Renishaw plc delivers a solid performance in mixed markets

Renishaw plc (LON:RSW), the global provider of manufacturing technologies, analytical instruments and medical devices, has published this trading update for the nine months ended 31 March 2024. It contains unaudited information that covers the first nine months of the financial year

Solid performance in mixed markets; early signs of semiconductor equipment recovery

Q3 trading activity

Revenue in the third quarter was £172.4m, 4% above the average in the first two quarters. Additive Manufacturing delivered strong growth during the third quarter, whilst co-ordinate measuring machine (CMM) and gauging systems continued to perform well. We also saw early signs of recovery in demand for position encoders from semiconductor equipment builders. By contrast, demand for metrology sensors for machine tools from consumer electronics customers was weaker than in the first half of the year.

9 months to 31 March 2024 trading activity

Revenue

Revenue for the nine-month period was £502.9m, compared to £522.0m for the corresponding period last year, representing a 4% reduction at reported exchange rates. At constant currency, revenue was in line with the previous year, with an increase of 5% in APAC offset by reductions of 6% in EMEA and 2% in the Americas. Manufacturing technologies revenues were 5% lower at reported exchange rates (0% at constant exchange rates), with growth in CMM and gauging systems sales in the Industrial Metrology area of our business being offset by lower revenues for our Position Measurement products. Analytical instruments and medical devices revenue was 16% higher (+17% at constant exchange rates), with strong growth in both Spectroscopy and Neurological.

Profitability

Adjusted profit before tax for the nine-month period was £86.8m (FY2023: £111.8m), amounting to 17% of revenue (FY2023: 21%). This reduction in profit primarily relates to the impact of currency and increased employee pay, including £2.1m of severance costs. Statutory profit before tax amounted to £86.8m (FY2023: £117.3m).​

Financial position

The Group balance sheet remains strong with cash and cash equivalents and bank deposit balances of £207.4m at 31 March 2024 (30 June 2023: £206.4m).

​Outlook

Renishaw have continued to deliver a solid performance in mixed market conditions, with growth from capital goods products and the early signs of recovering demand from semiconductor equipment builders. We expect the recent improvement in our trading performance to strengthen in the remainder of the financial year, as market conditions improve and as we continue to realise the benefits from a range of targeted growth opportunities. 

To support our growth strategy, we continue to focus on productivity and to make targeted investments in our people, our production facilities, and our new product pipeline.

In our interim statement released 6 February 2024 we communicated that we expected full year revenue to be in the range of £675m to £715m and adjusted profit before tax to be in the range of £122m to £147m. We now expect revenue to be in the range of £680m to £700m and adjusted profit before tax to be in the range of £122m to £135m.

We are holding our annual Capital Markets Day on 18 June 2024. Further details, including how to register, can be found at www.renishaw.com/en/capital-markets-day-tuesday-18th-june-2024–48647.

*In accordance with Renishaw’s Alternative Performance Measures (APMs) policy and ESMA Guidelines on Alternative Performance Measures (2015), APMs included in this statement are: Revenue at constant exchange rates and Adjusted profit before tax.

Revenue at constant exchange rates is defined as revenue recalculated using the same rates as were applicable to the previous year and excluding forward contract gains and losses.

The adjustment to statutory profit relates to the accounting treatment of certain forward currency contracts used as hedging instruments which do not qualify for hedge accounting as they do not meet the hedge effectiveness criteria set out in the International Accounting Standard IFRS 9 ‘Financial Instruments’. The Board deems that the adjusted profit before tax also represents a useful measure of performance of Renishaw. All previously ineffective contracts matured in FY2023 and no further contracts have been designated as ineffective in FY2024. The following table reconciles statutory profit before tax to adjusted profit before tax.