Renishaw plc                                                              

3 February 2022

Interim report 2022 - for the six months ended 31 December 2021

Highlights

Renishaw, the global provider of manufacturing technologies, analytical instruments and medical devices, today reports its half-year results for the six months to 31 December 2021.

·      Record first-half revenue and adjusted profit before tax.
 

·      Revenue growth of 27% to £325.2m, with:

•       Record level of demand as key market sectors recover and semiconductor and electronics remain strong; and

•       Strong growth in all regions, continuing the trend seen in 2021 H2.

·      Adjusted¹ profit before tax increased by 94% to £84.2m, with return on revenue increasing to 26% from 17% last year. 

·      Statutory profit before tax of £81.5m (H1 20/21: £63.9m). 

·      Robust balance sheet with net cash and bank deposit balances of £222.0m, compared with £215.0m at 30 June 2021, with the £37.8m final dividend for FY20/21 paid in H1. 

·      Interim dividend of 16.0p per share.

"We achieved very strong revenue growth in all regions and there was growth for all product lines within our Manufacturing technologies segment, most notably for the encoder and gauging lines. The strong demand for our encoder product lines continues to be driven by increased investments in industrial automation and the semiconductor and electronics capital equipment markets, while our gauging line is benefiting from a recovery in metal cutting operations and increased investments in shopfloor metrology."
Sir David McMurtry, Executive Chairman.

¹ Note 11, 'Alternative performance measures', defines how adjusted profit before tax and earnings per share are calculated.

Overview for the six months ended 31 December 2021

We have continued to deliver on our purpose of making it possible to create the products, materials and therapies that will define our world in the decades to come and touch billions of lives.

Revenue

Revenue for the six months ended 31 December 2021 was £325.2m, an increase of 27% compared with £255.1m for the corresponding period last year.  We achieved very strong revenue growth in all regions and there was growth for all product lines within our Manufacturing technologies segment, most notably for the encoder and gauging lines. The strong demand for our encoder product lines continues to be driven by increased investments in industrial automation and the semiconductor and electronics capital equipment markets, while our gauging line is benefiting from a recovery in metal cutting operations and increased investments in shopfloor metrology. The notable increase in demand from the Americas and EMEA that we experienced in the second-half of FY20/21 has continued, as these economies recovered from the impacts of the pandemic. The investments that we made in manufacturing resources in the 2021 calendar year have allowed us to meet the challenges presented by a record order intake and deliver the strong increase in first-half revenue and profit.

Operating costs

Our gross margin (excluding engineering costs) for this half-year at 35.5% of revenue is similar to the previous year, however we have seen an increase in the cost of some purchased materials and an adverse currency impact, which have been offset by improved efficiencies resulting from higher production volumes.

The Group headcount has increased during the first half of the financial year and was 4,975 at the end of December 2021 compared to 4,664 at the end of June 2021 and 4,324 at the end of December 2020. This increase is primarily due to additional manufacturing staff to ensure we have sufficient capacity to meet demand, targeted growth to support product development, and recruitment for our future talent programmes. Labour costs, excluding bonus provisions and prior year overseas job retention grant income, were £115.1m in this half-year compared to £102.4m last year, with the average headcount in the first half-year being 4,832 (H1 20/21: 4,371). As part of our ongoing staff development and retention programmes, which includes ensuring competitive remuneration packages, we have recently undertaken extensive salary benchmarking exercises in certain areas of the business, including the UK. This has led to targeted investments which will result in around £5m of additional annual labour cost going forward.

Certain other operating costs, such as travel and exhibitions, are higher this half-year compared to last year as some restrictions relating to the pandemic have been lifted. We have also experienced an increase in utilities costs, arising from increasing energy prices and usage. The impact of these increases will result in higher costs in the second half of the year.  No significant asset impairments have been recognised in this half-year, or in the previous half-year.

We remain committed to our long-term strategy of developing innovative and patented products to create strong market positions. During the first six months of this year, we incurred net engineering expenditure of £37.8m compared with £37.2m last year, which includes our continuing commitment to support existing products and technologies. We continue to prioritise those 'flagship' projects that either bring faster revenue benefits or are strategically important to the business. At the EMO Milano exhibition in October, we launched the REVO® ultrasonic probe (RUP1) which allows the measurement of thickness on components, such as aircraft landing gear parts and power generation drive shafts, where access to internal features is challenging.  

Profit and tax

Adjusted profit before tax¹ for the first half-year was £84.2m compared with £43.4m last year, primarily due to the revenue growth, giving a return on revenue of 26% (H1 FY20/21: 17%). Statutory profit before tax for the first half-year was £81.5m, compared with £63.9m last year, which includes a £2.9m fair value loss on financial instruments not effective for hedge accounting and not included in adjusted profit before tax. The gain in the previous half-year relates primarily to proportions of forward contracts which failed hedge effectiveness testing in FY19/20, after the global macroeconomic uncertainty resulted in reductions to the highly probable forecasts of the hedged item. No further contracts have been designated as ineffective in the six months to 31 December 2021.

The income tax expense in the Consolidated income statement has been estimated at a rate of 15.9% (H1 20/21: 18.0%) and is based on management's best estimate of the full year effective tax rates by geographical unit applied to half-year profits. The reduced effective tax rate mainly arises from a forecast increase in the UK Patent Box benefit from nil in the prior year.

Adjusted earnings per share were 97.2p, compared with 49.2p last year. Statutory earnings per share were 94.2p, compared with 72.1p last year.

Manufacturing technologies

Revenue for our manufacturing technologies segment, which comprises our Industrial Metrology, Position Measurement and Additive Manufacturing businesses, was £308.7m for the first six months, compared with £236.9m last year². Adjusted operating profit was £81.3m, compared with £41.1m for the comparable period last year². We have seen growth in demand for all our Manufacturing technologies product lines, notably in our gauging product line, and our magnetic and optical encoder product lines. The latter has seen strong growth due to significant global investments in the semiconductor and electronics capital equipment market, driven by an increase in both consumer and commercial demand for electronic products, the growth in electric vehicles which contain more sensors than conventional vehicles, and the desire for more nations to become self-sufficient in semiconductor manufacturing. Magnetic encoders manufactured by our associate company, RLS, also experienced strong growth due to increased demand for industrial automation products. We also experienced good growth in demand for our machine tool and co-ordinate measuring machine product lines, where our global customer base and strong portfolio of products, including recent introductions, have allowed us to benefit from a recovery in investments in metal cutting machinery and the need to measure the outputs from those processes.

The supply chain challenges that we experienced in FY20/21 continue, especially due to the global shortage of electronic components. However, these risks are mitigated by our extensive in-house manufacturing operations, our proactive inventory management, continual assessment of alternative components, and the loyalty of our customer base. 

Analytical instruments and medical devices

Revenue from our analytical instruments and medical devices segment for the first six months was £16.5m, compared with £18.3m last year². The adjusted operating profit was £1.6m in the first half of this year compared with a £2.3m for the comparable period last year². Despite a good order book, our spectroscopy line saw a small reduction in revenue due to delays shipping product to China where some customers are experiencing long lead-times in obtaining duty exemption certificates. Excluding China, revenue has increased year-on-year.

Balance sheet

Capital expenditure for this half-year was £12.2m (H1 20/21: £4.8m) and was primarily on plant and equipment to support our manufacturing processes and IT infrastructure, and the completion of our new distribution facility in South Korea.

Inventory balances have increased by £22.3m since 30 June 2021, in line with increases in global demand and reflecting planned increases in certain component safety stock levels to mitigate global supply shortages. Trade receivables have decreased by £2.8m in the same period reflecting a reduction in debtor days.

Net cash and bank deposit balances at 31 December 2021 were £222.0m, compared with £215.0m at 30 June 2021, primarily reflecting the cash generated from operating profit, offset by the working capital movement, capital expenditure, tax payments and the final dividend payment for FY20/21.

Dividend

The Board has approved an interim dividend of 16.0 pence net per share (2021: 14.0p) which will be paid on 11 April 2022 to shareholders on the register on 11 March 2022.

Principal risks and uncertainties

The Board has considered the risks and uncertainties which could have a material effect on the Group's performance and position. While there is continuing uncertainty regarding the impact of COVID-19, as well as global macroeconomic conditions, supply chain challenges and trade tensions, the overall impact and likelihood of our principal risks is not considered to have changed significantly. This conclusion also reflects the mitigation undertaken by the Group in response to these risks. The principal risks and uncertainties set out on pages 34 to 43 of the 2021 Annual Report therefore remain relevant.

COVID-19 update

Our priorities continue to be the health and welfare of our employees, their families and the wider communities in which we operate, and to maintain high service levels to our global customer base. Our response and mitigation committee continues to meet at least twice weekly to review any developments caused by the pandemic and to take any necessary mitigating actions. We have a wide-range of robust COVID-secure working practices in place to protect against the spread of the virus and, within the UK, where we have higher numbers of employees, we have continued self-testing for all employees who are working on-site, including daily testing introduced during the recent Omicron wave of infections. All our manufacturing facilities around the world are operating as normal, and we have maintained supply to customers. Many of our non-manufacturing employees have worked remotely throughout the pandemic, and while this has generally been a positive experience in terms of productivity, we recognise the benefits of in-person collaboration. We have therefore agreed a hybrid working policy, initially in the UK. The pandemic has brought forward many digital initiatives, including the expansion of the use of digital collaborative tools for customer support, and the use of marketing automation, virtual exhibitions and webinars to ensure a supply of high-quality sales opportunities.

Brexit

To mitigate against the impacts of the UK leaving the EU, we have taken actions in recent years including establishing a warehouse in Ireland, expanding our existing warehouse in Germany, and increasing the inventory of certain finished goods and components at sites within the EU and the UK. Although there have been some delays at the UK borders for shipments into the EU and for imports from the EU and other regions, including shipments from our manufacturing facility in India, the measures that we have taken have minimised the impact on customer service.

Sustainability

From 30 June 2015 to 30 June 2021, we reduced our greenhouse gas emissions (scopes 1, 2 and measured scope 3) by 39% and by the end of FY 20/21 80% of our global electricity was from renewable sources, of which 11% was self-generated. However, like most organisations there is much more that we must do to meet the challenges of climate change. At the end of November, we committed to a science-based Net Zero emissions target by no later than 2050, with an ambition to bring this date forward once we have a better understanding of currently unmeasured scope 3 emissions. We are also currently in the process of agreeing a Net Zero target for scope 1 and 2 emissions. Our targets will be validated and monitored by the internationally respected SBTi (Science Based Target initiative) and as part of this commitment we will also start to report against the relevant UN Sustainable Development Goals in this year's Annual Report.

The drive to Net Zero represents many opportunities for our business as our products positively contribute to our customers own sustainability ambitions by reducing energy consumption and minimising waste.

Directors and employees

The Directors would like to thank our employees for their continuing resilience, skill and dedication throughout the pandemic, which has ensured continuous supply and support to our customers, the introduction of innovative new products, the progression of key projects that will underpin the future success of our business, and the support for each other and our local communities. They have truly demonstrated our core values of innovation, inspiration, integrity and involvement.

On 31 December 2021, Carol Chesney, stepped down from the Board as a Non-executive Director, Chair of the Audit Committee and a member of the Remuneration and Nomination Committees. She was appointed in 2012 and made a considerable contribution to the Board and Renishaw, and we would like to thank her and wish her well for the future. Juliette Stacey was appointed to the Board on 1 January 2022 as a Non-executive Director and Chair of the Audit Committee and has also joined the Nomination and Remuneration Committees. Juliette is currently Senior Independent Director at Fuller, Smith & Turner P.L.C. where she is Chair of its Audit Committee and a member of its Nomination and Remuneration committees. She is also a Non-executive Director of Sanderson Design Group plc where she is Chair of its Audit Committee and a member of its Remuneration and Nomination Committees. Juliette previously held roles as Group Finance Director and later as Group Chief Executive at Mabey Holdings Ltd. She brings extensive experience, with her strong finance and leadership background and will be a valuable addition to the Company's resources at board level and particularly as Chair of the Audit Committee.

Outlook

The Board continues to be confident in our long-term prospects and ability to deliver on our purpose, due to our strong financial position, the high quality of our people, our innovative product pipeline, extensive global sales and marketing presence, and relevance to high-value manufacturing.

We currently have a record order book, and we expect demand from the semiconductor and electronics sectors to remain strong and that the recoveries in the machine tool market and co-ordinate measuring machine market will continue. At this stage, we expect full year revenue to be in the range of £650m to £690m. Adjusted profit before tax is expected to be in the range of £157m to £181m.

¹ Note 11, 'Alternative performance measures', defines how revenue at constant exchange rates, adjusted profit before tax, operating profit and earnings per share are calculated.

² Results relating to sales of additive manufacturing machines to medical and dental customers are no longer recognised in the Analytical instruments and medical devices (previously Healthcare) operating segment. Comparative figures have been reclassified accordingly, see note 2.

Consolidated income statement

Consolidated statement of comprehensive income and expense

Consolidated balance sheet

Consolidated statement of changes in equity

Consolidated statement of cash flow

Notes

1.         Basis of preparation

The Interim report, which includes the condensed consolidated financial statements for the six months ended 31 December 2021, was approved by the Directors on 3 February 2022.

The condensed consolidated financial statements for the six months ended 31 December 2021 were prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' (IAS 34) as issued by the International Accounting Standards Board and as adopted by the UK, and apply the same accounting policies, presentation and methods of calculation as were applied in the preparation of the Group's consolidated financial statements for the year ended 30 June 2021, except for income taxes which are accrued using the forecast tax rate for the financial year, and except for the adoption of new accounting standards.

The condensed consolidated financial statements included in this Report have not been audited and do not constitute the Group's statutory accounts as defined in section 434 of the Companies Act 2006. The information relating to the year ended 30 June 2021 is an extract from the Group's published Annual Report for that year, which has been delivered to the Registrar of Companies, and on which the auditor's report was unqualified and did not contain any emphasis of matter or statements under section 498(2) or 498(3) of the Companies Act 2006.

For the year to 30 June 2022 the annual financial statements will be prepared in accordance with IFRS as adopted by the UK Endorsement Board. This change in basis of preparation is required by UK company law as a result of the UK's exit from the EU on 31 January 2020 and the end of the transition period on 31 December 2020. This change does not constitute a change in accounting policy but rather a change in accounting policy which is required to ground the use of IFRS in company law. There is no impact on recognition, measurement or disclosure between the two frameworks in the period reported.

Going concern

The Directors have prepared the unaudited interim financial information on a going concern basis. In considering the going concern basis, the Directors have considered the above-mentioned principal risks and uncertainties, as well as the Group's current trading performance and updated cashflow forecasts.

In the 2021 Annual Report we disclosed details of a 'base' scenario as well as five 'severe but plausible' scenarios which were used in the Director's going concern assessment, and viability statement, as at October 2021. With strong trading performance in the first half of the year and a record order book, both of our operating segments are expected to outperform the 'base' scenario forecasts for the year to 30 June 2022, and performance in subsequent periods is also expected to outperform the 'base' scenario. The Directors have continued to monitor the 'severe but plausible' scenarios, noting no change from the risks identified as at 30 June 2021, concluding that the Group will have positive cash balances in all scenarios throughout the going concern period. The Directors have also considered the financial resources available to the Group, with net current assets of £420.6m at 31 December 2021 (compared to £393.8m at 30 June 2021), including £222.0m net cash and bank deposits at 31 December 2021, an increase from £215.0m at 30 June 2021.

Having made appropriate enquiries, the Directors are satisfied that, at the time of approving the unaudited condensed consolidated financial statements, it is appropriate to continue to adopt a going concern basis of accounting.

2.         Segmental information

The Group manages its business in two segments, comprising Manufacturing technologies and Analytical instruments and medical devices. Within the operating segments, there are multiple product offerings with similar economic characteristics, similar production processes and similar customer bases. The results of these segments are regularly reviewed by the Board to allocate resources and to assess their performance. More details of the Group's products and services are given in the Strategic Report of the 2021 Annual Report.

In normal trading conditions, whilst future revenue is difficult to predict given that the Group's outstanding order book is typically less than three months' worth of revenue value, larger consumer electronics orders in the APAC region within the manufacturing technologies segment typically fall in the first or last quarter of the financial year. In addition, the Group typically experiences lower demand in August and December, and so revenue and operating profits are typically lower in the first half of the year. This information is provided to allow for a better understanding of the results, and management do not believe that the business is 'highly seasonal' in accordance with IAS 34.

¹In previous years, we reported the results of additive manufacturing machines marketed and sold to medical and dental customers within Analytical instruments and medical devices (formerly Healthcare), reflecting how we managed this business. The management of this now sits within the Additive Manufacturing product line, with a similar customer base and risk profile to this product line, with results and operational matters reported to the Executive Committee and Chief Operating Decision Maker accordingly. We now therefore report the medical and dental results within Manufacturing technologies rather than Analytical instruments and medical devices. Comparative figures have been reclassified accordingly. For the 6 months to 31 December 2020, revenue of £1,232,000, depreciation and amortisation of £695,000, and operating loss before gains from fair value of financial instruments of £131,000 have been reclassified from Analytical instruments and medical devices to Manufacturing technologies. Amounts of £4,254,000, £993,000 and £1,480,000 (profit) respectively have also been reclassified in the year ended 30 June 2021.

There is no allocation of assets and liabilities to operating segments. Depreciation is included within certain other overhead expenditure which is allocated to segments on the basis of the level of activity.

The following table shows the disaggregation of Group revenue by category:

Aftermarket services include repairs, maintenance and servicing, programming, training, extended warranties, and software licences and maintenance.

The following table shows the analysis of revenue by geographical market:

Revenue in the above table has been allocated to regions based on the geographical location of the customer. Countries with individually material revenue figures in the context of the Group were:

There was no revenue from transactions with a single external customer amounting to 10% or more of the Group's total revenue.

3.         Cost of sales

4.         Financial income and expenses

Currency losses relate to revaluations of foreign currency-denominated balances using latest reporting currency exchange rates. Certain intragroup balances are classified as 'net investments in foreign operations', such that revaluations from currency movements on designated balances accumulate in the Currency translation reserve in Equity. Rolling one-month forward currency contracts are used to offset currency movements on remaining intragroup balances, with fair value gains and losses being recognised in financial income or expenses.

5.         Taxation

The income tax expense in the Consolidated income statement has been estimated at a rate of 15.9% (December 2020: 18.0%), based on management's best estimate of the full year effective tax rates by geographical unit applied to half-year profits. The reduced effective tax rate mainly arises from a forecast increase in the UK Patent Box benefit.

6.         Earnings per share

The earnings per share for the six months ended 31 December 2021 is calculated on earnings of £68,533,000 (December 2020: £52,460,000) and on 72,774,147 shares (December 2020: 72,778,904 shares), being the number of shares in issue during the period. This excludes 14,396 shares (December 2020: 9,639 shares) held by the Renishaw Employee Benefit Trust.

7.         Dividends

All shareholders on the register on 11 March 2022 will be paid an interim dividend of 16.0p net per share on 11 April 2022, resulting in a dividend payable of £11,646,167.

8.         Property, plant and equipment

Additions to assets in the course of construction of £5,927,000 (December 2020: £3,040,000) comprise £1,095,000 (December 2020: £251,000) for freehold land and buildings and £4,832,000 (December 2020: £2,789,000) for plant and equipment. At the end of the period, assets in the course of construction, not yet transferred, of £11,602,000 (December 2020: £6,663,000) comprise £4,308,000 (December 2020: £2,804,000) for freehold land and buildings and £7,294,000 (December 2020: £3,859,000) for plant and equipment.

9.         Intangible assets

As detailed in the 2021 Annual Report, the key assumption in determining the value-in-use of intangible assets are sales forecasts. Latest sales forecasts, and other factors which may impact the business plans, for relevant cash generating units have been reviewed for indicators of impairment at 31 December 2021. As a result, total impairments of £185,000 have been recognised in the six months to 31 December 2021 (December 2020: £nil).

10.        Financial instruments

There is no significant difference between the fair value of financial assets and financial liabilities and their book value in the Consolidated balance sheet. All financial assets and liabilities are held at amortised cost, apart from the forward exchange contracts which are held at fair value, with changes going through the Consolidated income statement unless subject to hedge accounting. The fair values of the forward exchange contracts have been calculated by a third-party expert, discounting estimated future cash flows on the basis of market expectations of future exchange rates, representing level 2 in the IFRS 13 fair value hierarchy. There were no transfers between levels during any period disclosed.

Credit risk

The Group carries a credit risk relating to non-payment of trade receivables by its customers and establishes an allowance for impairment in respect of trade receivables where recoverability is considered doubtful. In the six months to 31 December 2021, the Group has not experienced a deterioration in debtor repayments nor in the assumptions used in calculating allowances for expected credit losses. At 31 December 2021, total expected credit losses amounted to £3,544,000, being 3.2% of gross trade receivables, compared with £3,826,000 at 30 June 2021, being 3.2% of gross trade receivables.

Liquidity risk

The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, and the Group continues to use monthly cash flow forecasts on a rolling 12-month basis to monitor cash requirements. With net cash and bank deposits at 31 December 2021 totalling £222,038,000, an increase of £7,030,000 from 30 June 2021, and bank deposits of maximum six-month maturity, the Group's liquidity has improved in the six months to 31 December 2021.

Market risk

At 31 December 2021 the total nominal value of USD, EUR and JPY forward contracts held for cash flow hedging purposes was £516,547,000. At 31 December 2021 the remaining nominal value of USD, EUR and JPY forward contracts ineffective for cash flow hedging and yet to mature amounted to £109,199,000, with no additional forward contracts becoming ineffective for hedge accounting purposes in the six months to 31 December 2021. On an ongoing basis, a 10% depreciation of GBP against USD, EUR and JPY would result in a £12,133,000 gain being recognised in the Consolidated Income Statement, while a 10% appreciation would result in a £9,927,000 loss. Fair value gains and losses relating to this have been excluded from adjusted profit measures, see note 11 for further detail.

11.        Alternative performance measures

In accordance with Renishaw's Alternative Performance Measures (APMs) policy and ESMA Guidelines on Alternative Performance Measures (2015), APMs are defined as - Revenue at constant exchange rates, Adjusted profit before tax, Adjusted earnings per share and Adjusted operating profit.

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

Adjusted profit before tax, Adjusted earnings per share and Adjusted operating profit are defined as the profit before tax, earnings per share and operating profit after excluding third-party costs relating to the formal sale process ('FSP') concluded in July 2021 and gains and losses in fair value from forward currency contracts which did not qualify for hedge accounting and which have yet to mature.

From FY16/17, the gains and losses from the fair value of financial instruments not effective for cash flow hedging have been excluded from statutory profit before tax, statutory earnings per share and statutory operating profit in arriving at Adjusted profit before tax, Adjusted earnings per share and Adjusted operating profit, to reflect the Board's intent that the instruments would provide effective hedges. This is classified as 'Fair value (gains)/losses on financial instruments not eligible for hedge accounting (i)' in the following reconciliations. The amounts shown as reported in revenue represent the amount by which revenue would change had all the derivatives qualified as eligible for hedge accounting. Gains and losses which recycle through the Consolidated income statement as a result of contracts deemed ineffective during FY19/20 are also excluded from adjusted profit measures, on the basis that all forward contacts are still expected to be effective hedges for Group revenue, while the potentially high volatility in fair value gains and losses relating to these contracts will otherwise cause confusion for users of the financial statements wishing to understand the underlying trading performance of the Group. This is classified as 'Fair value (gains)/losses on financial instruments not eligible for hedge accounting (ii)' in the following reconciliations.

The Board considers these alternative performance measures to be more relevant and reliable in evaluating the Group's performance.

Adjustments to segmental operating profit:

² Results relating to sales of additive manufacturing machines to medical and dental customers are no longer recognised in the Analytical instruments and medical devices (previously Healthcare) operating segment. Comparative figures have been reclassified accordingly, see note 2.

12.        Related party transactions and events subsequent to the end of the reporting period

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Full details of the Group's other related party relationships, transactions and balances are given in the Group's Annual Report for the year ended 30 June 2021. No related party transactions have taken place in the first six months of the financial year that have materially affected the financial position or the performance of the Group during that period.

In January 2022 an agreement was reached between Renishaw plc and Meggitt plc for the sale of Renishaw's 33.33% shareholding in HiETA Technologies Limited to Meggitt plc. This has resulted in a net gain on disposal of £0.5m, to be recognised in the Manufacturing technologies operating segment in the second half of the financial year.

13.        Responsibility statement

The condensed set of financial statements is the responsibility of, and has been approved by, the Directors. We confirm that to the best of our knowledge:

-       As required by DTR 4.2 of the Disclosure Rules and Transparency Rules, the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation as a whole. The Interim report has been prepared in accordance with IAS 34, 'Interim Financial Reporting', as issued by the International Accounting Standards Board and as adopted by the UK.

-       The Interim report includes a fair review of the information required by:

(a) DTR 4.2.7 of the Disclosure Rules and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8 of the Disclosure Rules and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that could do so.

On behalf of the Board

Allen Roberts FCA

Group Finance Director

3 February 2022

Financial calendar

Registered office:

Renishaw plc

New Mills

Wotton-under-Edge

Gloucestershire

GL12 8JR

UK