Renishaw pic Annual Report and Accounts 2017 RENISHAW apply innovation™

Renishaw plc Annual report and accounts 2017

Strategic report Introduction Renishaw is a world-leading metrology company. With our highly experienced team we are confidently driving our future growth through innovative and patented products and processes, efficient high-quality manufacturing, and the ability to provide local support in a growing number of geographies and markets. 95% of our sales are outside the UK. Our continuing investment in new product development, plant and equipment, and facilities (c.£100m in the last year) is the key to our confidence in the Group’s long-term strategy and prospects. With 4,530 skilled and motivated people,...

02 Strategic report At a glance The Group has 77 locations in 35 countries from where we distribute and support products for our global customer base, with 95% of sales outside the UK. Who we are Renishaw is a world-leading metrology company operating in two key business areas, metrology and healthcare. We manufacture our products in the UK, Ireland, India, Germany, USA and France. What we do Metrology products: Our technology solutions help manufacturers to maximise production output, to significantly reduce the time taken to produce and inspect components, and to keep their machines running...

Strategic report new subsidiary company established. Financial statements Shareholder information new sq ft office in Taiwan now formally opened. Spain relocated to a new facility three times the size of the former building. Canada new Additive Manufacturing Solutions Centre. Continental Europe Other regions

Strategic report Chairman’s statement I am pleased to report our 2017 annual results with record revenue for the year ended 30th June 2017 of £536.8m compared to a restated £427.2m for last year. The Group’s adjusted profit before tax for the year was £109.1m Chairman and Chief Executive Adjusted profit before tax (£m) 109.1 87.5 +25% Renishaw pic Annual report and accounts 2017

I am pleased to report our 2017 annual results. We achieved a record turnover of £536.8m with an underlying revenue growth of 14% at constant exchange rates*. We report an adjusted profit before tax of £109.1m* and a statutory profit before tax of £117.1m, an increase of 25% on an adjusted basis. Our total shareholder return during the year was 67%, ranking Renishaw in the top 25 in both the FTSE 250 and FTSE 350. Renishaw is a long-term business and we remain committed to strategic investments and R&D. In addition, over the past year, we have focused on underperforming business areas resulting...

Strategic report Chairman’s statement continued Statutory profit before tax for the year was £117.1m compared to a restated £61.7m last year. Statutory earnings per share on continuing activities were 141.3p compared to 71.8p last year. This year's tax charge on continuing operations amounts to £14.3m (2016 restated: £10.0m) representing a tax rate of 12.2% (2016 restated: 16.2%). The tax rate has benefited from the continued phasing in of the patent box tax regime and a reduction in the UK tax rate applied when calculating certain deferred tax assets and liabilities. Metrology Revenue from our...

There was an adjusted operating loss of £7.2m, compared with a restated loss of £3.1m last year. We remain focused on moving this business sector into profit, where we have implemented a number of initiatives and are restructuring the neurological and medical dental businesses. Discontinued activities As reported in our October 2016 trading update, the Board decided to discontinue operations at Renishaw Diagnostics Limited (RDL), resulting in the closure of the business. Subsequently, certain assets of the business have been sold. The RDL business has been accounted for as a discontinued activity,...

Strategic report Chairman’s statement continued Outlook The Group is in a strong financial position and continues to invest in the development of new products and applications, along with targeted investment in production, and sales and marketing facilities around the world. We have experienced strong growth in 2017 and whilst noting ongoing uncertainty surrounding Brexit and currency exchange rate volatility, your directors remain confident in the long-term prospects for the Group and at this early stage in the year anticipate growth in both revenue and profits in the current financial year. Dividend A...

Strategic report Strategic report We identify customer needs and then apply innovative engineering to deliver successful solutions. Financial statements Shareholder information Renishaw’s strategy of investment in R&D and engineering skills enables us to take a longerterm view of the viability of new technologies. We are actively expanding our significant portfolio of innovative and patented products. We anticipate future trends and seek to solve problems before they appear to be happening. We are a highly vertically integrated company so that we can ensure success for our customers. We not only...

Our products serve truly diverse markets across a wide range of industries, customer types and geographic regions. From the manufacture of jet engines and wind turbines, through to dentistry and brain surgery, our products, and our people who service them, are making a real difference to the capabilities of our manufacturing and healthcare clients. These benefits are extended to the end-consumer of our clients’ products and services, whether using a smartphone, driving a car, riding a mountain bike, or having a new dental crown fitted, many of these products rely on Renishaw’s technology and applications...

On these two pages we have listed some of our principal markets and the specific key drivers of growth within those markets for our products. However, there are more generic market growth drivers that are positive for our business: • Global skills shortages - increased investments in automation and user-friendly technology. • Rising energy costs - increased demand for products that maximise output. • Focus on reducing emissions and waste - increased demand for high performance products with ever tighter manufacturing tolerances and products that help minimise waste and rework. • Population growth...