riding the nanotechnology wave - oxford instruments · pdf fileriding the nanotechnology wave...

The Business of Science®

© Oxford Instruments 2013

Riding the

Nanotechnology Wave

13th February 2013



• General concepts, Nanotechnology and Tools – Jonathan Flint, Chief Executive

• Applying concepts to markets – Andy Matthews, Group Operations Director

• Accessing markets – Kevin Boyd, Group Finance Director

• Managing products and people – Ian Barkshire, Group Technical Director

• Summary and conclusions – Jonathan Flint, Chief Executive

Agenda



• Mathematics

This presentation may contain Science



• Mathematics

• Physics




• Mathematics

• Physics

• Chemistry




• Mathematics

• Physics

• Chemistry

• Quantum Mechanics




Mathematics



The $ per atom argument



Nanotechnology is a

mathematical certainty



• Surface area really matters

– Same volume of material

– 1 nm Nanoparticles have 10 million times the surface

area of a 1cm cube

Chemistry

Image courtesy of www.nano.gov/naonotech-101



Basic chemistry makes

Nanotechnology

inevitable



Moore’s Law



Physics makes

Nanotechnology a

certainty



Cooper’s Law



Haitz’s Law



The Quantum leap…



• Quantum Encryption

• Quantum Computing

The Quantum leap to Nanotechnology



Rose’s Law



Scientific principles make

Nanotechnology inevitable



How can you harvest

near term and long

term value from

Nanotechnology?



Sutter’s Fort



Samuel Brannan



John Sutter



Industrialise the process



Nanotechnology Tools

• NanoAnalysis Asylum Research Omniprobe

• NanoScience

• Omicron

• Plasma Technology

Industrial Products

• Industrial Analysis X-ray Fluorescence Optical Emission Spectroscopy Magnetic Resonance

• Industrial

Components Austin Superconducting Wire X-ray Technology

Service

• OiService CT& MR (3rd Party)

• NT & IP Service (OI products)

Our Businesses



• New Materials

Global Trends



• Environment

Global Trends



• New sources of energy

Global Trends



• High Tech Healthcare

Global Trends

0

500

1000

1500

2000

2500

2000 2010 2020 2030 2040 2050

Mill

ions

Year

World Population 60 and Over: 2000 - 2050

Source: Ageing societies – Sarah Harper (Hodder Arnold)



• Emerging markets

Global Trends

0

10

20

30

40

50

60

2010 2050

Constant 2000 USD, Tn

Growth of Emerging Markets vs Developing Markets

Developed Markets Emerging Markets

Source HSBC Calculations



• New Materials

• Environment

• New sources of energy

• High Tech Healthcare

• Emerging Markets

Company of the Future



Oxford Instruments

• Market:

• Model:

• Products:

Nanotechnology

Tools

Driven by Global Trends



Applying Concepts to Markets

Andy Matthews

Group Operations Director



Convergence of sciences

The Nanotechnology Revolution

Nano science

Nanotechnology

Bio Chem Phys





Nano science

Nanotechnology

Bio Chem Phys

Repeatable

Fabrication & Measurement

capability



Global Markets



Bio Chem Phys

Repeatable


capability

Nanotechnology

Nano science

Auto & Aviation

Metals Consumer Chemicals

Semi-con Pharma/

health



Global Markets



Nanotechnology Markets

Nanotechnology Enabled

Products



Nanotechnology Markets

Nanotechnology Enabled Products

Growing at 30%-40% CAGR




Global Markets

Consumer

Semi-con




Global Markets

Pharma/ health

http://www.fiercedrugdelivery.com/story/cloaked-nanoparticles-look-blood-cells-carry-drugs/2013-02-01




Global Markets

Auto & Aviation

Metals Chemicals



Global Markets



Bio Chem Phys

Repeatable


capability

Nanotechnology

Nano science

Auto & Aviation

Metals Consumer Chemicals

Semi-con Pharma/

health



Governments’ funding of

Nanotechnology

Source: Cientifica ltd. 2011

20% growth in funding in next 3 years



US Government Nanotechnology Funding

Source: NNI (Nano.Gov Web Site)



Nanotechnology Market

• Nanotechnology market = $17 billion

• Growing at 10% -15% CAGR

• Nanotools market = $4 billion



• Nanotechnology enabled product – High efficiency solar cells currently in development

• Nanotechnology – Thin film 10nm Al2O3 layer used to improve efficiency

• Nanotool – FlexAl ALD tool from Plasma Technology

Nanotechnology Example



World Nanotechnology Market

World GDP ≈ $70 trillion

World Industry GDP ≈ $22 trillion Nano-enabled products ≈ $1 trillion

Nano products ≈ $17 billion

NanoTools ≈ $4 billion



Accessing markets

Kevin Boyd

Group Finance Director



World Nanotechnology Market

World GDP ≈ $70 trillion

World Industry GDP ≈ $22 trillion Nano-enabled products ≈ $1 trillion

Nano products ≈ $17 billion

NanoTools ≈ $4 billion



• What fraction of the market is addressed by our products?

(Product coverage)

• What fraction of the customers can we reach?

(market Presence)

• What fraction of the customers choose us over the

competition?

(Hit rate)

Link to Oxford Instruments

PPH Analysis



How we determine market share



Market Share

Market Share = 72% x 50% x 50% = 18%



• Increase R&D

spend

• Add technologies

through acquisitions

Nanotechnology Tools Sector PPH

- Product Coverage

0

5

10

15

20

25

30

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12

£M



• Increase direct presence

in BRIC

• Acquire distribution and

offer more Service

• Presence growth in

BRIC for acquisitions


- Presence

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2009 2010 2011 2012

£M

BRIC revenues



• Brand recognition value

• Recruit and retain best people

• Better, faster, more efficient internal

processes and controls

• Better integrated marcomms

• Better selling processes and CRM

• Improve customer satisfaction score


- Hit Rate



100%

17%

71%

55%

7%

0%

20%

40%

60%

80%

100%

120%

Market Product Coverage

Presence Hit Rate Market Share




Total Market

$4bn

Acquisition

Targets

Product Product Product Product

Presence Presence Presence Presence

Hit Rate Hit Rate Hit Rate Hit Rate

Plasma Tech

Market

Omicron

Market Hopper

NanoScience

Market NanoAnalysis

Market

Organic Growth

Strategy

R&D Plan

Sales Plan

Ops Plan

M&A

Strategy

Target

Selection

From Market to Strategy

NS NA

PT ON

Addressed Market



Techniques totalling $4.0bn

Market segmentation



Group Techniques into Clusters

Experimental equipment, $300M

Imaging, $1,600M

Characterisation, $600M

Nano-mechanics, $70M

Nano-structures, $1,100M

Nano-particles, $240M

0

10

20

30

40

50

60

70

80

90

100

Nu

mb

er

of

co

mp

an

ies

pa

rtic

ipa

tin

g

Market proximity



Market Concentration

OI

OI

OI

OI

OI

Co. 8

Co. 8 Co. 8

Co.8

Co. 7

Co. 7

Co. 7

Co. 6

Co. 5

Co. 5

Co. 5

Co. 4

Co. 3

Co. 3

Co. 3 Co. 2

Co. 2

Co. 2

Co. 1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

experimental equipment

characterisation imaging nanomechanics nano structures/films particles

Sh

are

of

Clu

ste

r

http://www.edax.com/

http://www.bruker.com/home_.html

http://www.jeol.com/Default.aspx?tabid=36

http://www.veeco.com/default.aspx



Product Coverage

Characterisation Experimental

equipment Imaging Nano-structures Nano-mechanics Nano-particles

EBSD WDS EDS Technique C1 Technique C2 Technique C3 Technique C4 Technique C5 Technique C6 Technique C7 Technique C8 Technique C9

Cryogenics >1k ULT <1k Systems (MPHS/PMPS) Magnet Instrumentation (experiment control) Technique EE1 Technique EE2 Technique EE3

Technique I1 Technique I2 Technique I3 Technique I4 Technique I5 Technique I6 Technique I7 Technique I8

CVD PECVD PVD ALD RIE Technique NS1 Technique NS2 Technique NS3 Technique NS4 Technique NS5 Technique NS6 Technique NS7 Technique NS8

Technique NM1 Technique NM2 Technique NM3 Technique NM4 Technique NM5 Technique NM6 Technique NM7

Particle analysis Technique NP1 Technique NP2

Existing



Product Coverage

Omicron



EBSD WDS EDS XPS Auger Technique C3 Technique C4 Technique C5 Technique C6 Technique C7 Technique C8 Technique C9

Cryogenics >1k ULT <1k Systems (MPHS/PMPS) Magnet Instrumentation (experiment control) UHV Technique EE2 Technique EE3

SPM - UHV Technique I2 Technique I3 Technique I4 Technique I5 Technique I6 Technique I7 Technique I8

CVD PECVD PVD ALD RIE MBE Technique NS2 Technique NS3 Technique NS4 Technique NS5 Technique NS6 Technique NS7 Technique NS8

Technique NM1 Technique NM2 Technique NM3 Technique NM4 Technique NM5 Technique NM6 Technique NM7


Existing



Product Coverage

Omniprobe





SPM - UHV Technique I2 Technique I3 Technique I4 Technique I5 Technique I6 Technique I7 Technique I8


Nanomanipulators Technique NM2 Technique NM3 Technique NM4 Technique NM5 Technique NM6 Technique NM7


Omicron

Existing



Product Coverage

Asylum





SPM - UHV SPM - ambient Technique I3 Technique I4 Technique I5 Technique I6 Technique I7 Technique I8


Nanomanipulators NanoIndentation Technique NM3 Technique NM4 Technique NM5 Technique NM6 Technique NM7


Omniprobe

Omicron

Existing



Regular Reviews

Synergistic

targets Regular

Contact Negotiation

Due diligence

100 day plan

Contract Integration

Criteria: • Expand product coverage

• Leverage the brand

• Synergies in markets

• Technology proximity

• Cultural proximity

• Growth potential

• Margin potential in line with 14³

or better

• Geographical proximity

Criteria: • Shareholders ready

to sell

• Doable

• Can agree on price

Criteria: • Letter of intent

Criteria: • No deal breakers

• Acceptable contract

• Board approval

• Agreed 100 day plan

c.100

businesses

The M&A Funnel



Managing products, channels and

people

Ian Barkshire

Group Technical Director



Customers

& Markets

Market Intimacy & Voice of Customer

Select Product

Developments

Focused Product Development

Product

Launch & Customer

Support

Continuous Development Cycle



‘ICEBURG’ of

Available

Information

Superficial

Information

dig

dig

dig

NEEDS

summarise

dig

dig

dig

Market

Trends

summarise

Market Intimacy – Voice of Customer

• Exploration process

• Customer Interviews & Observations

• Global, Territory & Market Sector focus



Making NPI more effective

Planning Delivery Embed Execution

• FIVE Stage Gate Development Process

• Management Board sign off

• Audited process






• Audited process







• Audited process

Planning Delivery Execution

0

20

40

60

80

100

120

I F D L V

Cost

Flexibility

%

Gate

Embed




0

20

40

60

80

100

120

I F D L V

Cost

Flexibility

%

Gate



• Audited process







• Audited process

44% Vitality Index




SIZE Matters - Taking Analysis from hours to minutes

A real success story

150mm2

Aug 2012



What else Matters to Customers?

Thermal Stability

Throughput

Resolution



+

Finding & Riding the Waves




HB LED




HB LED

Quantum Computing




HB LED

Graphene

Quantum Computing



Product Styling reinforces our brand



Managing the people who make it happen

Outstanding Personal

Performance

Clear, inspiring strategy

Challenging work

Performance culture

Customer intimacy

Personal Recognition

Intelligent Dialogue

Technical Career Path

Ethical Values



Innovative Teamwork



Employee Engagement

• Understanding the strategy

• Emotional commitment

73%

35-40%

Benchmark

point

Oxford Instruments



Efficiencies

80.0

100.0

120.0

140.0

160.0

180.0

200.0

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

£'0

00

Sales/employee



Managing & Integrating acquisitions

• Culture Advantage

• Engaging with Creative Staff

• Leverage ‘Value’ from proven OI processes

• Create new OI Champions



Summary and

Conclusions

Jonathan Flint

Chief Executive



• Nanotechnology is the place to be

• Broad exposure to Nanotechnology via Tools model

• Total Nanotechnology

• Tools market of $4bn

• PPH model drives detailed strategy

• Opportunity-rich, diverse market space

• People and processes to deliver growth

Summary



• This presentation concentrated on our

Nanotechnology Tools Sector

• Industrial Products Sector provides the opportunity

for industrialisation of Nanotech

• Service Sector provides stable, recurring revenues

to support R&D

Oxford Instruments Sectors



• 14 cubed target reaffirmed

• Strategic momentum for the medium and

long term, driven by successive

technology waves

• New strategic plan to be announced in

June 2014

Conclusions



Disclaimer

This presentation is prepared for and addressed to authorised persons within the meaning of the Financial Services and

Markets Act 2000 (FSMA). The information contained in this presentation is not for publication, distribution or reproduction,

in whole or in part, to any persons outside the jurisdiction of this Act. The Company, its Directors, employees, agents or

advisers do not accept or assume responsibility to any other person to whom this presentation is shown or into whose

hands it may come and any such responsibility or liability is expressly disclaimed.

Statements contained in this presentation are based on the knowledge and information available to the Company's

Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By

their nature, any statements concerning the risks and uncertainties facing the Company in this presentation involve

uncertainty since future events and circumstances can cause results and developments to differ materially from those

anticipated. To the extent that this presentation contains any statement dealing with any time after the date of its

preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to

occur. The Company undertakes no obligation to update these forward-looking statements.

The information in this presentation shall not constitute or be deemed to constitute any offer or invitation to invest in or

otherwise deal in shares or other securities of Oxford Instruments plc.

All information in the presentation is the property of Oxford Instruments plc.

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