the currency impact is, based on hedges currently in place and forecast currency rates, aheadwind of £11.8m to revenue, and £3.1m to profit. The currency headwind is in part due to a higher than anticipated exposure to theJapanese Yen. Forecast currency rates for the year on unhedged positions are: GBP:USD 1.23; GBP:EUR 1.15; GBP:JPY 185.
Looking further ahead to the financial year 2024/25, based on the above currency assumptions, we would expect currency effects tohave a small tailwind of £2.2m to revenue and a £2.8m headwind to operating profit. Uncertain volume and timing of shipments andacceptances, currency mix and FX rate volatility, may significantly affect forecast currency outcomes.
Dividend
The Group’s policy on the dividend takes into account changes to underlying earnings, dividend cover, movements in currency anddemands on our cash. The Board remains confident in the long term performance of the business and has declared an interim dividendof 4.9p per share (2022: 4.6p per share), growth of 6.5%. The interim dividend will be paid on 12 January 2024 to shareholders on theregister as at 1 December 2023.

Cash flow
The Group’s cash flow is summarised below.

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Adjusted operating profit

36.5

36.8

Depreciation and amortisation

5.4

5.1

Adjusted EBITDA

41.9

41.9

Working capital movement(31.6)(12.6)

1

Equity settled share schemes

1.1

1.2

Pension scheme payments above charge to operating profit

(4.0)

(3.9)

Cash from operations

7.4

26.6

Interest

1.2

0.1

Tax

(7.9)

(2.6)

Capitalised development expenditure

(0.3)

(0.1)

Expenditure on tangible and intangible assets(16.7)(11.5)-(7.9)

Proceeds from issue of share capital and exercise of share options

0.1-

Payments made in respect of lease liabilities

(2.6)

(1.5)

Decrease in borrowings

(0.1)

(0.1)

Net (decrease)/increase in cash and cash equivalents(18.9)

3.0

Dividends paid

1.

Adjusted EBITDA is defined as adjusted operating profit before depreciation and amortisation of capitalised development costs. The
consolidated statement of cash flows provides further analysis of the definition of adjusted EBITDA.

Cash from operations
Cash from operations of £7.4m (2022: £26.6m) represents negative cash conversion of 21% (2022: +47%). During the first half weincurred expenditure of £12.2m on the new semiconductor facility in Bristol, including new metrology tools. This amount also included£3.0m relating to the build-up of inventory ahead of the move of operations in the third quarter. Expenditure of £4.1m was incurred on
the purchase and strip-out of a new facility in Belfast for our optical imaging and microscopy business, and the fit-out of a new office andcustomer demonstration centre in Tokyo. In addition, the business suffered from exceptional cash outflows of £6.3m in relation to export
licence rejections and delays, covering the refund of customer deposits and a high level of finished goods awaiting export licenceclearance. On a normalised basis, which excludes these items, cash conversion was 41% (2022: 65%). Cash conversion is defined as
cash from operations before transaction 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.

Reconciliation of cash generated from operations to adjusted operating cash flow

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Cash from operations

7.4

26.6

Transaction costs

0.7-

Pension scheme payments above charge to operating profit

4.0

3.9

Capitalised development expenditure

(0.3)

(0.1)

Expenditure on tangible and intangible assets(16.7)(11.5)

Payments made in respect of lease liabilities

(2.6)

(1.5)

Adjusted cash from operations

(7.5)

17.4

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

(21%)

47%

Cash conversion % (normalised )

41%

65%

Add back:

1

1.
Cash conversion calculated on a normalised basis excludes expenditure in the half year of £16.3m on capacity expansion and £6.3m relating toexport licence refusals and delays.

Inventory levels have increased due to build costs incurred on long lead time new cryogenic platforms and accelerated raw materialpurchases ahead of an ERP implementation. In addition, we have made some strategic inventory purchases to avoid cost inflation.

PensionPension recovery payments above charge to operating profit total £4.0m (2022: £3.9m).
Interest
Net interest received was £1.2m (2022: £0.1m), reflecting an increase in interest rate on our cash balances.
Tax
Tax paid was £7.9m (2022: £2.6m); the increase primarily relating to higher payments on account following the increase in the UK
corporation tax rate.
Investment in Research and Development (R&D)

Total cash spend on R&D in the half year was £19.7m, equivalent to 9.4% of sales (2022: £17.5m, 8.7% of sales). A reconciliation
between the adjusted amounts charged to the consolidated statement of income and the cash spent is given below:
Half year toHalf year to
30 September 30 September
2023
2022
£m
£m
19.7

18.2

Depreciation of R&D-related fixed assets

-

(0.2)

Amounts capitalised as fixed assets

-

-

(0.3)

(0.6)

R&D expense charged to the consolidated statement of income

Amortisation and impairment of R&D costs capitalised as intangibles
Amounts capitalised as intangible assets

0.3

0.1

Total cash spent on R&D during the year

19.7

17.5

Net cash and funding
Net cashCash from operations in the half year was offset by an increase in capital expenditure, resulting in a decrease in the Group’s net cash
position from £100.2m at 31 March 2023 to £79.1m on 30 September 2023.
To date we have incurred costs of £38.0m on the new semiconductor facility, which is expected to be complete by the end of the fiscal
year. We expect further payments of approximately £5.3m in the second half of this year and £1.9m in Q1 25 to complete the project(including move and hook-up costs). We are in the early stages of a process to sell the current facility, with completion planned for H1
25. The estimated cost for the expansion in Belfast is not expected to exceed £15m; of which £2.1m has been incurred in H1 24, withthe remainder to be phased over the next 24 months.
Movement in net cash£m

Net cash after borrowings as at 31 March 2023

100.2

Cash generated from operations

7.4

Interest

1.2

Tax

(7.9)

Capitalised development expenditure(0.3)

Capital expenditure on tangible and intangible assets(16.7)

Payments made in respect of lease obligations(2.6)

Dividend paid-

Other items/FX(2.2)

Net cash after borrowings as at 30 September 2023

79.1

Net cash including lease liabilities

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Net cash after borrowings

79.1

97.1

Lease liabilities(34.8)(31.4)Net cash and lease liabilities after borrowings

44.3

65.7

The increase in lease liabilities reflects the lease signed during the period for the new office and customer demonstration centre inTokyo.
Funding
On 2 July 2018, the Group entered into an unsecured multi-currency revolving facility agreement, which is committed until June 2025.
The facility has been entered into with two banks and comprises a Euro-denominated multi-currency facility of €50.0m (£43m) and a US
Dollar-denominated multi-currency facility of $80.0m (£66m).
Debt covenants are net debt to EBITDA less than 3.0 times and EBITDA to interest greater than 4.0 times. At 30 September 2023 thebusiness 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 to future
accrual from 2010.
On an IAS 19 basis, the surplus arising from our defined benefit pension Scheme obligations on 30 September 2023 was £11.3m (31March 2023: £26.4m). The Scheme’s assets are hedged against gilt yields, whereas the accounting liabilities are valued based on
corporate bond yields. Gilt rates have risen by more than corporate bond yields, which has resulted in the Scheme’s assets falling morethan the accounting liabilities, resulting in a smaller surplus. The value of scheme assets decreased to £218.5m (31 March 2023:£251.5m) and scheme liabilities decreased to £207.2m (31 March 2023: £225.1m).
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 2025/26, at which point we expect, based on current assumptions, thescheme 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 inthe performance highlights, Chief Executive Officer’s review and operations review sections of this half year report. The financial
position of the Group, its cash flows, liquidity position and borrowing facilities are described in the finance review.
Trading for the Group has been good during the half year. The Group has prepared and reviewed a number of scenarios for the Group
based on key risks noted for the business and the potential impact on orders, trading and cash flow performance. In addition, the Grouphas overlaid the risk of long-term adverse movements in currency rates to our cash flow forecasts. The Board is satisfied, having
considered the sensitivity analysis, as well as its funding facilities, that the Group has adequate resources to continue in operational
existence for at least 12 months from the data of the interim financial statements.
Forward-looking statements
This document contains certain forward-looking statements. The forward-looking statements reflect the knowledge and information
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
13 November 2023

Condensed consolidated statement of income
Half year ended 30 September 2023

Note
Revenue
Cost of sales

4

Half year to 30 September 2023

Half year to 30 September 2022

Adjusted Adjusting
items(1)
£m
£m

Total

Adjusted

£m

Total

£m

Adjustingitems(1)
£m

£m

209.7

-

209.7

200.5

-

200.5

(98.7)-(98.7)(96.4)-(96.4)

Gross profit

111.0

-

111.0

104.1

-

104.1

(19.7)-(19.7)(18.2)-(18.2)

Selling and marketing(34.2)-(34.2)(29.2)-(29.2)

Administration and shared services

Research and development

5(28.2)(5.5)(33.7)(23.1)(4.4)(27.5)

Foreign exchange gain/(loss)

7.6

(2.4)

5.2

3.2

(6.1)

(2.9)

Operating profit

36.5

(7.9)

28.6

36.8

(10.5)

26.3

Financial income

1.9

-

1.9

0.9

-

0.9

Financial expenditure

(0.9)

-

(0.9)

(0.4)

(0.2)

(0.6)

37.5

(7.9)

29.6

37.3

(10.7)

26.6

Income tax expense

(9.0)

1.7

(7.3)

(8.0)

2.1

(5.9)

Profit for the period attributable toequity Shareholders of the parent

28.5

(6.2)

22.3

29.3

(8.6)

20.7

pence

pence

pence

pence

49.4

38.6

50.8

35.9

48.7

38.1

50.2

35.4

Profit before income tax

4Earnings per share
Basic earnings per share

3

From profit for the period

Diluted earnings per share

3

From profit for the period(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.

Condensed consolidated statement of income (continued)
Half year ended 30 September 2023

Year to 31 March 2023
Adjusted
Note£mAdjustingitems(1)
£m

4

444.7

-

444.7

Cost of sales(214.5)-(214.5)Gross profit

230.2

-

230.2

Revenue

Total£mResearch and development

5(35.9)(0.8)(36.7)

Selling and marketing(65.4)-(65.4)

Administration and shared services(52.9)(10.3)(63.2)

Foreign exchange gain

4.5

3.0

7.5

Operating profit

80.5

(8.1)

72.4

Financial income

2.7

-

2.7

Financial expenditure

(1.2)

(0.4)

(1.6)

82.0

(8.5)

73.5

Income tax expense(17.0)

2.1(14.9)

Profit for the period attributable to equity Shareholders of the parent

65.0

(6.4)

58.6

Profit before income tax

4Earnings per share
Basic earnings per share

From profit for the period

pence

112.7

101.6

111.3

100.3

3

From profit for the period

Diluted earnings per share

pence

3

(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.

Condensed consolidated statement of comprehensive income
Half year ended 30 September 2023

Profit for the period
Other comprehensive (expense)/income:Items that may be reclassified subsequently to condensed consolidated
statement of income

Half year to
30 September
2023£mHalf year to
30 September
2022£mYear to31 March
2023
£m

22.3

20.7

58.6

Foreign exchange translation differences

(0.2)

9.1

5.3

Items that will not be reclassified to condensed consolidated statementof incomeRemeasurement loss in respect of post-retirement benefits(19.4)(31.8)(38.6)

4.8

7.9

9.7

(14.8)(14.8)(23.6)

7.5

5.9

35.0

As at
As at
30 September 30 September
2023
2022
as restated(1)
Note
£m
£m

As at
31 March2023

Tax credit on items that will not be reclassified to condensed consolidated
statement of income
Total other comprehensive expense
Total comprehensive income for the period attributable to equity
Shareholders of the parent

Condensed consolidated statement of financial position
As at 30 September 2023

£m

AssetsNon-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Long-term receivables
Derivative financial instruments
Retirement benefit asset

8

73.1
34.5
127.3
1.2
11.3

41.0
31.1
138.4
0.1
0.1
24.5

59.3
31.4
132.1
0.5
0.4
26.4

12.6
260.0

14.1
249.3

12.5
262.6

104.1
107.2
0.8
2.3
101.7
316.1

79.5
102.7
0.9
0.1
118.9
302.1

81.4
113.2
0.5
1.6
112.7
309.4

576.1

551.4

572.0

2.9
62.6
0.2
12.7
273.2
351.6

2.9
62.5
0.2
16.7
233.3
315.6

2.9
62.6
0.2
12.9
265.4
344.0

0.7
29.8
0.4
3.9
34.8

1.1
27.2
1.2
0.1
7.5
37.1

0.9
26.2
7.8
34.9

21.9
149.0
5.0
7.2
0.9
5.7
189.7

20.7
152.3
4.2
6.7
7.8
7.0
198.7

11.6
159.4
5.2
8.1
1.2
7.6
193.1

Total liabilities

224.5

235.8

228.0

Total liabilities and equity

576.1

551.4

572.0

Retainedearnings
£m

Total
£m

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

8

Total assets
EquityCapital and reserves attributable to the company’s equity shareholders
Share capital
Share premium
Other reserves
Translation reserve
Retained earnings
Liabilities
Non-current liabilities
Bank loans
Lease payables
Derivative financial instruments
Provisions
Deferred tax liabilities

8

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

8(1) Details of restatement of prior period numbers can be found in note 1.

Condensed consolidated statement of changes in equity
Half year ended 30 September 2023

Sharecapital£mSharepremium
£m

2.9

62.6

0.2

12.9

265.4

344.0

-

-

-

-

22.3

22.3

- Foreign exchange translation differences

-

-

-

(0.2)

-

(0.2)

- Remeasurement loss in respect of postretirement benefits

-

-

-

-

(19.4)(19.4)

As at 1 April 2023

Other Translation
reserves
reserve£m£m

Total comprehensive (expense)/income:
Profit for the period
Other comprehensive (expense)/income:

-

-

-

-

4.8

4.8

-

-

-

(0.2)

7.7

7.5

-

-

-

-

1.1

1.1

-

-

-

-

(1.0)

(1.0)

-

-

-

-

0.1

0.1

As at 30 September 2023

2.9

62.6

0.2

12.7

273.2

351.6

As at 1 April 2022

2.9

62.5

0.2

7.6

243.2

316.4

-

-

-

-

20.7

20.7

- Foreign exchange translation differences

-

-

-

9.1

-

9.1

- Remeasurement loss in respect of postretirement benefits- Tax credit on items that will not be reclassified
to Consolidated Statement of Income
Total comprehensive income/(expense)
attributable to equity Shareholders of theparent----(31.8)(31.8)

-

-

-

-

7.9

7.9

-

-

-

9.1

(3.2)

5.9

-

-

-

-

1.2

1.2

-

-

-

-

(7.9)

(7.9)

-

-

-

-

(6.7)

(6.7)

2.9

62.5

0.2

16.7

233.3

315.6

- Tax credit on items that will not be reclassified
to Consolidated Statement of Income
Total comprehensive(expense)/income
attributable to equity Shareholders of theparentTransactions with owners recorded directlyin equity:- Credit in respect of employee service costs
settled by award of share options- Tax charge in respect of share options
Total transactions with owners recorded
directly in equity:

Total comprehensive income/(expense):
Profit for the period
Other comprehensive income/(expense):

Transactions with owners recorded directlyin equity:- Credit in respect of employee service costs
settled by award of share options- Dividends
Total transactions with owners recorded
directly in equity:
As at 30 September 2022

Condensed consolidated statement of changes in equity (continued)
Half year ended 30 September 2023

Sharecapital£mSharepremium
£m

2.9

62.5

0.2

-

-

- Foreign exchange translation differences-- Remeasurement loss in respect of postretirement benefits-

As at 1 April 2022

Other Translation
reserves
reserve£m£m

Retainedearnings
£m

Total
£m

7.6

243.2

316.4

-

-

58.6

58.6

-

-

5.3

-

5.3

-

-

-

(38.6)(38.6)

Total comprehensive income/(expense):
Profit for the period
Other comprehensive income/(expense):- Tax credit on items that will not be reclassified toConsolidated Statement of Income
Total comprehensive income attributable toequity Shareholders of the parent

-

-

-

-

9.7

9.7

-

-

-

5.3

29.7

35.0

Transactions with owners recorded directly inequity:- Credit in respect of employee service costs
settled by award of share options- Tax credit in respect of share options

-

-

-

-

2.4

2.4

-

-

-

-

0.7

0.7

- Proceeds from shares issued

-

0.1

-

-

-

0.1

- Dividends

-

-

-

-

(10.6)(10.6)

Total transactions with owners recorded
directly in equity:

-

0.1

-

-

(7.5)

(7.4)

2.9

62.6

0.2

12.9

265.4

344.0

As at 31 March 2023

Other reserves comprise the capital redemption reserve, which represents the nominal value of shares repurchased and then cancelledduring the year ended 31 March 1999.
The foreign exchange translation reserve comprises all foreign exchange differences arising since 1 April 2004 from the translation of
the Group's net investments in foreign subsidiaries into Sterling.

Condensed consolidated statement of cash flows
Half year ended 30 September 2023
Half year toHalf year to
30 September 30 September
2023
2022
as restated(1)£m£mProfit for the period

Year to31 March
2023
£m

22.3

20.7

58.6

7.3
(1.0)
2.4
0.7
-

5.9
(0.3)
6.1
(0.4)
0.5
-

14.9
(1.1)
(3.0)
(0.4)
0.5
0.4

Adjustments for:
Income tax expense
Net financial income
Fair value movement on financial derivatives
Release of provision on disposal
WITec post-acquisition gross margin adjustment
Transaction related costs
Restructuring costs

Intellectual property litigation costs
Impairment of capitalised development costs
Amortisation and impairment of acquired intangibles
Depreciation of right-of-use assets
Depreciation of property, plant and equipment
Amortisation of capitalised development costs
Adjusted earnings before interest, tax, depreciation and amortisation

0.2
4.6
2.7
2.4
0.3
41.9

4.3
1.9
2.6
0.6
41.9

0.5
0.8
9.3
4.6
4.8
1.4
91.3

Charge in respect of equity settled employee share schemes
Cash payments to the pension scheme more than the charge to operating
profitOperating cash flows before movements in working capital

1.1
(4.0)

1.2
(3.9)

2.4
(11.7)

39.0

39.2

82.0

Increase in inventories
Decrease/(increase) in receivables(Decrease)/increase in payables and provisions
Increase in customer deposits(22.9)
3.8(18.1)
5.6(12.8)
(8.3)
(5.3)
13.8

(15.6)(19.6)
16.9
9.2

Cash generated from operations

7.4

26.6

72.9

Interest paid
Income taxes paid
Net cash (used by)/from operating activities

(0.5)
(7.9)
(1.0)

(2.6)
24.0

(0.7)
(5.7)
66.5

0.1
(16.5)
(0.3)
(0.3)
1.7
(15.3)

0.1(11.6)(0.1)
0.1(11.5)

0.2(32.3)
(4.8)
(0.6)
1.1
(36.4)

Proceeds from issue of share capitalInterest paid on lease payables
Repayment of lease payables
Repayment of borrowings
Dividends paid
Net cash used in financing activities

0.1
(0.4)
(2.2)
(0.1)
(2.6)

(0.3)
(1.2)
(0.1)
(7.9)
(9.5)

0.1
(0.5)
(5.1)
(0.5)
(10.6)(16.6)Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the period(18.9)
101.5
(2.3)
80.3

3.0
87.7
8.0
98.7

13.5
87.7
0.3
101.5

101.7

118.9

112.7

(21.4)
80.3(20.2)
98.7(11.2)
101.5

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 acquired
Acquisition of intangible assets
Capitalised development expenditure
Interest received
Net cash used in investing activities
Cash flows from financing activities

Comprised of:Cash and cash equivalents as per the consolidated statement of financial
position
Bank overdrafts(1) Details of restatement of prior period numbers can be found in note 1.

Notes to the half-year financial statements
Half year ended 30 September 2023
1 Basis of preparation
Reporting entity
Oxford Instruments plc is a company incorporated in England and Wales. The condensed consolidated half-year financial statements
consolidate the results of the Company and its subsidiaries (together referred to as the "Group"). They have been prepared andapproved by the Directors in accordance with International Financial Reporting Standard ("IFRS") IAS 34 Interim Financial Reporting as
adopted by the UK. They do not include all of the information required for full annual financial statements and should be read in
conjunction with the consolidated Financial Statements of the Group for the year ended 31 March 2023.
The financial information contained herein is unaudited and does not constitute statutory accounts as defined by Section 435 of theCompanies Act 2006. The comparative figures for the financial year ended 31 March 2023 are not the Company’s statutory accounts forthat financial year. Those accounts have been reported on by the Company’s auditors and delivered to the registrar of companies. The
report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way ofemphasis without qualifying their report, and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The Board of Directors approved the Condensed Consolidated Interim Financial Statements on 13 November 2023.

Significant accounting policies
As required by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the condensed set of Financial
Statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the Company’s
published consolidated financial statements for the year ended 31 March 2023.
Prior period restatement
As reported in the statutory accounts for the year ended 31 March 2023, a restatement has been made for the presentation ofreceivable and payable balances in the prior year.
The Directors concluded that separate value-added tax (VAT) receivable and payable balances, within the same VAT group, or within
individual registrations, of group entities, held on the condensed consolidated statement of financial position at 31 September 2022
should have been netted off with one another, rather than presented gross.
As a result, the condensed consolidated statement of financial position as at 30 September 2022 and condensed consolidated
statement of cash flows for the period ended 30 September 2022 has been restated as follows:
30 September2022(as reported)£m

30 September
2022
Restatement(restated)£m£m

Condensed consolidated statement of financial position
Current assets
Trade and other receivables

118.2(15.5)

102.7(167.8)15.5(152.3)(13.9)

5.6

(8.3)

0.3

(5.6)

(5.3)

Current liabilities
Trade and other payables
Condensed consolidated statement of cash flows
Increase in receivables
Increase/(decrease) in payables and provisions

The restatement did not result in any change to reported profit, earnings per share, net assets or net cash from operating activities
reported in the 2022 half-year financial statements.
Changes in accounting standards
IFRS 17 Insurance Contracts provides consistent principles for all aspects of accounting for insurance contracts within the scope of thestandard. The standard is effective for years beginning on or after 1 January 2023 with a requirement to restate comparatives.
The Group has reviewed whether its arrangements meet the accounting definition of an insurance contract. While some contracts may
transfer an element of insurance risk, they relate to warranty and service type agreements that are issued in connection with the Group’s
sales of its goods or services and therefore will continue to be measured under IFRS 15 Revenue from Contracts with Customers and
IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Parent company financial guarantees, meet the IFRS 17 definition of insurance contracts. Whilst there could be an impact on individual
sets of financial statements of companies within the Group these have not impacted the condensed consolidated interim financial
statements for the period to 30 September 2023 and are not expected to have an impact for the full year. The Directors are not aware of
any other contracts where IFRS 17 would have an impact on the condensed consolidated interim financial statements.
IAS 12 Income Taxes has been amended to incorporate revisions for ‘deferred tax related to assets and liabilities arising from a single
transaction’ and ‘international tax reform: pillar two model rules’. There is no material impact on the Group as a result of theamendments.
Estimates
The preparation of half-year financial statements requires management to make judgements, estimates and assumptions that affect theapplication of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ fromthese estimates.
In preparing these half-year financial statements, the significant judgements made by management in applying the Group’s accounting
policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at
and for the year ended 31 March 2023.
Going concern
The Directors have considered the adoption of the going concern basis of preparation for these half-year financial statements. The
Directors have reviewed cash flow forecasts prepared for a period of 18 months from the date of approval of these condensed accounts.
At the end of the reporting period the Group had £188.0m of available liquidity including £79.1m of net cash and £108.9m of theundrawn revolving credit facility (‘RCF’). In reviewing the cash flow forecasts the Directors considered the current trading position of theGroup and the likely capital expenditure and working capital requirements. Trading for the Group has been good during the first half
year, though because of significant capital expenditure and exceptional export licence rejection and delays we have reported a negativecash flow conversion (-21%). On a normalised basis, which excludes these items, cash conversion was 40%. The Group has preparedand reviewed a number of scenarios for the Group based on key risks noted for the business and the potential impact on orders, trading
and cash flow performance. In addition, the Group has overlaid the risk of long-term adverse movements in currency rates to our cash
flow forecasts. The cashflow forecasts show that the Group expects to comply with the covenants included within the RCF agreement
throughout the review period.
Taking into account the current cash level and the committed facilities the Directors are confident that the Group will have sufficient
funds to allow it to continue to operate. After reviewing the projections and sensitivity analysis the Directors believe that it is appropriate
to prepare the half-year financial statements on a going concern basis.

2 Non-GAAP measures
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. These adjusting items are excluded in
the calculation of adjusted operating profit, adjusted profit before tax, adjusted profit for the period, 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, depreciation of right-of-use assets andamortisation of intangible assets to adjusted operating profit, and can be found in the condensed consolidated statement of cash flows.
The calculation of adjusted EPS can be found in Note 3. Adjusted effective tax rate is calculated by dividing the share 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.

Reconciliation between operating profit and profit before income tax and adjusted profit
Half year to
30 September 2023
Operating
Profitprofitbeforeincome tax£m£m
Statutory measure
Release of provision on disposal
Transaction related costs
WITec post-acquisition gross margin adjustment
Restructuring costs
Intellectual property litigation costs
Impairment of capitalised development costs

Half year to
30 September 2022
Year to 31 March 2023
Operating
Profit Operating
Profitprofitbeforeprofitbeforeincome tax
income tax
£m
£m
£m
£m

28.6

29.6

26.3

26.6

72.4

73.5

-

-

(0.4)

(0.4)

(0.4)

(0.4)

0.7

0.7

-

-

-

-

-

-

0.5

0.5

0.5

0.5

-

-

-

-

0.4

0.4

0.2

0.2

-

-

0.5

0.5

-

-

-

-

0.8

0.8

Amortisation and impairment of acquired
intangibles
Fair value movement on financial derivatives

4.6

4.6

4.3

4.3

9.3

9.3

2.4

2.4

6.1

6.1

(3.0)

(3.0)

-

Unwind of discount in respect of contingent
consideration
Total non-GAAP adjustments

7.9

Adjusted measure

36.5

Adjusted effective tax rates

7.9

10.5

37.5

36.8

(9.0)

Adjusted income tax expense
Adjusted profit for the period

0.2

36.5

28.5

0.4

10.7

8.1

37.3

80.5

(8.0)
36.8

24.0%

29.3

8.5
82.0
(17.0)

80.5

21.4%

65.0
20.7%

Release of provision on disposal
These represent the release of the provision on disposal of the OI Healthcare business in the US in 2020.
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 periods 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 will not recur, as all such inventory at the acquisition date had
been delivered to customers by 31 March 2023.
Restructuring costs
These represent the costs of one-off restructuring charges within the Materials & Characterisation segment in the prior period.
Intellectual property litigation costs
These represent one-off legal costs in the Research & Discovery segment to defend our intellectual property.
Impairment of capitalised development costs
During the prior year, the Group reviewed the capitalised development costs to ensure they remained directly related to targeted productor software developments. The one-off non-cash impairment relates to delays in market launch of specific development projects within
the Materials & Characterisation segment.
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 alsomeasured at fair value. In respect of instruments used to hedge foreign exchange risk and interest rate risk, the Group does not takeadvantage of the hedge accounting rules provided for in IFRS 9 since that standard requires certain stringent criteria to be met in orderto 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 at fair value through profit or loss. To theextent that instruments are hedges of future transactions, adjusted profit for the period is stated before changes in the valuation of these
instruments so that the underlying performance of the Group can be more clearly seen.
Unwind of discount in respect of contingent consideration
Adjusted profit in the prior periods exclude the unwind of the discount in respect of the contingent consideration on the acquisition of
WITec.
Adjusted income tax expense
Adjusting items include the income tax on each of the items described above.
Reconciliation of changes in cash and cash equivalents to movement in net cash
Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Year to31 March2023£m

Net (decrease)/increase in cash and cash equivalents(18.9)

3.0

13.5

Effect of exchange rate fluctuations on cash held

(2.3)

8.0

0.3

Movement in net cash in the period(21.2)

11.0

13.8

0.1

0.2

0.5

Net cash after borrowings at the start of the period

100.2

85.9

85.9

Net cash after borrowings at the end of the period

79.1

97.1

100.2

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Year to31 March2023£m

Repayment of borrowings

Reconciliation of net cash to Statement of Financial Position

Covid-19 loan at WITec

(1.2)

(1.6)

(1.3)

Overdrafts(21.4)(20.2)(11.2)Cash and cash equivalents

101.7

118.9

112.7

Net cash after borrowings at the end of the period

79.1

97.1

100.2

3 Earnings per share
Basic earnings per ordinary share (EPS) is calculated by dividing the profit attributable to equity shareholders of the parent by theweighted average number of ordinary shares in issue during the period. The weighted average number of shares used in the calculation
is as follows:
Half year toHalf year to
30 September 30 September
2023
2022
SharesShares
Weighted average number of shares used in calculation of basic earnings
per share

Year to31 March
2023
Sharesmillionmillionmillion

57.7

57.7

57.7

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 theirconversion to ordinary shares would decrease EPS.

The following table shows the effect of share options on the calculation of diluted earnings per share:
Half year toHalf year to
30 September 30 September
2023
2022
SharesSharesYear to31 March
2023
SharesmillionmillionmillionNumber of ordinary shares per basic earnings per share calculations

57.7

57.7

57.7

Effect of shares under option

0.8

0.7

0.7

Number of ordinary shares per diluted earnings per share calculations

58.5

58.4

58.4

Basic and diluted EPS are based on the profit for the period attributable to equity shareholders of the parent, as reported in thecondensed consolidated statement of income. Adjusted and diluted adjusted EPS are based on adjusted profit for the period, asreported in Note 2:
Half year to
30 September 2023
£m
Pence

Half year to
30 September 2022
Year to 31 March 2023
£m
Pence
£m
Pence

Underlying profit attributable to equity
shareholders of the parent/Underlying EPS
Total underlying adjustments to profit before tax(Note 2)
Related tax effects
Adjusted profit attributable to equity
shareholders of the parent/adjusted EPS
Diluted underlying EPS
Diluted adjusted EPS

22.3

38.6

20.7

35.9

58.6

101.6

7.9

13.7

10.7

18.5

8.5

14.7

(1.7)

(2.9)

(2.1)

(3.6)

(2.1)

(3.6)

28.5

49.4

29.3

50.8

65.0

112.7

38.1

35.4

100.3

48.7

50.2

111.3

4 Segment information
The Group has nine operating segments. These operating segments have been combined into three aggregated operating segments tothe extent that they have similar economic characteristics, with relevance to products and services, type and class of customer, methodsof sale and distribution and the regulatory environment in which they operate. Each of these three aggregated operating segments is areportable segment. The aggregated operating segments are as follows:- 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 unique environments
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 third-party
healthcare imaging systems.
The Group’s internal management structure and financial reporting systems reflect 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 on a reasonablebasis. The operating results of each are regularly reviewed by the Chief Operating Decision Maker, which is deemed to be the Board of
Directors. Discrete financial information is available for each segment and used by the Board of Directors for decisions on resource
allocation and to assess performance. No asset information is presented below as this information is not presented in reporting to theGroup’s Board of Directors.

Results
Half year to 30 September 2023

Materials &Characterisation£mResearch &Discovery£mService &Healthcare
£m

Total
£m

Total segment revenue

109.3

66.6

33.8

209.7

Segment adjusted operating profit

17.4

9.6

9.5

36.5

Materials &Characterisation£mResearch &Discovery£mService &Healthcare
£m

Total
£m

Total segment revenue

108.7

58.1

33.7

200.5

Segment adjusted operating profit

18.9

7.0

10.9

36.8

Half year to 30 September 2022

Year to 31 March 2023

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

Revenue in the Materials & Characterisation and Research & Discovery segments relates to the sale of products. Revenue in theService & Healthcare segment relates to service income.
Reconciliation of reportable segment profit
Half year to 30 September 2023

Materials &Characterisation£m

Segment adjusted operating profit

Research &Discovery£mService & UnallocatedHealthcare Group items
£m
£m

Total
£m

17.4

9.6

9.5

-

36.5

Transaction related costs

-

(0.7)

-

-

(0.7)

Intellectual property litigation costs

-

(0.2)

-

-

(0.2)

(1.5)

(3.1)

-

-

(4.6)

-

-

-

(2.4)

(2.4)

Financial income

-

-

-

1.9

1.9

Financial expenditure

-

-

-

(0.9)

(0.9)

Profit/(loss) before income tax

15.9

5.6

9.5

(1.4)

29.6

Half year to 30 September 2022

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

Segment adjusted operating profit

18.9

7.0

10.9

-

36.8

Release of provision on disposal

-

-

0.4

-

0.4

(0.5)

-

-

-

(0.5)

(1.2)

(3.1)

-

-

(4.3)

-

-

-

(6.1)

(6.1)

Financial income

-

-

-

0.9

0.9

Financial expenditure

-

-

-

(0.6)

(0.6)

17.2

3.9

11.3

(5.8)

26.6

Materials &Characterisation£mResearch &Discovery£mService &Healthcare£mUnallocatedGroup items
£m

Total
£m

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 costs

-

(0.5)

-

-

(0.5)

Impairment of capitalised development costs

(0.8)

-

-

-

(0.8)

WITec post-acquisition gross margin
adjustment
Amortisation and impairment of acquired
intangibles
Fair value movement on financial derivatives

(0.5)

-

-

-

(0.5)

(3.1)

(6.2)

-

-

(9.3)

-

-

-

3.0

3.0

Financial income

-

-

-

2.7

2.7

Financial expenditure

-

-

-

(1.6)

(1.6)

35.7

11.3

22.4

4.1

73.5

Amortisation and impairment of acquired
intangibles
Fair value movement on financial derivatives

WITec post-acquisition gross margin
adjustment
Amortisation and impairment of acquired
intangibles
Fair value movement on financial derivatives

Profit/(loss) before income tax

Year to 31 March 2023

Profit before income tax

Revenue

Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Year to31 March
2023
£m

UK

12.8

10.4

29.4

China

65.1

56.8

107.4

Japan

16.0

16.8

46.7

USA

51.2

55.2

121.2

Germany

15.4

14.9

32.1

Rest of Europe

20.7

18.1

43.4

Rest of Asia

20.5

23.6

47.1

Rest of World

8.0

4.7

17.4

209.7

200.5

444.7

Total

5 Research and development (R&D)
The total research and development spend by the Group is as follows:
Half year toHalf year to
30 September 30 September
2023
2022
£m
£m

Year to31 March
2023
£m

19.7

18.2

36.7

Less: depreciation of R&D-related fixed assets

-

(0.2)

(0.3)

Add: amounts capitalised as fixed assets

-

-

-

Less: amortisation of R&D costs previously capitalised as intangibles

(0.3)

(0.6)

(2.2)

Add: amounts capitalised as intangible assets

0.3

0.1

0.6

Total cash spent on R&D during the year

19.7

17.5

34.8

R&D expense charged to the Consolidated Statement of Income

6 Taxation
The total effective tax rate on profits for the half year is 24.7% (2022: 22.2%). The weighted average tax rate in respect of adjusted profit
before tax (see Note 2) for the half year is 24.0% (2022: 21.4%).
For the full year the Group expects the tax rate in respect of adjusted profit before tax to be 24.2%.

7 Dividends per share
The following dividends per share were paid by the Group:
Half year toHalf year to
30 September 30 September
2023
2022
pence
pence

Year to31 March
2023
pence

Previous period final dividend

-

13.7

13.7

Current period interim dividend

-

-

4.6

-

13.7

18.3

The following dividends per share were proposed by the Group in respect of each accounting period presented:
Half year toHalf year to
30 September 30 September
2023
2022
pence
pence
Interim dividend

4.9

4.6

Year to31 March
2023
pence
4.6

Final dividend

-

-

14.9

4.9

4.6

19.5

The interim dividend for the year to 31 March 2023 of 4.6 pence was approved by a sub-committee of the Board on 7 November 2022
and was paid on 13 January 2023. The final dividend for the year to 31 March 2023 of 14.9 pence was approved by Shareholders at theAnnual 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 per share was approved by a sub-committee of the Board on 7
November 2023 and has not been included as a liability as at 30 September 2023. The interim dividend is expected to be paid on 12
January 2024 to Shareholders on the register on the record date of 1 December 2023, with an ex-dividend date of 30 November 2023
and with the last date of election for the Dividend Reinvestment Plan (DRIP) being 19 December 2023.

8 Financial instruments
Fair values of financial assets and liabilities
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fairvalue hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if thecarrying amount is a reasonable approximation of fair value.
As at
30 September 2023
Fair value
hierarchy

Carrying Fair value
amount£m£m

As at
30 September 2022
as restated (1,2)
Carrying Fair value
amount£m£m

As at 31 March 2023
as restated (2)Carrying
amount£m

Assets carried at amortised cost
Long-term receivables

1.2

0.1

0.5

Trade receivables

82.0

86.2

92.4

Other receivables and accrued
incomeCash and cash equivalents

11.1

6.0

8.4

101.7

118.9

112.7

Assets carried at fair value

Fair value£mDerivative financial instruments:- Foreign currency contracts

2

2.3

2.3

0.2

0.2

2.0

2.0

2

(1.3)

(1.3)

(9.0)

(9.0)

(1.2)

(1.2)

Liabilities carried at fair value
Derivative financial instruments:- Foreign currency contracts
Liabilities carried at amortised
cost
Trade and other payables(59.9)(64.6)(79.9)

Bank overdrafts(21.4)(20.2)(11.2)

Borrowings

(1.2)

(1.7)

(1.3)

Lease payables(34.8)(31.4)(31.4)(1) Details of restatement of prior period numbers can be found in note 1.
(2) The other receivables and accrued income and trade and other payables balances in the table above, as at 30 September 2022 and 31 March 2023,
have been restated to remove the tax-related balances which do not meet the accounting definition of financial assets and liabilities. As a result, at 30
September 2022, other receivables and accrued income were reduced by £5.2m, while trade and other payables were reduced by £7.1m; at 31 March
2023, other receivables and accrued income were reduced by £5.8m, while trade and other payables were reduced by £6.1m.

The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in theabove 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.
Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the carrying amount is deemed to reflect the fair value. All otherreceivables/payables are discounted to determine their fair value. Advances received are excluded from other payables above as these
are not considered to be financial liabilities. Tax related receivables and payables are excluded from the above table as these are notconsidered to be financial assets and liabilities.
Lease payables
The lease liability is measured at amortised cost using the effective interest method.

Fair value hierarchy
The table above gives details of the valuation method used in arriving at the fair value of financial instruments. The different levels havebeen 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 (i.e. as
prices) or indirectly (i.e. derived from prices); and- 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.

9 Retirement benefit obligations
The Group operates a defined benefit plan in the UK. A full actuarial valuation of the UK plan was carried out as at 31 March 2021
which, for reporting purposes, has been updated to 30 September 2023 by a qualified independent actuary.
At 31 March 2023, the scheme actuary calculated a retirement benefit asset of £26.4m, being the net of £251.5m of assets and apresent value of future liabilities of £225.1m.

In the period to 30 September 2023, there has been an increase in the discount rate from 4.8% to 5.5% and significant changes tomarket conditions have reduced the value of the scheme's obligations. The impact of these changes has decreased the benefit
obligation to £207.2m (31 March 2023: £225.1m). There have been no material changes to the demographic assumptions associatedwith the scheme.
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 deficit recovery payment for the period
was £4.2m (year to 31 March 2023: £8.2m as well as an additional one-off payment of £4.0m). However, significant changes in market
conditions reduced the scheme’s assets during the period. As a result, the fair value of plan assets decreased to £218.5m (31 March
2022: £251.5m).
The overall effect is that for the purposes of IAS 19 the surplus on the scheme decreased from £26.4m to £11.3m.

10 Related parties
There have been no related party transactions in the first 6 months of the current financial year which have materially affected thefinancial position or performance of the Group.
Related parties are consistent with those disclosed in the Group's annual report for the year ended 31 March 2023.

Principal risks and uncertainties
Information regarding the risk management process in place at the Group is set out on pages 94 to 96 of the 2023 Report and Financial
Statements.
The principal risks and uncertainties identified through that process are set out on pages 97 to 101 of the 2023 Report and Financial
Statements and can be found on the Group’s website at www.oxinst.com.
In keeping with the risk management process, the Group has performed a quarterly update of its risk register as at 30 September 2023.
It has evaluated the disclosures made on pages 97 to 101 of the 2023 Report and Financial Statements and has concluded that all of
the risks identified continue to be relevant for the remainder of the year ending 31 March 2024.
Further it considers that there are no additional significant risks to be disclosed.
A summary of the risks and uncertainties identified in the 2023 Report and Financial Statements is set out below:
•
•
•
•
•
•
•
•
•
•
•
•
•

Geopolitical risk;
Supply chain risk;
Routes to market risk;
New Product Introduction risk
Market risk: Recession/inflation
Information Technology risk
Legal and regulatory compliance risk
Risk of adverse movements in long-term foreign currency rates
Risk that a global pandemic/catastrophe causes major disruption
People and capability risk
Business interruption: operational risk
Climate change risk; andPensions risk.

Responsibility statement of the Directors in respect of the half-year financial
statements
The Directors confirm that, to the best of their knowledge:• the condensed consolidated interim financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the UK; and• the interim management report includes a fair review of the information required by:a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during
the first six months of the financial year and their impact on the condensed consolidated interim financial statements; and a descriptionof the principal risks and uncertainties for the remaining six months of the year; and(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the firstsix months of the current financial year and that have materially affected the financial position or performance of the entity during that
period; and any changes in the related party transactions described in the last Annual Report that could do so.
By order of the Board

Richard Tyson
Chief Executive Officer
13 November 2023

Gavin Hill
Chief Financial OfficerIndependent review report to Oxford Instruments plc
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in thehalf-yearly financial report for the six months ended 30 September 2023 is not prepared, in all material respects, in accordance with UK
adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial
Conduct Authority.
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six
months ended 30 September 2023 which comprises the condensed consolidated statement of income, condensed consolidated
statement of comprehensive income, condensed consolidated statement of financial position, condensed consolidated statement ofchanges in equity, condensed consolidated statement of cash flows, and the related explanatory notes.
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, “Review of Interim Financial
Information Performed by the Independent Auditor of the Entity” (“ISRE (UK) 2410”). A review of interim financial information consists ofmaking enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK)and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion.
As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with UK adopted international
accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared inaccordance with UK adopted International Accounting Standard 34, “Interim Financial Reporting”.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion
section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern
basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately
disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions
may cause the group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance andTransparency Rules of the United Kingdom’s Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible for assessing the company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based onprocedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of
the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial Conduct Authority and for no other purpose. No
person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purposeof our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

BDO LLP
Chartered Accountants
Reading, UK
13 November 2023

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).