Renishaw PLC — Call Transcript 2025

Okay, good morning everyone. My name's Chris Pockett. I'm Head of Communications for Renishaw, and I'd like to welcome you to this live Q&A session for Renishaw's Full-Year Financial Results for the year ended June 30, 2025. Hopefully, you've all had an opportunity to view the video presentation that's released as part of this morning's R&S statement. Will Lee, CEO, and Allen Roberts, Group FD, are here now to answer any queries that you may have in relation to that presentation and the results statement. They'll try to answer as many questions as possible before we close at 11:15 A.M. I'll try to group similar questions together, so we may not answer all individual questions. If you haven't already done so, you can submit questions throughout this webcast via the question icon that you can see on the control panel on the right of your screen. Okay, let's get going. The first question here is around our industrial metrology products. The markets appear very mixed here with automotive weakness ongoing and machine tool data in Germany still soft, offset by the strength in your systems business. What is your outlook for this industrial metrology business in FY 2026? I think that's over to you, Will. Thanks, Chris, and good morning everyone. With the industrial metrology market, clearly yes. For our sensors business selling into machine tools, probably worst case maybe Germany or Taiwan, those markets are really quite soft at the moment with our customers facing challenging conditions. Here we focus, as we always do, on the medium to long term, working on business development with those customers. I think we're making good progress there. Particularly probably of note is on the latest tool setting side where some of the newer innovations that we've launched with the NC4+ Blue product line are really starting to help us with gaining market share there. An area where typically we've actually been unusually on number two rather than number one, so making really good progress. The area where we can have the more immediate impact over the shorter term is on the systems business. Here focused very much on shop floor metrology, which we see as a high growth area and an area for us to really grow business quickly. Making good progress and we are very positive there going forward. In terms of specific outlooks, I think early to say for the year and we'll be monitoring and pushing that hard there. Okay, thanks Will. Question now on additive manufacturing. You said that AM revenue was down in FY 2025 but finished the year with a good order book. What was the book to bill for AM for FY 2025? I think that's another one for you, Will. Yeah, so AM was a bit softer. It is one of those businesses that is still relatively small, also with high ticket items, so we expect a bit more variability there. I think some really positive signs. Some of the markets that are strong, I think defense probably is the one to pick out at the moment, as being really after performance, but quicker moving, quicker decision making than something like an aerospace. Looking forward positively there for this year. Again, very early on in the year, really to comment though. Okay, thank you. Question now relating to China. Could you expand on the opportunities that you see in market segments that you do not currently serve in China? Given rising competition and resulting pricing pressures, are Renishaw margins now lower in China than in other regions? Back to you, Will. Yeah, if you look at it really, then China relative to the rest of APAC, there is no significant difference in margins there. Clearly we do, and we've talked about saying, are there some entry level good enough markets where we don't really operate at the moment, and there probably are for both IM and PM. Both areas are quite interesting. Commercially, we've talked about exploiting more of what appears to be an entry level market and some of the machine shop factories over in China with lower price alternative to some of our core products. We will develop that strategy going forward. We also see probably on the encoder market that some applications start to come in, some new applications in electronics and semiconductor come in for our encoders. Some applications start to become more commoditized and maybe drop out the bottom, but the overall market there is growing for us. It's actually probably a complicated picture. I think in general we still see more positives with opportunities, both as new things start and also with our commercial strategies. Overall for us though, China is seeing good growth and we are optimistic going forward with the opportunities that we have. Thanks, Will. Question now regarding consumer electronics markets. Could you clarify what you're seeing in this end market? It was noted as an area of strength for industrial metrology, but in his prepared remarks, Allen said that this end market was down in 2025 at group level. What is going on here? Back to you, Will. Yeah, our biggest challenge last year was the first half of H1. Last year was tougher for consumer electronics, seeing a gradual recovery throughout the year with H2 ending up better. Looking forward, this is always a really tricky one to predict, but it feels like customers are now facing the necessity to make decisions that they have been off-putting. Looking forward, I think we feel more positive here in terms of investment for this over the rest of this financial year than probably we did three to six months ago, just because our customers have no choice. They have to make some decisions, we believe. We are monitoring this quite closely. The one thing we always try and do is make sure we are prepared for whatever happens here. Okay, now a question on pricing and tariffs. Assuming no miracles emerge from today's talks at Chequers and U.S. tariffs remain in place, can you make surcharges permanent or do you have other options to address this headwind, such as localizing more production? Will, with you again. Okay, we have made the assumption that these will be permanent. Surcharges have been migrated and are migrating through into price increases here for our customers in the U.S. We've taken that route rather than look at localizing of production. We will consider our group manufacturing strategy and what we do with changes in geopolitics, but that's certainly a far more long-term decision. At the moment, this is all being covered by now a price increase. Increased revenue offsets those additional costs that we are facing. Thank you. Another question on end markets. Can you talk about the extent of the contraction in automotive and your expectation for FY 2026? Also, in relation to defense, how big is it? What is it growing at and a rough split? Back to you again, Will. Yeah, okay. To be clear, we don't know for sure the size of our exposure to these markets because a lot of our stuff will go through integrators. When we're selling to a machine tool builder, they will sell on RX. Extrapolation and what we think is happening is roughly about 5% for defense, roughly about 13% for automotive. Defense, I think, is a really interesting area at the moment. Sadly, clearly a lot more investment going in there. We'll talk about a little bit with additive earlier. Certainly, and I know there's a question on this coming up, I think, next on inductive encoders. It feels like there are opportunities also here with us supporting that industry directly with some of our newer encoders as well. Okay, thank you. You've already alluded to that part of the next question. This relates to new products and new product launches. The question is, how are these new products performing that have been recently launched and specifically mentioned Equator-X, the Dual Laser RenAM machine, and the ASTRiA inductive encoder? Back to you again, Will. Yeah, thanks. We have been very clear. Our strategy is very much one about using innovation, specifically new product innovation, really here to drive our long-term growth. A lot of focus has been on looking at productivity within the group, really to get some key new products through. This is a really exciting time for us with the launches that we have made recently and are making in the next few months. Of particular note, very topical, Equator-X and importantly the new software to go through with it, MODUS IM. Next week, we will be over at the Emo trade show, a really large machine tool trade show in Germany. This will be the first significant public launch of those two products. I was actually getting a demo of MODUS IM yesterday on new software for this and going through with the team. Simplicity and ease of use get really, really transformative here. This is really, really important for us in terms of looking at developing new routes to market and getting us more productive and reducing our distribution costs, our applications costs. Exciting times there with those two. Also, ASTRiA I think has been a good example of our minimum viable product or MVP strategy with new development. Of getting out, testing out with customers, we have really seen a sweet spot we believe with defense customers here. We have been able to take now from the initial work that we have done, a robust, good working product to make sure we can now do some of the final tailoring and specific for their needs to exploit that opportunity. Also with this, the question we do get asked is then what about next? What is coming through? It is good here that we get to see, only last week we had our encoder group review of their early stage technology. The exciting bit here is we have an awful lot of new stuff coming through. This is right across the board for the group. Now our focus is on the productivity. How do we help our really talented engineering teams get these products through to market sooner, making both priority call decisions and also how do we support them to make sure they can operate as productively as possible? Okay, thanks Will. I've got some similar questions here relating to costs and specifically the EUR 20 million labor savings. If I just try and whiz through these and try and join some of these together. What is your expectation for underlying cost inflation in FY 2026? Can you talk us through the main moving parts of the FY 2026 operating profit bridge, including how much of the EUR 20 million savings will be seen in FY 2026? What is engineering cost inflation, labor admin inflation, savings from facility closure, and any ERP costs? Also, are there any other savings within the EUR 20 million that might take time to filter through? Let's try and amalgamate a few questions there. Start with Will and I think, oh, it's going to start with Allen on that one. Thank you, Chris, and good morning everybody. Yes, there's good progress on the cost reduction program, which alongside the closure of our drug delivery business and the closure of our R&D facilities in Edinburgh, are going well. We expect these to have a cost saving of around EUR 24 million. However, we do have the pay rise that was put into effect at the beginning of this year and possibly a likely similar percentage coming up in January 2026. Also, based upon a turnover, a payroll cost of around EUR 300 million. In addition, we do have the EUR 3 million of incremental national insurance over and above the previous year that we have to accommodate. On the other side, in addition to these cost reduction measures, we are further looking at productivity initiatives across the business in all areas, including the rollout of our global ERP program. We are further looking at our logistics automation, investments in manufacturing equipment that we've been putting in over the last couple of years, and the processes that we're focusing on, which you probably saw if you were at our CMD a few months ago, when you went through our manufacturing plant. A lot of initiatives are taking place in cost reductions, and we're starting to see some of those coming through now, which will in fact impact our gross margin. With the rollout of our e-commerce platform as well, there are a lot of initiatives going on across the board with regard to cost management. Okay, thanks, Allen. Tariffs again. Trump implemented increased U.S. Section 232 tariffs on certain steel and aluminum, I guess we should say, products in August and post your year end. Does that affect any of Renishaw's products? If so, what is the impact? Offset mechanisms including timing. Will, I think that's for you. Yes, I think we've probably answered most of this already. Yes, we do get caught up in the tariffs here. Tariff, we have now switched over to price increases rather than a surcharge. It's about a 1% impact on revenue, about EUR 9 million. We feel in a comfortable place there. Clearly, it's lots of discussions with customers in getting to that position. I don't think too much more to add on that one. Okay, thank you. Question about cash. There's nearly EUR 300 million of cash on the balance sheet. Any plans to deploy this via M&A or in the absence of that, would the management consider a special divvy or a buyback? What would be the preference between these two options? There's a similar question noting that, or asking, could we give more color on the "more active capital allocation" that you referred to in today's statement? Will, start with you on that one. Yeah, let's just underpin this with the things that we are trying to achieve at the moment. In terms of the priorities and initiatives for us here, Allen has talked about a minute ago on the productivity side of saying, yes, our number one strategy is still very much the revenue growth, profitable revenue growth through innovation, but we will underpin that with being more focused and more productive. With that, on top of that, we want to make sure we're pushing up our cash generation from that profit and also being prudent with our capital investment over the next few years. This is generating cash for us and correct, we are up to now almost EUR 300 million. As I mentioned at Capital Markets Day, we are discussing this. It is a hot topic of discussion for the board as to the use of that cash and what we do. I don't have any new information for everyone at the moment on that, but what I can say is it is something that is being had to be discussed with the board at the moment. Okay, thanks, Will. The question now on our search for the new CFO, and the question is, how is it going? Yeah, very early stages, nothing really to add on that at the moment. Okay. Question on expense. I think this is going Allen's way. Can you remind us of the phasing of IT infrastructure spend and whether this is going above or below the line? Allen? Thanks, Chris. Yes, the phasing of the ERP rollout is actually very active right now because we went live in the U.K., Ruxel, our U.K. sales activity, which is probably one of the most complex implementations that we will have during the whole rollout program. That went live 10 days ago, and we're working through it and we are shipping product. That's good news. We're going to be rolling it out through Germany and then through America and progressively through APAC and the rest of EMEA. That's going well, and we're looking to do a lot more of the in-house rollout ourselves. Whilst there will be further costs incurred with consultants in this current year, it is all above the line actually. We have been burdened with that over the last couple of years, and it will reduce over time over the next two or three years as the rollout progresses. Okay, thanks, Allen. Just looking through, I think we've already answered there's a question on the air tariffs. I think we've pretty much answered that. We've talked through capital allocation. Question, Allen, I think for you. What do you expect the effect of currency to be during FY 2026? Thank you, Chris. Yeah, our forward currency hedging program seeks to mitigate the short-term volatility in our results due to currency. At this stage, we don't see a significant net impact in 2026 versus 2025. We do have average forward U.S. dollar contract rates, forward rates for 2026 and 2027 at $1.27 to the pound and $1.28 for the following year. This is against the current rate of $1.36. We're in quite a good position in that respect. Okay, thanks, Allen. I think we've answered everything that's come in. Unless there's a late flurry, I'm not seeing anything. I think that that's it. I think we've now ended. Oh, I think there's a, oh, this looks like there might be a question coming in. We'll take this one. It's just coming through the system. Just wait for that one. Okay, just snuck this in before the end. How does working capital move as a percentage of sales given potential growth? How does CapEx look beyond the EUR 40 million this year? Allen, put that one over to you. Yeah, we're looking at around EUR 40 million for the current year in terms of CapEx. For the following couple of years also, that sort of order. The major spend, which was at Miskin, as you would have seen at CMD, was the build and construction of Halls 3 and 4. The major element of that expansion program took place in the last couple of years. We're well prepared going forward in terms of capacity, production capacity, and the availability of Hall 4, which could come through depending on our growth over the next few years. EUR 40 million a year. In terms of working capital, I wouldn't expect to see any significant movement in working capital statistics over the next two or three years. Okay. We do exercise very tight control on our debtors and working capital and inventory. There's quite good control on our inventory management process, which will be further enhanced and improved as the rollout of our ERP program proceeds. Okay, thanks, Allen. Another question's come in on currency. Can you remind us of the FX impact that came through in Q1 of 2025, and then if there could be a similar impact this year? No, we don't expect. That was a one-off benefit that we got in Autumn 2022 when the Liz Truss mini budget, we took the opportunity to get some good board contracts, which came through in the first quarter of last year. I think it was circa EUR 5 million, and we don't expect that to reoccur this year. Okay, thank you, Allen. This question here about order trends. Could you touch upon order trends? The development was noted to be encouraging in Q3. What has the development been like in Q4 and the last few months? I think that's one for Will. Yeah, overall positive, slightly up. I think those broad themes we talk about of actually APAC overall being positive at the moment, Europe’s already struggling and the Americas being a bit more complicated, with some encouraging signs, but also some risks there, remain true. I think we would also say that we view the sort of semiconductor electronics as being an unusual sort of steady growth rather than its normal cyclical ramp up and down. I think as we talked on earlier, we sort of see consumer electronics being probably going into a more positive phase, but really not sure. I think those are the bits I would probably pull out. Clearly, we’ve touched on some of these other bits earlier as well. Okay, thanks, Will. I think that really is it this time. That now ends today's session. As ever, we'll aim to publish a combined recording of this webcast and results presentation on the IR section of our website by tomorrow morning. Just to point out that whilst we've had no questions today on the new reporting segmentation, we will be publishing results for the new reporting segments at 07:00 A.M. BST on Tuesday, 23rd of September. If you can look out for that. On behalf of Renishaw, just like to thank you all for attending this event and have a great day.

Speaker 1: Okay, good morning everyone. My name's Chris Pockett. I'm Head of Communications for Renishaw, and I'd like to welcome you to this live Q&A session for Renishaw's Full-Year Financial Results for the year ended June 30, 2025. Hopefully, you've all had an opportunity to view the video presentation that's released as part of this morning's R&S statement. Will Lee, CEO, and Allen Roberts, Group FD, are here now to answer any queries that you may have in relation to that presentation and the results statement. They'll try to answer as many questions as possible before we close at 11:15 A.M. I'll try to group similar questions together, so we may not answer all individual questions. If you haven't already done so, you can submit questions throughout this webcast via the question icon that you can see on the control panel on the right of your screen. Okay, good morning everyone. okay good morning everyone My name's Chris Pockett. my name's chris pockett I'm Head of Communications for Renishaw, and I'd like to welcome you to this live Q&A session for Renishaw's Full-Year Financial Results for the year ended June 30, 2025. i'm head of communications for renishaw and i'd like to welcome you to this live q&a session for renishaw's full-year financial results for the year ended june 30 2025 Hopefully, you've all had an opportunity to view the video presentation that's released as part of this morning's R&S statement. hopefully you've all had an opportunity to view the video presentation that's released as part of this morning's r&s statement Will Lee, CEO, and Allen Roberts, Group FD, are here now to answer any queries that you may have in relation to that presentation and the results statement. will lee ceo and allen roberts group fd are here now to answer any queries that you may have in relation to that presentation and the results statement They'll try to answer as many questions as possible before we close at 11:15 A.M. they'll try to answer as many questions as possible before we close at 11:15 a.m I'll try to group similar questions together, so we may not answer all individual questions. i'll try to group similar questions together so we may not answer all individual questions If you haven't already done so, you can submit questions throughout this webcast via the question icon that you can see on the control panel on the right of your screen. if you haven't already done so you can submit questions throughout this webcast via the question icon that you can see on the control panel on the right of your screen Okay, let's get going. The first question here is around our industrial metrology products. The markets appear very mixed here with automotive weakness ongoing and machine tool data in Germany still soft, offset by the strength in your systems business. What is your outlook for this industrial metrology business in FY 2026? I think that's over to you, Will. Okay, let's get going. okay let's get going The first question here is around our industrial metrology products. the first question here is around our industrial metrology products The markets appear very mixed here with automotive weakness ongoing and machine tool data in Germany still soft, offset by the strength in your systems business. the markets appear very mixed here with automotive weakness ongoing and machine tool data in germany still soft offset by the strength in your systems business What is your outlook for this industrial metrology business in FY 2026? what is your outlook for this industrial metrology business in fy 2026 I think that's over to you, Will. i think that's over to you will

Speaker 2: Thanks, Chris, and good morning everyone. With the industrial metrology market, clearly yes. For our sensors business selling into machine tools, probably worst case maybe Germany or Taiwan, those markets are really quite soft at the moment with our customers facing challenging conditions. Here we focus, as we always do, on the medium to long term, working on business development with those customers. I think we're making good progress there. Particularly probably of note is on the latest tool setting side where some of the newer innovations that we've launched with the NC4+ Blue product line are really starting to help us with gaining market share there. An area where typically we've actually been unusually on number two rather than number one, so making really good progress. The area where we can have the more immediate impact over the shorter term is on the systems business. Thanks, Chris, and good morning everyone. thanks chris and good morning everyone With the industrial metrology market, clearly yes. with the industrial metrology market clearly yes For our sensors business selling into machine tools, probably worst case maybe Germany or Taiwan, those markets are really quite soft at the moment with our customers facing challenging conditions. for our sensors business selling into machine tools probably worst case maybe germany or taiwan those markets are really quite soft at the moment with our customers facing challenging conditions Here we focus, as we always do, on the medium to long term, working on business development with those customers. here we focus as we always do on the medium to long term working on business development with those customers I think we're making good progress there. i think we're making good progress there Particularly probably of note is on the latest tool setting side where some of the newer innovations that we've launched with the NC4+ Blue product line are really starting to help us with gaining market share there. particularly probably of note is on the latest tool setting side where some of the newer innovations that we've launched with the nc4+ blue product line are really starting to help us with gaining market share there An area where typically we've actually been unusually on number two rather than number one, so making really good progress. an area where typically we've actually been unusually on number two rather than number one so making really good progress The area where we can have the more immediate impact over the shorter term is on the systems business. the area where we can have the more immediate impact over the shorter term is on the systems business Here focused very much on shop floor metrology, which we see as a high growth area and an area for us to really grow business quickly. Making good progress and we are very positive there going forward. In terms of specific outlooks, I think early to say for the year and we'll be monitoring and pushing that hard there. Here focused very much on shop floor metrology, which we see as a high growth area and an area for us to really grow business quickly. here focused very much on shop floor metrology which we see as a high growth area and an area for us to really grow business quickly Making good progress and we are very positive there going forward. making good progress and we are very positive there going forward In terms of specific outlooks, I think early to say for the year and we'll be monitoring and pushing that hard there. in terms of specific outlooks i think early to say for the year and we'll be monitoring and pushing that hard there

Speaker 1: Okay, thanks Will. Question now on additive manufacturing. You said that AM revenue was down in FY 2025 but finished the year with a good order book. What was the book to bill for AM for FY 2025? I think that's another one for you, Will. Okay, thanks Will. okay thanks will Question now on additive manufacturing. question now on additive manufacturing You said that AM revenue was down in FY 2025 but finished the year with a good order book. you said that am revenue was down in fy 2025 but finished the year with a good order book What was the book to bill for AM for FY 2025? what was the book to bill for am for fy 2025 I think that's another one for you, Will. i think that's another one for you will

Speaker 2: Yeah, so AM was a bit softer. It is one of those businesses that is still relatively small, also with high ticket items, so we expect a bit more variability there. I think some really positive signs. Some of the markets that are strong, I think defense probably is the one to pick out at the moment, as being really after performance, but quicker moving, quicker decision making than something like an aerospace. Looking forward positively there for this year. Again, very early on in the year, really to comment though. Yeah, so AM was a bit softer. yeah so am was a bit softer It is one of those businesses that is still relatively small, also with high ticket items, so we expect a bit more variability there. it is one of those businesses that is still relatively small also with high ticket items so we expect a bit more variability there I think some really positive signs. i think some really positive signs Some of the markets that are strong, I think defense probably is the one to pick out at the moment, as being really after performance, but quicker moving, quicker decision making than something like an aerospace. some of the markets that are strong i think defense probably is the one to pick out at the moment as being really after performance but quicker moving quicker decision making than something like an aerospace Looking forward positively there for this year. looking forward positively there for this year Again, very early on in the year, really to comment though. again very early on in the year really to comment though

Speaker 1: Okay, thank you. Question now relating to China. Could you expand on the opportunities that you see in market segments that you do not currently serve in China? Given rising competition and resulting pricing pressures, are Renishaw margins now lower in China than in other regions? Back to you, Will. Okay, thank you. okay thank you Question now relating to China. question now relating to china Could you expand on the opportunities that you see in market segments that you do not currently serve in China? could you expand on the opportunities that you see in market segments that you do not currently serve in china Given rising competition and resulting pricing pressures, are Renishaw margins now lower in China than in other regions? given rising competition and resulting pricing pressures are renishaw margins now lower in china than in other regions Back to you, Will. back to you will

Speaker 2: Yeah, if you look at it really, then China relative to the rest of APAC, there is no significant difference in margins there. Clearly we do, and we've talked about saying, are there some entry level good enough markets where we don't really operate at the moment, and there probably are for both IM and PM. Both areas are quite interesting. Commercially, we've talked about exploiting more of what appears to be an entry level market and some of the machine shop factories over in China with lower price alternative to some of our core products. We will develop that strategy going forward. We also see probably on the encoder market that some applications start to come in, some new applications in electronics and semiconductor come in for our encoders. Yeah, if you look at it really, then China relative to the rest of APAC, there is no significant difference in margins there. yeah if you look at it really then china relative to the rest of apac there is no significant difference in margins there Clearly we do, and we've talked about saying, are there some entry level good enough markets where we don't really operate at the moment, and there probably are for both IM and PM. clearly we do and we've talked about saying are there some entry level good enough markets where we don't really operate at the moment and there probably are for both im and pm Both areas are quite interesting. both areas are quite interesting Commercially, we've talked about exploiting more of what appears to be an entry level market and some of the machine shop factories over in China with lower price alternative to some of our core products. commercially we've talked about exploiting more of what appears to be an entry level market and some of the machine shop factories over in china with lower price alternative to some of our core products We will develop that strategy going forward. we will develop that strategy going forward We also see probably on the encoder market that some applications start to come in, some new applications in electronics and semiconductor come in for our encoders. we also see probably on the encoder market that some applications start to come in some new applications in electronics and semiconductor come in for our encoders Some applications start to become more commoditized and maybe drop out the bottom, but the overall market there is growing for us. It's actually probably a complicated picture. I think in general we still see more positives with opportunities, both as new things start and also with our commercial strategies. Overall for us though, China is seeing good growth and we are optimistic going forward with the opportunities that we have. Some applications start to become more commoditized and maybe drop out the bottom, but the overall market there is growing for us. some applications start to become more commoditized and maybe drop out the bottom but the overall market there is growing for us It's actually probably a complicated picture. it's actually probably a complicated picture I think in general we still see more positives with opportunities, both as new things start and also with our commercial strategies. i think in general we still see more positives with opportunities both as new things start and also with our commercial strategies Overall for us though, China is seeing good growth and we are optimistic going forward with the opportunities that we have. overall for us though china is seeing good growth and we are optimistic going forward with the opportunities that we have

Speaker 1: Thanks, Will. Question now regarding consumer electronics markets. Could you clarify what you're seeing in this end market? It was noted as an area of strength for industrial metrology, but in his prepared remarks, Allen said that this end market was down in 2025 at group level. What is going on here? Back to you, Will. Thanks, Will. thanks will Question now regarding consumer electronics markets. question now regarding consumer electronics markets Could you clarify what you're seeing in this end market? could you clarify what you're seeing in this end market It was noted as an area of strength for industrial metrology, but in his prepared remarks, Allen said that this end market was down in 2025 at group level. it was noted as an area of strength for industrial metrology but in his prepared remarks allen said that this end market was down in 2025 at group level What is going on here? what is going on here Back to you, Will. back to you will

Speaker 2: Yeah, our biggest challenge last year was the first half of H1. Last year was tougher for consumer electronics, seeing a gradual recovery throughout the year with H2 ending up better. Looking forward, this is always a really tricky one to predict, but it feels like customers are now facing the necessity to make decisions that they have been off-putting. Looking forward, I think we feel more positive here in terms of investment for this over the rest of this financial year than probably we did three to six months ago, just because our customers have no choice. They have to make some decisions, we believe. We are monitoring this quite closely. The one thing we always try and do is make sure we are prepared for whatever happens here. Yeah, our biggest challenge last year was the first half of H1. yeah our biggest challenge last year was the first half of h1 Last year was tougher for consumer electronics, seeing a gradual recovery throughout the year with H2 ending up better. last year was tougher for consumer electronics seeing a gradual recovery throughout the year with h2 ending up better Looking forward, this is always a really tricky one to predict, but it feels like customers are now facing the necessity to make decisions that they have been off-putting. looking forward this is always a really tricky one to predict but it feels like customers are now facing the necessity to make decisions that they have been off-putting Looking forward, I think we feel more positive here in terms of investment for this over the rest of this financial year than probably we did three to six months ago, just because our customers have no choice. looking forward i think we feel more positive here in terms of investment for this over the rest of this financial year than probably we did three to six months ago just because our customers have no choice They have to make some decisions, we believe. they have to make some decisions we believe We are monitoring this quite closely. we are monitoring this quite closely The one thing we always try and do is make sure we are prepared for whatever happens here. the one thing we always try and do is make sure we are prepared for whatever happens here

Speaker 1: Okay, now a question on pricing and tariffs. Assuming no miracles emerge from today's talks at Chequers and U.S. tariffs remain in place, can you make surcharges permanent or do you have other options to address this headwind, such as localizing more production? Will, with you again. Okay, now a question on pricing and tariffs. okay now a question on pricing and tariffs Assuming no miracles emerge from today's talks at Chequers and U.S. tariffs remain in place, can you make surcharges permanent or do you have other options to address this headwind, such as localizing more production? assuming no miracles emerge from today's talks at chequers and u.s tariffs remain in place can you make surcharges permanent or do you have other options to address this headwind such as localizing more production Will, with you again. will with you again

Speaker 2: Okay, we have made the assumption that these will be permanent. Surcharges have been migrated and are migrating through into price increases here for our customers in the U.S. We've taken that route rather than look at localizing of production. We will consider our group manufacturing strategy and what we do with changes in geopolitics, but that's certainly a far more long-term decision. At the moment, this is all being covered by now a price increase. Increased revenue offsets those additional costs that we are facing. Okay, we have made the assumption that these will be permanent. okay we have made the assumption that these will be permanent Surcharges have been migrated and are migrating through into price increases here for our customers in the U.S. surcharges have been migrated and are migrating through into price increases here for our customers in the u.s We've taken that route rather than look at localizing of production. we've taken that route rather than look at localizing of production We will consider our group manufacturing strategy and what we do with changes in geopolitics, but that's certainly a far more long-term decision. we will consider our group manufacturing strategy and what we do with changes in geopolitics but that's certainly a far more long-term decision At the moment, this is all being covered by now a price increase. at the moment this is all being covered by now a price increase Increased revenue offsets those additional costs that we are facing. increased revenue offsets those additional costs that we are facing

Speaker 1: Thank you. Another question on end markets. Can you talk about the extent of the contraction in automotive and your expectation for FY 2026? Also, in relation to defense, how big is it? What is it growing at and a rough split? Back to you again, Will. Thank you. thank you Another question on end markets. another question on end markets Can you talk about the extent of the contraction in automotive and your expectation for FY 2026? can you talk about the extent of the contraction in automotive and your expectation for fy 2026 Also, in relation to defense, how big is it? also in relation to defense how big is it What is it growing at and a rough split? what is it growing at and a rough split Back to you again, Will. back to you again will

Speaker 2: Yeah, okay. To be clear, we don't know for sure the size of our exposure to these markets because a lot of our stuff will go through integrators. When we're selling to a machine tool builder, they will sell on RX. Extrapolation and what we think is happening is roughly about 5% for defense, roughly about 13% for automotive. Defense, I think, is a really interesting area at the moment. Sadly, clearly a lot more investment going in there. We'll talk about a little bit with additive earlier. Certainly, and I know there's a question on this coming up, I think, next on inductive encoders. It feels like there are opportunities also here with us supporting that industry directly with some of our newer encoders as well. Yeah, okay. yeah okay To be clear, we don't know for sure the size of our exposure to these markets because a lot of our stuff will go through integrators. to be clear we don't know for sure the size of our exposure to these markets because a lot of our stuff will go through integrators When we're selling to a machine tool builder, they will sell on RX. when we're selling to a machine tool builder they will sell on rx Extrapolation and what we think is happening is roughly about 5% for defense, roughly about 13% for automotive. extrapolation and what we think is happening is roughly about 5% for defense roughly about 13% for automotive Defense, I think, is a really interesting area at the moment. defense i think is a really interesting area at the moment Sadly, clearly a lot more investment going in there. sadly clearly a lot more investment going in there We'll talk about a little bit with additive earlier. we'll talk about a little bit with additive earlier Certainly, and I know there's a question on this coming up, I think, next on inductive encoders. certainly and i know there's a question on this coming up i think next on inductive encoders It feels like there are opportunities also here with us supporting that industry directly with some of our newer encoders as well. it feels like there are opportunities also here with us supporting that industry directly with some of our newer encoders as well

Speaker 1: Okay, thank you. You've already alluded to that part of the next question. This relates to new products and new product launches. The question is, how are these new products performing that have been recently launched and specifically mentioned Equator-X, the Dual Laser RenAM machine, and the ASTRiA inductive encoder? Back to you again, Will. Okay, thank you. okay thank you You've already alluded to that part of the next question. you've already alluded to that part of the next question This relates to new products and new product launches. this relates to new products and new product launches The question is, how are these new products performing that have been recently launched and specifically mentioned Equator- X, the Dual Laser RenAM machine, and the ASTRiA inductive encoder? the question is how are these new products performing that have been recently launched and specifically mentioned equator- x the dual laser renam machine and the astria inductive encoder Back to you again, Will. back to you again will

Speaker 2: Yeah, thanks. We have been very clear. Our strategy is very much one about using innovation, specifically new product innovation, really here to drive our long-term growth. A lot of focus has been on looking at productivity within the group, really to get some key new products through. This is a really exciting time for us with the launches that we have made recently and are making in the next few months. Of particular note, very topical, Equator-X and importantly the new software to go through with it, MODUS IM. Next week, we will be over at the Emo trade show, a really large machine tool trade show in Germany. This will be the first significant public launch of those two products. I was actually getting a demo of MODUS IM yesterday on new software for this and going through with the team. Yeah, thanks. yeah thanks We have been very clear. we have been very clear Our strategy is very much one about using innovation, specifically new product innovation, really here to drive our long-term growth. our strategy is very much one about using innovation specifically new product innovation really here to drive our long-term growth A lot of focus has been on looking at productivity within the group, really to get some key new products through. a lot of focus has been on looking at productivity within the group really to get some key new products through This is a really exciting time for us with the launches that we have made recently and are making in the next few months. Of particular note, very topical, Equator- X and importantly the new software to go through with it, MODUS IM. this is a really exciting time for us with the launches that we have made recently and are making in the next few months. of particular note very topical equator- x and importantly the new software to go through with it modus im Next week, we will be over at the Emo trade show, a really large machine tool trade show in Germany. next week, we will be over at the emo trade show a really large machine tool trade show in germany This will be the first significant public launch of those two products. this will be the first significant public launch of those two products I was actually getting a demo of MODUS IM yesterday on new software for this and going through with the team. i was actually getting a demo of modus im yesterday on new software for this and going through with the team Simplicity and ease of use get really, really transformative here. This is really, really important for us in terms of looking at developing new routes to market and getting us more productive and reducing our distribution costs, our applications costs. Exciting times there with those two. Also, ASTRiA I think has been a good example of our minimum viable product or MVP strategy with new development. Of getting out, testing out with customers, we have really seen a sweet spot we believe with defense customers here. We have been able to take now from the initial work that we have done, a robust, good working product to make sure we can now do some of the final tailoring and specific for their needs to exploit that opportunity. Also with this, the question we do get asked is then what about next? What is coming through? Simplicity and ease of use get really, really transformative here. simplicity and ease of use get really really transformative here This is really, really important for us in terms of looking at developing new routes to market and getting us more productive and reducing our distribution costs, our applications costs. this is really really important for us in terms of looking at developing new routes to market and getting us more productive and reducing our distribution costs our applications costs Exciting times there with those two. exciting times there with those two Also, ASTRiA I think has been a good example of our minimum viable product or MVP strategy with new development. also astria i think has been a good example of our minimum viable product or mvp strategy with new development Of getting out, testing out with customers, we have really seen a sweet spot we believe with defense customers here. of getting out testing out with customers, we have really seen a sweet spot we believe with defense customers here We have been able to take now from the initial work that we have done, a robust, good working product to make sure we can now do some of the final tailoring and specific for their needs to exploit that opportunity. we have been able to take now from the initial work that we have done a robust good working product to make sure we can now do some of the final tailoring and specific for their needs to exploit that opportunity Also with this, the question we do get asked is then what about next? What is coming through? also with this the question we do get asked is then what about next? what is coming through It is good here that we get to see, only last week we had our encoder group review of their early stage technology. The exciting bit here is we have an awful lot of new stuff coming through. This is right across the board for the group. Now our focus is on the productivity. How do we help our really talented engineering teams get these products through to market sooner, making both priority call decisions and also how do we support them to make sure they can operate as productively as possible? It is good here that we get to see, only last week we had our encoder group review of their early stage technology. it is good here that we get to see only last week we had our encoder group review of their early stage technology The exciting bit here is we have an awful lot of new stuff coming through. the exciting bit here is we have an awful lot of new stuff coming through This is right across the board for the group. this is right across the board for the group Now our focus is on the productivity. now our focus is on the productivity How do we help our really talented engineering teams get these products through to market sooner, making both priority call decisions and also how do we support them to make sure they can operate as productively as possible? how do we help our really talented engineering teams get these products through to market sooner making both priority call decisions and also how do we support them to make sure they can operate as productively as possible

Speaker 1: Okay, thanks Will. I've got some similar questions here relating to costs and specifically the EUR 20 million labor savings. If I just try and whiz through these and try and join some of these together. What is your expectation for underlying cost inflation in FY 2026? Can you talk us through the main moving parts of the FY 2026 operating profit bridge, including how much of the EUR 20 million savings will be seen in FY 2026? What is engineering cost inflation, labor admin inflation, savings from facility closure, and any ERP costs? Also, are there any other savings within the EUR 20 million that might take time to filter through? Let's try and amalgamate a few questions there. Start with Will and I think, oh, it's going to start with Allen on that one. Okay, thanks Will. okay thanks will I've got some similar questions here relating to costs and specifically the EUR 20 million labor savings. i've got some similar questions here relating to costs and specifically the eur 20 million labor savings If I just try and whiz through these and try and join some of these together. if i just try and whiz through these and try and join some of these together What is your expectation for underlying cost inflation in FY 2026? what is your expectation for underlying cost inflation in fy 2026 Can you talk us through the main moving parts of the FY 2026 operating profit bridge, including how much of the EUR 20 million savings will be seen in FY 2026? can you talk us through the main moving parts of the fy 2026 operating profit bridge including how much of the eur 20 million savings will be seen in fy 2026 What is engineering cost inflation, labor admin inflation, savings from facility closure, and any ERP costs? what is engineering cost inflation labor admin inflation savings from facility closure and any erp costs Also, are there any other savings within the EUR 20 million that might take time to filter through? also are there any other savings within the eur 20 million that might take time to filter through Let's try and amalgamate a few questions there. let's try and amalgamate a few questions there Start with Will and I think, oh, it's going to start with Allen on that one. start with will and i think oh it's going to start with allen on that one

Speaker 3: Thank you, Chris, and good morning everybody. Yes, there's good progress on the cost reduction program, which alongside the closure of our drug delivery business and the closure of our R&D facilities in Edinburgh, are going well. We expect these to have a cost saving of around EUR 24 million. However, we do have the pay rise that was put into effect at the beginning of this year and possibly a likely similar percentage coming up in January 2026. Also, based upon a turnover, a payroll cost of around EUR 300 million. In addition, we do have the EUR 3 million of incremental national insurance over and above the previous year that we have to accommodate. On the other side, in addition to these cost reduction measures, we are further looking at productivity initiatives across the business in all areas, including the rollout of our global ERP program. Thank you, Chris, and good morning everybody. thank you chris and good morning everybody Yes, there's good progress on the cost reduction program, which alongside the closure of our drug delivery business and the closure of our R&D facilities in Edinburgh, are going well. yes there's good progress on the cost reduction program which alongside the closure of our drug delivery business and the closure of our r&d facilities in edinburgh are going well We expect these to have a cost saving of around EUR 24 million. we expect these to have a cost saving of around eur 24 million However, we do have the pay rise that was put into effect at the beginning of this year and possibly a likely similar percentage coming up in January 2026. however we do have the pay rise that was put into effect at the beginning of this year and possibly a likely similar percentage coming up in january 2026 Also, based upon a turnover, a payroll cost of around EUR 300 million. also based upon a turnover a payroll cost of around eur 300 million In addition, we do have the EUR 3 million of incremental national insurance over and above the previous year that we have to accommodate. in addition we do have the eur 3 million of incremental national insurance over and above the previous year that we have to accommodate On the other side, in addition to these cost reduction measures, we are further looking at productivity initiatives across the business in all areas, including the rollout of our global ERP program. on the other side in addition to these cost reduction measures we are further looking at productivity initiatives across the business in all areas including the rollout of our global erp program We are further looking at our logistics automation, investments in manufacturing equipment that we've been putting in over the last couple of years, and the processes that we're focusing on, which you probably saw if you were at our CMD a few months ago, when you went through our manufacturing plant. A lot of initiatives are taking place in cost reductions, and we're starting to see some of those coming through now, which will in fact impact our gross margin. With the rollout of our e-commerce platform as well, there are a lot of initiatives going on across the board with regard to cost management. We are further looking at our logistics automation, investments in manufacturing equipment that we've been putting in over the last couple of years, and the processes that we're focusing on, which you probably saw if you were at our CMD a few months ago, when you went through our manufacturing plant. we are further looking at our logistics automation investments in manufacturing equipment that we've been putting in over the last couple of years and the processes that we're focusing on which you probably saw if you were at our cmd a few months ago when you went through our manufacturing plant A lot of initiatives are taking place in cost reductions, and we're starting to see some of those coming through now, which will in fact impact our gross margin. a lot of initiatives are taking place in cost reductions and we're starting to see some of those coming through now which will in fact impact our gross margin With the rollout of our e-commerce platform as well, there are a lot of initiatives going on across the board with regard to cost management. with the rollout of our e-commerce platform as well there are a lot of initiatives going on across the board with regard to cost management

Speaker 1: Okay, thanks, Allen. Tariffs again. Trump implemented increased U.S. Section 232 tariffs on certain steel and aluminum, I guess we should say, products in August and post your year end. Does that affect any of Renishaw's products? If so, what is the impact? Offset mechanisms including timing. Will, I think that's for you. Okay, thanks, Allen. okay thanks allen Tariffs again. tariffs again Trump implemented increased U.S. trump implemented increased u.s Section 232 tariffs on certain steel and aluminum, I guess we should say, products in August and post your year end. section 232 tariffs on certain steel and aluminum i guess we should say products in august and post your year end Does that affect any of Renishaw's products? does that affect any of renishaw's products If so, what is the impact? if so what is the impact Offset mechanisms including timing. offset mechanisms including timing Will, I think that's for you. will i think that's for you

Speaker 2: Yes, I think we've probably answered most of this already. Yes, we do get caught up in the tariffs here. Tariff, we have now switched over to price increases rather than a surcharge. It's about a 1% impact on revenue, about EUR 9 million. We feel in a comfortable place there. Clearly, it's lots of discussions with customers in getting to that position. I don't think too much more to add on that one. Yes, I think we've probably answered most of this already. yes i think we've probably answered most of this already Yes, we do get caught up in the tariffs here. yes we do get caught up in the tariffs here Tariff, we have now switched over to price increases rather than a surcharge. tariff we have now switched over to price increases rather than a surcharge It's about a 1% impact on revenue, about EUR 9 million. it's about a 1% impact on revenue about eur 9 million We feel in a comfortable place there. we feel in a comfortable place there Clearly, it's lots of discussions with customers in getting to that position. clearly it's lots of discussions with customers in getting to that position I don't think too much more to add on that one. i don't think too much more to add on that one

Speaker 1: Okay, thank you. Question about cash. There's nearly EUR 300 million of cash on the balance sheet. Any plans to deploy this via M&A or in the absence of that, would the management consider a special divvy or a buyback? What would be the preference between these two options? There's a similar question noting that, or asking, could we give more color on the "more active capital allocation" that you referred to in today's statement? Will, start with you on that one. Okay, thank you. okay thank you Question about cash. question about cash There's nearly EUR 300 million of cash on the balance sheet. there's nearly eur 300 million of cash on the balance sheet Any plans to deploy this via M&A or in the absence of that, would the management consider a special divvy or a buyback? any plans to deploy this via m&a or in the absence of that would the management consider a special divvy or a buyback What would be the preference between these two options? what would be the preference between these two options There's a similar question noting that, or asking, could we give more color on the "more active capital allocation" that you referred to in today's statement? there's a similar question noting that or asking could we give more color on the "more active capital allocation" that you referred to in today's statement Will, start with you on that one. will start with you on that one

Speaker 2: Yeah, let's just underpin this with the things that we are trying to achieve at the moment. In terms of the priorities and initiatives for us here, Allen has talked about a minute ago on the productivity side of saying, yes, our number one strategy is still very much the revenue growth, profitable revenue growth through innovation, but we will underpin that with being more focused and more productive. With that, on top of that, we want to make sure we're pushing up our cash generation from that profit and also being prudent with our capital investment over the next few years. This is generating cash for us and correct, we are up to now almost EUR 300 million. As I mentioned at Capital Markets Day, we are discussing this. It is a hot topic of discussion for the board as to the use of that cash and what we do. Yeah, let's just underpin this with the things that we are trying to achieve at the moment. yeah let's just underpin this with the things that we are trying to achieve at the moment In terms of the priorities and initiatives for us here, Allen has talked about a minute ago on the productivity side of saying, yes, our number one strategy is still very much the revenue growth, profitable revenue growth through innovation, but we will underpin that with being more focused and more productive. in terms of the priorities and initiatives for us here allen has talked about a minute ago on the productivity side of saying yes our number one strategy is still very much the revenue growth profitable revenue growth through innovation but we will underpin that with being more focused and more productive With that, on top of that, we want to make sure we're pushing up our cash generation from that profit and also being prudent with our capital investment over the next few years. with that on top of that we want to make sure we're pushing up our cash generation from that profit and also being prudent with our capital investment over the next few years This is generating cash for us and correct, we are up to now almost EUR 300 million. this is generating cash for us and correct we are up to now almost eur 300 million As I mentioned at Capital Markets Day, we are discussing this. as i mentioned at capital markets day we are discussing this It is a hot topic of discussion for the board as to the use of that cash and what we do. it is a hot topic of discussion for the board as to the use of that cash and what we do I don't have any new information for everyone at the moment on that, but what I can say is it is something that is being had to be discussed with the board at the moment. I don't have any new information for everyone at the moment on that, but what I can say is it is something that is being had to be discussed with the board at the moment. i don't have any new information for everyone at the moment on that but what i can say is it is something that is being had to be discussed with the board at the moment

Speaker 1: Okay, thanks, Will. The question now on our search for the new CFO, and the question is, how is it going? Okay, thanks, Will. okay thanks will The question now on our search for the new CFO, and the question is, how is it going? the question now on our search for the new cfo and the question is how is it going

Speaker 2: Yeah, very early stages, nothing really to add on that at the moment. Yeah, very early stages, nothing really to add on that at the moment. yeah very early stages nothing really to add on that at the moment

Speaker 1: Okay. Question on expense. I think this is going Allen's way. Can you remind us of the phasing of IT infrastructure spend and whether this is going above or below the line? Allen? Okay. okay Question on expense. question on expense I think this is going Allen's way. i think this is going allen's way Can you remind us of the phasing of IT infrastructure spend and whether this is going above or below the line? can you remind us of the phasing of it infrastructure spend and whether this is going above or below the line Allen? allen

Speaker 3: Thanks, Chris. Yes, the phasing of the ERP rollout is actually very active right now because we went live in the U.K., Ruxel, our U.K. sales activity, which is probably one of the most complex implementations that we will have during the whole rollout program. That went live 10 days ago, and we're working through it and we are shipping product. That's good news. We're going to be rolling it out through Germany and then through America and progressively through APAC and the rest of EMEA. That's going well, and we're looking to do a lot more of the in-house rollout ourselves. Whilst there will be further costs incurred with consultants in this current year, it is all above the line actually. Thanks, Chris. thanks chris Yes, the phasing of the ERP rollout is actually very active right now because we went live in the U.K., Ruxel, our U.K. sales activity, which is probably one of the most complex implementations that we will have during the whole rollout program. yes the phasing of the erp rollout is actually very active right now because we went live in the u.k ruxel our u.k sales activity which is probably one of the most complex implementations that we will have during the whole rollout program That went live 10 days ago, and we're working through it and we are shipping product. that went live 10 days ago and we're working through it and we are shipping product That's good news. that's good news We're going to be rolling it out through Germany and then through America and progressively through APAC and the rest of EMEA. we're going to be rolling it out through germany and then through america and progressively through apac and the rest of emea That's going well, and we're looking to do a lot more of the in-house rollout ourselves. that's going well and we're looking to do a lot more of the in-house rollout ourselves Whilst there will be further costs incurred with consultants in this current year, it is all above the line actually. whilst there will be further costs incurred with consultants in this current year it is all above the line actually We have been burdened with that over the last couple of years, and it will reduce over time over the next two or three years as the rollout progresses. We have been burdened with that over the last couple of years, and it will reduce over time over the next two or three years as the rollout progresses. we have been burdened with that over the last couple of years and it will reduce over time over the next two or three years as the rollout progresses

Speaker 1: Okay, thanks, Allen. Just looking through, I think we've already answered there's a question on the air tariffs. I think we've pretty much answered that. We've talked through capital allocation. Question, Allen, I think for you. What do you expect the effect of currency to be during FY 2026? Okay, thanks, Allen. okay thanks allen Just looking through, I think we've already answered there's a question on the air tariffs. just looking through i think we've already answered there's a question on the air tariffs I think we've pretty much answered that. i think we've pretty much answered that We've talked through capital allocation. we've talked through capital allocation Question, Allen, I think for you. question allen i think for you What do you expect the effect of currency to be during FY 2026? what do you expect the effect of currency to be during fy 2026

Speaker 3: Thank you, Chris. Yeah, our forward currency hedging program seeks to mitigate the short-term volatility in our results due to currency. At this stage, we don't see a significant net impact in 2026 versus 2025. We do have average forward U.S. dollar contract rates, forward rates for 2026 and 2027 at $1.27 to the pound and $1.28 for the following year. This is against the current rate of $1.36. We're in quite a good position in that respect. Thank you, Chris. thank you chris Yeah, our forward currency hedging program seeks to mitigate the short-term volatility in our results due to currency. yeah our forward currency hedging program seeks to mitigate the short-term volatility in our results due to currency At this stage, we don't see a significant net impact in 2026 versus 2025. at this stage we don't see a significant net impact in 2026 versus 2025 We do have average forward U.S. dollar contract rates, forward rates for 2026 and 2027 at $1.27 to the pound and $1.28 for the following year. we do have average forward u.s dollar contract rates forward rates for 2026 and 2027 at $1.27 to the pound and $1.28 for the following year This is against the current rate of $1.36. this is against the current rate of $1.36 We're in quite a good position in that respect. we're in quite a good position in that respect

Speaker 1: Okay, thanks, Allen. I think we've answered everything that's come in. Unless there's a late flurry, I'm not seeing anything. I think that that's it. I think we've now ended. Oh, I think there's a, oh, this looks like there might be a question coming in. We'll take this one. It's just coming through the system. Just wait for that one. Okay, just snuck this in before the end. How does working capital move as a percentage of sales given potential growth? How does CapEx look beyond the EUR 40 million this year? Allen, put that one over to you. Okay, thanks, Allen. okay thanks allen I think we've answered everything that's come in. i think we've answered everything that's come in Unless there's a late flurry, I'm not seeing anything. unless there's a late flurry i'm not seeing anything I think that that's it. i think that that's it I think we've now ended. i think we've now ended Oh, I think there's a, oh, this looks like there might be a question coming in. oh i think there's a oh this looks like there might be a question coming in We'll take this one. we'll take this one It's just coming through the system. it's just coming through the system Just wait for that one. just wait for that one Okay, just snuck this in before the end. okay just snuck this in before the end How does working capital move as a percentage of sales given potential growth? how does working capital move as a percentage of sales given potential growth How does CapEx look beyond the EUR 40 million this year? how does capex look beyond the eur 40 million this year Allen, put that one over to you. allen put that one over to you

Speaker 3: Yeah, we're looking at around EUR 40 million for the current year in terms of CapEx. For the following couple of years also, that sort of order. The major spend, which was at Miskin, as you would have seen at CMD, was the build and construction of Halls 3 and 4. The major element of that expansion program took place in the last couple of years. We're well prepared going forward in terms of capacity, production capacity, and the availability of Hall 4, which could come through depending on our growth over the next few years. EUR 40 million a year. In terms of working capital, I wouldn't expect to see any significant movement in working capital statistics over the next two or three years. Yeah, we're looking at around EUR 40 million for the current year in terms of CapEx. yeah we're looking at around eur 40 million for the current year in terms of capex For the following couple of years also, that sort of order. for the following couple of years also that sort of order The major spend, which was at Miskin, as you would have seen at CMD, was the build and construction of Halls 3 and 4. the major spend which was at miskin as you would have seen at cmd was the build and construction of halls 3 and 4 The major element of that expansion program took place in the last couple of years. the major element of that expansion program took place in the last couple of years We're well prepared going forward in terms of capacity, production capacity, and the availability of Hall 4, which could come through depending on our growth over the next few years. we're well prepared going forward in terms of capacity production capacity and the availability of hall 4 which could come through depending on our growth over the next few years EUR 40 million a year. eur 40 million a year In terms of working capital, I wouldn't expect to see any significant movement in working capital statistics over the next two or three years. in terms of working capital i wouldn't expect to see any significant movement in working capital statistics over the next two or three years

Speaker 1: Okay. Okay. okay

Speaker 3: We do exercise very tight control on our debtors and working capital and inventory. There's quite good control on our inventory management process, which will be further enhanced and improved as the rollout of our ERP program proceeds. We do exercise very tight control on our debtors and working capital and inventory. we do exercise very tight control on our debtors and working capital and inventory There's quite good control on our inventory management process, which will be further enhanced and improved as the rollout of our ERP program proceeds. there's quite good control on our inventory management process which will be further enhanced and improved as the rollout of our erp program proceeds

Speaker 1: Okay, thanks, Allen. Another question's come in on currency. Can you remind us of the FX impact that came through in Q1 of 2025, and then if there could be a similar impact this year? Okay, thanks, Allen. okay thanks allen Another question's come in on currency. another question's come in on currency Can you remind us of the FX impact that came through in Q1 of 2025, and then if there could be a similar impact this year? can you remind us of the fx impact that came through in q1 of 2025 and then if there could be a similar impact this year

Speaker 3: No, we don't expect. That was a one-off benefit that we got in Autumn 2022 when the Liz Truss mini budget, we took the opportunity to get some good board contracts, which came through in the first quarter of last year. I think it was circa EUR 5 million, and we don't expect that to reoccur this year. No, we don't expect. no we don't expect That was a one-off benefit that we got in Autumn 2022 when the Liz Truss mini budget, we took the opportunity to get some good board contracts, which came through in the first quarter of last year. that was a one-off benefit that we got in autumn 2022 when the liz truss mini budget we took the opportunity to get some good board contracts which came through in the first quarter of last year I think it was circa EUR 5 million, and we don't expect that to reoccur this year. i think it was circa eur 5 million and we don't expect that to reoccur this year

Speaker 1: Okay, thank you, Allen. This question here about order trends. Could you touch upon order trends? The development was noted to be encouraging in Q3. What has the development been like in Q4 and the last few months? I think that's one for Will. Okay, thank you, Allen. okay thank you allen This question here about order trends. this question here about order trends Could you touch upon order trends? could you touch upon order trends The development was noted to be encouraging in Q3. the development was noted to be encouraging in q3 What has the development been like in Q4 and the last few months? what has the development been like in q4 and the last few months I think that's one for Will. i think that's one for will

Speaker 2: Yeah, overall positive, slightly up. I think those broad themes we talk about of actually APAC overall being positive at the moment, Europe’s already struggling and the Americas being a bit more complicated, with some encouraging signs, but also some risks there, remain true. I think we would also say that we view the sort of semiconductor electronics as being an unusual sort of steady growth rather than its normal cyclical ramp up and down. I think as we talked on earlier, we sort of see consumer electronics being probably going into a more positive phase, but really not sure. I think those are the bits I would probably pull out. Clearly, we’ve touched on some of these other bits earlier as well. Yeah, overall positive, slightly up. yeah overall positive slightly up I think those broad themes we talk about of actually APAC overall being positive at the moment, Europe’s already struggling and the Americas being a bit more complicated, with some encouraging signs, but also some risks there, remain true. i think those broad themes we talk about of actually apac overall being positive at the moment europe’s already struggling and the americas being a bit more complicated with some encouraging signs but also some risks there remain true I think we would also say that we view the sort of semiconductor electronics as being an unusual sort of steady growth rather than its normal cyclical ramp up and down. i think we would also say that we view the sort of semiconductor electronics as being an unusual sort of steady growth rather than its normal cyclical ramp up and down I think as we talked on earlier, we sort of see consumer electronics being probably going into a more positive phase, but really not sure. i think as we talked on earlier we sort of see consumer electronics being probably going into a more positive phase but really not sure I think those are the bits I would probably pull out. i think those are the bits i would probably pull out Clearly, we’ve touched on some of these other bits earlier as well. clearly we’ve touched on some of these other bits earlier as well

Speaker 1: Okay, thanks, Will. I think that really is it this time. That now ends today's session. As ever, we'll aim to publish a combined recording of this webcast and results presentation on the IR section of our website by tomorrow morning. Just to point out that whilst we've had no questions today on the new reporting segmentation, we will be publishing results for the new reporting segments at 07:00 A.M. BST on Tuesday, 23rd of September. If you can look out for that. On behalf of Renishaw, just like to thank you all for attending this event and have a great day. Okay, thanks, Will. okay thanks will I think that really is it this time. i think that really is it this time That now ends today's session. that now ends today's session As ever, we'll aim to publish a combined recording of this webcast and results presentation on the IR section of our website by tomorrow morning. as ever we'll aim to publish a combined recording of this webcast and results presentation on the ir section of our website by tomorrow morning Just to point out that whilst we've had no questions today on the new reporting segmentation, we will be publishing results for the new reporting segments at 07:00 A.M. just to point out that whilst we've had no questions today on the new reporting segmentation we will be publishing results for the new reporting segments at 07:00 a.m BST on Tuesday, 23rd of September. bst on tuesday 23rd of september If you can look out for that. if you can look out for that On behalf of Renishaw, just like to thank you all for attending this event and have a great day. on behalf of renishaw just like to thank you all for attending this event and have a great day