Download PDF

1. Company Snapshot

1.a. Company Description

Renishaw plc, an engineering and scientific technology company, designs, manufactures, distributes, sells, and services metrology and healthcare products worldwide.The company offers co-ordinate measuring machine (CMM) products, machine tool probe and software, performance measurement systems, gauging systems, fixtures, and styli for touch probe systems; interferometric laser, magnetic, and optical encoders; additive manufacturing systems; plastics and metal vacuum casting machines; and mapping sensors.It also provides healthcare products, such as dental scanners, neurosurgical robots and accessories, neurosurgical planning software, drug delivery systems, Raman microscopes, craniomaxillofacial customized implants, analysers, and hybrid Raman systems.


In addition, the company offers asset financing and travel agency services.It serves the aerospace, agriculture, automotive, construction, consumer electronics, healthcare, power generation, resource exploration, energy, heavy, medical, and precision manufacturing industries, as well as scientific, research, and analysis industries.The company was incorporated in 1973 and is headquartered in Wotton-under-Edge, the United Kingdom.

Show Full description

1.b. Last Insights on RSW

Renishaw plc's recent performance was driven by a record first half, with notable demand pickup in the second quarter and improving profitability. The company's semiconductor manufacturing equipment segment showed strength, with management citing a notable increase in demand from customers in this space. Additionally, the company's involvement in the growing image-guided drug delivery market, with a forecasted CAGR of 32.01%, presents a promising long-term opportunity. Upgraded medium-term earnings expectations and faster progress on efficiency initiatives have also contributed to the company's narrative shift, with analysts now aligning with a higher price target.

1.c. Company Highlights

2. Renishaw's H1 Results: A Strong Performance

Renishaw reported a record first half with 7.1% reported revenue growth and 11.5% constant currency growth, driven by strong performances in the Americas and APAC regions. Operating profit increased by 11.4% to GBP 57.5 million, with an improved operating margin of 0.6 percentage points. Earnings per share (EPS) came in at 0.688, beating analyst estimates of 0.677. The company's cost reduction efforts and closure of the loss-making drug delivery business contributed to the margin improvement.

Publication Date: Feb -15

📋 Highlights
  • Revenue Growth:: 7.1% reported revenue increase (11.5% constant currency) in H1, driven by strong performance in Americas and APAC.
  • Operating Profit Expansion:: 11.4% rise to GBP 57.5 million, with operating margin improvement of 0.6 percentage points despite GBP 20 million cost cuts.
  • Segment Growth:: Specialized Tech segment surged over 25% (constant currency), led by Additive Manufacturing; Position Measurements grew 7.4%.
  • Cost Efficiency:: GBP 9 million savings from cost programs and GBP 17 million H1 CapEx, with GBP 40 million annual target to support growth.
  • Emerging Businesses:: Additive Manufacturing and inductive encoders showed strong traction, with GBP 20 million allocated to emerging tech investments.

Segment Performance

The company's segments performed well, with Industrial Metrology seeing solid revenue growth of 4.3%, Position Measurements growing by 7.4%, and Specialized Tech achieving over 25% constant currency growth, driven by the Additive Manufacturing business. These emerging businesses are showing promise, with Additive Manufacturing starting to pay dividends and inductive encoders receiving positive customer feedback.

Cash Generation and Return on Invested Capital

Renishaw is focusing on cash generation and return on invested capital, with a target of 15%. CapEx was GBP 17 million in the first half, and the company expects to run at a rate of about GBP 40 million for the year. Cash conversion was just below target at 68%, but the company is taking steps to support growth with its balance sheet.

Guidance and Outlook

The company provides positive revenue and profit trading guidance for the year ahead, driven by growth in existing markets, new product launches, and improving productivity. Despite market uncertainty, the company feels it has momentum going into the second half of the year. Analysts estimate next year's revenue growth at 6.0%, indicating a continued upward trajectory.

Valuation

Renishaw's current valuation metrics indicate a P/E Ratio of 36.69, P/B Ratio of 3.32, and P/S Ratio of 4.31. The company's Return on Invested Capital (ROIC) stands at 7.92%, and Return on Equity (ROE) is at 9.19%. These metrics suggest that the market is pricing in a certain level of growth, and the company's ability to deliver on its targets will be crucial in determining its future valuation.

3. NewsRoom

Card image cap

Renishaw H1 Earnings Call Highlights

Feb -11

Source:

Card image cap

Is Now An Opportune Moment To Examine Renishaw plc (LON:RSW)?

Feb -06

Source:

Card image cap

Renishaw plc's (LON:RSW) Stock On An Uptrend: Could Fundamentals Be Driving The Momentum?

Jan -20

Source:

Card image cap

Europe Image-Guided Drug Delivery Market Forecast and Research Report 2025-2035 Featuring Renishaw, Neurochase, and Koninklijke Philips

Dec -30

Source:

Card image cap

Why Analysts Think Renishaw’s Story Is Shifting With Upgraded Profit Outlook and Targets

Dec -18

Source:

Card image cap

Why Analysts See Renishaw Differently After Margin Gains And Higher Price Targets

Dec -04

Source:

Card image cap

Why Analysts See Shifting Fortunes for Renishaw Amid Margin Gains and Mixed Signals

Nov -19

Source:

Card image cap

Why The Narrative Around Renishaw Is Shifting Following Analyst Upgrades and New Developments

Nov -04

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.56%)

6. Segments

Manufacturing Technologies

Expected Growth: 4.5%

Renishaw plc's Manufacturing Technologies segment growth of 4.5% is driven by increasing adoption of additive manufacturing, rising demand for precision engineering, and growing need for process control and inspection solutions in industries such as aerospace, automotive, and healthcare.

Analytical Instruments and Medical Devices

Expected Growth: 5.5%

Renishaw's 5.5% growth in Analytical Instruments and Medical Devices is driven by increasing demand for precision engineering and healthcare technology. Strong R&D investments, expanding applications in 3D printing and neurosurgery, and growing adoption in emerging markets contribute to this growth. Additionally, the company's diversified product portfolio and strategic acquisitions support its expansion in these segments.

7. Detailed Products

Additive Manufacturing Systems

Renishaw's additive manufacturing systems are designed to produce complex parts and products with high accuracy and precision.

Coordinate Measuring Machines (CMMs)

Renishaw's CMMs are used for precision measurement and inspection of manufactured parts and assemblies.

Machine Tool Probe Systems

Renishaw's machine tool probe systems are used to measure and inspect parts during the manufacturing process.

Raman Spectroscopy Systems

Renishaw's Raman spectroscopy systems are used for chemical analysis and material identification.

Encoder Systems

Renishaw's encoder systems are used to measure position, angle, and displacement in industrial and scientific applications.

Laser Calibration Systems

Renishaw's laser calibration systems are used to calibrate and align machine tools and CMMs.

Neurological Products

Renishaw's neurological products are used in neurosurgery and neurology applications.

8. Renishaw plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Renishaw plc's products are highly specialized and customized, making it difficult for substitutes to emerge. However, the company's reliance on a few key customers and the increasing trend of additive manufacturing could pose a threat.

Bargaining Power Of Customers

Renishaw plc's customers, such as aerospace and automotive companies, have significant bargaining power due to their large size and purchasing power. This could lead to pressure on prices and margins.

Bargaining Power Of Suppliers

Renishaw plc's suppliers are relatively small and specialized, giving the company significant bargaining power. This allows Renishaw to negotiate favorable prices and terms.

Threat Of New Entrants

The high barriers to entry in Renishaw plc's markets, including significant capital expenditures and specialized expertise, make it difficult for new entrants to emerge.

Intensity Of Rivalry

The markets in which Renishaw plc operates are highly competitive, with several established players. However, the company's strong brand reputation and differentiated products help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.46%
Debt Cost 6.31%
Equity Weight 98.54%
Equity Cost 7.56%
WACC 7.54%
Leverage 1.49%

11. Quality Control: Renishaw plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
TE Connectivity

A-Score: 5.3/10

Value: 1.7

Growth: 6.6

Quality: 6.8

Yield: 2.5

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Jabil

A-Score: 4.8/10

Value: 3.5

Growth: 6.6

Quality: 4.4

Yield: 0.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Renishaw

A-Score: 4.7/10

Value: 2.4

Growth: 4.7

Quality: 6.9

Yield: 3.8

Momentum: 6.0

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
Inficon

A-Score: 4.6/10

Value: 0.9

Growth: 6.8

Quality: 7.7

Yield: 4.4

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Spectris

A-Score: 4.3/10

Value: 1.4

Growth: 3.1

Quality: 4.3

Yield: 3.8

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
Comet Holding

A-Score: 2.5/10

Value: 1.1

Growth: 3.8

Quality: 6.2

Yield: 1.2

Momentum: 1.5

Volatility: 1.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.9$

Current Price

39.9$

Potential

-0.00%

Expected Cash-Flows