Accelerating

breakthroughs

Oxford Instruments plc

Annual Report 2025

Oxford Instruments plc

Annual Report 2025

To accelerate the

breakthroughs that

create a brighter future

for our world

Our technology and scientific

expertise enables our customers

to discover and bring to market

exciting new advances that drive

human progress.

Visit our investor centre on

our website to view the rest

of our reporting suite:

www.oxinst.com/investors-hub

We provide academic and commercial organisations

worldwide with market-leading scientific technology

and expertise across our key market segments:

Materials Analysis, Semiconductors, and Healthcare

& Life Science.

Innovation is the driving force behind our growth and

success, supporting our core purpose to accelerate

the breakthroughs that create a brighter future for

our world.

We hold a unique position to anticipate global drivers

and connect academic researchers with commercial

applications engineers, acting as a catalyst that

powers real world progress.

Our Purpose

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2025

highlights

Chief

Executive

Officer’s

review

Finance

review

At a glance

Reasons

to invest

Sustainability

Our purpose-

led approach

Our strategy

for growth

Governance

Contents

Overview

02 2025 highlights

05 At a glance

07 Our purpose-led approach

Strategic Report

09 Chair’s statement

11 Chief Executive Officer’s review

21 Reasons to invest

23 Our business model

27 Engaging with our stakeholders

29 Our strategy for growth

33 Our strategy in action

35 Key performance indicators

37 Finance review

45 Sustainability

47 Sustainability – environment

52 Sustainability – TCFD statement

61 Sustainability – social

67 Sustainability – governance

69 Risk management

79 Viability statement

81 Non-financial information

statement

Governance

83 Chair’s overview

85 Board of Directors

88 Board leadership and company

purpose

88 Corporate Governance statement

89 How we engage with

stakeholders

94 Section 172(1) Statement

95 Division of responsibilities

100 Composition, succession and

evaluation

105 Nomination Committee Report

109 Audit and Risk Committee Report

116 Sustainability Committee Report

119 Remuneration Committee report

122 Directors’ remuneration report

140 Shareholder information

141 Directors’ report

144 Directors’ responsibilities

Financial statements

146 Consolidated statement of

income

146 Consolidated statement of

comprehensive income

147 Consolidated statement of

financial position

148 Consolidated statement of

changes in equity

149 Consolidated statement of

cashflows

150 Material accounting policies

157 Notes to the consolidated

financial statements

190 Parent Company statement of

financial position

191 Parent Company statement of

changes in equity

192 Notes to the Parent Company

financial statements

201 Independent auditor’s report

to the members of Oxford

Instruments plc

211 Historical financial summary

Strategic actions drive strong revenue and profit growth, together with margin progression.

Adjusted financial highlights

Revenue

£500.6m

(2024: £470.4m) % change

organic constant

currency (OCC)

+6.4% +6.5%

Adjusted operating profit

£82.2m

(2024: £80.3m) % change

OCC

+2.4% +10.8%

Adjusted operating profit margin

16.4% (70bps)

Organic constant currency

profit margin

17.8% +70 b ps

(2024: 17.1%)

Adjusted basic earnings per share

112.4p

(2024: 109.0p)

+3.1%

Cash conversion

89%

(2024: 64%)

Net cash

£84.4m

(2024: £83.8m)

Strong performance with significant growth

1 Adjusted items exclude the amortisation and impairment of acquired

intangible assets, acquisition items, business reorganisation costs,

other significant non-recurring items, and the mark-to-market

movement of financial derivatives. A full definition of adjusted numbers

can be found in the Finance review, pages 37 to 44 and Note 2, pages

161 to 162.

2 References to year-on-year movements and margin percentages

are shown at OCC or constant currency (CC) as appropriate. Constant

currency numbers are prepared on a month-by-month basis using the

translational and transactional exchange rates which prevailed in the

previous year rather than the actual exchange rates which prevailed

in the year. Transactional exchange rates include the effect of our

hedging programme.

3 Normalised cash conversion measures the percentage of adjusted

cash from operations to adjusted operating profit, as set out in the

Financereview.

4 Net cash includes total borrowings, cash at bank and bank overdrafts

but excludes IFRS 16 leaseliabilities.

5 Proposed dividend per share, to be confirmed at the annual general

meeting on 28 July 2025.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2025 highlights

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2025 highlights continued

Statutory financial highlights

Operating profit

£39.2m

(2024: £68.3m)

(42.6%)

Profit before taxation

£39.8m

(2024: £71.3m)

(44.2%)

Operating profit margin

7.8%

(2024: 14.5%)

(670bps)

Basic earnings per share

44.8p

(2024: 87.7p)

(48.9%)

Dividend per share for

the year (proposed)

22.2p

(2024: 20.8p)

+6.7%

Revenue

£500.6m

(2024: £470.4m)

+6.4%

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2025 highlights continued

• Revenue exceeds £500m for the first

time, up by 6.5% at OCC

• Good growth in semiconductor and

materials analysis, offsetting continued

weakness in healthcare & life science

• Strong performance across North

America, Asia and Europe, with

successful pivot to new markets in

China, now complete

• Double-digit revenue growth from

commercial customers (c. 50% of

revenue, up from 45% in 2024) as we

leverage our strength in our priority

technologies, from academia to

commercial and applied R&D

• Adjusted operating profit of £82.2m,

up 10.8% OCC, and adjusted operating

profit margin of 17.8% OCC, up 70bps,

supported by operational efficiencies

and new, simplified Group structure

• Imaging & Analysis: OCC margin

24.7%, up 60bps – in the upper range

of medium-term guidance, reflecting

early results in strategic action, and

despite market headwinds in life

science holding back growth and

operating leverage

• Advanced Technologies: constant

currency margin of 4.5%, up 360bps –

fix and improve action plan on track,

with continued double-digit growth in

compound semi business scaling and

quantum returned to profitability

• Robust demand and resulting

orderbook provide good visibility

foryear ahead

• £84.4m net cash (2024: £83.8m)

after£15.4m acquisition consideration;

normalised cash conversion improved

to 89% from 64% in 2024

• FX headwind of £8.5m on adjusted

operating profit, largely due to

USD weakening

• 6.7% increase in the total dividend

to22.2p (2024: 20.8p)

See page 03 for notes 2 and 5.

Financial and operational highlights

Sale of quantum business

and £50m share buyback

programme launched

• Binding agreement to sell

NanoScience, the Group’s quantum

business, for consideration of £60m,

of which £3m deferred. One-off

transaction costs expected to be

£2m–£3m

• Enables the Group to focus on

businesses with strong growth

and margin characteristics where

it is best placed to deliver value

for shareholders

• Accelerates progress to deliver

the Group’s medium-term

margin targets

• Strength of balance sheet

and proceeds from the sale of

NanoScience enable up to £50m

share buyback programme which

will commence shortly

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

At a glance

Total revenue

£500.6m

+2,200

Employees

Base locations

Countries from

which we operate

We are a leading provider of scientific

technology and expertise to academic

and commercial partners worldwide

What we do

We develop and manufacture market-leading imaging, analysis and fabrication tools that accelerate new scientific

breakthroughs. Our technology and market insight place us in a unique position to anticipate global drivers and connect

academic researchers with commercial applications engineers, acting as a catalyst that powers real world progress.

Revenue split by sector

Imaging & Analysis £330.5m

Advanced Technologies £170.1m

For further details / Pages 15 to 18

Advanced Technologies

Compound semiconductor

fabrication equipment, cryogenic

and superconducting magnet

technology and X-ray tubes

Imaging & Analysis

Microscopy, cameras, analytical

instruments and software

Our divisional structure

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

primary regions

primary end markets

Where we operate

We sell products and services all over the world, employing

more than 2,200 people across 27 bases in 23 countries.

Who we work with

We work with thousands of academic and commercial

organisations in three key structural growth markets.

Revenue by region Revenue by market

EMEA-I £134.9m

North America £154.5m

China £107. 2m

East and Southeast Asia £100.5m

Rest of world £3.5m

Materials analysis £203.7m

Semiconductor £144.8m

Healthcare & life science £78.3m

Other markets, including quantum £73.8m

At a glance continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our purpose-led approach

Our technology and scientific expertise enables our customers to discover

and bring to market exciting new advances that drive human progress.

To accelerate the breakthroughs that

create a brighter future for our world

Be the scientific instrumentation partner in every significant lab and production facility across the world

Powering our ambition

Deliver strong

growth through

‘customer first’

ways of working

Deliver a step change

in operational

performance

(delivery, quality,

efficiency)

Simplify the

organisation,

increasing

collaboration

and accountability

Continue to invest in

new technology and

products, protecting

and enhancing our core

strengths

Embed our values

and ways of working

so that they are

lived every day

Reach net zero

in our own

operations by 2030

and contribute to

global sustainability

Our strategy for growth / Pages 29 to 32

Driven by our strategy

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our purpose-led approach continued

Delivering for our key end markets

Creating value for our stakeholders

Materials analysis

Our key structural growth end markets / page 25

How we engage with our stakeholders / pages 89 to 93

Custom ers

Customer intimacy helps

us to identify additional

opportunities to deliver

increased value to

our customers

Market drivers

Supporting advanced material development and sustainability

progress, with improved performance from finite resources

Healthcare & life science

Market drivers

Supporting development of improved treatments & vaccines

atlower cost, and personalised medicine & therapies

Semiconductor

Market drivers

Supporting growth in bandwidth, connectivity and faster

devices; power efficiency and the greening of the economy

Employees

By working together as

one team, we help

and trust each other

to succeed

Local

communities

We strive to support the

development of stronger

communities and have

a positive environmental

and social impact

Shareholders

Delivering strong growth

and shareholder returns

promotes the long-term

sustainable success of

the company

Suppliers

Our supply chain plays

a vital role in supporting

sustainable growth and

efficiency across the

business

Society

Our technology and

scientific expertise enables

our customers to discover

and bring to market

exciting new advances

that drive human progress

Trusted

We build successful, long-term

relationships based on accountability,

integrity and respect

Purposeful

We care, and our passion and

commitment drive positive

change in the world

Underpinned by our values

Inclusive

By seeking out different

perspectives and diverse

collaboration, we deliver better

solutions and lasting success

Innovative

Through our knowledge, expertise

and focused curiosity, we create

new possibilities for ourselves

andfor our customers

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chair’s statement

Strategic actions

beginning to unlock

the full potential of

Oxford Instruments

“ This has been an excellent

year for Oxford Instruments,

with strong financial results

and significant early progress

on the delivery of our strategy.”

NEIL CARSON

Chair

It has been a year of positive progress at Oxford Instruments,

culminating in an excellent set of results which underline our

confidence in the mid-term outcomes set out in last year’s

strategic update (and in Richard’s review on page 12).

A year on, we have streamlined our divisional structure, begun

our operational transformation and completed our regional pivot,

reducing our exposure in China, while continuing to focus on our

core strengths. Through these actions, we are creating a simpler,

sharper and more commercially focused organisation, to put

ourselves in the best possible shape to fulfil our strong potential.

The revenue, profit and margin growth we have achieved

demonstrate that we are heading in the right direction.

Our business is driven by supporting academic research and the

development of new applications and products, accelerating our

customers’ progress in our chosen structural growth markets. We

anticipate global drivers, connecting academic and commercial

researchers, and acting as a catalyst to unlock real world

progress. Our unique position provides us with valuable resilience

from the usual macro market cyclicality, as we help customers

globally to fulfil the ever-present need to innovate.

Over the coming year, we will continue to focus on reshaping

Oxford Instruments and deploying our capital on the most value-

creating areas of the business, in pursuit of improved outcomes

for all our stakeholders.

Our people delivering positive change

I have been impressed with the way teams around the business

have embraced our strategic priorities, immediately getting

under way with delivery in pursuit of our ambitions. I was pleased

to be able to join part of the strategy-focused Leadership

conference held last September and hear at first hand some of

the plans that were taking shape, many of which have already

come to fruition. Our new ways of working, set out on page 61,

have proven to be a strong set of guiding principles for teams

and individuals as they work to make Oxford Instruments a

more customer-led, commercially focused business, and are

becoming part of the everyday language of Oxford Instruments,

as intended.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chair’s statement continued

I would like to take this opportunity to thank all our employees

around the world for their contribution to an excellent set of

results. On behalf of the Board, I also wish a warm welcome

to new colleagues at our newly acquired business FemtoTools

in Zurich, who joined us formally at the end of June 2024.

FemtoTools is now fully integrated with Imaging & Analysis,

addressing new customers and new markets as part of

OxfordInstruments.

Sustainability

This has been a milestone year on our sustainability journey, with

the approval of our ambitious science-based net zero plans by

the Science Based Targets initiative (SBTi) and the publication

of our net zero transition plan, which sets out how we will reach

net zero in Scopes 1 and 2 by 2030, and across all three scopes

by 2045.

Board changes in the year

It is my pleasure, on behalf of my fellow Directors, to welcome

two new members to the Board this year. Paul Fry joined Oxford

Instruments in January and took up the roles of Chief Financial

Officer and Executive Director on 1 April 2025. Paul brings a

wealth of highly relevant experience in business transformation,

most recently as CFO at Argenta Group, and previously at

Vectura plc, and is already demonstrating the value he will

bring to the organisation as he partners with Richard Tyson to

drive the company forward and unlock its full potential. We also

welcomed Rowena Innocent, who joined us as a Non-Executive

Director on 17 February 2025. Rowena holds a number of

academic and advisory posts in addition to her role as consultant

at AcoustoFab Ltd, and with more than 30 years’ experience in

high-tech product design and manufacturing, her deep technical

understanding and commercial acumen will be an asset to

ourBoard.

I would like to offer our sincere best wishes to Gavin Hill, who

stepped down as Chief Financial Officer and Executive Director

at the end of the financial year (31 March 2025), and who will

leave Oxford Instruments this month.

Gavin has made a very significant contribution to Oxford

Instruments over the past nine years, and has been a strong

steward of the company’s finances throughout his tenure, shaping

our growth and building the foundations for ongoing success.

Wewish Gavin every happiness and success in the future.

Our thanks and best wishes also go to Mary Waldner, who

stepped down as Non-Executive Director in February 2025,

after nine years of sterling service to the Board, and to Reshma

Ramachandran, who stepped down in July 2024 due to

her executive role limiting the time available to commit to

OxfordInstruments.

Parting ways with NanoScience

This week marks an important moment for Oxford Instruments,

with the sale of our quantum-focused business NanoScience.

For Oxford Instruments, the decision is consistent with our focus

on our three core markets: materials analysis, semiconductor,

and healthcare and life science. It aligns with our strategy

to focus and invest in the best areas of opportunity to create

value for shareholders, and supports progress towards our

medium-term margin targets.

For NanoScience, the new owners Quantum Design’s desire

to lead the business through the next stage of its journey is

a testament to its talented team and excellent technology.

I wish our departing colleagues every success in the future.

I also want to acknowledge NanoScience’s direct connection

to the groundbreaking work begun by our founders, Sir Martin

and Lady Audrey Wood, with its long history of making advances

in low-temperature physics and magnet technology. We will

continue to celebrate the vital role of the Woods in our success

and carry their innovative ethos with us into the future.

Dividend

In line with our progressive dividend policy and strong trading

performance in the year, the Board is proposing a final dividend

of 17.1p per share (2024: 15.9p), which is subject to approval at the

AGM on 28July2025.

“ Coping with a constantly changing world

requires real agility and resilience, qualities

which the people of Oxford Instruments

have in abundance.”

Looking ahead

In common with all businesses, we are operating in a very

complex and fast-moving environment. The world order is

shifting, the climate is changing, and rapid and consequential

technological advances are taking place – many of them helped

along by Oxford Instruments, as we set out in this report. Coping

with a constantly changing world requires real agility and

resilience, qualities which the people of Oxford Instruments

have in abundance.

If recent months and years are any guide, we and others may

face unpredictable geopolitical and macroeconomic events

through the coming year – but our purpose and strategy give

us real clarity as we move forward, and whatever lies ahead on

the world stage, there is much positive progress within our own

control as we look to the year ahead. I have every confidence

that our excellent team will address the coming year with their

characteristic innovative and agile spirit, and look forward to

reporting on our progress in 12 months’ time.

NEIL CARSON

Chair

12 June 2025

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Excellent

performance with

significant progress

on strategic priorities

I am pleased to report on an excellent full-year performance for

Oxford Instruments. The actions we have taken to simplify the

Group, improve commercial execution and realign our regional

presence have resulted in strong growth in revenue and profit,

and increased margins in both divisions. As signalled at half

year, our targeted actions underpinned a strong second half

performance, a particularly encouraging achievement in the

context of a challenging geopolitical and macro environment.

Orders

£463.7m

(2024: £459.1m)

Adjusted

operating profit

£82.2m

(2024: £80.3m)

Revenue

£500.6m

(2024: £470.4m)

Adjusted

organic constant currency operating margin

17.8%

(2024: 17.1%)

Chief Executive Officer’s review

1. Details of adjusting items can be found in note 2 to the financial statements.

“ I am really pleased with the

agility and performance of

our team across the business

as they have responded to

change and navigated the

current macro environment.”

RICHARD TYSON

Chief Executive Officer

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Demand for our market-leading technology, led by commercial

customers, has resulted in strong double-digit revenue growth

in both compound and silicon semiconductor markets, and

continued growth in materials analysis applications, which

together have more than offset ongoing weakness in healthcare

and life science.

With good growth in orders and a robust order book, we have

good visibility of planned revenues for the coming year, with order

book to revenue ratios in line with historical patterns. We have

mitigated the direct impacts of tariffs on existing orders through

positive engagement with customers. With key semiconductor

product lines currently exempt from the 10% US universal tariff,

and with further mitigating actions at our disposal, we are

confident we can continue to navigate this dynamic situation.

The outcomes we have achieved reinforce our confidence in our

ability to achieve the mid-term outcomes outlined in June 2024,

which are as follows:

• organic revenue growth of 5–8% CAGR;

• adjusted operating margin improvement to 20%+;

• cash conversion of over 85%;

• continuing to invest in growth, including 8–9% on R&D;

• strong return on capital employed (currently 27%);

• selective acquisitions bringing complementary capabilities.

Positive strategic and operational progress

As we set out in June 2024, our exceptional technology,

strong talent base, well-distributed regional infrastructure and

exposure to attractive markets give us a strong platform from

which to grow, as well as providing valuable resilience to

external dynamics.

We highlighted then the significant opportunities ahead – and

the fact that to capture them in full and achieve industry-leading

margins, we needed to structure Oxford Instruments differently.

A key focus of the year, therefore, was to simplify and streamline

the Group, reconfiguring it into two new divisions, each with

separate and distinct characteristics and opportunities.

Both divisions have delivered strong progress. Our strategic

actions to target enhanced growth and profitability through a

customer-first approach have gained real traction, and have

started to generate many of the outcomes we set out to achieve.

In Imaging & Analysis, which represents 66% of the Group’s

revenue, and 93% of profit, our actions to integrate multiple

business units and drive operational excellence have

enabled the division to improve on an already strong position.

The resulting synergies, cost reductions and productivity

enhancements have supported the delivery of a 60bps

improvement in OCC margin to 24.7%, at the upper end of our

medium-term guidance of 23–25%. Ongoing demand remains

strong, with our semiconductor and materials analysis end

markets more than offsetting the continued weakness in

healthcare and life science.

Advanced Technologies, representing 34% of revenue and

7% of Group profit, has delivered strong double-digit revenue

growth as our compound semiconductor business continued to

increase returns from its new state-of-the-art facility, while our

quantum business, Oxford Instruments NanoScience, returned to

profitability as a result of cost savings and the first installations

of an ongoing programme for a key global technology customer.

Group 2025 2024 Growth

Organic constant

currency (OCC)

growth

Orders £463.7m £459.1m +1.0% +0.9%

Revenue £500.6m £470.4m +6.4% +6.5%

Adjusted

operating profit £82.2m £80.3m +2.4% +10.8%

Adjusted

operating margin 16.4% 17.1% (70bps)

Adjusted

OCC operating margin 17.8% 17.1% +70bps

Statutory operating profit £39.2m £68.3m

Statutory operating margin 7.8% 14.5%

1. For definition refer to note on page 2.

2. Details of adjusting items can be found in note 2 to the financial statements.

Together, these actions have resulted in a strong increase in CC

margins in the division to 4.5% (2024: 0.9%).

We have this week exchanged contracts to sell NanoScience to

Quantum Design, International Inc for a £60m total consideration,

including up to £3m of deferred consideration linked to growth in

quantum scaling systems. The divestment will enable the Group

to focus its capital deployment on business capabilities with

higher margin and potential to create shareholder value.

The sale, which is expected to complete in the third quarter of

FY2025/26, is also consistent with our focus on our three core

markets: materials analysis, semiconductor, and healthcare and

life science.

For further details on each division’s performance, see the

divisional overviews on pages 15 to 18.

The delivery of our operational transformation programme

has also enabled us to identify further growth and margin

opportunities, which we are already capturing in FY2025/26,

giving scope to build on progress already made.

Across both divisions, we have reduced the cost base, with a

70bps improvement in both gross profit margin and operating

profit margin.

Chief Executive Officer’s review continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

out the related cost, and refocusing our efforts on products

with core leading technology with strong market potential

and alternative commercial strategies to create value.

Together with improvements already made, and with new

leadership, we expect to see significant further opportunity

for growth and margin enhancement for this facility.

• Wave two of the programme is also under way at our

Advanced Technologies quantum facility in Oxfordshire,

targeting productivity, quality, lead time and cost engineering

improvements on the Proteox suite of cryogenic dilution

refrigerators, the facility’s leading product range.

• Our Raman facility in Ulm, Germany, will be the subject of

wave three, beginning in July, helping the facility to scale to

meet growing demand.

The impact of the programme to date is clear, and we will

continue to roll it out to further sites.

Execution of our regional pivot

Our actions to rebalance our regional focus, moving the sales

force to address less sensitive commercial customers in China,

and strengthening our presence elsewhere in Asia, and in

North America, have contributed to the Group’s strong revenue

growth. Growth in Europe, East and Southeast Asia and North

America has more than offset the reduction in revenue in

China resulting from our pivot away from sensitive quantum

and certain semiconductor applications, and the ensuing

cancellation of orders.

Our pivot in China is now complete, and the local team have

delivered 8% year-on-year growth in orders by targeting

structurally growing commercial markets. Our recovery in

the country has been supported by cross-training sales and

service teams on multiple products, in combination with strong

representation in key territories.

All regions are now focusing their marketing and sales efforts

around a targeted, customer segment-based approach, rather

than a product-first approach. This is particularly beneficial in

the Imaging & Analysis division, where we take an increasingly

product-agnostic approach, offering a whole suite of analysis

techniques to help customers deliver the outcomes they need

for their specific use cases.

Bolstering the bench strength of the Americas team, and

investing in more effective marketing channels, has resulted in

strong double-digit revenue growth for the region and a 20%

increase in sales per head. With a strong pipeline of qualified

opportunities, ongoing activities to optimise revenue and

profitability, and supportive engagement with customers on

tariffs, the team is agile, close to its customers and well placed

to mitigate to the impacts of the new US administration’s

positioning on tariffs and academic funding.

Strong revenue growth of 25% CC in East and Southeast Asia

has been supported by the consolidation of separate teams

for Japan, East and Southeast Asia, and Australia under one

leadership team, with shared processes and increasingly aligned

approaches to segmentation as set out above. Revenue growth

in the region has stemmed largely from strong semiconductor

sales as customers move their operational capability out of

China and new investment increases in the region. The growth

is broadly split between materials analysis capabilities and

compound semiconductor fabrication equipment, and was able

to completely offset the £20.2m reported reduction in China

resulting from the decision to exit selling of certain sensitive

technologies in that territory.

We are continuing to share best practice and streamline

processes in our regional sales and marketing structures and

anticipate generating further productivity benefits as we do so.

Chief Executive Officer’s review continued

“ Our actions to rebalance our regional

focus, moving the sales force to

address less-sensitive market areas in

China, and strengthening our presence

elsewhere in Asia, and in North America,

have contributed to the Group’s strong

revenuegrowth.”

Further efficiencies are anticipated across the Group as we

continue with our operational programme, and with the ongoing

streamlining and simplification of processes. Strong management

of inventory has contributed to an improvement in cash conversion

in both divisions, with a strong net cash balance of £84.4m after

£15.4m acquisition consideration, up from £39.3m at the half year.

The strength of our balance sheet and the returns to come

from the sale of NanoScience enable us to return capital to

our shareholders via a share buyback, to commence shortly.

Driving a step change in operational

performance and productivity

Alongside our actions to streamline and simplify Oxford

Instruments, we have continued with our operational

transformation programme, beginning at our Imaging & Analysis

facility in Belfast and our quantum facility in Oxfordshire. The

programme seeks to improve our customers’ experience and

drive a step change in operational performance and productivity,

ultimately putting all the Group’s manufacturing sites onto a

much stronger operational footing. We have introduced leaner

processes, improved quality and lead times, and transformed

planning and forecasting. As the programme progresses, an

increasing number of colleagues are upskilled, with team members

subsequently deployed to further sites to pass on their learning.

• The first wave of the programme, in the Belfast camera

lines, has boosted camera output by more than half, from a

smaller direct workforce, as well as delivering a significant

improvement in first time pass rates through the build and

test process. Wave one revealed further scope for quality

improvements and efficiencies than had been anticipated,

with work continuing as we go through FY2025/26. A facility-

wide product review in April 2025, as part of wave two of the

programme, focused on systems, and has identified a small

number of product lines where high material costs, heavy

labour requirements and poor delivery performance has led to

low profitability and questions over the competitiveness and

potential of these products. Having considered performance

improvement actions and potential returns, we will be

discontinuing those which are a drag on the business, taking

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Positioned in structurally growing markets

Materials analysis, semiconductors and healthcare & life

science remain our three primary markets. They all have high

structural growth potential. Quantum technology, a much

smaller contributor to our current revenue, also represents a

growth opportunity, primarily within our Advanced Technologies

division. This has begun to crystallise this year, although the

trajectory of the quantum computing market remains less clear.

The strategic priorities within each division reflect our decision

to focus our product development and marketing activities on

addressing these structurally growing markets.

We have delivered strong year-on-year revenue growth in

semiconductors, up 16.4% CC to £144.8m, generated from

both divisions, with a roughly 60/40 split between our growing

Advanced Technologies compound semiconductor business

and our Imaging & Analysis capabilities. As semiconductor

design and manufacturing reshoring programmes take place,

customers are increasingly using our Imaging & Analysis tools for

quality control in final assembly, among other tasks. In Advanced

Technologies, our fabrication equipment is used to accelerate

the development of next-generation semiconductor capabilities

which are fundamental to enable advances in technology,

including AI chips, augmented reality, 3D sensing and the

hyperscale data centres needed to support growing demand for

data. As well as advancing our customers’ capabilities, we play

a vital role in supporting the delivery of more good quality wafers

at a lower cost per wafer.

Materials analysis has continued to grow steadily and remains

the largest end market for the Group, with revenue of £203.7m,

up 3.4% CC, as customers use our technology to understand,

improve and test the properties of materials across a wide

range of markets, from development of structural materials and

polymers to quality control in automotive and food industries.

£203.7m

Materials analysis revenue, +3.4% CC

£144.8m

Semiconductor revenue, +16.4% CC

£78.3m

Healthcare and life science revenue, (11.6%) CC

Chief Executive Officer’s review continued

Growth in these markets has more than offset continued

weakness in healthcare & life science, which has seen an 11.6%

CC reduction in revenue year on year due to the dual headwind

of original equipment manufacturers (OEMs) pausing deliveries

to use existing stocks built up during the Covid pandemic, and

overall sales of microscopes slowing in response to wider market

dynamics. Demand has stabilised, with order demand flat

between the second half and the first half of FY25, and book to

bill for the year ending at 1.O2x.

Revenues from other markets have seen a 44.6% CC increase

to £73.8m, largely derived from quantum applications. This

included the first installations under a key ongoing quantum

partnership for Advanced Technologies, which were the key

drivers of this significant growth.

Overall demand remained positive throughout the year with 3%

growth in orders at constant currency. The order book provides

visibility consistent with prior years at Oxford Instruments.

Imaging and Analysis has c.5 months of order cover for FY26

and had a underlying book to bill of 1.0x in FY25 excluding China

cancellations. Advanced Technologies has c.9 months of order

cover for FY26 and a book to bill of 0.9x in FY25 excluding China

cancellations, reflecting the normal lumpiness in quantum orders

in Advanced Technologies. Our pipeline of new opportunities is

strong, whilst acknowledging the increased timing uncertainty

given macro conditions.

Focusing on our key strengths

We have maintained levels of investment in R&D at 8.2% (2024:

8.3%) and launched new products in every part of our business,

recognising that our differentiated technology is a key source

of strength. The principles of maintaining and developing new

leading-edge capabilities, combined with increasing ease of

use, are common to the whole Group’s R&D programme. As we

develop our combined innovation roadmap for the Imaging &

Analysis division, we are applying an increasingly commercial

lens to the investments we make, to ensure that new products

address a genuine gap in the market, are cost-effective to

manufacture and can generate an attractive profit margin.

We will also limit the number of custom builds we produce,

recognising that modular, repeatable assembly benefits both

productivity and profitability.

In Imaging & Analysis, new semiconductor-specific capabilities

in Raman and atomic force microscopy have gained significant

traction, while our tools for electron backscatter diffraction

microscopy have proved popular with industrial customers.

A number of OEMs have integrated our products into their own

new ranges. In Advanced Technologies, the first installations of

our largest modular dilution refrigerator and increasing adoption

of our latest atomic layer deposition equipment for compound

semiconductors have significantly contributed to growth.

At a Group level, commercial customer revenues have increased

as a proportion of total Group revenues, with our focus on

growing our presence in this much larger market driving double-

digit growth. Revenue from academic customers, who remain the

bedrock from which our commercial growth stems, was broadly

flat year on year.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chief Executive Officer’s review continued

The Imaging & Analysis division develops and manufactures microscopes, scientific cameras,

analytical instruments and software, with manufacturing bases in the UK (High Wycombe and

Belfast), Europe (Aix-en-Provence, Ulm and Zurich) and the USA (Santa Barbara).

Imaging & Analysis market dynamics

Created in 2024, the division maintains strong positions in each of our three core markets: materials

analysis, semiconductors and healthcare & life science, due to our differentiated product ranges and

ongoing investment in innovation. Notably strong growth in semiconductor and growth in materials

analysis more than offset the continued weakness in the healthcare and life science market.

The division supports silicon semiconductor development and production, where the breadth of our

capabilities across the life cycle, from supporting early-stage academic research through to quality

assurance and failure analysis in production settings, provides resilience to cyclicality in the silicon

semiconductor market.

Key highlights

Imaging & Analysis 2025 2024 Growth OCC growth

Orders £318.6m £306.6m +3.9% +3.0%

Revenue £330.5m £328.1m +0.7% +0.2%

Adjusted

operating profit £76.2m £79.0m (3.5%) +2.8%

Adjusted

operating margin 23.1% 24.1% (100bps)

Adjusted constant currency

operating margin 24.7% 24.1% +60bps

Statutory operating profit £40.8m £69.2m

Statutory operating margin 12.3% 21.1%

1. For definition refer to note on page 2.

2. Details of adjusting items can be found in note 2 to the financial statements.

Imaging & Analysis

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chief Executive Officer’s review continued

Specific semiconductor editions of our Raman microscope

(capable of analysing 300mm wafers) and our atomic

force microscope have helped us to increase traction in the

commercial sector, with both technologies enabling customers

to work on new capabilities and maintain and enhance

wafer quality.

Divisional revenue from semiconductors was up 35% CC, with

orders up by a similar amount at 32% CC. This reflects strong

continued demand for our highly differentiated product suite, as

new applications are creating growth opportunities for electron

microscopy, coupled with companies establishing new product

manufacturing lines across Asia, Europe and the USA.

Materials analysis applications also performed well, with orders

up 8% CC on the year, with strong growth in structural materials

R&D, commercial applications in nuclear and solar energy, and

the development of new, advanced materials such as graphene

and other 2D materials, where our ability to analyse at the

nanoscale is key. We also saw strong growth in sales to service

labs for core facilities, centralised shared resources where

cutting-edge equipment is made available for scientists to

carry out a wide range of analysis. Here, as elsewhere, the ease

of use, accuracy and speed of the results generated by our tools

are key differentiators.

In terms of technology adoption, both Raman and electron

backscatter diffraction (EBSD) products have achieved strong

growth year on year. EBSD has gained particular traction with

industrial customers, such as a tier 1 automotive manufacturer

in China which is using our product to speed the development

of faster charging EV batteries. The addition to our portfolio of

nanoindentation, a technique which enables customers to test

the hardness of materials, with the acquisition of FemtoTools, has

also contributed to revenue growth across both semiconductor

and materials analysis.

The weakness in the healthcare & life science market continued

in the second half of the year, with full-year revenue 12% CC

below a strong prior year comparator.

This downturn primarily reflects a reduction in imaging revenue,

together with OEM and wider destocking, and is concentrated

largely on our Belfast microscopy and scientific cameras facility,

where historic operational challenges have been an additional

factor in the reduction in revenue.

Healthcare & life science orders reflect similar weakness,

ending the year 8% CC down versus the prior year, lower

than anticipated at half year, with some customers in the US

deferring orders in the final quarter due to the actions of the

USadministration.

However, demand has stabilised, with orders broadly flat across

both halves of the year and book to bill at 1.02. Revenue from our

Imaris software remained strong, while Raman microscopy for

life science has delivered strong double-digit growth, generating

8% of divisional life science revenue (up from 4% last year).

Overall, the division has made significant progress in growing

revenue to industrial customers (up 12% CC year on year),

in line with our strategic ambition to extend our reach in the

much larger commercial R&D and production sector. Growth

toacademic customers remains steady at 3%.

Strategic and operational progress

The newly created division brings together a suite of product

lines with strong synergies and a track record of success,

manufactured from five sites across the UK and Europe which

were previously run as separate business units (including

FemtoTools, acquired at the start of the year). Focused on small-

scale imaging and analysis equipment and software, they share

common business models, go to market strategies and margins,

and address a similar client base in their three key markets

in materials analysis, semiconductors, and healthcare & life

science. We therefore saw a clear opportunity to enhance growth

and profitability, taking the businesses in the division from good

to great, by simplifying our operating model and maximising

existing synergies through greater collaboration.

Over the course of the year, we have integrated five materials

analysis businesses under one leadership team.

This has facilitated a degree of delayering, resulting in £1.9m

of cost efficiencies as well as streamlining processes. We have

also developed a shared innovation roadmap for the division,

enabling us to target new product development based on the

Group’s strategic goals rather than at a business unit level.

The realignment and integration programme has enabled us to

more effectively realise the potential of our recent acquisitions,

most notably the WITec business, acquired in 2021, which

specialises in Raman microscopy. Raman product lines have

delivered strong double-digit revenue growth year on year, and

almost 50% growth in orders, concentrated on semiconductor

and life science applications.

Our bolt-on acquisition in June of nanoindentation specialist

FemtoTools has brought a new complementary technique

to the Group’s portfolio and is performing to plan, while First

Light Imaging, acquired in the prior financial year, has been

integrated with our cameras and microscopy business, extending

its capabilities, notably in high speed, low noise and infrared

scientific cameras. Both of our most recent acquisitions have now

launched their first products under the Oxford Instruments brand.

We see opportunities to achieve even closer integration across

the Imaging & Analysis division and are actively pursuing these

in FY2025/26. A further key focus for the division has been

the two waves of our operational transformation programme

focused on cameras and systems in Belfast, details of which are

set out on page 13.

Our strategic actions to consolidate and streamline the division’s

product lines, and to embark on our operational excellence

programme, have underpinned a strong divisional performance,

with growth in revenue, profit and orders. We were particularly

pleased to have extended Imaging & Analysis’ excellent

operating profit margin by 60 basis points to 24.7% at constant

currency, at the upper end of our medium-term target range for

the division. We were able to deliver this strong margin growth

despite the weakness in the division’s life science market, and

having identified the limited profitability of a small number of

product lines, primarily in Belfast, which is now being addressed.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chief Executive Officer’s review continued

The Advanced Technologies division develops and manufactures

compound semiconductor fabrication capital equipment (Severn

Beach, UK), cryogenic and superconducting magnet technology

(Oxford, UK), and X-ray tubes (Scotts Valley, USA).

The two larger businesses in Advanced Technologies each benefit

from a dedicated, focused approach to reflect their specialist

markets (compound semiconductor and quantum), unique growth

drivers and principally separate customer bases. The division has

a different profile from Imaging & Analysis, selling much lower

product volumes of larger-scale complex systems.

Our strategic priorities for Advanced Technologies are to ‘fix, improve

and grow’, leveraging the well-invested base in both key businesses,

delivering improved margins and growing our commercial customer

revenues. Both businesses have made good progress following our

targeted actions, resulting in strong growth in both halves of the

year. Revenue was up 21.3% CC year on year, and, as predicted, the

division delivered a profitable full-year performance.

Our compound semiconductor business continues to scale as it

reaps the benefits of its new, state-of-the-art facility, which has tripled

capacity to address structural growth in datacomms (including

AI datacentre scaling), power electronics, and augmented reality.

Advanced

Technologies

Strong double-digit growth in both revenue and orders reflects

the business’s increasing foothold in carefully diversified and

profitable niches within the burgeoning compound semiconductor

sector. Greater focus on fewer product lines has supported

improved productivity.

Our quantum-focused facility has delivered a good year of recovery,

returning to profitability as it leveraged a reduced cost base and

installed the first orders for a key global technology customer as

part of a major technology demonstrationprogramme. We have

crystallised the performance improvement through the sale of

the business, due to complete in the third quarter of FY2025/26.

The division’s strong growth is particularly notable in the context of

our regional pivot, which saw us end new quantum sales to China

and target alternative customers and applications in compound

semiconductor in the country. At a divisional level, we have

delivered strong growth in revenue as we gained traction in North

America and East and Southeast Asia, and rebuilt our position in

China, with more than 50% CC order growth year onyear.

Orders overall were slightly behind last year, reflecting the lumpy

order profile of the large capital equipment typically sold in the

division, and a large biannual framework order that our X-Ray

Technology business received a few days into the new financialyear.

Key highlights

Advanced Technologies 2025 2024 Growth OCC growth

Orders £145.1m £152.5m (4.9%) (3.3%)

Revenue £170.1m £142.3m +19.5% +21.3%

Adjusted

operating profit £6.0m £1.3m +351.1% +486.5%

Adjusted

operating margin 3.5% 0.9% +260bps

CC operating margin 4.5% 0.9% +360bps

Statutory operating profit/(loss) (£0.7m) £2.2m

Statutory operating margin (0.4%) 1.5%

1. For definition refer to note on page 2.

2. Details of adjusting items can be found in note 2 to the financial statements.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chief Executive Officer’s review continued

Compound semiconductor operational

developments and market dynamics

Our compound semiconductor business has completed a

successful first full year at its new facility at Severn Beach, near

Bristol, UK. Growth plans are firmly on track, with 13% CC growth

in both revenue and orders, as the business takes advantage

of the improved layout and process flow of the new site, and

simplified production. A key development in the year has been

the completion of the site’s cleanroom, which is one of the most

advanced in the world for compound semiconductor process

development, and is now fully signed off and operating to ISO5

specifications. Final systems, including showcasing our Imaging

& Analysis metrology capabilities, are being installed and tested.

The sale of our legacy site is expected to complete in H1 of

FY2025/26.

Our exceptional high-tech facilities have increased our ability

to partner with leading blue-chip manufacturers. Customer

demonstrations are up 30% year on year, and our qualified

pipeline of opportunities has grown by 7% year on year, with

improved conversion rates.

The business has grown revenue by successfully focusing

on carefully chosen subsets within the growing compound

semiconductor market where we have leading-edge capabilities,

and where we are able to deploy pricing power to command a

higher margin than in more standardised processes. We enable

next generation device architectures for better performance,

helping our industrial customers to accelerate their own growth

by improving wafer performance, yield and therefore cost

per wafer. Our market applications range from datacomms

to augmented reality, next-generation power electronics and

quantum, the blend of which provides valuable resilience to

fluctuations in any single area.

This year has seen strong growth in applications for

datacentres, including a significant and ongoing partnership

with global manufacturer of advanced chips Coherent Corp.

to support Coherent’s 6” InP fab ramp in Europe and the US

for AI datacentres.

We have also successfully grown revenue from quantum

applications, as customers (ranging from blue chip global

technology companies to leading universities and start ups) use

our equipment to make qubits, and develop their capabilities in

quantum sensing and quantum communications.

Gallium nitride (GaN) applications which enable customers to

increase power and drive efficiency, have delivered significant

revenue growth over the year, with Tier 1 blue chips in Japan

deploying our technology into 5G and 6G, and other customers

using GaN to enable more efficient power in energy hungry data

centres. We continue to target growth in GaN power applications

for the year to come.

In silicon carbide, where we have strong capabilities but limited

exposure (representing 2% of FY2024/25 orders for this facility),

we have delivered modest revenue growth despite the downturn

in the electric vehicle market, as customers invest in R&D for

next-generation silicon carbide performance.

In tandem with the move to the new site, and the strategic

decision to focus in on the technologies where we have a

significant competitive edge, we have also generated efficiencies

by streamlining the product portfolio of this business. More

than 80% of orders in the year came from sales of three core

platforms – Plasma Pro, IonBeam and ALD (atomic layer

deposition) – with modular assembly carried out in dedicated

bays, and fewer complex and resource-hungry one-off products.

A strengthened focus on service has also contributed to the

business’s growth, with service revenue up 18% CC year on year.

Quantum operational developments

andmarketdynamics

We are pleased with the progress made at our quantum-focused

facility Oxford Instruments NanoScience, based just outside

Oxford, with the business having achieved a return to profitability,

delivering the first systems of a key commercial partnership with

a globally significant technology player and benefiting from

reductions in its cost base made in the first half.

The key partnership is founded on the strength of our modular

Proteox proposition, which delivers vital cooling capabilities

to support the scaling of this customer’s quantum computing

programme. The customer has received the first of our largest

Proteox QX systems to be installed anywhere in the world.

Our products, including ongoing deliveries of our smaller

Proteox MX, are key to enabling our customer to scale

significantly past current cryogenic refrigeration limitations

todeliver its quantum roadmap.

A further contributor to the business’s recovery in 2024/25 was

our action to address the operational challenges which have

hampered growth in recent years. We made progress with

productivity initiatives, and addressed supply chain management

and inventory challenges which became apparent following the

introduction of a new ERP system. This allowed us to strengthen

output through the first half and deliver a record closing month,

with more systems shipped than in any previous period.

As set out on pages 4 and 12, we have now agreed the sale

of Oxford Instruments NanoScience to Quantum Design. The

divestment will enable the Group to focus its capital deployment

on business capabilities with higher margin and potential for

shareholder returns, and is consistent with our focus on our three

core markets: materials analysis, semiconductor, and healthcare

and life science.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chief Executive Officer’s review continued

Capital allocation priorities

We have a strong balance sheet which provides good optionality

for the business to support our growth aspirations. Our net

cash position improved in the second half of the year, with net

cash increasing to £84.4m from £39.3m at the half year. We are

committed to continuing to invest 8–9% revenue in R&D and to

making targeted operational investments to support our growth,

whilst also being mindful of shareholder returns, taking account

of underlying earnings, dividend cover, currency movements and

demands on our cash.

Our acquisition pipeline remains healthy, and is focused on

adding capabilities in Imaging & Analysis.

Our recent acquisitions, most notably WITec and FemtoTools,

have benefited from the integration of business units under

Imaging & Analysis, with WITec’s performance notably

accelerating during the year.

We will continually assess the appropriateness of additional

returns to shareholders in the form of dividends and/or buyback

of the company’s shares, such as the programme announced

this week.

Positive impact and progress to net zero

The markets we serve are carefully chosen to support the

development of a more sustainable planet. Our products support

a range of positive outcomes, from enabling the development

of personalised treatments for cancer to facilitating the path

to decarbonisation through our extensive role in the battery

ecosystem. We are equally committed to running our own

operations sustainably.

We took an important step forward this year, securing validation

and approval from the Science Based Targets initiative (SBTi) of

our science-based near and long-term targets, through which

we have committed to reach net zero across our whole value

chain by 2045, and to tackle our Scope 1 and 2 emissions even

earlier, by 2030.

Benefits of integration

Our Raman business, acquired

as WITec in 2021 has been a

key contributor to the Group’s

growth in 2024/25. Sales of our

Raman lines have been boosted

by greater integration as part of

Imaging & Analysis.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chief Executive Officer’s review continued

Our targets are stretching, putting our goal five years ahead

of the UK Government’s own commitment. Given our purpose,

to accelerate the breakthroughs that create a brighter future

for our world, and the contribution our technology makes to

developing sustainable solutions to global challenges, I have

every confidence in the commitment and talent of the Oxford

Instruments team to deliver them.

Our commitment to operating sustainably also encompasses the

social impact we have on our employees and our communities,

and our ethical approach to doing business. We reconfirmed

our approach to each of these areas through the launch of a

new Code of Conduct in November 2024, and via a new rolling

programme of enhanced and extended compliance training.

Talented global workforce addressing strategy

The strong progress we have made this year has been driven

by the energy and expertise of our highly engaged global team,

who have embraced our new strategic priorities and addressed

them at pace. I would like to extend my sincere thanks to all my

colleagues for their commitment and agility, as we streamline

and simplify Oxford Instruments and transform our operational

capabilities to meet our full potential. Amid the additional context

of a challenging external landscape, they have maintained

strong focus and demonstrated their ability to adapt and thrive

in new circumstances.

Our first externally benchmarked global employee survey saw

Oxford Instruments rated by Best Companies as ‘One to Watch’,

recognising that this is a good place to work. While we are

pleased with this outcome, especially in a year of transition,

we will use it as a spur to enhance our progress in future years.

A new chapter for NanoScience

I would also like to take this opportunity to thank our departing

colleagues in NanoScience for the contribution they have made

to Oxford Instruments and the global scientific community

with their advances in cryogenics and advanced magnet

technology over many years. Their talent and innovative spirit

are remarkable, and the Board and I wish them every success

asthey begin a new chapter with Quantum Design.

Leadership changes

I am delighted to welcome Paul Fry, who joined Oxford

Instruments in January 2025, and took up the role of Chief

Financial Officer on 1 April 2025, joining the Board as an

Executive Director on the same date. I have greatly enjoyed

working and travelling with Paul over recent months, visiting

several of our international sites together as we develop our

plans to unlock the full potential of Oxford Instruments. I look

forward to building a strong and close partnership with him in

themonths and years to come.

Gavin Hill stepped down as Chief Financial Officer and Executive

Director at the end of the financial year (31 March 2025), and

leaves Oxford Instruments this month. Gavin was an excellent

steward of the company’s finances and is enormously well

respected and liked by both colleagues and stakeholders.

On a personal note, I am very grateful to Gavin for his support

for me when I joined the company, and wish him the very best

for the future.

Through the year we have further strengthened our capabilities

through recruitment and internal promotions, including the

permanent retention of our Chief Transformation Officer as

Chief Operating Officer for the Group and the appointment of

an internal candidate to the role of Managing Director for the

Imaging & Analysis division.

Summary and outlook

The Group has had a good year, reporting strong revenue, profit

growth, and constant currency margin progression. It was also

a year of significant progress with our strategic initiatives to

improve our operational and commercial outcomes. We have

turned around the profitability of our NanoScience business,

and subsequently crystallised an attractive value through the

sale of the business for £60m, announced this week. The sale is

in line with our strategy to focus and invest in the best areas of

opportunity to grow the Group and create value for shareholders,

and accelerates our progress to our medium-term margin

targets. I am really pleased with the agility and performance of

the whole Oxford Instruments team as they have responded to

the strategic changes and navigated the current environment.

This year’s results demonstrate the benefits of the long-term

drivers of our business model, founded on the growth dynamics

in the markets where we operate, and the demand for our

market-leading products and solutions. Looking ahead, whilst

acknowledging the level of macro uncertainty, we have a strong

and more focused business; there is a lot we can control, and we

are well placed to mitigate any direct impact from tariffs. There

are further benefits to be realised from our strategic initiatives to

transform the business, and our revenue visibility is healthy. Our

strong balance sheet and the proceeds to come from the sale of

our quantum business allow us to return capital to shareholders

via a share buyback that we have also announced this week.

We are confident that our differentiated higher margin business

will continue to deliver attractive profitable growth.

RICHARD TYSON

Chief Executive Officer

12 June 2025

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Innovation, and the commercialisation of our technologies,

is the driving force behind the Group’s growth and success,

with our core purpose being to accelerate the breakthroughs

that create a brighter future for our world.

Our leading technology and customer-centric, focused-

market strategy provide a strong platform from which to

deliver sustainable growth, margin expansion and enhanced

shareholder returns.

Exceptional technology

and software in attractive

structural growth markets

with significant value

creation potential

Reasons to invest

Oxford Instruments provides

market-leading scientific

technologies, software and

expertise to customers worldwide.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Reasons to invest continued

Clear purpose to create

a brighter, cleaner future,

underpinned by our

commitment to

responsible business

• Clear purpose to accelerate

the breakthroughs that create a

brighter future for our world is well

aligned with global mega trends

• Our technologies and services

help customers to optimise the

use of resources, advance the

green transition, develop new and

enhanced medical treatments,

and sustainably power an

increasingly digital world

• Also committed to building on our

strong sustainability foundations

in the way we do business,

through our actions to reach net

zero, our values-based culture

and our contributions to local

communities

Exceptional technologies

and unique expertise

provide high value add

to customers

• Our differentiated solutions enable

customers to accelerate meeting

their objectives

• We have a competitive advantage

across a broad base, spanning all

scientific disciplines

• An outstanding team with deep

expertise in scientific research

and application engineering

Leading positions in

key structural growth

markets, across the

production life cycle

• Market leaders across

three key structural growth

markets: materials analysis,

semiconductors, and healthcare &

life science (together representing

c.85% of revenues)

• Diverse commercial and

academic customer base

spanning the world’s leading

companies and scientific research

communities, across North

America, Europe and Asia

• Unique ability to leverage insights

from research stage through to

commercial production

Strong financial profile

supports investment in

growth and innovation

• Revenue and adjusted operating

profit CAGR of 9.5% and 10.2%

over the last five years have

driven a strong ROCE of 27.1%

(2024/25: 25.9%)

• Cash-generative growth and

a strong balance sheet with

significant net cash support

investment in growth and

innovation and a progressive

dividend policy

• Well invested, supporting

operational gearing from

capacity utilisation, new product

development (8–9% pa),

investment in talent and selected,

value-accretive acquisitions

Clear opportunities to

accelerate growth and

enhance margins

• Strong order book and pipeline

provide a positive underpin for

continued growth

• Attractive opportunities to

accelerate growth through

existing product portfolio, new

product pipeline, enhanced sales

and servicing, and selective M&A

• Enhancing margins through

driving and leveraging growth,

operational transformation and

efficiencies, and generating

synergies from simplification

and standardisation

See Sustainability report /

Pages 45 to 68

See CEO review /

Pages 11 to 20

See CEO review /

Pages 11 to 20

See Finance review /

Pages 37 to 44

CEO review /

Pages 11 to 20

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Explore Develop Produce and test

Our business model

Accelerating the breakthroughs that

create a brighter future for our world

We add value across the research and commercial production life cycle:

We have a strong reputation for our market-leading

technology and expertise which enable academic

researchers and scientists to make new breakthroughs

across all areas of fundamental research.

Resilient market with

diversified funding

Find out more / Pages 11 to 20

Our key enabling technologies and solutions cut

the time from discovery to real world progress, and

by leveraging our market insights from the academic

research stage, our technology is used to develop

new products for commercial applications.

Attracting commercial R&D spend as

we support customers to develop

new products

Find out more / Pages 11 to 20

Our products support today’s manufacturing

challenges and increase productivity.

Our biggest opportunity area as

we extend our reach into the much

larger production market

Find out more / Pages 11 to 20

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our business model continued

Manufacturing sites in the UK, Germany, Switzerland and the US

Capabilities include:

• microscopy;

• analysis tools for microscopy;

• scientific cameras;

• specialist software.

The division brings together similar smaller-scale imaging and analysis equipment and

analytical software tools, which are high margin products with a common operating

framework, routes to market and customer base.

Imaging

& Analysis

Manufacturing sites in the UK and US

Capabilities include:

• Compound semiconductor etch and deposition equipment; and

• dilution refrigerators and magnet technology for quantum and advanced research.

The division includes low volume, longer lead time, complex and larger scale systems

in distinct specialist markets, with different customer bases and growth drivers.

Advanced

Technologies

2025

66%

of Group revenue

93%

of Group profit

2025

34%

of Group revenue

of Group profit

Find out more / Pages 11 to 20 Find out more / Pages 11 to 20

Through a new, simplified divisional structure for the Group

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our business model continued

• £1.2bn market, growing at 4-7% pa

• Structural drivers include:

– supporting advanced material development

and sustainability progress;

– improving performance from finite resources.

Materials analysis

• £1.5bn market, growing at 6-9% pa

• Structural drivers include:

– enabling development of new compound

semiconductors;

– supporting growth in bandwidth and connectivity,

faster devices, power efficiency, and the

green economy.

Semiconductors

• £2.0bn market, growing at 8-12% pa

• Structural drivers include:

– improving treatments & vaccines, whilst reducing

the cost of development;

– personalising medicine & therapies and caring for

an ageing population.

Healthcare & life science

* The remaining 14% of Group revenue is generated in other markets, including quantum, which represented 11% of revenue in 2024/25.

41%

of Group revenue*

29%

of Group revenue*

16%

of Group revenue*

The health and resilience of our chosen end markets has played a critical role in our strong performance. We believe our strong position in these end markets,

along with their structural growth drivers, will continue to create value for our customers and present significant opportunities for sustainable growth.

Find out more / Pages 11 to 20 Find out more / Pages 11 to 20 Find out more / Pages 11 to 20

Across three key structural growth end markets

Our global footprint, with operations in 23 countries across Europe, Asia and the Americas,

provides excellent reach and resilience to changing international dynamics.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our business model continued

How we add value:

To our customers

We develop strong, long-standing

relationships with our customers,

understanding their needs, challenges

and opportunities. Our technology and

scientific expertise enable our customers

to meet their objectives to discover and

bring to market exciting new advances

that drive human progress.

Outcomes:

Revenue

£500.6m

+6.5% at organic constant currency

Adjusted operating profit

£82.2m

+10.8% at organic constant currency

Adjusted EPS

112.4p

2024: 109.0p

Return on capital employed

27.1%

How we invest our capital:

Organic cash investment with R&D of £41.1m

and capital expenditure of £14.4m

Shareholder distributions with full-year

dividend payments of £12.1m

Balance sheet flexibility for inorganic

opportunities with net cash of £84.4m

To our people

Our culture reflects our values – we are

committed to creating the best possible

working environment for our employees,

enabling them to thrive in an exciting,

purpose-driven organisation.

To our shareholders

Innovation, and the commercialisation

of our technologies, is the driving force

behind the Group’s growth and success.

Our leading technology and customer-

centric, focused-market strategy provide

a strong platform from which to deliver

cash-generative, sustainable growth,

margin expansion and enhanced

shareholder returns.

To our planet

Sustainability is central to Oxford

Instruments, with our purpose, values,

strategy and chosen end markets all

aligning around the positive impact we

seek to make on our planet and our

stakeholders. Through our products and

services, we are working to accelerate

the breakthroughs that create a brighter

future for our world. And through our

commitment to operating responsibly,

in line with our values, we strive to be

a good citizen of our communities and

the planet.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Engaging with our stakeholders

Engagement with stakeholders has been vital

to the launch of a new strategy for the Group

This has been a pivotal year for Oxford Instruments,

as we embarked on the delivery of our new strategy

(see Chief Executive’s review, pages 11 to 20).

Two high-profile external events – a strategy launch to investors

and analysts in London, followed by a capital markets day for

some 70 stakeholders at our new state-of-the-art compound

semiconductor facility near Bristol – provided the ideal

opportunity to set out our new direction to shareholders and

analysts. This engagement has continued throughout the year,

with customers and suppliers also receiving detailed insight

into our strategic priorities. The strategy has been received well,

with stakeholders praising our new, simpler structure and clear

divisional priorities (see unattributed comments, right, from stock

market analysts and bankers).

Our talented people played a key role in the development of the

strategy, with senior leaders and a wide range of employees

taking part in a deep-dive diagnostic exercise and consultation

on our priorities and the ways of working that will deliver them.

CEO Richard Tyson and members of the Senior Leadership

Team then undertook a series of townhalls at sites around the

world to inform and inspire employees of the next steps on

Oxford Instruments’ journey. Messages were reinforced by a

suite of engaging posters, wall art and other physical and digital

collateral to ensure priorities and ways of working stay front

ofmind.

“ The refreshed strategy is positive, and

I like the refocus, with the actions to

be taken in each division being clear.”

“ The new divisional structure does

make Oxford Instruments easier to

understand, and it’s a very tangible

way of being able to demonstrate

progress going forwards.”

“ With this new strategy now, the business

is a lot clearer than it has been.”

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Engaging with our stakeholders continued

Promoting the

success of the

company for the

benefit of all

stakeholders

Engagement with our stakeholders allows us to grow and

execute our strategy, so we consider the impact we have

on them as well as what they consider important when

developing our plans for long-term success.

We use a range of engagement mechanisms to understand

and consider our stakeholders’ views. In some cases, the

Board engages directly with stakeholders, but there is

also significant engagement by senior management and

throughout the company. The Board receives reports and

updates on such engagement, and the views and feedback

gathered from stakeholders are used to inform discussion

and decision-making.

See pages 89 to 93 for details of how we engage with our

stakeholders and page 94 for our statement in accordance

with Section 172(1) of the Companies Act 2006.

How we engage with our stakeholders / Pages 89 to 93

Customers

Customer intimacy helps

us to identify additional

opportunities to deliver

increased value to

our customers

Employees

By working together as one

team, we help and trust

each other to succeed

Shareholders

Delivering strong growth

and shareholder returns

promotes the long-term

sustainable success of

the company

Suppliers

Our supply chain plays

a vital role in supporting

sustainable growth and

efficiency across the

business

Local

communities

We strive to support the

development of stronger

communities and have

a positive environmental

and social impact

Society

Our technology and

scientific expertise

enables our customers

to discover and bring

to market exciting new

advances that drive

human progress

Our purpose

To accelerate the

breakthroughs that

create a brighter

future for our world

Our opportunity

Oxford Instruments holds

a unique position to

anticipate global drivers

and connect academic and

commercial researchers,

acting as a catalyst that

powers real world progress

Our strategic priorities

Our ways of working

• We start with

the customer

• We succeed by

being focused

• We make and keep

our promises

• We work together

as one team

• We help and trust each

other to succeed

Our ambition

Be the scientific

instrumentation

partner in every

significant lab and

production facility

across the world

Medium-term KPIs

Enhance growth, margins and returns:

• Organic growth CAGR 5–8%

• Adjusted operating profit margin 20%+

• Return on capital employed > 29%

• Cash conversion > 85%

• Selective acquisitions

Deliver strong

growth through

‘customer first’ ways

of working

Deliver a

step change in

operational

performance

Simplify the

organisation

Significant

investment in new

technology and

products

Embed our

values and ways

of working

Reach net zero in our

own operations

by 2030

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview Strategic Report

Our strategy for growth

Our strategy for growth and our strategy in action / Pages 29 to 34

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our strategy for growth continued

Progress in 2024/25

• Wave 1 of operational transformation

programme has driven major productivity

improvements in Belfast (see page 13)

• Lean manufacturing principles and

effective production performance

management introduced in Belfast

andOxford

• In-house capability built through

operational transformation programme at

Belfast and Oxford, with teams upskilled

to train colleagues

Deliver a step change in

operational performance

(delivery, quality, efficiency)

Focus for 2025/26

• Enhance profitability of Belfast product

lines through quality improvements and

the discontinuation of a limited number

of products

• Begin a fourth wave of our operational

transformation programme to support

scaling at our Ulm Raman facility

• Carry out Group-wide procurement

transformation programme

+60%

productivity enhancement

Progress in 2024/25

• Improved lead times on key products

• Moved away from a product-first

approach to a market segment-based

approach, enhancing our ability to

support customers with a range of

technologies

• Drove double-digit revenue growth in

North America by strengthening team

and adopting new marketing channels

Focus for 2025/26

• Shifting accountability for sales and

service fully into our regional teams

• Continued focus on improving customer

experience, including product lead time,

service and repairs

order growth in China as we

target industrial customers

Deliver strong growth

through ‘customer first’

ways of working

Strategy in action

We have worked with a leading automotive

customer in China on their electric

vehicle battery programme, creating a

bespoke data dashboard to accelerate

theirprogress.

Strategy in action

Our operational transformation team have

achieved an average 60% uplift in the

volume of cameras produced per employee

in Belfast, and a 90% pass rate through the

clean room – a significant improvement.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our strategy for growth continued

Progress in 2024/25

• Shared innovation roadmap created

for Imaging & Analysis division with

enhanced commercial focus and

improved targeting on our core markets

• New products launched across multiple

techniques and both divisions

• World-first gaining traction: Unity

combines backscatter electron

microscopy and X-ray for faster,

better imaging

Focus for 2025/26

• Continue to invest 8–9% of revenue

• Build on shared innovation roadmap to

ensure we are targeting markets with

most potential for revenue growth and

margin enhancement

• Increase collaboration between R&D

teams across facilities

Continue to invest in new technology

and products, protecting and

enhancing our core strengths

Progress in 2024/25

• Created a new, simpler structure for

Oxford Instruments, reducing previous

three divisions to two: Imaging & Analysis

and Advanced Technologies

• Consolidated Japan and ESEA regional

teams under one leadership team,

driving shared ways of working and

25% revenue growth

• Centralised marketing function, sharing

best practice and reducing duplication

of effort

Focus for 2025/26

• Further aligning Belfast cameras and

microscopy facility with materials

analysis businesses under one divisional

Imaging & Analysis leadership team

• Increased focus on global account

management for key accounts

• Centralising key functions including

Finance, HR, Legal and IT to share best

practice and ensure strong governance

Simplify the organisation,

increasing collaboration

and accountability

8.2%

revenue invested in R&D

£1.9m

efficiency savings in

Imaging & Analysisto date

Strategy in action

We have consolidated five businesses

under one leadership team within

Imaging & Analysis, facilitating improved

collaboration, cross-training and cross-

selling, and reduced costs.

Strategy in action

We have maintained target levels of

investment in R&D while still delivering

margin enhancement in both divisions.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our strategy for growth continued

Progress in 2024/25

• Development of medium-term Scope3

target of a 25% reduction in absolute

emissions by 2030

• Approval of medium and long-term

science-based net zero targets by the

Science Based Targets initiative

• Publication of net zero transition plan

• Sustainable product development

workshops delivered to more than

300colleagues

Reach net zero in our own operations

by 2030 and contribute to global

sustainability through our products

Focus for 2025/26

• Drive progress towards our medium-

term (2030) emissions reduction targets

• Progress programmes to replace oil

and gas boilers at two of our UK sites

byMarch 2027

• Extend renewable energy certification

tofurther sites outside the UK

• Continued engagement with top

suppliers to strengthen Scope 3 data

• Carbon footprinting on representative

sample of products

Progress in 2024/25

• Worldwide roll-out of new strategy and

ways of working via a series of in-person

roadshows led by the CEO

• Leadership conference held for c.75

leaders to equip them with the skills to

role model and embed ways of working

• Ways of working reinforced at local level

through workshops and visual prompts

• Externally benchmarked engagement

survey carried out for the first time

• New Code of Conduct published and

rolled out to all colleagues

Focus for 2025/26

• Increased focus on line management

effectiveness using Best Companies

personalised feedback tool

• Target improvements to Best

Companiesscore as evidence

ofimproved engagement

• Continued focus on communicating

our values and ways of working so

that they become second nature

toemployees

Embed our values and

ways of working so that they

are lived every day

Strategy in action

We achieved a ‘One to Watch’ rating from

Best Companies in our first externally

benchmarked employee survey, reflecting

our position as a good place to work.

Strategy in action

We were delighted to achieve a ‘B' in

our first CDP climate change submission

since 2016, recognising our effective

management of climate change.

CDP score for 2024

‘One to Watch’

Rating from Best Companies

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Case study

Successfully growing

our Raman business

Links to strategy

Our Raman spectroscopy products are finding new markets and delivering strong

growthas WITec, acquired in 2021, integrates more fully into Oxford Instruments.

Raman spectroscopy provides detailed information about the chemical make-up of

molecular samples by measuring the way scattered light interacts with chemical bonds.

Having been a specialist technique for many years, following its discovery by physicist

CV Raman in the 1920s, it is now entering mainstream research as increasing numbers

of researchers in both academic and commercial labs see its many benefits, and as it

becomes more accessible thanks to the speed and ease of use of our latest models. Used in

combination with our bespoke software, Raman can identify unique characteristics in a wide

range of materials, in any state including solids, liquid and gases, and in both 2D and 3D.

It is also non-destructive, since it does not come into contact with materials, meaning the

same sample can be tested multiple times.

Oxford Instruments acquired leading German Raman imaging provider WITec in 2021,

recognising the strong synergies with our existing portfolio of materials analysis techniques.

The business has seen an acceleration in its growth this year as it benefits from closer

integration with other product lines in Imaging & Analysis (for example via the successful

launch of RISE, the world’s first fully integrated Raman imaging and scanning electron

microscopy), and focuses on our core market segments – materials analysis, semiconductor,

and healthcare & life science. A new semiconductor-specific edition has won key commercial

orders in Germany and Japan, and we have also seen strong growth in life science

applications for Raman as customers increasingly choose our products to explore metabolic

changes in cells.

Read more about our Raman microscopy range at raman.oxinst.com

Raman has achieved

strong revenue growth

+18% CC

Momentum is accelerating

with strong order growth

+47% CC

Our strategy in action

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Case study

Ramping up to meet

growing demand

Links to strategy

With ever more rapid advances in technology, comes greater demand for compound

semiconductors – that is, semiconductors made from a blend of two or more elements.

The efficiency and flexibility of compounds unlocks capabilities which simply aren’t

possible with silicon alone: higher energy efficiency, higher power, a wider temperature

range and greater optoelectronic properties.

Our brand-new, state-of-the-art compound semiconductor factory outside Bristol, part

of the Advanced Technologies division, is now one of the world’s leading facilities for the

development of these game-changing devices. With triple the capacity of our previous site,

1,000 square feet of ISO 5- and ISO 6-classified cleanrooms, and advanced measurement

and testing technologies from our Imaging & Analysis division, we are better equipped than

ever before to help both academic and commercial customers accelerate the development,

production and testing of next-generation capabilities.

We are increasingly working with high volume manufacturers to push boundaries, including

a global advanced chip manufacturer as it expands in the US and Europe to support the vast

datacentres needed to meet the huge data demand created by AI. We are also enabling

customers to achieve their goals in a wide range of other growth markets, from augmented

reality glasses to 3D sensing and quantum computing, With £500m+ of qualified opportunities

in our sales pipeline, we are confident that the demand is there to maximise the potential of

our brilliant new facility.

Read more at plasma.oxinst.com

Strong qualified pipeline

of opportunities

£500m+

Double-digit order growth

on track with plans

13%

Our strategy in action continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Key performance indicators

6.5% 16.4%

89%

3.1% 27.1%

21.1%

19.5% 35.2%

88%

18.1%

5.8% 17.1%

(3.3)% 29.1%

24/25

24/25 24/25

24/25

23/24

23/24 23/24

23/24

22/23

22/23 22/23

22/23

Cash flow conversion (%)*

89%

Revenue growth (%)

6.5% organic constant currency

Adjusted operating profit margin (%)

16.4% reported

Adjusted earnings per share (EPS) growth (%)

3.1%

Return on capital employed (ROCE) (%)

27.1%

Financial KPIs

Why we measure: To drive profitable, sustainable growth

through the implementation of our strategy against its

strategicplans.

Why we measure: To achieve long-term growth in EPS. Why we measure: To deliver ROCE in excess of our cost

ofcapital.

Why we measure: To maintain a strong operating cash

conversion ratio and high level of free cash flow.

Why we measure: To assess progress towards our target

of 20%+ adjusted operating profit margin.

The Group

uses a range

of measures

to monitor

progress

against its

strategic plans

Measuring our performance

Our goal through our financial KPIs is to deliver shareholder

returns through profitable, sustainable growth and strong

cash conversion and efficient use of capital. The Group

uses a range of measures to monitor progress against

its strategic plans. The key performance indicators are

presented here.

64%

* Normalised.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Key performance indicators continued

8.2%

7.8%

8.3%

24/25

23/24

22/23

1.54

3,886

7.76 0

1.55

1,316*

2.89*

1.52

5,722*

12.16* 0

24/25

23/24

22/23

Investment in R&D (%)

8.2%

Value added (#)

1.54

Absolute carbon emissions (Scope 1 and 2) tCO

3,886

Carbon emissions intensity (tCO

e per £m revenue)

7.76

Employee engagement

‘One to watch’

rating awarded by Best Companies

This is a new metric for 2025 (see page 61).

Why we measure: To assess employee engagement via a

recognised external benchmark and identify areas of focus.

24/25

23/24

22/23

Serious injuries (#)

What we measure: Rate of serious injuries to employees

forongoing businesses.

Why we measure: To measure the impact of our safety

drive,Push for Zero, to reduce accidents.

Serious injuries are defined as those which are reportable

under RIDDOR (Reporting of Injuries, Diseases and

Dangerous Occurrences Regulation) and are measured as

anabsolutenumber.

Non-financial KPIsStrategic KPIs

What we measure: Investment in R&D as a percentage

ofrevenue.

Why we measure: To measure the effectiveness of our

R&Dprogrammes.

What we measure: Market-based carbon emissions from

ourown operations, Scope 1 and 2, measured using the

GreenHouseGas Protocol methodology.

Why we measure: To track our progress towards our Scope 1

and 2 2030 net zero target.

What we measure: ‘Value add’ – (adjusted operating profit

+employment costs)/employment costs.

Why we measure: To measure efficiency.

What we measure: Carbon intensity = Absolute market-based

carbon emissions/Revenue.

Why we measure: To track our progress towards our Scope 1

and 2 2030 net zero target.

* Adjusted figure following rebaselining in 2024/25; please see pages 47 to 51

Finance review

Very positive step forward

towards our medium-term

financial goals

Adjusted operating profit

£82.2m

(2024: £80.3m)

Revenue

£500.6m

(2024: £470.4m)

Adjusted operating profit margin

16.4%

(2024: 17.1%)

Normalised cash conversion

89%

(2024: 64%)

“ The business made a very

positive step forward towards

its medium-term financial

goals, with organic constant

currency revenue growth in

the target range, and both

divisions showing margin

progression and improved

cash conversion. Focused

deployment of the strategy

has offset challenging market

conditions in life sciences and

the pivot in China.”

PAUL FRY

Chief Financial Officer

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

Key highlights

Adjusted

Statutory

FY25 FY24

OCC

Change FY25 FY24 Change

Revenue £500.6m £470.4m +6.5% £500.6m £470.4m +6.4%

Operating profit £82.2m £80.3m +10.8% £39.2m £68.3m (42.6%)

Profit before tax £83.4m £83.3m +8.3% £39.8m £71.3m (44.2%)

Operating margin 16.4% 17.1% (70) bps 7.8% 14.5% (670) bps

Operating margin organic constant currency 17.8% +70 bps

Normalised cash conversion

89% 64%

Free cash flow

£31.6m £13.5m

Earnings per share – basic 112.4p 109.0p +3.1% 44.8p 87.7p (48.9%)

Dividend per share 22.2p 20.8p +6.7% 22.2p 20.8p +6.7%

Return on capital employed

27.1% 29.1%

1 Removing the effect of adjusting items; See Note 2 to the financial statements for further analysis of adjusting items.

2 Organic constant currency basis.

3 Normalised cash conversion excludes the impact of Severn Beach capital investment, and in FY24 also excluded the impact of the site expansion in Belfast.

4 Free cash flow before acquisitions.

5 See section 13 of the Finance review for details of the calculation used.

1. Orders

Total reported orders grew by 1.0% (+0.9% at organic constant

currency) to £463.7m. Order growth in the year was impacted

by a high order intake in FY24 in our NanoScience business,

related to a large quantum computing programme for a key

US customer, the replenishment of which is not expected until

FY26. Organic order intake excluding NanoScience grew 2.8% CC

(+0.4% reported).

Order intake in the Imaging and Analysis (I&A) division grew

3.0% on an organic CC basis. First Light Imaging and FemtoTools

were acquired into the I&A division in January and June 2024

respectively. Orders were strong in the semiconductor (+32%)

and core materials analysis (+8%) markets, but were offset by

declines in the healthcare and life science market in part due to

general market weakness, but also due to historical operational

challenges in our imaging business which have impacted order

momentum in FY25.

Order intake in the Advanced Technologies (AT) division fell 3.3%

CC. The high level of NanoScience orders in FY24, which are

expected to replenish in FY26, provided a high comparator, and

order intake growth excluding NanoScience was 2.1% CC. Order

growth was also held back by cyclical ordering in our X-Ray

Technology business, where FY24 orders are due to replenish on

an approximately eighteen month to two year cycle. The Plasma

business experienced strong order growth in FY25, with orders up

13.0% CC, driven by continued strong investment in commercial

compound semiconductor R&D.

Certain Alternative Performance Measures (APMs) have been

included within this Annual Report. These APMs are used by

management and the Board to help it effectively monitor the

performance of the Group as they consider that these represent

a more consistent measure of underlying performance.

Note 2 provides further analysis of the adjusting items in reaching

adjusted profit measures. Definitions of the Group’s material

alternative performance measures, along with reconciliation

to their equivalent IFRS measure, are included within the

Finance review. Unless stated otherwise, movements in orders,

revenue and adjusted operating profit are given on an organic

and constant currency (OCC) basis, removing the impact of

acquisitions, disposals and currency movements in the year.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

2. Revenue

Revenue of £500.6m (FY24: £470.4m) increased by 6.5% OCC

(Statutory -6.4%), which lies in the middle of the Group’s target

range of 5-8% organic growth. The cancellation of China

orders in FY24 due to UK export restrictions and the Group’s

pivot toward lower risk customers, has resulted in CC revenues

being £18.7m lower in China than FY24. This pivot is complete

and China revenues are expected to return to growth in FY26.

Revenues in our NanoScience business have grown significantly

in FY25 (+£20.9m CC), largely due to the shipping of a number of

large quantum computing systems during the year to a key US

customer. Organic CC revenue growth excluding NanoScience

and China revenues was 9.4%.

Revenues in the academic sector fell 4.5% CC (statutory -6.4%)

and have been impacted largely by the loss in China revenues

described above. Non-China academic revenues grew 4.1% CC.

US academia, which accounted for approximately 12% of FY25

revenue, grew 0.8% CC mainly due to a slowdown in healthcare

and life science sales. US academic grew 8.7% CC excluding

healthcare and life sciences revenues. Commercial applied

R&D grew very strongly as commercial customers continued to

invest strongly in new product and technology developments.

Revenues from this sector grew 24% CC, and excluding

NanoScience grew 13% CC. Revenues from commercial

production and testing applications grew 7% CC.

The Imaging and Analysis (I&A) division accounts for around

66% of Group revenue, and grew 3.1% (Statutory +0.7%). There

was strong growth across the portfolio of product ranges,

including SEM detectors and Raman systems, and good market

acceptance of price increases. These gains were partially offset

by declines in the healthcare and life sciences sector, in part

due to general market weakness, but also due to historical

operational challenges in our Belfast based imaging business

which have impacted performance in FY25. Divisional revenue

has also been impacted by cancelled orders in China (-£7.6m

versus FY24). Organic CC growth excluding China remained solid

at 3.4%.

The Advanced Technologies (AT) division grew revenue by 21.3%

(Statutory +19.5%) benefiting from strong demand for its plasma

products and the revenue pull through of NanoScience orders

placed in FY23 and FY24. AT revenues were also impacted by

the cancellation of orders for the China market in FY24, due to

UK export licence restrictions (-£11.1m versus FY24). Excluding

NanoScience and China, AT revenues grew at 29.0% CC, driven

by a significant step up in plasma equipment shipments.

£m

Imaging &

Analysis

Advanced

Technologies Total

Revenue: 2024 328.1 142.3 470.4

Constant currency growth 10.1 30.3 40.4

Currency (7.7) (2.5) (10.2)

Revenue: 2025 330.5 170.1 500.6

Revenue growth: reported +0.7% +19.5% +6.4%

Revenue growth: organic

constant currency +0.1% +21.3% +6.5%

Geographic revenue growth

On a geographical basis, the US is now the Group’s largest

market, accounting for 28% of revenues. Growth has been strong

in the US, up 30% OCC, due to both NanoScience revenues,

and strong semiconductor performance for both plasma and

materials research tools. US growth excluding NanoScience

was11% OCC.

Whilst China revenue growth suffered from order cancellation

in FY24, markets in the rest of Asia, notably Japan, South Korea,

Singapore and Taiwan have shown significant growth. Europe

growth at 1.9% CC has been held back by a high comparator year

in FY24 in the UK, whereas key markets such as Germany, France,

Italy and the Netherlands have all shown double digit growth.

Total

2025

£m

2024

£m Change Change CC

United States

142.3 111.7 +27.4% +29.6%

China 107. 2 127.4 (15.9%) (14.7%)

Asia (ex. China) 112.7 94.1 +19.8% +23.4%

Europe 115.8 116.1 (0.3%) +1.9%

Rest of World 22.6 21.1 +7.1% +8.5%

500.6 470.4 +6.4% +6.5%

1 CC growth excluding NanoScience +11.3%.

3. R&D

Total R&D expenditure charged to the income statement in

the year was £41.1m, equivalent to 8.2% of sales (FY24: £39.1m;

8.3% of sales). In addition, a further £1.5m of R&D expense was

capitalised (FY24 £0.7m).

4. Adjusted operating profit and margin

Adjusted operating profit of £82.2m (FY24: £80.3m) represents

organic constant currency growth of 10.8% (Statutory +2.4%).

Adjusted operating profit margin was 16.4% (FY24: 17.1%). On an

organic constant currency basis adjusted operating margin was

17.8%, up 70 bps versus the prior year.

The I&A division represents 93% of the Group’s adjusted

operating profit, and it has continued to deliver a strong margin,

despite the challenges in the life sciences market and imaging

business, increasing its OCC margin by 60 bps to 24.7% (Statutory

23.1%). This performance is driven by a combination of product

mix, price increases, and overhead cost reductions.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

The AT division improved profitability substantially in FY25.

Adjusted operating profit for the division was £6.0m, up from

£1.3m in FY24 and a significant reversal from the loss of £2.0m

reported in H1. Profitability has benefited from the operational

leverage associated with higher volumes in both the Plasma

and NanoScience businesses, as well as by a focus on cost,

operational improvements, and leveraging the efficiencies from

the new facility in Severn Beach. As a result adjusted operating

OCC margin has improved to 4.5% (FY24: 0.9%).

£m

Imaging &

Analysis

Advanced

Technologies Total

Adjusted operating

profit: 2024 79.0 1.3 80.3

Constant currency

growth 3.9 6.5 10.4

Currency (6.7) (1.8) (8.5)

Adjusted operating

profit: 2025 76.2 6.0 82.2

Adjusted operating

margin

: 2024 24.1% 0.9% 17.1%

Adjusted operating

margin

: 2025 23.1% 3.5% 16.4%

Adjusted operating

margin

(OCC): 2025 24.7% 4.5% 17.8%

1. Adjusted margin is calculated as adjusted operating profit divided by revenue.

Adjusted margin at constant currency is defined as adjusted operating profit at

constant currency divided by revenue at constant currency.

5. Adjusting items

The following adjusting items are excluded from statutory profit

in order to give a clearer picture of the underlying profitability of

the Group:

• Amortisation of acquired intangibles relates to intangible

assets recognised on acquisitions, being the value of

technology, customer relationships and brands. This value

was slightly up versus the prior year at £9.2m (FY24: £9.1m).

• Impairment of acquired intangibles, where the carrying value

of intangible assets is not supported by forecasts of future

cash flows. The Group recognised a £26.0m charge in the

period, relating to the impairment of acquisition goodwill of

its Andor business (see page 41 under Balance Sheet –

Intangible assets).

• Non-recurring items are expenses which are considered to

be exceptional in nature, and not reflective of underlying

performance in the year. These costs in FY25 were £7.5m

(FY24 £2.2m) and included:

– restructuring costs of £7.8m, of which £4.8m relating to

relocation of the plasma business to Severn Beach

– transaction-related costs of £1.8m

– release of First Light Imaging contingent consideration

(£2.1m) following a review of expected performance versus

the earn out targets agreed at acquisition

• The Group uses derivative products to hedge its short-

term exposure to fluctuations in foreign exchange rates.

Net movements on mark-to-market derivatives in respect

of transactional currency exposures of the Group in future

periods are disclosed in the Income Statement as foreign

exchange and excluded from our calculation of adjusted profit

before tax. In the year this amounted to a charge of £0.3m

(FY24: £0.7m).

• The unwind of discount in respect of contingent consideration

on the acquisition of FemtoTools (£0.6m), reported under Net

Finance Income.

6. Net finance income

Adjusted net finance income for the Group was £1.2m (FY24:

£3.0m). The reduction from last year is largely the result of lower

interest income on reduced cash balances in FY25 (£1.6m; FY24

£3.2m), following capital expenditure at the Severn Beach facility

and acquisitions.

7. Taxation

The adjusted tax charge of £18.2m (FY24: £20.3m) represents

an adjusted effective tax rate of 21.8% (FY24: 24.4%). The tax

charge of £13.8m (FY24: £20.6m) represents an effective tax rate

of 34.7% (FY24: 28.9%). The decrease in the adjusted effective

tax rate is due to historical transactional currency conversion

adjustments related to interbranch dividend payments, as

well as an increase in the rate at which the US deferred tax is

recognised. We expect the adjusted effective tax rate to increase

in FY26 to approximately 25.5%.

8. Earnings per share

Adjusted basic earnings per share increased by 3.1% to 112.4p

(FY24: 109.0p); adjusted diluted earnings per share increased by

3.3% to 111.1p (FY24: 107.5p). Basic earnings per share decreased

by 48.9% to 44.8p (FY24: 87.7p); diluted earnings per share

decreased by 48.8% to 44.3p (FY24: 86.5p).

The number of undiluted weighted average shares increased to

58.0m (FY24: 57.8m).

9. Currency

The Group faces transactional and translational currency

exposure, most notably against the US dollar, euro and

Japanese yen. For the year, approximately 15% of Group revenue

was denominated in sterling, 51% in US dollars, 22% in euros,

9% in Japanese yen and 3% in other currencies. Translational

exposures arise on the consolidation of overseas company

results into sterling. Transactional exposures arise where the

currency of sale or purchase transactions differs from the

functional currency in which each company prepares its

local accounts.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

The Group’s translation and transaction foreign currency

exposure for the full year 2024/25 is summarised below.

£m equivalent Revenue

Adjusted

operating profit

Sterling 72.7 (189.3)

US Dollar 254.5 179.4

Euro 108.6 53.1

Japanese Yen 45.7 28.2

Chinese Renminbi 7.0 3.3

Other 12.1 7.5

500.6 82.2

The headwind to operating profit is due to stronger transactional

sterling currency rates against the US dollar, euro and Japanese

yen exposures versus the hedged and unhedged currency rates

achieved in FY24:

£m

equivalent

FY25

blended rate

FY24

blended rate

Change

US Dollar 1.27 1.23 (3.3%)

Euro 1.17 1.14 (2.6%)

Japanese Yen 191 173 (10.4%)

For the full year FY26, our assessment of the currency impact is,

based on hedges currently in place and forecast currency rates, a

headwind of £9.1m to revenue and £4.4m to operating profit. A one

cent movement in the GBP to USD exchange rate would have an

approximately £0.5m impact on adjusted operating profit.

10. Balance sheet

Intangible assets

The Group’s microscopy and scientific cameras business, Andor

Technology, faced a challenging trading period as a result of

continued healthcare and life science market weakness, loss

of revenues in China, and operational challenges with certain

product lines. Actions have been put in place in to improve the

performance of the business including restructuring, operational

improvements and realigned commercial focus. These plans

are in the early phases of execution, and therefore forecasts at

31 March 2025 for expected future cash flows from the business

give greater weight to recent performance and reflect future

uncertainty over the potential outcomes of those plans. Based

on these forecasts it was determined that Andor’s expected

future cash flows at 31 March 2025 were not sufficient to support

its full carrying value, resulting in a £26.0m impairment of the

acquisition goodwill.

Intangible assets net book value decreased by £16.4m versus

the prior year. This decrease is largely driven by the Andor

impairment and £10.6m of amortisation. This is partially offset

by the acquisition of FemtoTools in June 2024, adding £10.5m of

intangible assets related to trademarks, technology, know-how

and patents, and £9.5m of goodwill.

Property, plant and equipment

Additions to property, plant and equipment were £14.4m in the

year. £9.2m of this was related to investment in the Severn Beach

plasma facility, with £5.8m classed as assets under construction.

At year-end, the total assets under construction balance was

£39.0m (FY24: £33.2m). Property, plant and equipment with a

carrying value of £3.6m were disposed of in the year, of which

£1.8m was related to moving out of the Yatton plasma facility.

The depreciation charge for the year was £5.9m.

Working capital

Working capital increased by £11.2m to £64.3m. The increase

is mainly driven by a £9.9m reduction in FY24 customer

pre-payments balances related to NanoScience quantum

computing systems which were shipped in FY25, moving from

trade payables to trade receivables. Trade receivables also

increased due to the shipment of large equipment in the final

months of the year. Inventories partially offset these movements,

decreasing by £8.8m as a result of normalising inventory levels

following destocking in OEMs, the burn down of the additional

safety stock purchased ahead of the Severn Beach move, and

other operational planning improvements. Approximately £4.2m

of the trade receivables balance was related to sales to the

NanoScience large US quantum computing customer in Q4,

which were settled by the customer in early April.

Pensions

The Group has a defined benefit pension scheme in the UK. This

has been closed to new entrants since 2001 and closed to future

accrual from 2010.

Scheme liabilities decreased to £194.8m (FY24: £223.6m).

Company contributions of £8.7m in the period were offset by

market conditions that reduced the scheme’s assets during the

period to £219.2m (FY24: £239.7m). On an IAS 19 basis, the surplus

arising from our UK defined benefit pension scheme obligations

on 31 March 2025 rose to £24.4m (FY24: £16.1m).

The scheme’s actuarial valuation review, rather than the

accounting basis, determines our cash payments into the

scheme. Whilst the scheme is close to self-sufficiency, the

company has agreed to continue contributions until 2029.

The company is expecting to contribute £9m in FY26.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

The Group Consolidated Statement of Cash Flows is summarised below:

2025

£m

2024

£m

Adjusted operating profit 82.2 80.3

Depreciation and amortisation 12.7 11.0

Adjusted EBITDA

94.9 91.3

Working capital movement (11.2) (24.7)

Loss on disposal of plant, property and equipment 1.3 –

Non-recurring items (7. 5) (2.2)

Equity settled share schemes (0.1) 3.0

Pension scheme payment above charge to operating profit (7.9) (8.0)

Cash generated by operations 69.5 59.4

Add/(deduct):

Interest income 1.0 2.2

Tax paid (19.8) (16.1)

Capitalised development expenditure (1.5) (0.7)

Expenditure on tangible and intangible assets (12.1) (26.5)

Payments made in respect of finance leases (5.5) (4.8)

Free Cash Flow (FCF)

31.6 13.5

Acquisition of subsidiaries, net of cash acquired (15.4) (13.4)

Dividends paid (12.1) (11.4)

Decrease in borrowings (0.8) (1.8)

Net increase/(decrease) in cash and cash equivalents 3.3 (13.1)

Effect of exchange rate fluctuations on cash held (3.5) (2.9)

Closing cash 85.3 85.5

Borrowings (0.8) (1.8)

Net cash 84.4 83.8

1 Adjusted EBITDA is defined as Adjusted operating profit before

depreciation and amortisation of capitalised development costs.

2 Free cash flow is reported before acquisitions or similar corporate

development activity.

11. Cash and liquidity

The Group ended the year with £85.3m in cash and cash

equivalents (£84.4m net cash). Adjusted cash from operations,

including capital expenditure, was £65.7m (FY24: £37.6m)

and represents a cash conversion of 80% (FY24: 47%). Cash

conversion is calculated as adjusted cash from operations

divided by adjusted operating profit. Excluding capital

expenditure relating to our new semiconductor systems facility,

and facility expansion in Belfast in FY24, cash conversion on a

normalised basis was 89% (FY24: 64%).

The improvement in cash conversion is mainly driven by a

lower working capital increase in the year versus the prior year

(FY25: +£11.4m; FY24: +£24.7m). This was partially offset by an

increase innon-recurring costs of £4.9m. Free cash flow (FCF)

has improved significantly to £31.6m in FY25 (FY24: £13.5m).

This is due mainly to the improvement in cash conversion, and

to the reduction in capital expenditure associated with the new

Severn Beach plasma facility. FCF wasused for acquisitions

and to fund a dividend payment of £12.1m (FY24: £11.4m).

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

Reconciliation of cash generated from operations to adjusted

operating cash flow:

2025

£m

2024

£m

Cash generated by operations 69.5 59.4

Add back/(deduct):

Pension scheme payment above charge to

operating profit 7.9 8.0

Non-recurring items 7.5 2.2

Capitalised development expenditure (1.5) (0.7)

Expenditure on tangible and intangible assets (12.1) (26.5)

Payments made in respect of finance leases (5.5) (4.8)

Adjusted cash generated by operations 65.8 37.6

Cash conversion

80% 47%

Normalised cash conversion

89% 64%

1 Cash conversion = Adjusted cash generated by operations divided by adjusted

operating profit.

2 Cash conversion calculated on a normalised basis excludes expenditure in the

year of £7.9m (FY24: £14.1m) relating to the new semiconductor systems facility

in Severn Beach in FY25 and FY24. FY24 also excludes the property acquisition

in Belfast.

The Group maintains an unsecured multi-currency revolving

facility agreement which expires in March 2028, with two

extension options. The facility is supported by four banks and

comprises a euro-denominated multi-currency facility of €95.0m

(£80m) and a US dollar-denominated multi-currency facility of

$150.0m (£116m).

Debt covenants are net debt to EBITDA less than 3.0 times

andEBITDA to interest greater than 4.0 times.

12. Dividend

The Group’s policy on the dividend takes into account changes

to underlying earnings, dividend cover, movements in currency

and demands on our cash. The Board remains confident in the

long-term performance of the business and has proposed a

final dividend of 17.1p (FY24: 15.9p) per share. This results in a

total dividend of 22.2p (FY24: 20.8p) per share, growth of 6.7%. An

interim dividend of 5.1p per share was paid on 7 January 2025.

The final dividend will be paid, subject to shareholder approval, on

19 August 2025 to shareholders on the register as at 11 July 2025.

13. Return on capital employed (ROCE)

ROCE measures effective management of capital employed

relative to the profitability of the business. ROCE is calculated as

adjusted operating profit less amortisation of intangible assets

divided by average capital employed. Capital employed is defined

as assets (excluding cash, pension, tax and derivative assets) less

liabilities (excluding tax, debt and derivative liabilities).

Average capital employed is defined as the average of the

closing balance at the current and prior year end.

ROCE has fallen on a reported basis to 27.1% (FY24: 29.1%), and

on an organic basis, which excludes the impact of acquisitions,

and Andor impairment in the year, to 26.4% (FY24: 30.6%). The

fall in ROCE is due to the increase in capital employed (CE) to

£268.8m from FY23 (FY24: £269.2m; FY23: £219.5m). Aside from

acquisitions, the main drivers are:

• the large investment in the new semiconductor systems

facility in Bristol which has increased property, plant and

equipment between year-end FY23 (included in the FY24

average CE value);

• the significant step up in inventories in FY24 from FY23.

Inventories have reduced in FY25 versus FY24, but remain at

historically high levels due to increases in the level of safety

stock to support the Plasma move to Severn Beach; and

• increased trade receivables due to the volume of high value,

large equipment shipments at year end, including the movement

of NanoScience quantum computing pre-payments from

trade payables to trade receivables.

2025

£m

2024

£m

Adjusted operating profit 82.2 80.3

Amortisation of acquired intangible assets (9.2) (9.1)

Adjusted operating profit after

amortisation of acquired intangible assets 73.0 71.2

Property, plant and equipment 85.6 80.5

Right-of-use assets 29.9 32.4

Intangible assets 121.8 138.2

Long-term receivables 1.0 1.3

Inventories 99.1 108.1

Trade and other receivables 126.2 114.7

Non-current lease liabilities (26.7) (28.6)

Trade and other payables (157.7 ) (166.2)

Current lease liabilities (4.5) (4.8)

Provisions (5.9) (6.4)

Capital employed 268.8 269.2

Average capital employed 269.0 244.4

Return on capital employed (ROCE) 27.1% 29.1%

Return on invested capital (ROIC)

ROIC measures the after-tax return on the total capital invested

in the business. It is calculated as adjusted operating profit

after tax divided by average invested capital. Invested capital

is total equity less net cash, including lease liabilities. Average

invested capital is defined as the average of the closing balance

at the current and prior year end. Oxford Instruments aims to

deliver high returns, measured by a return on capital in excess

of our weighted average cost of capital of 13.4%-14.0%. ROIC

has decreased in the year, due to the same key factors driving

capitalemployed described above.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Finance review continued

2025

£m

2024

£m

Adjusted operating profit 82.2 80.3

Taxation (18.2) (20.3)

Adjusted operating profit after taxation 64.0 60.0

Total equity 376.1 365.7

Less: net cash and lease liabilities (53.2) (50.4)

Invested capital 322.9 315.3

Average invested capital 319.1 295.3

Return on invested capital (ROIC) 20.1% 20.3%

Subsequent events

On 10 June 2025 the Group entered into a binding agreement to

sell our NanoScience business for a total consideration of £60m,

of which £57m is payable on closing and up to £3m is contingent

on future business performance over three years. The deal is

expected to close in Q3 of FY26.

Whilst a sale process was ongoing prior to 31 March 2025, at

that point no binding offer or terms from prospective buyers

had been received and therefore actions to complete the sale

remained highly uncertain. In addition, management were not

committed to sale and given the macro conditions prevailing

at that time a successful sale remained highly uncertain. As a

result, the Directors consider that the IFRS 5 conditions to classify

the NanoScience assets as held for sale were not fully met.

Therefore, no adjustments have been made in FY25 financial

statements in respect of this potential transaction.

Capital allocation

The Group generated £31.6m of free cash flow in FY25, and

held £85.3m in cash and cash equivalents at 31 March 2025.

The Group will prioritise opportunities which deliver incremental

organic growth and remains committed to a progressive

dividend policy, rising in line with underlying earnings. Oxford

Instruments will consider inorganic opportunities where they

offer acompelling strategic and synergy case, delivering

returns above the Group’s strict financial criteria. Alongside this

the Group will consider the buy back of its own shares where

it considers there is a compelling case to create value for

individualshareholders.

In accordance with this policy the Board has approved a return

of capital to shareholders of approximately £50m by means of a

share buyback. In making this decision the Board has considered

the current and future capital needs of the business, as well as

taken into account the potential future proceeds of a sale of

ourNanoScience business.

Forward-looking statements

This document contains certain forward looking statements.

The forward-looking statements reflect the knowledge and

information available to the company during the preparation

and up to the publication of this document. By their very nature,

these statements depend upon circumstances and relate to

events that may occur in the future, thereby involving a degree

of uncertainty. Therefore, nothing in this document should be

construed as a profit forecast by the company.

PAUL FRY

Chief Financial Officer

12 June 2025

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability

Sustainability is central to Oxford Instruments, with

our purpose, values, strategy and products all aligning

around the positive impact we seek to have on our

planet and the societies in which we operate

Through our products and services, we are working to

accelerate the breakthroughs that create a brighter

future for our world. And through our commitment to

operating responsibly, in line with our values, we strive

to operate with the highest standards and integrity.

We take a holistic approach to sustainability, ensuring

that it is embedded throughout the organisation, from

our Board-level Sustainability Committee, joined by all

Board members, to our workforce around the world. We

also seek to embed principles of sustainability in our

interactions with all stakeholders, including customers,

supply chain partners and our local communities.

We are committed to building on past progress and

continuing to challenge ourselves to go further. Our

environmental, social and governance (ESG) strategy

focuses on driving positive action across the following

areas: progress to net zero and environmental impact;

sustainable product stewardship; health and safety;

investing in our people; culture and engagement, ethical

business practices and regulatory financial compliance.

We set out our progress throughout this section.

Environment Social Governance

Our purpose and values-driven

social programme seeks to

uphold our deeply held sense of

responsibility to our employees,

the communities we impact, and

the generations to come. We strive

to create a safe and inclusive

culture where colleagues can

build rewarding careers, and to

be a responsible corporate citizen

everywhere we operate.

Our products and services have

a key role to play in achieving

a more sustainable future. We

are committed to minimising our

own impact on the environment,

reflected in our ambitious net

zero targets: 2030 in our own

operations, and 2045 across our

whole value chain.

We are committed to upholding

the highest ethical standards

in all our interactions with our

colleagues, customers, suppliers,

and the stakeholders in our wider

network. How we run our business

is as important as what we do. We

seek to operate in an inclusive,

responsible and sustainable way,

and with integrity at all times.

For more information /

Pages 47 to 51

For more information /

Pages 61 to 66

For more information /

Pages 67 and 68

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

The way we run our business and the actions we take

throughout our value chain support the following goals:

The United Nations Sustainable Development Goals

provide an ambitious and powerful framework for

companies and other organisations to focus their efforts

and commitments. We fully support all 17 goals, but have

focused our efforts around those goals where we feel most

able to have a positive impact.

Our products contribute toward the following goals:

Sustainability continued

Introduction

We are committed to advancing our positive progress on

sustainability each year. This has been a milestone year on

our environmental sustainability journey. Having made a new

commitment in 2024 to reach net zero in Scopes 1 and 2 by

2030, this year, we addressed Scope 3, setting an interim target

of a 25% absolute reduction in emissions by 2030. This was

followed by the publication of our net zero transition plan in

November 2024, which sets out how we will achieve our goals.

We then successfully submitted our targets for validation by

the Science Based Targets initiative (SBTi), achieving approval

in March 2025. We also submitted to CDP’s climate change

assessment for the first time since 2016, achieving a B rating in

acknowledgment of our commitment and action in this area.

We were pleased to report a strong health and safety (H&S)

performance, with no serious accidents in the year. A small

increase in minor injury reports largely reflected improved

reporting protocols, and we continue to roll out our IOSH-

accredited H&S training programme.

A key focus of our social programme this year has been to

embed our new purpose and ways of working with colleagues

around the world, including incorporating our ways of working

into the annual personal development process, and launching

a suite of engaging collateral to use at sites around the world.

We also carried out our first externally benchmarked global

employee engagement survey.

Our Foundations programme pilot, supporting high-potential

colleagues in their early career, came to a successful

conclusion, and is set to run again in 2025/26. Three cohorts of

our long-running Leadership programme also benefited from

bespoke training, while five cohorts undertook management

essentials training, recognising the importance of effective line

management skills. We continue to extend both the number

of participants and the range of opportunities offered in our

apprenticeship and graduate programmes.

We also secured accreditation from the Living Wage Foundation

in the UK, where more than half of our workforce is based,

reflecting our commitment to wages that help our employees

cope with the cost of living.

Our focus on strong governance underpinned the development

and production of our newly extended Code of Conduct in five

languages (English, Chinese, French, German and Japanese). We

also rolled out an updated and extended compliance training

programme, driving employee awareness through training and

regular communications. Colleagues completed more than

9,600 compliance training courses during calendar year 2024.

For more on our people and governance-centred initiatives, see

pages 61 to 68.

Colleagues were invited to make pledges at an International Women’s Day event at

our High Wycombe site

Our sustainability ratings

CDP climate change:

ISS:

C-

MSCI ESG Ratings:

S&P:

(82nd percentile)

Sustainalytics

ESG Risk Rating:

12.1 Low risk

(13th percentile among

technology hardware

companies)

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability – environment

Strategy and targets

Work has continued across the Group to reduce our

environmental impact. Activities have included the reintroduction

of renewable electricity contracts in the UK, and a number

of smaller behaviour change actions undertaken by our

employee-led Go Green teams. We have also reached the

procurement stage for capital investment projects including gas

boiler replacements and an additional solar array, which will

significantly reduce our Scope 1 and 2 profile.

Earlier this year we were pleased to announce that both our

near and long-term science-based targets had been approved

by the Science Based Targets initiative (SBTi). Our targets now

include both near and long-term targets for scope 1, 2 and 3

emissions. Overall, our SBTi target is to reach net zero across

the value chain by 2045. More details on our interim targets

can be found on the SBTi website.

This long-term commitment

will see us delivering net zero five years ahead of the

UK Government’s commitment.

We have committed to reach net zero (where we add no

incremental greenhouse gases to the atmosphere) across our

own operations (Scopes 1 and 2) by 2030. For Scope 3 we are

committed to reducing our emissions by 25% by 2030. Our 2030

and 2045 targets are against a FY2023/24 baseline.

Overall net zero target

Oxford Instruments plc commits to reach net zero greenhouse

gas emissions across the value chain by 2045.

To ensure our SBTi targets were using our most up-to-date and

accurate data, in line with best practice, we re-baselined our

carbon footprint. This was largely driven by our improved data

gathering, as we identified additional emissions which moved

our footprint by more than 5% from our previous baseline. Most

notable among these was an increase in process emissions from

our Severn Beach site.

We are proud of the role our products play in supporting decarbonisation, and

we are committed to reaching net zero emissions across our value chain by 2045

Plans are already under way to remove the majority of

these emissions through increased control measures and

abatement systems.

Today, our market-based carbon intensity metric for Scopes 1

and 2 stands at 7.76 tonnes CO

e per £million revenue. This is a

decrease from 12.16 tonnes per £million revenue in FY2023/24

primarily as a result of having reinstated REGO-certified

renewable electricity at our UK manufacturing sites.

Transition plan to net zero

In November 2024, we published our net zero transition plan,

created in line with the recommendations of the Transition

Plan Taskforce. This key document sets out how we intend to

hit our 2030 and 2045 targets. We have already begun our

implementation plan:

• Heat decarbonisation – Heating systems are a large

contributor to our Scope 1 emissions. Planning has progressed

to detailed design stage to update the heating systems in

both Belfast and High Wycombe. Both systems will remove

the use of natural gas from the sites, saving a combined 196

tonnes CO

e per year.

• Process emissions – Process emissions have become a

significant part of our Scope 1 footprint from the processes at

our compound semiconductor facility. A significant proportion

of these gases can be abated, and work is already under way

to design these systems.

• Scope 3 emissions – The largest proportion of our emissions

comes from our purchased goods and services. Work began

this year to engage with our key suppliers, sharing our net

zero targets and collecting data around their own carbon

footprint and the work they are doing to reduce it. We also ran

a programme of 22 workshop sessions with product managers

and engineers to help to address emissions arising from

customers’ use of our products. Sustainability considerations are

now fully embedded in our new product introduction process.

Together with the establishment of our SBTi-verified targets, our

plan will help us to drive ambitious and positive change to the

business. As shown, work has already begun to tackle issues

across all emission scopes to ensure we hit our 2030 and 2045

targets. The steps we will take between now and 2045 include:

• implementing our net zero transition plan;

• ensuring that all of our sales, service and manufacturing

operations, wherever possible, are powered by on-site

renewables or electricity backed by renewable energy

certificates, eg the Renewable Energy Guarantee of Origin

(REGO) scheme in the UK. Where this is not achievable,

we will look to move from current sites as leases come up

for renewal;

• prioritising positive environmental attributes when we are

looking for new sales, services or manufacturing facilities;

• looking for opportunities to reduce energy usage at each of

our sites. We will continue to use and invest in energy-efficient

equipment to help reduce the quantity of energy we purchase;

• early replacement of gas and oil boilers (with the Board

setting a target, linked to executive remuneration, to replace

boilers at two UK sites in the next three years (see page 133);

• switching fleet vehicles to electric rather than internal

combustion engines; and

• continuing to engage with our supply chain to understand

their decarbonisation strategy.

1 https://sciencebasedtargets.org/target-dashboard.

2 Figures have been rebaselined in FY2024/25.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Streamlined Energy and Carbon Reporting (SECR)

We have outlined our emissions and energy usage across the

whole Group, accounting for all Oxford Instrument sites.

Absolute location-based Scope 1 and 2 emissions increased by

5.5% during the year. The main reason for this was an increase

in electricity usage, as well as an increase in fuel consumption.

These increases relate to the continued ramping up of our

Severn Beach compound semiconductor facility, our first full year

of data from First Light imaging and the addition of FemtoTools

to the portfolio.

Sustainability – environment continued

Scope 1 emissions have reduced by 1.5% due to a reduction

in process emissions. Scope 2 market-based emissions have

decreased significantly (75.5%) due to the reinstatement of

renewable energy contracts at all our UK sites this year. As

discussed in last year’s Annual Report, these had ceased in

late 2023 due to our previous supplier exiting the market and

withdrawing its renewable energy option. UK contracts were

therefore retendered as soon as possible, with all UK sites

reverting to REGO-certified electricity from April 2024.

In the near term, we will continue to purchase renewable energy

certificates to reduce our market-based Scope 2 emissions. In

the longer term we will explore further development of on-site

generation and power purchase agreements (PPAs) and pursue

energy efficiency opportunities.

We report our location-based emissions and energy intensity

as tonnes CO

e/£m revenue and kWh/£m revenue. Emissions

intensity has reduced by 0.8% this year, while energy intensity

has increased by 10.6%.

GHG emissions (tCO

2025 2024

UK Global (exc. UK) Group total UK Global (exc. UK) Group total

Scope 1 fugitive emissions (tCO

e) 26 – 26 1 1 2

Scope 1 process emissions 2,692 – 2,692 2,935 0 2,395

Scope 1 combustion emissions (tCO

e) 486 104 590 372 51 423

Total Scope 1 (tCO

e) 3,204 104 3,308 3,308 52 3,360

Scope 2 location-based (tCO

e) 2,767 761 3,528 2,315 803 3,118

Scope 2 market-based (tCO

e) 0 578 578 1,715 647 2,362

Total Scope 1 + 2 location-based (tCO

e) 5,971 865 6,836 5,623 855 6,478

Total Scope 1 + 2 market-based (tCO

e) 3,204 682 3,886 5,023 699 5,722

Upstream Scope 3 (tCO

e) – – 81,144 – – 81,023

Downstream Scope 3 (tCO

e) – – 25,002 – – 31,371

Total Scope 3 (tCO

e) – – 106,146 – – 112,394

Total Scope 1, 2 & 3 location-based (tCO

e) – – 112,982 – – 118,872

Total Scope 1, 2 & 3 market-based (tCO

e) – – 110,032 – – 118,116

Scope 1 + 2 location-based GHG emissions intensity ratio (per Group turnover) £m – – 13.66 – – 13.77

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Energy consumption (kWh)

2025 2024

UK Global (exc. UK) Group total UK Global (exc. UK) Group total

Total renewable fuels consumption (kWh) 0 0 0 0 0 0

Liquid fuel (diesel, petrol, fuel oil) 1,094,564 151,926 1,246,490 662,253 12,706 674,959

Gaseous fuel (natural gas) 1,069,404 364,483 1,433,887 1,091,919 261,036 1,352,955

Total non-renewable fuels consumption (kWh) 2,163,968 516,409 2,680,377 1,754,172 273,742 2,027,914

Total fuels consumption (kWh) 2,163,968 516,409 2,680,377 1,754,172 273,742 2,027,914

Consumption of purchased or acquired electricity renewable (kWh) 13,364,131 488,661 13,852,792 6,485,154 395,202 6,880,356

Consumption of purchased or acquired electricity non-renewable (kWh) – 1,872,295 1,872,295 4,695,603 1,893,110 6,588,713

Consumption of self-generated non-fuel renewable energy (solar) (kWh) 28,867 183,222 212,089 – 255,139 255,139

Total electricity consumption (kWh) 13,392,998 2,544,178 15 ,937,176 11,180,757 2,543,450 13,724,207

Consumption of purchased or acquired heating, steam and cooling non-renewable (kWh) – 250,034 250,034 – 252,243 252,243

Consumption of purchased or acquired heating, steam and cooling renewable (kWh) – 49,673 49,673 – 64,967 64,967

Total renewable energy consumption (kWh) 13,392,998 721,556 14,114,554 6,485,154 715,307 7,200,461

Total non-renewable energy consumption (kWh) 2,163,968 2,638,738 4,802,706 6,449,775 2,419,094 8,868,869

Total energy consumption (kWh) 15,556,966 3,360,294 18,917,260 12,934,929 3,134,402 16,069,330

% renewable electricity from total electricity 100% 26% 88% 58% 16% 50%

Energy intensity ratio (per Group turnover) £m – – 37,789 – – 34,161

Sustainability – environment continued

1. This section has been prepared for the reporting period of 1 April 2024 to 31 March 2025. We report on all of the material emission sources in line with an operational control approach method, as required in Part 7 under the Companies Act 2006 (Strategic

Report and Directors’ Reports) Regulations 2013 and under the UK’s Streamlined Energy and Carbon Reporting (SECR) requirements.

Our energy consumption and emissions data is reported in accordance with the reporting requirements of the Greenhouse Gas Protocol (‘GHG Protocol’), Revised Edition and the Environmental Reporting Guidelines, including the SECR guidance dated March

2019. The GHG Protocol standard covers the accounting and reporting of seven greenhouse gases (GHGs) covered by the Kyoto Protocol.

We report on Scopes 1 and 2 GHG emissions, as well as select Scope 3 emissions, providing a detailed breakdown of the Group’s emissions by type and intensity measurement.

In our calculations, we have taken into account instances where sites generate their own renewable electricity or purchase electricity backed by contractual instruments, such as Renewable Energy Guarantee Origin (REGO). Consistent with the Greenhouse

Gas Protocol, we regularly review our reporting procedures in response to changes in business structure, calculation methodologies, and data accuracy and availability. Consequently, we have restated our Scope 1 and 2 2024 emissions data to reflect

updated emissions factors and data availability.

For Scope 1 emissions, we have utilised emission factors from the UK Government’s GHG Conversion Factors for Company Reporting 2024 (provided by the Department for Environment, Food and Rural Affairs (DEFRA)). Scope 2 emissions, calculated using the

GHG Protocol location-based method, have been determined using country-specific emission factors from the International Energy Agency (IEA) and DEFRA for UK sites. For Scope 2 emissions calculated using the GHG Protocol market-based method, we

have used residual mix emission factors from the Association of Issuing Bodies (AIB) 2022 where applicable. In cases where residual mix emission factors were not available, we employed country-specific emission factors from the IEA in accordance with GHG

Protocol guidelines.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Scope 3 emissions

Our Scope 3 emissions are still our most significant source of

emissions, contributing 94% of our total emissions.

We calculated all applicable Scope 3 categories for our carbon

footprint, with five categories not applicable to our business. In

line with the Greenhouse Gas Protocol, we continue to review

our reporting in light of any changes in business structure,

calculation methodology and the accuracy or availability of data.

Due to recognised inherent uncertainties in calculating Scope 3,

we have adopted a continuous improvement approach. We will

continue to review our processes and disclose any restatements

in a timely and transparent manner. Below is a description of our

most material Scope 3 categories for our 2024/25 footprint.

Purchased goods and services (65.5% of Scope 3) – We use

purchase data by spend of raw materials, components and

services. We have continued to use a ‘spend-based’ approach

which allocates emissions to an amount spent on specific

commodities. While this method contains a certain degree

of uncertainty, it provides a view of our hotspots in our supply

chain emissions. As more granular data becomes available

through engagement with our supply chain, we will refine this

methodology and look to incorporate supplier-specific emissions.

Use of sold products (23.3% of Scope 3) – We calculate the

lifetime energy use for representative products of our key product

ranges, using our annual sales volume, average power use per

product and estimated hours in use over life. Emissions factors

for our key sales regions are applied to this data.

Upstream transportation and distribution (4.3% of Scope 3) –

All inbound, intragroup and outbound logistics paid for by the

Group are mapped against the transportation mode, weight

anddistance travelled to calculate emissions on a

well-to-wheel basis.

Category Description Status

2025

Scope 3 emissions

(tCO

2024

Scope 3 emissions

(tCO

Purchased goods and services Relevant, calculated 69,501 71,046

Capital goods Relevant, calculated Inc. in category 1 Inc. in category 1

Fuel- & energy-related activities Relevant, calculated 1,181 545

Upstream transportation and distribution Relevant, calculated 4,553 3,150

Waste generated in operations Relevant, calculated 15 13

Business travel Relevant, calculated 4,447 4,825

Employee commuting Relevant, calculated 1,447 1,445

Upstream leased assets Not relevant, not applicable – –

Upstream emissions 81,144 81,023

Downstream transportation and distribution Relevant, calculated 310 326

Processing of sold products Not relevant, not applicable – –

Use of sold products Relevant, calculated 24,689 31,034

End-of-life treatment of sold products Relevant, calculated 3 11

Downstream leased assets Not relevant, not applicable – –

Franchises Not relevant, not applicable – –

Investments Not relevant, not applicable – –

Downstream emissions 25,002 31,371

Total Scope 3 106,146 112,394

Sustainability – environment continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Environmental management and legislation

As a Group, we are committed to strong environmental

management and to ensuring compliance with environmental

legislation in the countries where we operate. We maintain

certification to ISO 14001 at all our UK manufacturing sites.

No environmental fines or penalties have been placed on the

Group in the last three years. Some of the primary frameworks

which drive our environmental compliance actions are as follows:

• Waste Electronic and Electrical Equipment (WEEE) Directive;

• Restriction on the use of Hazardous Substances (RoHS)

regulations;

• Registration, Evaluation, Authorisation of Chemicals (REACH)

Directive; and

• European Waste Framework Directive.

Water and waste

Water withdrawal and waste data has been collected across

the Group from sites with independent water supplies and direct

control of their waste collection services. This includes allthe

primary UK manufacturing sites, which account for 83% of

Grouprevenue.

Some of our operations are in regions with high or extremely high

levels of water stress. However, water is not seen as a material risk

as it is not used significantly as part of our production processes.

In total the Group recorded 33,835 m

of water withdrawal

(2023/24: 10,553m

) and produced 33,835 m

of water discharged.

UK sites are sending zero waste to landfill; our waste from these

sites is either recycled or used at energy from waste facilities to

generate electricity. We are committed to reducing the quantity

of hazardous waste we produce.

Total waste – treatment kg % split of waste

Recycled 122,261 29%

Landfill 11,595 3%

Energy from waste 290,476 69%

Total 424,322

Hazardous vs non-hazardous kg % split of waste

Hazardous 12,412 3%

Non-hazardous 411,920 97%

Total 424,322

Water m

Intensity ratio

(per Group turnover)

£m

Withdrawal 33,835 67.59

Discharge 33,835 67.59

Sustainable product development

Oxford Instruments provides academic and commercial

organisations worldwide with market-leading scientific

technology and expertise across our key market segments:

materials analysis, semiconductors, and healthcare &

life science. Our Imaging & Analysis division develops,

manufactures and services microscopes, scientific cameras,

analytical instruments and software. Our Advanced Technology

division develops, manufactures and services compound

semiconductor fabrication equipment, cryogenic and

superconducting magnet technology and X-ray tubes.

Our new product introduction (NPI) process considers sustainable

design alongside customer and market demands. This will allow

us to continue to produce technologies that enable and facilitate

the transition to a low-carbon economy.

Our NPI process considers the sustainability attributes of new

products from the feasibility and design stage through to

development, launch and scale up. Some of the key sustainable

design considerations for reducing product-related emissions

include: seeking recycled or low emission raw materials with

suitable technical properties, reducing the weight and number

of components in our products, and enhancing their overall

efficiency during the use phase.

Sustainability – environment continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Introduction

In tandem with our net zero commitment, this report addresses

our climate governance and describes how we integrate climate

risks and opportunities into our risk management, strategic

planning, and decision-making, in line with our ambition to

achieve net zero emissions across Scopes 1 and 2 by 2030,

and across Scopes 1, 2 and 3 by 2045.

As a global manufacturer of high-technology products,

mitigating, adapting and responding to the impacts of climate

change is central to our strategy, both in terms of how we

operate our business, and in terms of the key role our products

and services play in the technology pathway to enable the

transition from fossil fuels to a low-carbon economy. This year,

in addition to having our emissions targets SBTi validated and

publishing our net zero transition plan, we have reviewed the

risks and opportunities that we identified last year, taking into

account any changes to impact or likelihood over the past year.

Compliance statement

For clarity around compliance of the following information

with the TCFD framework, and requirements arising from

UK Listing Rule 6.6.6(8), we consider our disclosure to be

consistent with all TCFD recommendations and recommended

disclosures as detailed in ‘Recommendations of the Task

Force on Climate-related Financial Disclosures’ (2017) and the

additional guidance as set out in the 2021 Annex, ‘Implementing

the Recommendations of the Task Force on Climate-related

Financial Disclosures’ and with the climate-related financial

disclosure requirements under the Companies (Strategic Report)

(Climate-related Financial Disclosure) Regulations 2022 (CA

414CB), as shown in the TCFD and CFD cross reference and

disclosure consistency summary opposite.

Sustainability – TCFD statement

TCFD pillar Recommended disclosure Disclosure location CA 414CB

Governance: Disclose the

organisation’s governance

around climate-related risks and

opportunities

a. Describe the Board’s oversight of climate-related risks and

opportunities.

Page 53 (a)

b. Describe management’s role in assessing and managing

climate-related risks and opportunities.

Page 54 (a)

Strategy: Disclose the actual

and potential impacts of climate-

related risks and opportunities

on the organisation’s businesses,

strategy, and financial planning

where such information is material

a. Describe the climate-related risks and opportunities the

organisation has identified over the short, medium, and long

term.

Pages 56 to 59 (d)

b. Describe the impact of climate-related risks and opportunities

on the organisation’s businesses, strategy, and financial

planning.

Page 60 (e)

c. Describe the resilience of the organisation’s strategy, taking

into consideration different climate-related scenarios,

including a 2°C or lower scenario.

Page 60 (f)

Risk management: Disclose

how the organisation identifies,

assesses, and manages climate-

related risks

a. Describe the organisation’s processes for identifying and

assessing climate-related risks.

Pages 54 to 55 (b)

b. Describe the organisation’s processes for managing climate-

related risks.

Page 55 (b)

c. Describe how processes for identifying, assessing, and

managing climate-related risks are integrated into the

organisation’s overall risk management.

Page 55 (c)

Metrics and targets: Disclose the

metrics and targets used to assess

and manage relevant climate-

related risks and opportunities

where such information is material

a. Disclose the metrics used by the organisation to assess

climate-related risks and opportunities in line with its strategy

and risk management process.

Page 60 (h)

b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3

greenhouse gas (GHG) emissions, and the related risks.

Pages 47 to 52 (h)

c. Describe the targets used by the organisation to manage

climate-related risks and opportunities and performance

against targets.

Pages 47 to 51, 60 (g)

Task Force on Climate-related Financial Disclosures (TCFD) Statement for the year ended 31 March 2025.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk

Committee

Remuneration

Committee

Board Sustainability

Committee

Governance

Board level

The Board of Directors has ultimate responsibility for the

oversight of climate change-related issues and is supported by

its Committees (primarily the Sustainability Committee, the Audit

and Risk Committee and the Remuneration Committee), the

Senior Leadership Team, the Sustainability Leadership Forum

(SLF), and the wider leadership team. Climate change-related

considerations are embedded throughout our governance

structure, and at every level across the organisation, as set

out in the graphic and explained in more detail below. The

Board engages regularly with a range of external advisers and

internal subject matter experts on environmental legislation,

decarbonisation and climate risk.

The Group’s environmental strategy and the management of

climate-related risks and opportunities is set and directed by

the CEO and the Senior Leadership Team. Any major capital

expenditure, including climate-related initiatives such as solar

arrays or energy efficiency upgrades to sites, is approved by the

CEO and CFO and, if required, the Board.

The Board, through its Sustainability Committee (comprising all

the Non-Executive Directors), provides oversight and governance

over environmental strategy, including monitoring progress to

SBTi-aligned net zero targets through its review of emissions

data, and assessing how these are being managed. The

Sustainability Committee meets at least three times a year.

The Audit and Risk Committee provides oversight and

governance in relation to climate change-related risks and

opportunities, while the Remuneration Committee is responsible

for setting and overseeing climate change-related remuneration

incentives, together with any other sustainability-related

incentives. The current climate-related executive remuneration

objectives can be found on pages 132 to 134. The Sustainability

Committee in turn provides strategic guidance and oversight to

the management-level SLF primarily through the attendance of

relevant SLF members at the Committee’s meetings.

Sustainability – TCFD statement continued

Oxford Instruments plc Board

Senior

Leadership

Team

Business unit and

regional leaders

Go Green teams

Management

of climate

risks and

opportunities

Energy

use and

reporting

Target setting

and progress

towards net zero

Product

design

Supply

chain

Waste

management

Communications

and engagement

Sustainability Leadership Forum

Climate-related governance framework

Note to graphic: Arrows indicate two-way transfers of information and guidance between forums.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Management level

The SLF is a cross-functional forum, chaired by the Chief HR

Officer, with a remit across the full spectrum of sustainability,

including matters relating to environment, social and

governance. It holds responsibility for environmental issues at a

management level, including identifying and assessing climate-

related risks and opportunities and the delivery of the Group’s

environmental strategy. The Group’s science-based emissions

targets were also reviewed by the SLF before recommending

to the Board and CEO. Representatives of the SLF attend

Sustainability Committee as required to share strategic updates,

and seek the Board’s input on them. The SLF meets at least

quarterly, and is primarily responsible for detailed development

of strategy, and the assessment, management and tactical

delivery of the environmental remit.

Its membership includes functional heads and subject matter

experts, who lead workstreams on:

• the management of climate risks and opportunities;

• energy use and reporting;

• development of target setting and progress towards net zero;

• product design;

• supply chain;

• waste management and recycling; and

• communications and engagement.

SLF members lead liaison with external consultant CEN-

Group on climate, energy and progress to net zero. In addition,

members monitor the KPIs outlined in the Metrics and Target

section on page 60.

A key part of the SLF’s remit, working in collaboration with the

Senior Leadership Team, is to foster two-way engagement with

business units, regional leadership and Go Green teams to drive

and accelerate Oxford Instruments’ progress towards net zero

and our management of climate risks and opportunities. Our Go

Green Initiative has been active in the UK since the early 2000s.

Following its extension to become a global network of 12 teams

in 2024, it has driven further progress towards our 2030 net zero

target for Scopes 1 and 2 through projects targeting reductions

in energy, waste, water and travel. Projects have included

behaviour change projects along with providing assistance with

larger infrastructure programmes.

Risk management

Our process for identifying and assessing

climate-related risks

As a principal risk, climate-related risks and opportunities

are identified and assessed in line with Oxford Instruments’

processes for wider enterprise risk management. This allows

the importance of climate-related risks and opportunities to

be compared with other risks and opportunities. All physical

and transition risk categories (current and emerging) outlined

by the TCFD are considered by Oxford Instruments, regardless

of whether they occur within our operations, upstream or

downstream of the Group. Our approach to identifying and

assessing risks and opportunities is set out in detail in the

Risk Management section on pages 69 to 78 of the Annual

Report 2025.

Relevant risks and opportunities are identified with help from

external consultants, CEN-Group, and involve collaboration with

key internal stakeholders such as senior management, legal

and regulatory, product management, and health and safety

functions. As part of this process, we carry out horizon scanning

to identify potential threats, particularly regulatory changes,

and any emerging risks and opportunities, which allows for

better preparedness to support decision making. We consider

climate-related risks and opportunities across the short, medium

and long term, with these timeframes defined on page 55.

Generally, transition risks are considered at a macro level by

the Group in collaboration with internal stakeholders and senior

management, while physical risks are typically more granular

and therefore more relevant at a business unit and site level.

Any new regulatory requirements are implemented as they arise,

and further actions taken as appropriate.

As with all other Group risks, climate risks and opportunities

are assessed on a 4x5 matrix, which incorporates an

assessment of both Likelihood (Highly Unlikely to Highly Likely)

and Impact (Insignificant to Severe

). The financial impact of a

risk is defined below.

Financial impact

Insignificant Notable Significant Major Severe

Financial

impact of

250k

Financial

impact of

250k–

£1m

Financial

impact of

£1m–

£2m

Financial

impact of

£2m–

£5m

Financial

impact of

> £5m

1. Likelihood is a measure of the risk occurrence while impact is a measure of the

combination of financial, reputational and compliance impacts.

2. Materiality limits are set in line with the Group’s financial statement materiality

levels. Last year Group financial materiality was £3.5m based on 5% of profit

before tax.

Through this assessment, risks are assigned a Risk Score and

classified as either Low, Moderate, High or Significant. Risks that

are classified as High or above are reported to the Group for

further assessment. This process allows prioritisation of risks and

ensures that the significance and scope of climate-related risks

are considered in relation to non-climate-related risks.

Sustainability – TCFD statement continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Climate-related risks scored as High or above are reflected in

the Group risk register, which is reported to the Audit and Risk

Committee on a quarterly basis. Risks below this threshold are

still monitored and considered for future review. The decision to

tolerate, transfer or treat a risk is determined by the outcome

of the Risk Score; higher scoring risks need to be managed to

bring the risk impact back in line with the Group’s appropriate

risk appetite. Action plans for each risk are outlined in the risk

these actions.

Additional information regarding each risk and opportunity

has been elaborated upon, including an assessment of

their implications, including but not limited to financial and

reputational implications, strategic responses, associated

costs, and the variability within climate-related scenarios,

where feasible. This detailed analysis, coupled with evaluations

of impact and likelihood, facilitates the determination of

appropriate risk responses, such as mitigation, acceptance, or

control. Consequently, resources can be allocated effectively

to address the most consequential climate-related impacts,

while other risks necessitate additional scrutiny or are deemed

acceptable within the Group’s customary risk tolerance.

Strategy

Climate-related risks and opportunities

Our approach to managing climate-related risks and leveraging

opportunities is incorporated into our business strategy. In

2025, we have reviewed and refined the climate-related risks

and opportunities we identified as part of our previous climate

scenario analysis in 2024. This has ensured we are aware of any

new climate-related risks and opportunities that have become

relevant to Oxford Instruments throughout the year, and also that

we understand whether the impact or likelihood of any previous

risks or opportunities has changed.

Transition risks and opportunities

The TCFD defines transition risks in four categories (Policy and

Legal, Market, Technology, and Reputation) and transition

opportunities in five categories (Resource Efficiency, Energy

Source, Products & Services, Markets and Resilience). These

categories were considered as part of the transition risk

assessment. Risks and opportunities identified in these

categories were ranked, with only the most significant being

reported below. Short, medium and long-term time horizons

defined below were used as part of this assessment to identify

the impact of climate on our business strategy.

Impact time horizon Year from Year to Rationale

Short term 2025 2028 In line with the existing risk management time horizon and

specific business plan strategy.

Medium term 2028 2035 Encompasses Oxford Instruments’ near-term emission targets,

set at 2030.

Long term 2035 2050 Encompasses the Group’s net zero by 2045 target, the UK

Government’s net zero by 2050 target and the useful life of the

organisation’s assets.

The following International Energy Agency climate scenarios

have been used to perform scenario analysis on our transition

risks and opportunities.

• Net Zero 2050 (NZE): a narrow but achievable pathway for

the global energy sector to achieve net zero CO

emissions by

2050. This scenario meets the requirement for a ‘below 2°C’

scenario and is used as a positive climate pathway. NZE also

informs the decarbonisation pathways used by the SBTi.

• Stated Policies Scenario (STEPS): This scenario represents

projections based on the current policy landscape and is

used as a base case pathway. Global temperatures rise by

around 2.5°C by 2100 from pre-industrial levels, with a

50% probability.

Sustainability – TCFD statement continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk Risk description Risk type

Potential impact

on the business

Response/actions we are taking

and how they are managed KPIs

NZE scenario STEPS scenario

Scenario implications

2028 2035 2050 2028 2035 2050

Current and

emerging

environmental

regulation

and increasing

reporting

requirements

Increased exposure to

environmental regulation

– such as regulation

on Perfluoroalkyl and

Polyfluoroalkyl Substances

(PFAS).

Policy

and legal

Rise in material

prices for switching to

compliant products

or disruption to

production if unable to

react in sufficient time.

Could also result in

component/process

obsolescence.

We have product compliance processes in

place to manage the regulatory environment.

We use existing processes to meet Restriction

of Hazardous Substance (RoHS) and

Registration, Evaluation, Authorisation and

Restriction of Chemicals (REACH) requirements,

which remain appropriate to manage

future changes in standards. Further, our

new product development process considers

environmental regulation.

• Frequency of

horizon scanning

for new regulation

The pace and

magnitude of regulation

would increase more

substantially under

NZE – but no foreseen

long-term change in risk

exposure between NZE

and STEPS, given our

mitigation processes.

The global regulatory landscape

for ESG issues is changing

rapidly, and uncertainty remains

with respect to the adoption of

ISSB reporting standards, and

the scale and timing of CSRD

and CS3D. Failure to keep up

with emerging regulation could

increase costs of compliance.

Policy

and legal

Penalties for non-

compliance with

regulation. Further,

cost of compliance

could increase

through being late to

address regulation.

Oxford Instruments has dedicated internal

risk, legal and environmental management

resource, as well as investing in external

consultancy, to ensure that we are aware of,

and remain compliant with, legislation. Further,

we implement any new regulatory requirements

as they arise. Our certified ISO 14001 systems

at our four UK manufacturing sites support our

mitigation of climate risk.

• Percentage of

sites with ISO

14001 certification

The pace and

magnitude of regulation

would increase more

substantially under

NZE – but no foreseen

long-term change in risk

exposure between NZE

and STEPS, given our

mitigation processes.

Price inflation

in the value

chain

Value chain exposure to carbon

pricing impacts. Globally,

there is an increase in carbon

pricing mechanisms – both

policy and market instruments

– for example Carbon Border

Adjustment Mechanism (CBAM)

within the UK and the EU.

Our suppliers may be exposed

to carbon pricing within their

own operations.

Policy

and legal

Potential of higher

supply chain costs

through increased

rawmaterial prices.

As part of our net zero plan, we are aiming for

a 25% reduction in Scope 3 by 2030 and net

zero across the value chain by 2045, thereby

mitigating the impacts of carbon pricing

on our value chain. Our net zero transition

plan highlights key levers to reduce supply

chain emissions. We are engaging with our

key suppliers on their carbon footprint via

surveys, requesting information on any carbon

reduction targets and programmes that they are

undertaking to reduce their carbon footprint.

• Scope 3 –

category 1, 4

emissions

• Global carbon

prices

Net risk

= zero;

company

plans

to be net

zero by

2045

Net risk

= zero;

company

plans

to be net

zero by

2045

Exposure is likely to be

greater under NZE due

to the higher cost of

carbon and increased

global implementation

of carbon pricing

mechanisms.

Global supply chains are

implementing more expensive

production methods and

changing raw materials to

facilitate decarbonisation,

although the extent to which

increased costs will be passed

on is largely unknown.

Market Potential of higher

supply chain costs.

Oxford Instruments maintains close relationships

with key suppliers. Product Development and

Strategic Sourcing teams identify and evaluate

viable alternatives in materials and processes

and work closely with key suppliers to deliver

supply chain solutions.

• Percentage of

supply chain

spend with

decarbonisation

dialogue

• Percentage of

suppliers engaged

to collect

emissions data

Change is more rapid

under NZE compared

with STEPS. Pricing

implications under NZE

are also more significant.

Sustainability – TCFD statement continued

Transition risks and opportunities

Transition risks identified

Significant risk/opportunity

Report to Group

High risk/opportunity

Report to Group

Moderate risk/opportunity

Do not report to Group mitigation

plan expected to be in place

Low risk/opportunity

Do not report to Group

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk Risk description Risk type

Potential impact

on the business

Response/actions we are taking

and how they are managed KPIs

NZE scenario STEPS scenario

Scenario implications

2028 2035 2050 2028 2035 2050

Increasing

stakeholder,

regulatory

and reporting

expectations

Key stakeholders are demanding

sustainability performance from

Oxford Instruments.

Reputation Reputational damage

that could result in

loss of customers and

shareholders and

reduced access to

capital.

Board-level scrutiny and oversight, and an

organisation-wide focus on addressing the risks

and opportunities arising from climate change,

together with a focus on impact reporting, wider

communications and stakeholder engagement.

Our net zero transition plan and SBTi-approved

targets reduce exposure to this risk and set out

our clear pathway to net zero.

• Rating agency

scores

Higher expectations of

stakeholders in short

to medium term under

NZE. Oxford Instruments’

emissions targets will

even out risk exposure

under both scenarios in

the medium to long term.

Transition opportunities identified

Opportunity Opportunity description

Opportunity

type

Potential impact

on the business

Response/actions we are taking

and how they are managed KPIs

NZE scenario STEPS scenario

Scenario Implications

2028 2035 2050 2028 2035 2050

Investment

in R&D for a

low-carbon

economy

The transition to a low-carbon

economy requires significant

investment in R&D for more

sustainable technologies.

Innovation and development

in technology areas such as

batteries are critical for the

transition to a low-carbon

economy.

Products

and services

Increased revenue Our products and services play a key role

in the technology pathway to enable the

transition from fossil fuels to a low-carbon

economy. Our enabling technologies, such as

materials analysis solutions, and semiconductor

equipment, help customers address these

challenges.

• Low-carbon

market segments

growth

• Industry

investment in low-

carbon R&D

Under NZE, there is

significant investment

in renewables and

alternative technologies.

Slower change under

STEPS.

In-house R&D and our new

product development process

has the potential to address

the need for products with

sustainability credentials,

eg energy-efficient products.

Products

and services

Increased revenue Our new product development process takes

environmental considerations into account.

Developments in our semiconductor equipment

are implicitly geared towards energy efficiency,

while our materials analysis instrumentation

supports battery development and analysis, and

the development and optimisation of renewable

energy technologies, and more sustainable

structural materials.

• Internal R&D

investment

• Scope 3 category

11, 12 emissions

Under NZE, there is

significant investment

in renewables and

alternative technologies.

Slower change under

STEPS.

Proactive collaboration with

suppliers to drive low-carbon

innovation helps improve the

sustainability credentials of

ourproduct portfolio.

Products

and services

Increased revenue We have been directly engaging with key

suppliers to understand the existing mechanisms

they are using to reduce their carbon footprint,

and subsequently to embed material and energy

efficiencies into the products we purchase.

• Number of

suppliers carbon

data obtained

from Scope 3

– category 1, 11

emissions

Under NZE, more

significant investment

in renewables and

alternative technologies.

Slower change under

STEPS.

Transition risks identified continued

Sustainability – TCFD statement continued

Significant risk/opportunity

Report to Group

High risk/opportunity

Report to Group

Moderate risk/opportunity

Do not report to Group mitigation

plan expected to be in place

Low risk/opportunity

Do not report to Group

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Opportunity Opportunity description

Opportunity

type

Potential impact

on the business

Response/actions we are taking

and how they are managed KPIs

NZE scenario STEPS scenario

Scenario Implications

2028 2035 2050 2028 2035 2050

Services that

facilitate the

reduction

of carbon

emissions and

deliver value

for customers

Remote Services Solutions is

a developing service across

the Group. This service area

not only provides an area for

growth but also allows for

reduction of emissions in our

own operations and for our

customers.

Products

and

services

Increased revenue

and decreased

transport cost and

emissions

Almost all our products are already shipped

with remote connectivity and we are building

business system infrastructure to enable

remote service capabilities.

• Revenue from

remote services

Slightly increased

opportunity under NZE

due to additive effect

of organisation seeking

carbon reduction

opportunities.

Local sourcing and strategic

placement of services delivers

efficiency to customers and

allows Oxford Instruments to

reduce logistics travel.

Resource

efficiency

Decreased transport

cost and emissions

We are engaging in strategic building of

capabilities and services to deliver efficiency to

customers. Load optimisation in logistics is also

part of this strategy. We continue to look for

opportunities in this area.

• Scope 3 –

category 4, 9

emissions

Slightly increased

opportunity under NZE

due to additive effect

of organisation seeking

carbon reduction

opportunities.

Operational

energy and

carbon

reductions

Obtaining renewable electricity

through renewable electricity

certificates (RECs) and power

purchase agreements (PPAs)

reduces reliance on local grid

and helps to reduce Scope

2 emissions as an interim

measure whilst exploring

opportunities to reduce energy

usage.

Energy

source

Reduced costs and

Scope 2 emissions.

Renewable electricity

can also provide

operating cost

savings and reduce

operational exposure

to carbon pricing.

Our current renewable energy programme

utilises REGO-certified or REGO-equivalent

certifications of renewable electricity. We make

use of solar arrays on our Severn Beach and

Scotts Valley manufacturing sites, along with

our Tokyo office. We are investigating adding

additional renewable generation capacity to

suitable sites.

• Scope 2 market-

based emissions

• Percentage

of renewable

electricity out of

total electricity

Greater availability of

supply under NZE. STEPS

lags slightly, reduced

availability of REC.

Resource

efficiency

Internally Oxford Instruments

can implement resource

efficiency programmes to

improve waste, water use and

energy savings.

Resource

efficiency

Reduced costs and

emissions

Group-wide, we are continually looking for

opportunities to embed resource efficiency

into our operations. We are in the process

of replacing gas boilers at Belfast and High

Wycombe with air source heat pumps, with

the aim of these entering operations by

FY2026/27. Several other operational efficiency

programmes to reduce waste in manufacturing

have been implemented in the fiscal year. We

also seek to invest in long-term, alternative

technologies as they become suitable and

economically feasible.

• Scope 1 and

Scope 2 (location-

based) emissions

• Total waste

• Total water

Greater exposure

under NZE due to more

investment in resource

efficient products and

services.

Transition opportunities identified continued

Sustainability – TCFD statement continued

Significant risk/opportunity

Report to Group

High risk/opportunity

Report to Group

Moderate risk/opportunity

Do not report to Group mitigation

plan expected to be in place

Low risk/opportunity

Do not report to Group

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Physical risks

The frequency of physical climate-related impacts is expected

to increase in the future through an increased frequency and

severity of extreme weather events. Oxford Instruments has used

a location risk tool to assess the Group’s sites and key suppliers’

current and future risk exposure to climate-related disruptions.

Sites have been assessed for both acute and chronic physical

risks, including potential risks such as drought stress, tornadoes,

storms, sea level rise and flooding events, among other hazards.

Particular attention has been paid to the four UK manufacturing

sites (Severn Beach, Tubney Woods, High Wycombe and Belfast)

as they contribute roughly 80% of Group revenue. Due to the

nature of physical climate-related risks manifesting more over

the long term, different time horizons have been used from

those used to assess the transition risks and opportunities.

These are: 2030 (short term), 2050 (medium term) and 2100

(long term). During the year we had no insurance claims that

were climate-related.

The following scenarios have been used for the physical risk

assessment:

• RCP 2.6 is an optimistic scenario whereby atmospheric

concentrations of greenhouse gases lead to a global

temperature rise of less than 2°C by the end of the century

relative to the pre-industrial period (1850–1900).

• RCP 8.5 is a pessimistic high emissions scenario, consistent

with a future with no policy change to reduce emissions and

leading to a global temperature rise of around 4°C by 2100.

Opportunity Opportunity description

Opportunity

type

Potential impact

on the business

Response/actions we are taking

and how they are managed KPIs

2.6 Scenario 8.5 Scenario

Scenario Implications

2030 2050 2100 2030 2050 2100

Flooding One manufacturing site is

projected to be a Zone 50 (2%

chance each year of a flood

event) site under all future

scenarios from 2030 onwards.

A further manufacturing site

is located in a Zone 100-year

return period for storm surges (1%

chance of occurring each year).

Acute Increased costs and

decreased revenue

through decreased

manufacturing output,

delayed production

times and damage

to site infrastructure,

equipment, or

inventory.

Oxford Instruments’ sites are insured for

asset/property damage as well as business

interruption. Each site has a business continuity

plan and emergency response measures in

place to deal with significant events. The flood

risk exposure at the Zone 50 site has been

mitigated by constructing the building on a 1.5m

raised platform.

• Number of days

operations are disrupted

due to flooding events

• Revenue loss from site

disruption

• Insurance premiums

Minimal change in

exposure between

RCP2.6 and 8.5.

Wildfire One manufacturing site is

currently at a high-risk level and

projected to remain high against

future scenario projections.

A further manufacturing site

increases from medium to

high risk across all projections

including the most optimistic

scenario by 2030.

Acute Increased costs and

decreased revenue

through disrupting

manufacturing output

such as road closures,

evacuation orders,

restricted access,

or damage to site

infrastructure.

Oxford Instruments’ sites are insured for

asset/property damage as well as business

interruption. Each site has a business continuity

plan and emergency response measures in

place to deal with significant events.

• Number of days

operations are disrupted

due to fire events

• Revenue loss from site

disruption

• Insurance premiums

Increased exposure

under RCP8.5,

particularly in the long-

term 2100 projections.

Supplier

disruption

from extreme

weather

Increasing extreme weather

events can cause supply chain

disruptions or site shutdowns.

Analysis indicates low physical

risk for our key suppliers currently.

However, two of our key suppliers

are at increasing risk of river

flooding and sea level rise across

both scenarios in the long term.

Acute Decreased revenue Business interruption insurance provides a

degree of cover in the event that supply chain

issues cause significant disruption to production.

• Number of days our

operations are disrupted

due to supply chain

issues resulting from

extreme weather events

Minimal change in

exposure between RCP2.6

and 8.5.

Sustainability – TCFD statement continued

Significant risk/opportunity

Report to Group

High risk/opportunity

Report to Group

Moderate risk/opportunity

Do not report to Group mitigation

plan expected to be in place

Low risk/opportunity

Do not report to Group

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Impact on strategy and financial planning

We consider climate change to be a principal risk for Oxford

Instruments, but also a source of material opportunity, given

our focus on accelerating breakthroughs, and the end markets

we serve. Our assessment is based on having evaluated key

climate-related risks and opportunities, including understanding

the potential impact of each in terms of its time horizon,

likelihood and magnitude, and the stakeholders or areas of the

business that may be affected.

Although there is not a dedicated climate-related R&D

budget, our existing R&D expenditure incorporates climate

change. Our products are designed to address our structurally

growing markets in advanced materials development

and semiconductors, which both have a key role to play in

decarbonisation and addressing the impacts of climate change.

In terms of the direct impact of our products, considerations

are incorporated into the Group’s New Product Development

process, to ensure the ongoing reduction of the carbon footprint

of our products through energy use, packaging and distribution,

as well as increased recyclability and upgradability. In addition

to R&D considerations, the costs of planned climate initiatives

are included within each business unit’s annual budget plans of

capital expenditure requests. When purchasing new offices and

manufacturing sites environmental considerations form part of

the procurement process.

Resilience of the organisation’s strategy to

climate change

The scenarios used in our climate scenario analysis are

explained in more detail above. They have been selected to

provide contrasting scenarios which allow us an understanding

of how resilient the Group is under different situations and

temperature pathways. Our identified climate-related risks and

opportunities, and action plans to address these, highlight that

in aggregate our overall climate risk exposure is moderate.

We believe, given our current mitigation plans, that we can

incorporate climate risks into our business-as-usual activities

and that the Group is financially resilient to climate change.

Therefore, we do not currently envisage any additional significant

capital expenditure or changes to business strategy as a result of

climate change that sits outside of our normal planning. Please

see page 152 of our financial statements where the impacts of

climate have been considered.

The outputs of the scenario analysis we have carried out can

be found on pages 55 to 59. The limitations of this scenario

analysis are:

• scenarios often only provide high level global and regional

forecasts;

• not all risks are easily subject to scenario analysis;

• scenario analysis requires analysis of specific factors and

modelling them with fixed assumptions;

• impacts are to be considered in the context of the current

financial performance and prices;

• impacts are modelled to occur in a linear fashion when,

in practice, dramatic climate-related impacts may occur

suddenly after tipping points are breached;

• the analysis considers each risk and scenario in isolation

when, in practice, climate-related risks may occur in parallel

as part of a wider set of potential global impacts; and

• carbon pricing is informed by the Global Energy Outlook 2023

report from the International Energy Agency.

Metrics and targets

Climate-related metrics

We disclose our Scope 1, 2 and 3 emissions in line with the

Greenhouse Gas (GHG) Protocol A Corporate Accounting and

Reporting Standard, with additional guidance from the GHG

Protocol Corporate Value Chain (Scope 3) Accounting and

Reporting Standard and the GHG Protocol Technical Guidance

for Calculating Scope 3 Emissions. This covers the accounting

and reporting of the seven greenhouse gases covered by the

Kyoto Protocol. An operational control approach was adopted,

with all material emissions sources reported.

We also disclose a wide range of metrics to help us to track our

progress across a number of climate-related and sustainability-

related areas. This includes electricity consumption, GHG

emissions intensity and water and waste usage. The specific

metrics used to track our climate-related risks and opportunities

are identified on pages 48 to 51. Please see the environment

section, pages 47 to 51. for further information, and for this year’s

SECR reporting, the primary means by which we report our

progress and track our impact.

Climate-related targets

As set out in the environment section, we are committed

to reaching net zero carbon emissions (where we add no

incremental greenhouse gases to the atmosphere) against

Scopes 1, 2 and 3 by 2045. These targets are ambitious, getting

us to net zero ahead of the UK Government’s pledge, and

demonstrate our commitment to operating responsibly. Our

Scope 1, 2 and 3 emissions targets have been validated by the

SBTi, as set out on page 47, while we have also published our net

zero transition plan which details our actions to achieve these

targets. Our SBTi-validated targets are as follows:

• to reach net zero emissions across Scopes 1 and 2 by

FY2030 from a FY2024 base year;

• to reduce absolute Scope 3 GHG emissions 25.00%

by FY2030 from a FY2024 base year;

• to reach net zero greenhouse gas emissions across the

value chain by FY2045.

Sustainability – TCFD statement continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability – social

Our social sustainability agenda

Our social sustainability agenda comprises six key subject areas,

as follows:

• Culture, values and engagement

• Inclusive workplace

• Health, safety and wellbeing

• Investment in our people

• Next-generation talent

• Community impact

Culture, values and engagement

We strive to create an open, inclusive and values-driven culture,

where colleagues feel able to share their views in a two-way

dialogue with senior leaders.

CEO Richard Tyson and the leaders of our business units and

regional teams based around the world hold regular in-person

and virtual briefing meetings where employees are encouraged

to, and do, ask a wide range of questions. The Board discusses

current workforce issues regularly with management, and

meets a broad range of employees, for example at site visits

by the Chair and Non-Executive Directors. We also gather our

people’s views annually through our global engagement survey,

monitoring a range of cultural KPIs and taking action

on opportunities for improvement at business unit, regional

and Group level.

This year, we carried out our first externally benchmarked

survey, with leading survey provider Best Companies. We

achieved a rating in the ‘One to Watch’ category, reflecting

that Oxford Instruments is a good company to work for.

We also rolled out Best Companies’ personalised feedback

for people managers who received three or more responses

to the survey, a valuable tool which will enable managers to

hone their management skills.

Our recently launched Ways of Working framework, summarised

above, provides a strong set of organisational principles to help

us deliver our strategy (see pages 29 to 32). We held a residential

Leadership Conference in September 2024 for around 70 senior

leaders to support the roll-out and delivery of our strategy and

embed our ways of working.

Inclusive

By seeking out different

perspectives and diverse

collaboration, we deliver

better solutions and

lasting success.

Innovative

Through our knowledge,

expertise and focused

curiosity, we create new

possibilities for ourselves

and for our customers.

Trusted

We build successful,

long-term relationships

based on accountability,

integrity and respect.

Purposeful

We care, and our

passion and commitment

drive positive change

in theworld.

We start with

the customer

We succeed by

being focused

We make

and keep

our promises

We work together

as one team

We help and

trust each other

to succeed

Our values

We believe that businesses have a valuable contribution to make to society. We are acutely aware

of our responsibility to our employees, the communities we impact and the generations to come.

These are now fully embedded into our corporate vernacular,

decision making and performance frameworks, and we have

rolled out a suite of communications collateral including posters,

wall art and desktop reminders to keep them front of mind.

Our ways of working

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Creating an inclusive workplace

We are committed to creating an inclusive culture. We seek to

develop and sustain a supportive and collaborative working

environment where difference is recognised, valued and

celebrated. However, we also recognise that we operate in 23

countries around the world in which the legislative frameworks

and cultural landscapes vary hugely. In each of the countries in

which we operate, we aim to be inclusive and progressive in our

working practices, but will ensure that we are not in conflict with

legislative frameworks.

Our approach to inclusion is overseen by the Board

Sustainability Committee.

We are signatories to the Business in the Community Race at

Work charter, underlining our commitment to improving equity of

opportunity in the workplace. We also engage in externally run

schemes offering inclusive internships and career opportunities.

Employees lead a number of impact groups, focused on less-

represented demographics in our workforce but open to all.

These include a women’s group, a neurodiversity group, a group

focused on race and ethnicity, and a group centred on LGBTQ+

issues. All four have been enthusiastically adopted by both

members and allies of each community.

We are committed to eliminating our gender pay gap. We

monitor, measure and take action globally to ensure that men

and women are paid fairly. Our external data reporting is focused

on UK legislation, which requires companies to report their pay

gap annually if they have more than 250 employees, and is

published in our Gender and Ethnicity Pay Gap Report,

www.oxinst.com/corporate-content/gender-pay-report.

The gap for our Oxford Instruments Nanotechnology Tools entity

in the UK, representing 801 employees in 2023, currently stands

at 9.0% (mean) and 12.5% (median).

We continue to build on the work we have done so far to

establish balanced recruitment shortlists (that is, shortlists

including candidates from groups which are underrepresented

in our workforce).

Our inclusive approach to recruitment includes the use

of technology to ensure that the language used in job

advertisements is free from bias. We operate a hybrid working

policy which helps employees to balance work and personal

commitments. We also offer support and, where appropriate,

special leave, for those with caring needs for dependants.

Following the reconfiguration of our internal employee data

portals to include the Office for National Statistics ethnicity

categories, 96% of UK employees and 79% of employees

globally have provided data on their ethnicity. We reported on

our UK ethnicity pay data for the second time this year. This

indicates that 12% of our UK workforce identify as being part of

an ethnic minority group, and reflects an ethnicity pay gap of

15.2% mean and 2.4% median in favour of employees from white

British ethnic backgrounds.

We are committed to using this data to help to ensure that our

processes and pay are fair and equitable with respect to race

and ethnicity, as well as the characteristics on which we have

had full data for several years. As an international company, we

recognise the importance of ensuring we have strong ethnically

diverse leadership role models and a diverse decision-making

team that reflects our customer base and the communities in

which we operate.

Sustainability – social continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

New employees in FY2024/25 by gender

Male 71%

Female 29%

At the date of the Annual Report, the team comprises 16 persons,

of whom 19% are of Asian or mixed ethnicity. There are 75 direct

reports of this team, of whom 21% identify as belonging to an

ethnic minority group. In that context, we will be seeking to

maintain and improve the ethnic diversity of this cohort.

Our Gender and Ethnicity Pay Gap Report provides more

information on all these areas: www.oxinst.com

Gender split

Male Female

Global Oxford Instruments 73% 27%

Plc Board 57% 43%

Senior Leadership Team 66% 34%

Managers 72% 28%

Employees 72% 28%

Gender split by region

Male Female

UK 76% 24%

EMEA-I 72% 28%

Asia (excluding China) 73% 27%

China 61% 39%

North America 29% 71%

Sustainability – social continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Health, safety and wellbeing

We are committed to fostering a healthy, safe and

productive work environment for our entire workforce,

and to driving continuous improvement in our health

and safety (H&S) performance.

The Board is responsible for oversight of our approach to

H&S, supported by the Sustainability Committee.

Our six-step strategic framework supports continuous

improvement via six key areas of management.

Our H&S management strategy, grounded in continuous risk

identification and mitigation, safeguards employees through

proactive measures. We employ chemical management

software to oversee hazardous substances, provide training

across known risk areas, enforce stringent PPE adherence and

utilise asset management software for equipment integrity. This

approach reduces risk before escalation into incidents or near-

miss events, thereby ensuring a secure and compliant workplace.

Recognising that our entire workforce has a role to play in creating

a safe working environment, we use, and regularly promote,

the Shield incident reporting system, through which we record,

manage and monitor accidents and safety observations, and to

which all employees have access. The system has supported our

improved performance since its introduction in 2019.

This year, to align with industry benchmarks and peer

organisations, we have adjusted our reporting period from

calendar year to financial year (FY), ensuring consistency and

comparability in our H&S metrics.

Through targeted H&S campaigns, we have successfully

increased H&S awareness and engagement throughout the

organisation, as evidenced by a rise in safety notifications and

contributors using Shield during FY2024/25. This heightened

focus has contributed to our accident frequency rate for work

process-related accidents rising from 18 to 21, reflecting an

improved reporting diligence and a proactive safety culture

across our teams. While this marks a change from last year’s

figure, it reflects a consistent stabilisation trend in recent years,

with no serious injuries reported since 2022 and no employee/

contractor fatalities recorded over the five-year period from 2020

to 2025. Our H&S performance continues to compare favourably

with industry benchmarks, and we remain committed to driving

global safety standards through our Push for Zero initiative which

targets a sustained reduction in work process-related accidents

over time.

Sustainability – social continued

Culture

Clarity

ControlsCollaboration

Healthy, safe

and productive

working

environments

CommunicationCompetence

Increasing health and safety awareness

100

144

188

283

579

1,349

2,390

2023 FY25202220212020

Safety notifications raised

876

1,121

810

Shield contributors (all employees can contribute)

Health and safety five-year performance

2023 FY25202220212020

Serious injury

Minor injury

Accidents per 1,000 employees

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our structured management systems, subject to external audits

as required, underpin our commitment to safe working practices,

environmental management and quality manufacturing. At our

primary manufacturing facilities in the UK, representing more

than 80% of revenue, we maintain certification to ISO 45001,

ISO 14001 and ISO 9001. The effectiveness of our management

systems is further supported by a robust internal audit

programme across all operational domains.

This year, we launched an accredited Institution of Occupational

Safety and Health (IOSH) training programme globally,

extending across all business units and regions. To date, more

than 180 employees have successfully completed this training,

with the roll-out continuing over the next 18 months. This will

equip our executive teams, as well as eligible members of our

management, production and services workforce with enhanced

H&S competency and awareness.

During FY2024/25, 1,786 employees have received H&S training.

This figure comprises new content, training renewals and

onboarding of new joiners.

We support our employees and their families by providing an

increasing range and number of opportunities to enhance their

wellbeing, including readily accessible support services on a

wide range of topics from financial wellbeing to mental health

and health assistance programmes.

We strive to empower individuals coping with mental health

challenges or disabilities to thrive in their professional roles,

encouraging colleagues to seek assistance when needed, via

our team of Mental Health First Aiders and through the provision

of independent and confidential digital platforms and services,

accessible to employees globally.

We are proud to support our local community groups and

charities alongside being inclusive of our people and culture

through the celebration of events and achievements.

Oxford Instruments is committed to ensuring its continued

compliance with regulatory requirements relating to the

reduction and elimination of certain harmful chemical

substances used in the development and manufacture of

our products.

We have recently engaged a leading external environmental

compliance partner to help us ensure that we keep pace with

existing and new regulatory requirements and to facilitate

the collection and assessment of data from our supply

chain partners. This in turn will improve our ability to react to

requirements and proactively remove substances of concern

from our products as evidence of their harmful nature

is identified.

In tandem with these efforts, we are equally dedicated

to meeting global health, safety and environment (HSE)

requirements. This commitment will now be enhanced through

engagement with an external global consultancy, ensuring that

our operations not only minimise environmental impact but

also safeguard the wellbeing of our employees, customers and

communities worldwide.

By aligning our product compliance initiatives with our broader

HSE obligations, we strengthen our ability to deliver sustainable,

safe and responsible solutions.

Employee turnover rates

Year Turnover

2024/25 14%, of which 8% was voluntary

2023/24 12%, of which 9% was voluntary

2022/23 11%, of which 9% was voluntary

2021/22 14%, of which 11% was voluntary

2020/21 8%, of which 6% was voluntary

2019/20 15%, of which 7% was voluntary

2018/19 14%, of which 10% was voluntary

Employee numbers

Full time Part time

Contract

workers

2024/25 2,117 104 53

2023/24 2,090 144 69

2022/23 1,894 134 86

2021/22 1,662 126 70

2020/21 1,518 107 100

2019/20 1,448 114 70

All employees are guaranteed a fair salary and other employment

benefits in accordance with their role and responsibilities. We

ensure compliance with minimum wage legislation and strive

to offer competitive compensation packages suitable for each

position and our business needs. In the UK, representing more than

half of our workforce, we are an accredited Living Wage employer.

All employees, regardless of location, are entitled to legally

required benefits such as annual leave, sick leave, maternity

leave and standard working hours. This year, we have embarked

on a major programme, Career Connections, which will seek

to align organisation, job families, accountabilities, levelling,

competencies and reward throughout Oxford Instruments over

the next two years.

All UK-based employees have access to our Share Incentive Plan

scheme after six months’ service. Furthermore, in compliance

with UK regulations, all UK employees have the option to enrol in

our workplace pension scheme.

Sustainability – social continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability – social continued

Investing in our people

Our people and their capabilities are core to what makes us

a great company. We are committed to being the company

where the best people in our sector want to work, and to

training our people and enabling their career development

and employability.

We provide a range of opportunities for our employees across

technical, commercial, operational and business support

functions to gain knowledge, skills and experience. This includes

challenging assignments, learning from colleagues and targeted

training. Colleagues have completed a total of 28,761 training

courses in FY2024/25 (26,878 online and 1,883 classroom/

virtual), pursuing more than 750 different courses.

We continue to strengthen our Oi Academy, which offers

development programmes, core skills training courses and

e-learning opportunities. We also offer a broad range of

secondments, career breaks, apprenticeships and support

towards external qualifications. In FY2024/25, three cohorts (33

employees) have undertaken our bespoke Oxford Instruments

Leadership programme, which brings together high-potential

candidates from across the Group and covers a wide range

of topics including interviewing skills, self-development,

developing others and managing remote teams. We have

delivered Management Essentials training to 43 managers

Group-wide, as well as delivering programmes focused on

Project Management Fundamentals and Project Leadership.

Following its successful launch in 2024, the second cohort of the

Foundations programme for emerging talent will begin in June.

The programme is designed to give aspiring leaders a variety of

tools and techniques to allow them to work effectively as they

progress their career at Oxford Instruments.

We have a robust system of regular feedback. 100% of our

employees have undergone an evaluation process in the year,

embedded through our annual performance review, which

also encompasses career development with a focus on

training opportunities.

Next-generation talent

We take our responsibility towards developing the next-

generation workforce seriously and are committed to inspiring

the next generation of scientists, engineers and business people

by showing them the difference they can make in the world.

For us, this begins in schools, colleges and learning institutions,

where we equip and encourage our employees around the

world to take any opportunity they can to talk to young people

about careers in our industry. We partner with universities and

post-graduate schools to help students understand the range of

careers available in a technology company, supporting this with

mock interviews for school-age students and work experience for

students from mid-teens to graduate and post-graduate level,

engaging with employees from a broad range of backgrounds.

A popular benefit we offer all employees is the offer of work

experience to family members between the ages of 16 and 25.

We remain committed to providing structured apprenticeships,

sponsorships, internships, early career jobs and graduate

programmes. We intentionally reach out to attract a diverse

range of people and those from untapped talent pools, ensuring

we are inclusive and accessible.

Community impact

We actively engage in locally focused activities that make

our communities and environments a better place to live and

work. All employees are offered up to two paid volunteering

days a year to share their professional or practical skills in the

community; we also participate in charity outreach programmes

and offer sponsorship of local community events.

Our global network of Go Green teams drives action to be more

environmentally friendly, both as a business and as individuals.

When we arrange gifts, celebrations, events and activities for

our teams we aim to support the small, independent businesses

near our sites. We also participate in a range of charity outreach

activities, including raffles, marathon sponsorships, pub quizzes

and coffee mornings.

Case study

Supporting the

next generation

of STEM leaders

We’re committed to giving young people the

opportunity to learn about science and explore

future careers options with us.

Employees at our High Wycombe materials analysis

site launched a new STEM Committee in 2024,

seeking to facilitate engaging STEM initiatives for the

local community and demonstrate the diverse career

paths open to young people. The committee launched

by welcoming 40 GCSE and A-level students from

three local schools during British Science Week to the

site’s Innovation Centre. Over the course of the day,

groups took part in exciting engineering activities,

where they made PCB boards and towers made

of marshmallows and spaghetti, and were given

demonstrations of our Raman and atomic force

microscopes, detectors for electron microscopy,

andnuclear magnetic resonance technology.

Read more about our materials analysis

technology / www.oxinst.com

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

We are wholly committed to conducting our business responsibly

and holding ourselves to high ethical standards. Our strong

values (see page 61) underpin everything we do; from how we

work with each other and our customers to how we trade with

suppliers. Every representative of Oxford Instruments is expected

to behave in a way which is consistent with these values.

Our approach to governance is overseen by our Board

of Directors and summarised in our Code of Conduct (see

www.oxinst.com/codeofconduct), which is updated regularly

and issued to all permanent and contracted employees as

a mandatory training module. All employees, customers and

suppliers also have round-the-clock access to our widely

publicised and independent whistleblowing hotline, Safecall

(www.safecall.co.uk/en/clients/oxinst/), should they encounter

any behaviour not in keeping with our ethical standards. A team

reviews any whistleblowing reports which are made, and each

report is escalated and investigated as appropriate. We received

one report via Safecall in 2024/25.

Our governance sustainability agenda

comprises eight key areas

Our overarching governance sustainability agenda, set out

below, is overseen by our Board Sustainability Committee, (see

pages 116 to 118); with the exception of anti-bribery and anti-

corruption, sanctions, export control and customs, and financial

sustainability and tax transparency, which are overseen by the

Audit and Risk Committee (see pages 109 to 115).

Sustainability – governance

Anti-bribery and anti-corruption

When dealing with business partners, suppliers and customers,

or when engaging with public officials, we expect our employees

to act in a transparent and fair manner. We choose our business

partners and suppliers carefully and avoid working with anyone

who does not meet and adhere to the same high standards.

The key principles we expect everyone to follow include

not offering or accepting bribes or improper payments; not

improperly influencing any individual; and not participating in any

kind of corrupt business activity, either directly or through a third

party. To help our employees understand what is expected of

them we developed a comprehensive training course, refreshed

this financial year, which all new joiners must complete to

pass their probationary period, and which all employees must

retakeannually; we also maintain a detailed policy document,

www.oxinst.com/investors-content/compliance/anti-bribery-

and-corruption.

In FY2024/25 we also launched a refreshed compliance and

onboarding programme for our channel partners. This includes

completion of a mandatory compliance training course covering

anti-bribery and anti-corruption and a certification to confirm

compliance with our anti-bribery and anti-corruption policy for

channel partners.

No one has been dismissed during FY2024/25 as a result of

having committed bribery.

Sanctions, export control and customs

We review our Sanctions Policy regularly (most recently in

May 2024) to align with UN, UK, EU and US sanctions.

We are committed to adhering to both the letter and the spirit

of export controls governing our activities, and engage regularly

with the UK Government’s Export Control Joint Unit and its

equivalents in other jurisdictions. In response to geopolitical

shifts, we have continued to pivot our regional focus towards less

sensitive applications and customers in China this year, having

exited the quantum market in the country in FY2023/24.

Inside information and share dealing

As a listed company on the London Stock Exchange, Oxford

Instruments and its employees must comply with the relevant

laws relating to inside information and share dealing, including

the UK Market Abuse Regulation, as well as our internal

Share Dealing Policy and associated procedures. We ensure

that there are adequate processes and controls in place to

identify, manage and disclose inside information and also

support our employees and anyone working on our behalf with

understanding their obligations.

Supply chain responsible sourcing

We operate our business in compliance with all applicable laws

and regulations and expect our suppliers to do the same. The

overarching standards we expect from our suppliers, covering

all operations, are set out in our Supplier Quality Manual,

which incorporates our Code of Conduct for Representatives

and Suppliers, www.oxinst.com/assets/uploads/documents/

OI_COC_REPS_SUPPLIERS.pdf.

In addition, as part of our supplier contracts, suppliers are

required to warrant that they and their sub-contractors will

comply with all applicable laws, statutes, regulations and codes

relating to modern slavery, anti-bribery and anti-corruption, and

Oxford Instruments’ Supplier Quality Manual, which incorporates

our Code of Conduct for Representatives and Suppliers.

We are committed to avoiding the use of controversial materials

and proactively eliminating the use of so-called ‘conflict

minerals’, ie minerals sourced from mines in the Democratic

Republic of Congo and adjoining countries which support or fund

conflict from products and the supply chain. Our conflict minerals

policy covers all operations. We undertake due diligence on

our key suppliers and expect them, in turn, to conduct due

diligence on their own supply chain to help eliminate the use of

conflict minerals. The recent engagement of a leading external

environmental compliance partner will support us in ensuring our

due diligence and risk assessment of suppliers is robust.

Upholding high ethical standards

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our existing online supplier portal allows us to store and audit

our key supplier documents and has been extended and

updated in 2024 to collect information on product environmental

compliance, quality and sustainability. 87% of UK manufacturing

key suppliers have started or made full returns through the

supplier portal. We are transitioning to a partnership with a

leading external compliance partner to help us ensure that we

keep pace with existing and new regulatory requirements and

to facilitate the robust collection and assessment of data from

our supply chain partners, including conflict minerals and carbon

footprint data.

Human rights and modern slavery

We are committed to preventing acts of modern slavery and

human trafficking from occurring within our business and supply

chain. We take a zero-tolerance approach to all forms of modern

slavery, including servitude, forced, bonded and compulsory

labour, and human trafficking, and we expect our suppliers to

adopt the same approach.

We believe in the importance of educating our employees

on human rights issues and have launched bespoke training

for relevant employees to help them to recognise the risks of

modern slavery and human trafficking in our business and

supply chain.

We have an established Whistleblowing Procedure for

employees to report any concerns, and further guidance is also

made available in our Global Human Rights Policy. In addition,

we have extended the availability of our Whistleblowing hotline

to all our suppliers and representatives.

Our global Code of Conduct sends a clear message to our

employees, business partners, investors, and other stakeholders

about our business principles and ethics. In addition, our Supplier

Quality Manual and Code of Conduct for Representatives and

Suppliers mandates that our suppliers take action to prevent

modern slavery occurring in their business and supply chain.

Our Anti-Slavery and Human Trafficking Statement is updated

annually and can be found both on our website and on the

Government’s Modern Slavery Statement Registry.

Intellectual property and confidentiality

Our intellectual property (IP) is one of our most important assets;

it is key to our success in the market and enables us to secure

and maintain a competitive advantage. We have comprehensive

policies and procedures in place to protect it, including

templates, guidance and training for colleagues. We continue

to protect our inventions, brand and designs through the use of

registered IP rights. In the year we filed a number of new priority

patent applications.

Oxford Instruments often collaborates with third parties on

projects which generate new IP, further enhancing our product

offerings to our customers. In these situations, we will not use any

IP without it first being legitimately acquired or licensed.

Data protection, data privacy and data security

Our global privacy standard www.oxinst.com/corporate-content/

privacy sets out the principles that guide our approach to

handling personal information, and all employees are required to

undertake mandatory training on data protection.

Our marketing teams work closely with our legal teams to ensure

our marketing activities are compliant with the European General

Data Protection Regulation (GDPR), UK GDPR and related privacy

legislation in other territories. We have invested in high-quality

CRM and marketing business systems infrastructure that have

enabled us to enhance our security and controls.

Our legal team horizon scans for developments in data

protection legislation around the world and develops compliance

programmes where necessary to ensure we can respond

quickly to any changes made in legislation and guidance

fromregulators.

We have implemented annual mandatory IT Security training

for all employees. We continue to assess and improve our

IT controls across the organisation in line with UK Government

recommendations.

Financial sustainability and tax transparency

We manage our tax affairs in accordance with the

following objectives:

• ensuring compliance with all relevant tax law in all

jurisdictions in which the Group operates whilst managing the

associated tax costs in a manner that is consistent with our

Code of Conduct and its attitude to commercial risk;

• seeking to maintain stable effective and cash tax rates which

reflect the geographic markets in which we operate, and the

Group’s tax attributes, such as brought-forward losses and

special deductions such as for research and development; and

• ensuring that all communication with tax authorities is

conducted in a transparent and professional manner.

Our Group Tax Strategy is available on our website at

www.oxinst.com.

Sustainability – governance continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management

An ongoing process for identifying, evaluating and managing

the significant risks faced by the Group is embedded throughout

the organisation. Day-to-day management of this process has

been delegated by the Board to the Executive Directors, as

detailed in the Audit and Risk Committee Report on pages 109

to 115. Our risk management and internal control systems have

been in place throughout the financial year and up to the date of

approval of this Annual Report, and are subject to annual review

by the Audit and Risk Committee. In respect of the year ended

31 March 2025, the Board considered that these processes

remained effective. A summary of our risk management

framework and process can be found below and on page 71.

The Board has carried out a robust assessment of the principal

risks facing the Group, including those which threaten its

business model, future performance, solvency and liquidity.

Details of all major risks identified, and the mitigating actions

adopted, are reported to and reviewed by the Audit and Risk

Committee throughout the year. On pages 72 to 78 we provide an

overview of the major risks and uncertainties faced by the Group.

All business units follow a standard process for risk identification

and reporting. The process is further described on page 71. On

a regular basis, each business unit reviews and updates its

risk register which is then consolidated and assessed in the

context of the wider Group and reported to the Chief Executive

Officer (CEO). If a material risk changes or arises, a review of the

adequacy of the mitigating actions taken is completed with the

CEO. The Board and Audit and Risk Committee also consider any

risks which may impact delivery against our strategic objectives

at a Group level, and consider the approach to managing and

mitigating these risks.

Priorities during financial year ended

31 March 2025

During the year ended 31 March 2025 we strengthened

our internal audit and risk management capability through

recruitment of additional headcount and organisational changes.

The role of Head of Risk, Assurance and Trade Compliance has

been split into two, and a dedicated Head of Internal Audit, with

responsibility for risk management and assurance, joined in

March 2025, reporting to the Chief Financial Officer (CFO). Further,

a new role, the Group Head of Trade, Ethics and Compliance,

was created, reporting to General Counsel. These changes have

increased the bandwidth available to address both areas and

will provide the focus required to identify and deliver the changes

we consider necessary to comply with the revised UK Corporate

Governance Code.

Also, during the year ended 31 March 2025, the CEO introduced

regular six-monthly formal reviews of principal risks by the Senior

Leadership Team. These include the identification and evaluation

of key risks and focus on the mitigating strategies and actions

required, where relevant. New and emerging risks are also

reviewed to support the risk reporting process.

In a further development, we have appointed a Chief Information

Security Officer to strengthen our resilience to cyber security risk.

Risk governance framework

The diagram below summarises the key accountabilities and

features of our risk governance framework.

Audit, risk and internal control

Board

Oversees the internal

control framework and

determines the nature

and extent of the principal

risks the company is

willing to take in order

to achieve its long-term

strategic objectives.

Ultimately accountable

for approving the

adequacy and

effectiveness of internal

controls operated by the

Group.

Operational

management

Responsible for risk

management and

control within the

business and, through

the Senior Leadership

Team, implementing

Board policies on risk

and control.

Guided by the internal

audit and assurance

function, completes

detailed risk reviews

on a quarterly basis.

Internal audit and

assurance function

Assesses the adequacy

and effectiveness

of the management

of significant risk

areas and provides

oversight of operational

management’s frontline

and assurance activities.

Further information

regarding the scope

of internal audit and

assurance activities is

setout on page 114.

Audit and

Risk Committee

Reviews the internal

financial controls and

systems that identify,

assess, manage and

monitor financial risks,

and other internal control

and risk management

systems.

More information

regarding the work of the

Committee can be found

in its report on pages 109

to 115.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

Internal control

Our internal control framework includes central direction,

oversight and risk management of the key activities within the

Group. It includes a financial planning process which comprises

a five-year planning model and a detailed annual budget which

is subject to Board approval. All Group businesses’ results are

reported monthly and include variance analysis to budget and

the prior year. Management also prepares monthly reforecasts.

Control activities include policies and procedures for appropriate

authorisation and approval of transactions, the application

of financial reporting standards and reviews of significant

judgements and financial performance. Financial, regulatory and

operational controls, procedures and risk activities across the

Group are reviewed by the Group’s internal audit and assurance

function, and are subject to separate review by subject matter

experts where required (eg trade compliance and health

andsafety).

The internal control framework has been designed to manage,

rather than eliminate, material risks to the achievement

of strategic and business objectives and can provide only

reasonable, and not absolute, assurance against material

misstatement or loss. Due to inherent limitations, internal

controls over financial reporting may not prevent or detect

all misstatements. There has been no material change to the

Group’s internal control framework during the period covered by

this Annual Report.

The key components designed to provide effective internal control within the Group include:

• a formal schedule of matters reserved for the Board

for decision and specific terms of reference for each

of its Committees; other than these matters, the Board

delegates to the CEO, who in turn reviews the delegation

of authorities throughout the management structure;

• the Group’s internal management beneath the Board

is led by the Senior Leadership Team (SLT). Day-to-day

responsibility for the management of the Group is

delegated to the SLT. There are clearly defined lines

of management responsibilities at all levels up to and

including the Group Board, and the Group’s accounting

and reporting functions reflect this organisation;

• financial reporting lines have been reorganised such

that financial executives within Group businesses report

directly to the CFO;

• the Board reviews strategic issues and options both as

part of the annual strategic planning process and on

an ongoing basis throughout the year. In addition, the

Executive Directors maintain a five-year planning model of

the Group and its individual businesses;

• annual budgets are prepared for each of the Group’s

businesses which include monthly figures for turnover,

profit, capital expenditure, cash flow and borrowings. The

budgets are reviewed through the Group management

structure and result in a Group financial budget which is

considered and approved by the Board;

• the businesses prepare monthly management accounts

which compare the actual operating result with both

the budget and prior year. They also prepare rolling

reforecasts for orders, turnover, operating profit and

cash. These are reviewed by the Board at each of its

scheduledmeetings;

• the Board approves all acquisition and divestment

proposals and there are established procedures for the

planning, approval and monitoring of capital expenditure;

• for all major investments, the performance of at least the

first 12 months against the original proposal is reviewed

bytheBoard;

• internal audits are carried out through a system of

regular reviews of the financial and non-financial

internal controls at individual businesses. See the Audit

and Risk Committee Report on pages 109 to 115, for

moreinformation;

• the Board and its Committees receive regular updates on

trade compliance, sustainability, business ethics, health

and safety, treasury, tax, insurance and litigation, amongst

other topics;

• authorisation limits are set at appropriate levels

throughout the Group; compliance with these limits is

monitored by the CFO and the Group assurance function;

• there is a detailed and risk-based delegation of authority

structure in place for sales contracts and managing

commercial risks. Contracts with onerous terms and

conditions (such as unlimited liability contracts) are

subject to enhanced approval requirements;

• the International Trade Committee monitors, considers

action and makes recommendations around the

management of key risks relating to international trade,

including sanctions, export controls and customs; and

• as regards the UK pension scheme, the Group nominates

half of the Trustee Directors of the scheme’s Corporate

Trustee; involves as appropriate its own independent

actuary to review actuarial assumptions; agrees the

investment policy with the Trustee; works with the Trustee

on its investment sub-committee to deal with day-to-day

investment matters; ensures there is an independent

actuarial valuation every three years; and agrees funding

levels to provide adequate funding to meet the benefit

payments to the members as they fall due.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Alignment

with strategy

The broad range of

potential factors which

could impact the Group

are considered and those

which have a significant

effect on its ability to

deliver its strategy are

determined to be principal

risks and uncertainties.

Evaluation

of risk

Careful consideration

is given to:

i) the specific scenarios

in which the risk could

arise; and

ii) the various potential

impacts which the

risk could present.

Mitigation

implementation

Suitable management

actions or robust

control mechanisms are

determined, developed

and implemented.

Risk

review

An embedded, cyclical

process review:

i) determination of

principal risks and

uncertainties; and

ii) the effectiveness of

the implemented

mitigation mechanisms.

Risk management continued

Risk management process

The diagram below summarises our methodical approach to risk management. The principal risks and uncertainties detailed on

pages 73 to 78 are identified, reported and monitored through this process.

Emerging risks

The Board is required to complete a robust assessment of the

company’s emerging and principal risks and confirms that it

performed such an evaluation during the financial year.

It is recognised that emerging risks can also be principal risks.

A detailed description of the principal risks and the activities to

mitigate these is set out on pages 73 to 78.

The identification and evaluation of emerging risks is derived

from the Group’s quarterly risk reporting framework. The output

from the business units’ detailed risk registers is reviewed by

the Group Head of Internal Audit and the CFO every quarter.

New significant risks reported by the business units are

highlighted and discussed as part of this process. A formal

review of emerging risks is conducted annually, with the outputs

shared and discussed with the Audit and Risk Committee as

part of its review of the Group risk register and principal risks

anduncertainties.

In the latest review performed by the Senior Leadership Team,

nosignificant emerging risks were identified.

The Committee discussed emerging risks with the Executive

Directors and Group Head of Internal Audit and agreed with the

assessment that there were no new significant emerging risks

todisclose.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

Principal risks and uncertainties

Principal risks are reported and discussed at every meeting of the

Audit and Risk Committee. We generally consider that principal

risks are those which could have a significant adverse impact

on the Group’s business model, financial performance, liquidity

or reputation. The Audit and Risk Committee also considers

emerging risks, within the risk management framework. A formal

review of emerging risks is conducted annually.

Principal risks and uncertainties matrix

Our principal risks and uncertainties are mapped onto a

probability and impact matrix, so that we can meaningfully

assess their relative importance. The arrows used in this matrix

indicate the change in the risk by comparison to the prior year’s

assessment. Our methodology uses the Group’s assessment

of the residual risk, being the probability of the risk occurring

and the potential impact it may have, taking account of any

mitigating actions and controls that have been implemented.

In the simplified version of this matrix shown here, the most

significant risks are positioned in its top right quadrant and the

least significant in the bottom left. It shows that, based on our

assessment, the likelihood of the geopolitical risk materialising

has increased compared to the prior year. For all other risks

we consider that the likelihood has remained the same. For

macroeconomic risk and people and capability risk, we consider

that the impact has increased.

The risk management process identified 11 principal risks. Across

pages 73 to 78 we have summarised each risk, explained why

it is relevant for the Group, set out the potential consequences

should it materialise and detailed the risk mitigation

mechanisms. The arrows indicate the change (up for an

increased risk, down for a decreased risk). A static risk is depicted

by an equals symbol. Risks are managed at Board level and are

not assigned to an individual risk owner.

Geopolitical

Legal and regulatory compliance

Routes to market

Operational transformation

People and capability

New Product Introduction (NPI)

Supply chain

Business interruption

Climate change

Macroeconomic

Cyber/information technology

Key:

325

Rare Unlikely ProbablePossible Very likely

Likelihood

Impact

Minor Moderate Significant Major Severe

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

Geopolitical

Change in the year:

Context:

The Group is principally a UK based,

export-driven business which operates

in global markets and is required to

comply with relevant regulations

including, but not limited to, sanctions,

embargoes and export controls.

Government policies on international

trade, including the export of specific

technologies, raw materials and the

approval of particular end users are

subject to foreign policy objectives

which can change over time.

Risk

• Uncertainty arising from the

impact of import tariffs on

supply chains, the increase in

the landed cost of goods and

end user pricing may have

an adverse impact on global

growth and subsequent

demand for our products in

key markets.

• Customers reallocate priorities

and financial budgets.

• Export restrictions on our

products as a result of

changes to foreign policy

objectives.

Possible impact

• Lower net pricing/reduced orders for

markets adversely affected by tariffs,

reducing contribution margins or

sales volumes.

• Increases to input costs and lower

gross margins.

• Counter measures by countries

affected, such as restrictions on

supply of key raw materials and

investment in domestic alternatives,

the latter leading to longer-term

reduction in export opportunities to

specific markets.

• Restrictions on the provision of

after-sales service, leading to lower

service contract revenues.

• Reduced volumes may impact

research and development (R&D)

investment decisions due to adverse

impacts on business cases.

Control mechanisms

• Engagement with UK Government

and regulatory authorities.

• Engagement with customers to

address the impact of tariffs.

• Contract review and protection

against breach of contract should

export licences be withheld.

• Long-term investment

planningstrategies.

Mitigation

• Broad global customer base;

contractual protection.

• Market diversification.

• Strategic sourcing/dual sourcing

to reduce landed cost of

purchases (notably for USA/

China origin goods).

• Use of duty-free programmes

when applicable.

• Opportunity to leverage

potential differences in tariff

rates compared to competitors.

• Focus on lower-risk markets

and end users.

Operational transformation

Change in the year:

Context:

Following the OI30 strategy review an

operational transformation programme

is in progress that aims to improve

operating efficiencies. Business plans

include revenue growth and operating

margin improvements that are, in

part, dependent on realising those

efficiencies in production, service and

support functions.

Risk

• The programme may fail

to generate operational

efficiencies intended to

improve operational gearing

through measures such

as lead time reduction

and reduced overheads in

relativeterms.

Possible impact

• Lower sales volumes than planned

due to higher lead times.

• Higher costs of production leading

to lower gross margins.

• Higher overhead costs leading

to lower operating profit.

Control mechanisms

• CEO and steering group oversight of

operational excellence programme.

Mitigation

• Programme headed by Chief

Operating Officer with a proven

track record in operational

improvement with dedicated

support in key areas such

as manufacturing and

strategicsourcing.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

Supply chain

Change in the year:

Context:

The Group operates a global supply

chain, sourcing from many suppliers

across a wide range of categories.

For certain technologies, there are

limited alternative sources. Disruption

may be triggered by global events

such as conflict, natural disaster,

geopolitical developments or

apandemic.

Risk

• Operational disruption or

price increases, due to supply

chain shortages, particularly

in electronic components.

• Suppliers de-committing

orders due to their inability to

supply as a result of internal

production issues.

• Change of supplier ownership

resulting in loss of supply.

• Regulatory changes or

economic viability causing

suppliers to discontinue

production, impacting the

long-term availability of

key components.

Possible impact

• Short-term delays or hiatus

in our production arising from

componentshortages.

• Poor customer service.

• Reputational damage.

• Lost revenue.

• Downward pressure on margins.

• Increased lead times and potential of

being unable to fulfil orders.

• Increased stock holding adversely

impacting cash conversion.

Control mechanisms

• Sales and operational

planningprocess.

• Group strategic sourcing

programme to consolidate

demand and manage key

supplierrisks.

• Sourcing of alternative options

and/or buffer stocks in relation to

high-risk suppliers.

• Long-term contracts with

keysuppliers.

Mitigation

• Strategic, selective and

diversified supplier base.

• Long-term demand planning.

• Buffer stock in extended

supplychain.

• Relationship management with

key suppliers.

• Responsive and adaptive

engineering change process.

Routes to market

Change in the year:

Context:

In some instances, the Group’s

products are components of

higher-level systems sold by original

equipment manufacturers (OEMs),

and thus the Group does not fully

control its route to market.

Risk

• Vertical integration by OEMs.

• Key relationships with

OEMs fail or are diminished.

Possible impact

• Loss of key customers/routes

tomarket.

• Reduction in sales volumes and/or

pricing and lower profitability.

Control mechanisms

• Customer insight to match product

performance to customer needs.

• Positioning of the Oxford

Instruments brand and marketing

directly to end users.

Mitigation

• Strategic relationships with

OEMs to promote the benefits

ofcombined systems.

• Product differentiation to

promote advantages of Oxford

Instruments’ equipment

andsolutions.

• Direct marketing to end users.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

New Product Introduction (NPI)

Change in the year:

Context:

The Group provides high-technology

equipment, systems and services to

itscustomers.

Risk

• Failure of the Group’s R&D

programme to produce

commercially viable products.

Possible impact

• Loss of market share or negative

pricing pressure, resulting in lower

turnover and reduced profitability.

• Additional NPI expenditure.

• Adverse impact on the Group’s brand

and reputation.

Control mechanisms

• ‘Voice of the Customer’ customer

listening approach and deep

market knowledge to direct

product development activities.

• Formal NPI processes to prioritise

investment and to manage R&D

expenditure.

• Product life cycle management.

Mitigation

• Understanding customer needs/

expectations and targeted

new product development

programme to maintain and

strengthen product positioning.

• Stage gate process in product

development to challenge

commercial business case and

mitigate technical risks.

• Operational practices

around sales-production

matching and inventory

management tomitigate stock

obsolescencerisks.

Macroeconomic

Change in the year:

Context:

Macroeconomic factors such as

recession, inflation and government

budget priorities, particularly regarding

US funding for universities may affect

demand or place upward pressure

on key elements of the cost base

such as labour and materials. A high

proportion of the Group’s revenue is in

foreign currencies, notably US dollars,

while the cost base is predominantly

denominated in GBP.

Risk

• Lower demand for the Group’s

products andservices.

• Rises in key cost drivers such

as people costs, energy,

components and raw

materials.

• For sales of long lead-

time items, requirement to

make inflationary estimates

when pricing, which may

beinaccurate.

• Long-term strengthening

of sterling against key

foreign currencies.

Possible impact

• Decrease in sales volumes.

• Increased cost of production leading

to a reduction in operating profit if not

offset by sufficient price increases.

• Potential for under-recovery of

increases if inflation estimates are

too low, or reduction in order volumes

if competitors do not react similarly.

• Reduction in reported revenue

andearnings.

Control mechanisms

• Strategic focus on growth markets.

• Price reviews.

• Inflation protection in commercial

response to long lead-time tenders

and long-term agreements.

• Strategic management of

currencyexposure.

Mitigation

• Ability to address inflationary

pressures through price

management reviews.

• Reviews of key drivers of

financial performance.

• Reviews of supply chain

currencybase.

• Active review of net exposure in

key currencies.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

Cyber/information technology

Change in the year:

Context:

Elements of production, financial and

other systems rely on IT availability.

Risk

• Cyber-attack on the Group’s

IT infrastructure.

• Ransomware/spread of

viruses or malware.

Possible impact

• System failure/data loss and

sustained disruption to production

operations.

• Loss of business-critical data.

• Delays in making payments to

employees and suppliers.

• Financial and reputational damage.

• Data privacy breach.

Control mechanisms

• Suite of IT protection mechanisms

including firewalls, penetration

testing, regular backups, virtual

machines and cyber reviews.

• External IT security consultants.

• Internal IT governance to maintain

protection systems and our

incident response.

• Employee awareness training.

Mitigation

• Managed service with third-

party security specialists

providing incident monitoring.

• Regular review, monitoring and

testing of key security measures

to assess adequacy of protection

against known threats.

• Upgrade of enterprise resource

planning (ERP) and other

internalsystems.

• End user education and phishing

simulation exercises.

Legal and regulatory compliance

Change in the year:

Context:

The Group operates in a complex and

evolving technological, legal and

regulatory environment, particularly

in areas such as export controls and

product compliance. In addition,

competitors may seek to protect

their position through enforcement of

intellectual property (IP) rights and

the Group may at times experience

unintentional legal, regulatory or IP

compliance issues.

Risk

• Infringement of a third party’s

intellectual property.

• Legal or regulatory breach.

Possible impact

• Potential loss of future revenue.

• Future royalty payments.

• Payment of damages.

• Fines and non-financial sanctions

such as restrictions on trade,

exclusion from public procurement

contracts.

• Reputational damage.

• Breach of contract with a third party.

• Potential loss of suppliers if they

cannot meet requirements that

need to be flowed down into

supplyagreements.

Control mechanisms

• Formal ‘Freedom to Operate’

assessment to identify potential

IP issues during product

development.

• Internal control framework

including Code of Conduct policies,

procedures, risk assessments

and training in risk areas such as

bribery and corruption, sanctions,

export controls, modern slavery,

market abuse and data protection.

• Specialist compliance teams,

supported by external advisers.

• Internal and external audits.

• Whistleblowing hotline.

• Supplier excellence programme.

Mitigation

• Confirmation of ‘Freedom to

Operate’ during new product

development stage gate

process.

• Compliance training,

communications and monitoring

programmes for key compliance

risks.

• Regular reviews of policies,

procedures and risk

assessments.

• Channel partner de-risking

project.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

People and capability

Change in the year:

Context:

Delivering and protecting core

capability and knowledge is a

strategic priority for the Group.

Risk

• Challenges in attracting and

retaining high-quality talent in

a tight labour market, notably

for roles requiring niche skills

that are in high demand.

• Shortage of key capabilities

required to meet the Group’s

strategic priorities.

Possible impact

• Salary inflation and/or additional

recruitment costs.

• Adverse impact on NPI.

• Operational disruption.

• Lower sales and profitability.

Control mechanisms

• Strategic focus on the employee

experience, including career

development, communications

and competitive remuneration, to

differentiate Oxford Instruments.

Mitigation

• Talent management and

succession processes.

• Leadership and technical

development programmes.

• Hybrid and remote working

policies to facilitate location-

agnostic appointments.

• Visa sponsorship registration

for employee mobility.

• Comprehensive internal

communications.

• Holistic approach to total

compensation.

Business interruption

Change in the year:

Context:

Business units’ production facilities are

typically located at a single site and

are dependent on availability of parts

sourced from global supply chains.

Risk

• Sustained disruption to

production arising from a

major incident at a site.

• Hiatus in production due to

shortage of supply.

Possible impact

• Inability to fulfil orders in the short

term, resulting in a reduction in sales

and profitability.

• Additional, non-recurring

overhead costs.

Control mechanisms

• Business continuity plans for all

manufacturing sites.

• Contractual protection to limit

financial consequences of

delayed delivery.

• Group strategic sourcing

programme.

Mitigation

• Business continuity plans can

reduce downtime arising from

incidents and facilitate the

restoration or relocation of

production.

• Standard sales contracts include

clauses for limitation of liability,

liquidated damages and the

exclusion of consequential losses.

• Business interruption insurance.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Risk management continued

Climate change

Change in the year:

Context:

Climate change generates both risks

and opportunities. Our response

needs to address risks and optimise

opportunities. More detail on our

approach is set out in our Task Force on

Climate-related Disclosures Statement

on pages 52 to 60.

Risk

• The transition from fossil

fuels to a low-carbon/

net zero economy may

require significant changes

in materials used and

production methods that may

impact our own operations

and those of our suppliers.

• Chronic changes in weather

and extreme weather events

may disrupt supply chains,

operations and logistics.

Possible impact

• Rises in production costs and product

development costs to reduce CO

emissions linked to our products.

• Delayed production and/

or installation leading to

delayedrevenue.

• Reduction in sales volumes if we fail

to meet customers’ environmental

expectations/requirements.

• Reputational damage or loss of

investment arising from failure to

anticipate or address climate risk.

• Increased freight and

packagingcosts.

Control mechanisms

• Sustainability Committee and

management-level Sustainability

Leadership Forum.

• Climate-related risks and

opportunities evaluation and

reporting embedded in operating

businesses.

• Strategic sourcing.

• Product compliance groups.

Mitigation

• Product compliance teams have

an established methodology

to deal with changes to

environmental regulations.

• Investment in product

development to capitalise on

the opportunities for our key

enabling technologies to help

customers address climate-

related challenges.

• Investment in CO

reductionsolutions.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Viability statement

RISK AREA

1. Geopolitical, supply chain, routes to market, macroeconomic (including tariffs)

Potential impact of risk Explanation

Loss of revenue due to

lower volumes, leading

to lost margin

The potential impact is estimated by applying the following sensitivities to revenue:

Year 1 – in line with detailed budget revenue

Years 2 and 3 – no revenue growth for any business

RISK AREA

2. Supply chain, macroeconomic, climate change

Potential impact of risk Explanation

Reduction in gross

margin if business units

are unable to mitigate

cost increases through

higher selling prices

Increased overheads

Simulates lower gross margins from failing to recover increased input costs via increases in the selling price.

Considers the potential impact of incremental overheads that could arise in the principal areas of expenditure

such as staff costs, logistics and facilities costs, including energy.

In years 2 and 3 of the viability assessment period, the impact is simulated by applying a two hundred basis

points reduction in the gross margin year-on-year (cumulatively four hundred basis points).

No specific additional charges for recurring overheads have been included relating to inflation risk compared

to the baseline scenario. This is because, in a scenario of stagnant revenue growth (scenario 1), the baseline

assumptions for inflationary increases are considered sufficient as they include a reasonable year-on-year

increase throughout the Viability Assessment Period when compared to Bank of England forecast inflation.

RISK AREA

3. Legal and compliance, Cyber and IT, New Product Introduction, macroeconomic, people and capability

Potential impact of risk Explanation

Additional non-recurring

overhead costs

Additional non-recurring overheads have been applied, representing a contingency for the potential impact

of a significant one-off charge totalling £15m. As timing is unpredictable, it has been spread evenly over the

threeyears.

RISK AREA

4. Business interruption

Potential impact of risk Explanation

Increased working

capital

The financial impact of major disruption to the Group’s manufacturing operations is mitigated through business

interruption insurance. Consequently, for the purposes of this assessment, the sensitivity applied relates to

increased working capital requirements only and was applied broadly at a Group level. In each year, the additional

working capital requirements in the baseline forecasts have been doubled to quantify the impact of this sensitivity.

The Board has assessed the viability of the Group over a three-

year period, taking into consideration its current position and the

potential impact of certain of its principal risks and uncertainties.

This assessment concerns the three-year period from 1 April

2025 to 31 March 2028 (the “Viability Assessment Period”).

Whilst the Board has no reason to believe that the Group will

not remain viable for a longer period, it is comfortable that three

years is an appropriate assessment period and is consistent with

the approach taken since the introduction of the requirement

to prepare a viability statement in 2016, in line with the UK

Corporate Governance Code.

Scenario testing

The viability assessment process is informed by the potential

impact of the principal risks and uncertainties and the likelihood

of them arising. This led to the application of four sensitivities

against management’s base-case forecasts to quantify the

potential impact of risks materialising. Further detail regarding

the key risks and uncertainties which have been considered in

this assessment are set out in the Risk Management section on

pages 73 to 78.

The process and methodology used for the Viability Assessment

is consistent with prior years.

The table on the right outlines the risk areas, their potential impact

and explains the nature of the scenario testing performed.

Note that not all principal risks and uncertainties have been

utilised for scenario testing purposes in this context. The potential

impact of cyber risk (for example, disruption to business-as-

usual operations arising from a cyber-attack or malware) has

not been estimated through the inclusion of a specific scenario,

as the impact is unpredictable (as it would depend on the nature

and duration of the issue) and because the downside impact

assessed from the impact of the other risks is considered to be

sufficient to account for this risk. Further, some of the potential

short-term impacts that may arise from climate change are

reflected in the inflationary cost sensitivities that have been

applied to direct costs, but potential longer-term impacts fall

outside the Viability Assessment Period.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Viability statement continued

Methodology

The Group starts the Viability Assessment Period with a positive

net cash position and the criteria used to assess viability in

aggregate were the same as the prior year. The Board believes

that either maintaining a positive net cash position during the

Viability Assessment Period or, alternatively, operating within

agreed debt arrangements (particularly relevant if retained cash

is used to fund acquisitions), would demonstrate the Group’s

liquidity to meet its liabilities as they fall due. Currently, the Group

has committed credit facilities of approximately £196m and a

closing net cash balance of £84.4m. Underlying cash conversion

was 89% and the Group generated £31.8m of free cash flow.

There are covenants associated with the facilities which require

the Group to operate within a ratio of three times EBITDA to

net debt, and EBITDA to interest greater than four times. These

covenants, therefore, could limit the headroom available

from facilities and are factored into the viability assessment

calculations where relevant.

The starting point to undertake the viability assessment is the

three-year Group forecast (“Forecast”) produced as part of the

annual budgeting process. The Forecast has several scenarios

which include a downside case, a base case, and an upside

case. The base case Forecast forms the “Baseline” for the

viability assessment calculations. The sensitivities set out above

were applied to the Baseline to provide a sensitised operating

profit figure for the Group.

The Forecast includes cash flow forecasts for each year of the

Viability Assessment Period at Group level only. These start with

the operating profit calculations (after sensitivities), and then

generally apply the same assumptions as the baseline model

to calculate movements in working capital, investing activities,

tax, dividends paid, etc. to forecast the net cash flow in each

year. The only exception is the application of additional working

capital requirements set out in sensitivity 4 above.

Thus, the viability assessment uses the same model as the

Forecasts to estimate annual movements in net cash and

includes no adjustment for any mitigating actions that the Group

might take in the event of adverse financial performance such

as reduced capital expenditure, changes to dividend policy,

reduction in bonuses, etc. This reflects a prudent approach to the

viability assessment calculations.

The cumulative impact of the scenarios tested is to reduce

revenue by £217m (13% of the Baseline total) and operating profit

by roughly £146m compared to the Baseline in the three-year

period covered by the assessment. However, the only elements

of the cash flow forecasts that have been adjusted in the viability

assessment relate to the movements in working capital and the

tax payment. All other cash flows, including, but not limited to,

capital expenditure, R&D expenditure and dividends, have not

been adjusted in the viability assessment.

Conclusion

In aggregate, over the three years of the Viability Assessment

Period and subsequent to scenario testing, the calculations

demonstrate that the Group would remain profitable and

would continue to generate a positive operating cash flow. The

outcomes show positive EBITDA and positive adjusted operating

profit in all three years. Further, the calculations show that the

Group would generate a positive net cashflow in total for the

Viability Assessment Period, leading to additional headroom.

Consequently, the Group would maintain a healthy net cash

balance at the end of the Viability Assessment Period and at

each balance sheet date during the period.

The forecast level of net cash, combined with banking facilities

of approximately £196m, demonstrate that during the Viability

Assessment Period, the Group’s forecasts include substantial

headroom. Consequently, the Board has a reasonable expectation

that the Group will be able to continue in operation and meet its

liabilities as they fall due over the next three years.

The outcome of this assessment supports not only the Viability

statement, but also the Going concern statement, as set out below.

Going concern statement

The Group’s business activities and factors that are considered

likely to affect its performance and position in the future are set

out in the Strategic Report on pages 9 to 81. The Finance review

on pages 37 to 44 discloses information relevant to the Group’s

financial position, its cash flows, borrowing facilities and liquidity.

The Board has considered the Group’s current financial position

and future prospects and, as set out in the Viability Statement

above, has performed an assessment of longer-term viability

up to 31 March 2028. On this basis, the Directors conclude that

there is a reasonable expectation that the Group will continue in

operational existence for the foreseeable future and that there are

no material uncertainties which may cast significant doubt over

its ability to continue as a going concern. As a result, the Board

considers it appropriate to continue to adopt the going concern

basis of accounting.

Approval

The Strategic Report was approved by the Board on 12 June 2025.

RICHARD TYSON

Chief Executive Officer

12 June 2025

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Non-financial information statement

Key policies and procedures Information within this report

Information available

on the company’s website

Environment

Health and Safety Policy

Environmental Policy

Supplier Due Diligence and

Audit Procedures

Sustainability Report:

pages 45 to 68

Sustainability Committee Report:

pages 116 to 118

Task Force on Climate-related

Financial Disclosures (TCFD)

Statement: pages 52 to 60

www.oxinst.com/investors/

sustainability

www.oxinst.com/investors/

compliance/environmental-

policy

www.oxinst.com/CodeofConduct

Employees

Code of Conduct

Health and Safety Policy

Working at Oxford Instruments Policy

Leaving Oxford Instruments Policy

IT Infrastructure and Use Policy

Conflicts of Interest Policy

Business Travel Policy

Crisis Management Policy

Reward and Recognition Policy

Performance Management Policy

Opportunity and Career Policy

Share Dealing Policy

Engaging with our stakeholders:

pages 27 to 28

Sustainability Report:

pages 45 to 68

How we engage with our

stakeholders: pages 89 to 93

Board Leadership and Company

Purpose: page 88

Sustainability Committee Report:

pages 116 to 118

www.oxinst.com/CodeofConduct

www.oxinst.com/investors/

sustainability/health-and-safety

www.oxinst.com/investors/

sustainability/gender-pay-report

www.oxinst.com/CodeofConduct

www.oxinst.com/careers

Social matters

Export Control Policy

Code of Conduct

Group Sanctions Policy

Group Export Controls

Sustainability Report:

pages 45 to 68

Community engagement:

page 91

Sustainability Committee Report:

pages 116 to 118

www.oxinst.com/corporate-

content/privacy

www.oxinst.com/CodeofConduct

www.oxinst.com/investors/

compliance/group-sanctions-

policy

www.oxinst.com/investors/

compliance/group-export-

controls-policy

Key policies and procedures Information within this report

Information available

on the company’s website

Human rights

Global Human Rights Policy

Modern Slavery Statement

Gender & Ethnicity Pay Gap Report

Ethics – human rights: page 68 www.oxinst.com/investors/

compliance/human-rights-policy

www.oxinst.com/investors/

compliance/modern-slavery

www.oxinst.com/investors/

sustainability/gender-pay-report

www.oxinst.com/corporate-

content/privacy

Anti-bribery and corruption

Anti-bribery and Anti-corruption Policy

Whistleblowing Policy

Share Dealing Policy

Supplier Code of Conduct

Conflicts of Interest Policy

Supplier Due Diligence and

Audit Procedures

Ethics – anti-bribery and

corruption: page 67

Supplier engagement:

page 91

www.oxinst.com/investors/

compliance/anti-bribery-and-

corruption

www.oxinst.com/CodeofConduct

Additional disclosures: – Business model – Principal risks – Non-financial KPIs

Group Tax Strategy Investment case:

pages 21 and 22

Business Model:

pages 23 to 26

Strategy: pages 29 to 34

KPIs: pages 35 and 36

Principal Risks: pages 73 to 78

Audit and Risk Committee Report:

pages 109 to 115

www.oxinst.com/investors/

compliance/group-tax-strategy

The Directors’ Report is approved by the Board and signed on its behalf by

LOUISE MEADS

Interim Company Secretary

12 June 2025

The table below explains where relevant non-financial information can be found within this report, further to the Financial Reporting Directive requirements contained in Sections 414CA and

414CB of the Companies Act 2006. Where appropriate, details on where additional information on these matters can be found, have also been included.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview Governance

Oxford Instruments plc

Annual Report 2025

Governance

83 Chair’s overview

85 Board of Directors

88 Board leadership and company purpose

88 Corporate Governance statement

89 How we engage with stakeholders

94 Section 172(1) Statement

95 Division of responsibilities

100 Composition, succession and evaluation

105 Nomination Committee Report

109 Audit and Risk Committee Report

116 Sustainability Committee Report

119 Remuneration Committee report

122 Directors’ remuneration report

140 Shareholder information

141 Directors’ report

144 Directors’ responsibilities

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chair’s overview

Promoting the

sustainable success

of the company

Dear Shareholder,

On behalf of the Board, I am pleased to introduce the

Governance Report for the year ended 31 March 2025. This

report describes our governance structures and procedures,

summarises the work of our Board and its Committees during

the year and illustrates how our responsibilities have been

discharged. We recognise that the Board’s fundamental role is to

promote the long-term sustainable success of the company and

the Group, generating value for shareholders and contributing

to wider society. To achieve this, we strive to ensure that we

implement and follow good governance practices.

Strategy and purpose

As noted in the 2024 Annual Report, one of the most important

areas of focus for the Board was the redevelopment of our

strategy and purpose. The Group’s new strategy is founded on

developing focused, customer-first ways of working, simplifying

our organisation and processes, and making a step change

in operational performance, while protecting our investments

in products and technology – the foundation of our existing

success. During the year to 31 March 2025, the Board focused

on monitoring the execution of this strategy and I am pleased to

report that our strategic actions to target enhanced growth and

profitability through customer-first ways of working have gained

real traction and have started to generate many of the outcomes

we set out to achieve. The delivery of our strategic programme

has also enabled us to identify further growth and margin

opportunities, giving scope to build on progress already made.

For more information, see Our purpose-led approach on

pages 7 and 8, Our Strategy on pages 29 to 32, the Chief

ExecutiveOfficer’s review on pages 11 to 20 and the case

studies on pages 33 and 34.

NEIL CARSON

Chair

Governance highlights

• Paul Fry joined the Board as Chief

Financial Officer on 1 April 2025,

following a robust appointment process.

• Rowena Innocent joined the Board

as a Non-Executive Director, effective

17 February 2025, and will serve as a

member of the company’s Audit and

Risk, Nomination, Remuneration and

Sustainability Committees.

• Oversight of significant progress with

the execution of the redeveloped

strategy and purpose.

• Gained meaningful insights through

ourprogramme of employee

engagement activity.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Chair’s overview continued

Positive progress

It has been a year of positive progress at Oxford Instruments,

culminating in an excellent set of results which underline our

confidence in the mid-term outcomes set out in last year’s

strategic update and in Richard’s review on page 12.

A year on, we have streamlined our divisional structure, begun

our operational transformation and completed our regional pivot,

while continuing to focus on our core strengths. The sale of our

quantum-focused business NanoScience is consistent with our

strategy to focus and invest in the best areas of opportunity to

create value for shareholders. Through these actions, we are

creating a simpler, sharper and more commercially focused

organisation, to put ourselves in the best possible shape to

fulfil our strong potential. The revenue, profit and margin growth

we have achieved demonstrate that we are heading in the

right direction.

Board composition and succession planning

It is essential that our Board’s composition encompasses the

necessary skills, knowledge and experience to provide effective

leadership. Our Nomination Committee actively keeps the

constitution of the Board and its Committees under review and

there have been a number of changes to the Board during the

year and up to the date of signing the Annual Report, as follows:

As noted in the Report and Financial Statements 2024, after

having served on the Board for almost nine years, Mary Walden

stepped down as a Non-Executive Director of the company with

effect from 4 February 2025. Ahead of this departure in relation

to her tenure and independence, the Board, supported by the

Nomination Committee, appointed Hannah Nichols as a Non-

Executive Director with effect from 1 January 2024. Hannah took

up the role of Chair of the Audit and Risk Committee with effect

from 25 July 2024 as part of the planned transition from Mary.

Rowena Innocent was appointed as a Non-Executive Director

of the company with effect from 17 February 2025. Rowena

has over 30 years’ experience in high-tech product design

and manufacturing and the Board will benefit from her deep

technical understanding combined with her commercial acumen.

On 31 March 2025, Gavin Hill stepped down as Chief Financial

Officer and was succeeded in this role by Paul Fry. Paul has a

strong track record in senior positions at international healthcare

and technology companies, having held the role of CFO, most

recently at Argenta Group. The Board appreciates the very

significant contribution Gavin has made to the success of

Oxford Instruments over nearly nine years.

Reshma Ramachandran stood down as a Non-Executive Director

with effect from 25 July 2024, due to her appointment in a new

executive role externally, which would have restricted the time

she had available to commit to her role with the company. The

Board thanks Reshma for the valuable contributions she has

made during her time as a Director.

Further information regarding the work of the Nomination

Committee can be found on pages 105 to 108.

Employee engagement

The Board was again pleased to participate in its formal

programme of employee engagement activity this year. We

strongly believe that this strengthens the Board’s understanding

of employees’ perspectives and enables us to more effectively

consider their interests when we are making decisions. The

Board plays a role in shaping the programme each year and we

aim to meet with employees across a broad range of roles, sites

and stages in their career. This year our programme included,

amongst other things, full-Board site visits to our Severn Beach

site in Bristol and our Andor Technology site in Belfast, as well as

a dedicated session on remuneration hosted by Alison Wood in

her capacity as Chair of the Board’s Remuneration Committee.

After each of these events the Board discusses, as a specific

agenda item at the next Board meeting, the insights gained

and determines any appropriate actions. We look forward

to participating in our programme of engagement activity

for 2025/26.

To find out more about our approach to stakeholder

engagement, please see the ‘Engaging with our stakeholders’

section on pages 27 to 28 and the ‘How we engage with our

stakeholders’ section on pages 89 to 93.

Annual General Meeting

The 2025 Annual General Meeting (AGM) of Oxford Instruments

plc will be held at Ashurst LLP, London Fruit & Wool Exchange,

1 Duval Square, London, E1 6PW at 11.00am on Monday

28July2025.

Further details, including the resolutions to be proposed to our

shareholders, can be found in the Notice of Meeting which has

been sent to our shareholders and which is also available on our

website at: www.oxinst.com/investors-content/annual-general-

meeting. The result of the votes on the resolutions put forward

at the AGM will be publicly announced to the stock exchange

and published on our website as soon as possible following the

conclusion of the meeting.

As usual, I will be available at the AGM and will be very happy to

take any questions you may have regarding the operation of the

Board during the year.

NEIL CARSON

Chair

12 June 2025

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Neil Carson

Chair

Appointed to the Board:

1 December 2018

Non-Executive

Independent: No

Skills and experience:

Neil is a former FTSE 100 chief executive. After completing an

engineering degree, Neil joined Johnson Matthey in 1980 where

he held several senior management positions in the UK and

the USA, before holding the role of Chief Executive Officer from

2004 to 2014. He has a broad industrial outlook and a highly

commercial approach with a practical perspective on business.

Heprovides valuable insight based on his former executive position

and operational experience and brings a track record of strong

operational exposure, familiarity with capital-intensive business and

a first-class international perspective on driving value in complex

environments, and this experience makes him particularly well

suited to serving as Chair of the Board. Neil was awarded an OBE

for services to the chemical industry in 2016.

Neil’s previous non-executive roles include serving as Chairman

of TT Electronics plc, Deputy Chairman of TI Fluid Systems plc

and as a Non-Executive Director of Paypoint plc and Amec Foster

Wheelerplc.

External appointments:

Non-Executive Director, member of the Sustainability Committee

and Chair of the Remuneration Committee of Shell plc.

Committee Membership

N R S

Board of Directors

Strength in

our leadership

Changes to the Board and its Committees

During the financial year and up to the date of signing

of the Annual Report, the composition of the Board

changed as follows:

• Reshma Ramachandran stepped down as a

Non-Executive Director on 25 July 2024.

• Mary Waldner stepped down from the role of Chair

of the Audit and Risk Committee with effect from

25 July 2024 and stepped down from the Board on

3 February 2025.

• Hannah Nichols took up the role of Chair of the Audit

and Risk Committee with effect from 25 July 2024.

• Rowena Innocent was appointed as a Non-Executive

Director on 17 February 2025.

• Gavin Hill stepped down as CFO and Executive

Director on 31 March 2025.

• Paul Fry was appointed as CFO and Executive

Director on 1 April 2025.

Committee Membership

A Audit and Risk Committee Member

R Remuneration Committee Member

N Nomination Committee Member

S Sustainability Committee Member

C Chair of Committee

1. Neil was independent upon appointment to the Board, in line with provision 10 of the UK Corporate Governance Code 2018.

Richard Tyson

Chief Executive

Appointed to the Board:

1 October 2023

Executive

Independent: No

Skills and experience:

Richard has a track record of business leadership in the advanced

technology sector spanning more than 30 years. In his previous

role as Chief Executive Officer at TT Electronics plc from 2014 to

2023, Richard transformed, reshaped and refocused the business,

delivering product innovation, building the group organically and

through acquisition, and delivering strong growth in revenue,

profits and margin. Richard previously held senior roles at defence

group Cobham plc, where he was a member of the executive

committee and led the aerospace and security division, and at

GoodrichAerospace.

Richard is a fellow of the Royal Aeronautical Society and a Governor

of St Swithun’s Independent School for Girls in Hampshire. He is

a graduate of the Executive Senior Leadership programme at

Henley Business School, and holds a diploma from the Chartered

Institute of Marketing and a BSc in Management Sciences from The

University of Manchester.

External appointments:

Senior Independent Director of Videndum plc.

Committee Membership

None

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Board of Directors continued

Paul Fry

Chief Financial Officer

Appointed to the Board:

1 April 2025

Executive

Independent: No

Skills and experience:

Paul has a strong track record in senior positions at international

healthcare and technology companies, having held the roles of

CFO, most recently at Argenta Group and previously at Vectura plc

and Immunocore Limited. With a career spanning more than 35

years, Paul has also held a number of senior roles at Vodafone and

GlaxoSmithKline. He brings a wealth of highly relevant experience

in business transformation, a clear understanding of Oxford

Instruments’ growth drivers, and a shared commitment to our

purpose and values-led approach. Paul holds a BA in Philosophy,

Politics and Economics from the University of Oxford and is an

associate of the Chartered Institute of Management Accountants.

Paul’s previous roles include serving as the Chief Financial Officer at

Argenta Group Limited, as the Chief Financial Officer with a period

as acting Chief Executive Officer at Vectura Group plc and as the

Chief Financial Officer at Immunocore Limited.

External appointments:

Non-Executive Director and Chair of the Audit Committee

of Avacta Group plc.

Committee Membership

None

Rowena Innocent

Non-Executive Director

Appointed to the Board:

17 February 2025

Non-Executive

Independent: Yes

Skills and experience:

Rowena is currently a consultant for AcoustoFab Ltd, which aims

to create precision-driven, sustainable solutions that address

real-world challenges across sectors such as lab automation, 3D

printing and agritech. She also serves as a member of the Advisory

Council at the National Composite Centre, and the Digital Program

Expert Group for the DSIT National Measurement System, and is an

Aegis Professor for Technology, Innovation and Equality and Chair

of the IAB School of Physics at the University of Bristol. Rowena

has over 30 years’ experience in high-tech product design and

manufacturing. She is a Chartered Engineer and holds a degree in

Physics with Astrophysics from the University of Leicester. Prior to

her current role, Rowena served as the Chief Operating Officer of

Ultraleap Limited. She has also held the position of Group Head

of STEM strategy at Spectris as well as a range of engineering

leadership roles with Malvern Panalytical (a Spectris company),

General Electric and Druck.

External appointments:

Consultant at AcoustoFab Ltd.

Committee Membership

A N R S

Alison Wood

Senior Independent Director

Appointed to the Board:

8 September 2020

Non-Executive

Independent: Yes

Skills and experience:

Alison holds a BA in Engineering, Economics and Management

from the University of Oxford and an MBA from Harvard Business

School. Her background is in leading business development, M&A

and strategic planning across blue-chip UK companies, particularly

in the defence sector. She was formerly the Global Director for

Corporate Development & Strategy at National Grid plc and before

that, Group Strategic Development Director for BAE Systems plc.

She is a highly experienced Non-Executive Director and committee

chair, with her experience being particularly well suited to her role

as Chair of Oxford Instruments’ Remuneration Committee.

Alison’s previous roles include serving as Senior Independent

Director and Remuneration Committee Chair of Costain Group PLC

and the British Standards Institute, a Non-Executive Director and

Remuneration Committee Chair of TT Electronics plc, Cobham

plc and Capricorn Energy PLC (formerly Cairn Energy PLC), Senior

Independent Director of e2v plc and a Non Executive Director of

both BTG plc and THUS plc.

External appointments:

Non-Executive Director and Chair of Galliford Try Holdings plc.

Senior Independent Director of Morgan Advanced Materials plc.

Committee Membership

A N R S

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Board of Directors continued

Sir Nigel Sheinwald

Non-Executive Director

Appointed to the Board:

22 September 2021

Non-Executive

Independent: Yes

Skills and experience:

Sir Nigel previously served as a British diplomat and has deep

knowledge of international politics, strategy, regulation and

communication. He holds an MA from Balliol College, University

of Oxford, where he is now an Honorary Fellow. He joined the

Diplomatic Service in 1976 and served in Brussels, Moscow,

Washington and in a wide range of policy roles in London. He

served as British Ambassador to the United States (2007-12)

and European Union (2000-03) and as Foreign Policy and

Defence Adviser to the Prime Minister (2003-07). Since leaving

the Diplomatic Service in 2012 he has served on a wide range of

corporate and not-for-profit boards. The extensive range of skills

and experience that he brings, along with his commitment to

Oxford Instruments’ sustainability agenda, is a good fit with the

Group’s requirements and particularly benefit his role as Chair of the

Sustainability Committee.

Sir Nigel was previously a Non-Executive Director and Chair of the

Safety, Environment and Sustainability Committee at Royal Dutch

Shell plc (now Shell plc).

External appointments:

Non-Executive Director of Invesco Ltd.

Visiting Professor at King’s College, London.

International Advisory Board member of BritishAmerican Business.

Advisory Board member of Centre for European Reform, London.

Committee Membership

A N R S

Hannah Nichols

Non-Executive Director

Appointed to the Board:

1 January 2024

Non-Executive

Independent: Yes

Skills and experience:

Hannah is currently Chief Financial Officer of Coats Group plc, a

world leader in thread manufacturing and structural components

for apparel and footwear, as well as an innovative pioneer in

performance materials and a constituent of the FTSE 250 index on

the London Stock Exchange, a role she has held since May 2025.

She holds a Classics degree from the University of Cambridge and

is a qualified chartered accountant. Hannah is an experienced

financial professional; prior to her current executive role she held

the role of Chief Financial Officer of Hill & Smith PLC, and prior

to this, had a successful 15-year career at BT Group plc, latterly

serving as Chief Financial Officer, Asia, Middle East and Africa for

BT Global Services, based in Singapore. She also held a number

of commercial roles at Cable & Wireless plc and qualified as a

chartered accountant at Arthur Andersen. Hannah’s expertise

demonstrates how she is well suited to the role of Chair of the Audit

and Risk Committee, a role which she has held since July 2024.

External appointments:

Chief Financial Officer of Coats Group plc.

Committee Membership

A N R S

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Effective Board

The primary function of the Board is to promote the long-term sustainable success of the Group,

to generate and preserve value and to contribute to wider society. Our Board equips itself to

achieve this by utilising good governance practices and it comprises Directors who possess the

necessary skills, knowledge and experience to provide effective leadership.

The Board’s approach to governance is explained throughout this Governance Report,

on pages 88 to 104, and each Director’s biographical information is set out in the

Board biographies on pages 85 to 87.

Purpose, strategy andstakeholders

Our core purpose is to accelerate the breakthroughs that create a brighter future for our world.

Our technology and expertise enable our customers to discover and bring to market exciting new

advances that drive human progress.

The Board is responsible for establishing our purpose. It is also responsible for setting the strategy

which will deliver in line with the purpose, and which is underpinned by our values, culture and

how we do business. Read more about the Board’s work on redefining the company’s purpose

and resetting its strategy on pages 11 to 14.

For more information on our purpose, see pages 7 and 8 and for more information on

our strategy, see pages 29 to 34.

To ensure that it fulfils its obligations to its shareholders and wider stakeholders, the Board actively

engages with these groups in order to understand their needs and how delivery of our strategy

impacts and delivers value for them.

For more information on our approach to shareholder and stakeholder engagement,

see pages 27 to 28 and 89 to 94.

This Corporate Governance Statement, along with the Governance Report as a whole, details how

the Group has applied the principles and complied with the relevant provisions of the UK Corporate

Governance Code 2018 (the ‘Code’) and other relevant requirements to which it is subject, such as

the Financial Conduct Authority’s Listing Rules and Disclosure Guidance and Transparency Rules,

during the financial year ended 31 March 2025.

This Corporate Governance Statement, as required by the Disclosure Guidance and Transparency

Rules, forms part of the Directors’ Report and has been prepared in line with the Code, which can

be found on the website of the Financial Reporting Council at www.frc.org.uk. The structure of

the Governance Report largely aligns with the structure of the Code in order to most effectively

demonstrate how its principles have been applied.

During the financial year ended 31 March 2025, the Board considers that it has complied with the

provisions of the Code.

Whilst the specific disclosures required by Disclosure Guidance and Transparency Rule 7.2 are

covered in more depth throughout the Annual Report, by way of reference, they can be found

as follows:

• A description of the main features of our internal control and risk management systems in

relation to the financial reporting process can be found on page 114.

• Share capital information can be found in the Directors’ Report on page 142.

• Details of the composition of the Board and its Committees can be found on page 96.

• Our Board diversity policy is described on page 107.

Board approval of the Corporate Governance Statement

This separate Corporate Governance Statement is approved by the Board and signed on behalf of

the Board by its Chair and Interim Company Secretary.

NEIL CARSON

Chair

LOUISE MEADS

Interim Company Secretary

12 June 2025

Board leadership and company purpose Corporate Governance statement

for the year ended 31 March 2025

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

How we engage with stakeholders

Our approach to engagement

On pages 27 and 28 we have described our key stakeholder groups, the value of each group to the company, the issues which matter most to them and how we engage with them, focusing on our activity

over the past year. The Board is committed to developing its understanding of the views of its key stakeholders. As noted earlier in this Annual Report, in some instances the Board engages directly with

stakeholders, but there is also significant engagement by senior management and throughout the company. The Board receives reports and updates on such engagement, and the views and feedback

gathered from stakeholders are used to inform discussion and decision making.

For a snapshot of our key stakeholders / Page 28

Stakeholder and

why we value them What matters to them How we engage Outcomes of our engagement

Board decisions where

stakeholders were considered

Customers

We put our customers’

needs at the centre of

our conversations and

decisionmaking.

Customer intimacy is key not

only to helping us identify

additional opportunities to

deliver increased value to our

customers, but to the long-

term growth of ourbusiness.

• Excellent customer

support and

engagement

throughout the buying

cycle.

• High-quality products

and technical

expertise.

• Products which deliver

value and help to meet

their objectives.

• Remote access and

continuity of supply

during disruption.

• The Executive Directors and senior management

frequently host direct meetings with key customers

from around the world, both virtually and in person

at our sites. These meetings provide meaningful

opportunities to understand first hand, at a senior

level of the organisation, how we can enhance our

offering to customers by shaping our understanding

of their current and future needs.

• The Board considers feedback from these

meetings, together with, for example, outputs

from our heightened customer intimacy such as

customertrends.

• Our technology and scientific expertise enable our

customers to discover and bring to market exciting

new advances that drive human progress.

• Continuing to invest in R&D allows us to deliver

cutting-edge products and services. Insights gained

from customer intimacy are instrumental in helping to

determine where investment should be made.

• Through deep knowledge of our target market

segments and the challenges faced by customers,

we have changed the way we communicate with

prospective and existing customers, more clearly

identifying the value our products can add.

• Our portfolio focuses on areas where our key enabling

technologies are driving long-term success. This

allows us to help customers to make ground-breaking

discoveries, accelerate their applied R&D and increase

productivity in high-tech manufacturing.

• Insights from customers help us to align our innovation

and product development initiatives to their strategic

roadmaps, so we can create differentiated products

and solutions which provide significant value.

• We have continued to refine our service offering with

digital connectivity helping to maintain productivity

through remote access and service.

Continued investment in high-quality

products and technical expertise is key to

the long-term growth of the business and

is in firm alignment with the company’s

strategy, which the Board sets andsupports.

See our strategy / Pages 29 to 34

The Board remains committed to developing

its understanding of the views of its key stakeholders

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

How we engage with stakeholders continued

Stakeholder and

why we value them What matters to them How we engage Outcomes of our engagement

Board decisions where

stakeholders were considered

Employees

Our employees are the

foundation of our business

success, and we have a

responsibility to support

their health, wellbeing and

development.

A highly capable, diverse

workforce also enables us

to better understand our

customers and markets.

Building an organisation with

a broad range of perspectives

and experiences increases

our ability to innovate, to

make the right decisions

and to meet or exceed our

customers’ expectations.

• Development

and progression

opportunities.

• Health, safety and

wellbeing.

• Fostering an inclusive

workplace.

• Understanding how

they contribute to our

strategy and success.

• Fair and consistent

remuneration.

• Clarity of expectation

on how recognition

and remuneration

structures align with

accountabilities.

• The Board was delighted to again participate in

a formal programme of employee engagement

activity this year, which included sessions focused

on executive remuneration, the ways of working

which will enable our colleagues to deliver our

strategy, and a full-Board site visit to our camera

and microscopy facility in Belfast.

• We maintain an engaging and structured approach

to connecting with our employees, with regular

sessions for all employees held at business unit

and regional level, together with a lively and active

intranet and Group-wide email communications

on key strategic initiatives. An annual engagement

survey tracks employee sentiment.

• We continue to promote our ‘Push for Zero’ health

and safety programme and Shield reporting system.

• The Board discusses the insights and actions from all

of its employee engagement activity. This continues

to foster meaningful consideration of employees as

key stakeholders. The Board will be participating in an

extensive programme of engagement activity during

2025/26.

• The Remuneration Committee reviewed the wider

workforce remuneration landscape and related

policies, and considered these when setting Executive

Director and Management Board remuneration.

• We have continued to promote observation reporting,

aiming to ensure that remedial actions can be taken to

prevent accidents from happening.

• The Sustainability Committee considered our maturing

approach and internal targets and measures relating

to equality, diversity and inclusion.

Decisions relating to our social sustainability

agenda, from health, safety and wellbeing

to investment in our people.

See the Sustainability Report /

Pages 45 to 68 and

Sustainability Committee Report /

Pages 116 to 118

Setting Executive Director and Senior

Leadership Team remuneration.

See the Directors’ Remuneration

Report / Pages 119 to 139

Shareholders

Generating value for

shareholders is part of

the Board’s fundamental

role, alongside promoting

the long-term sustainable

success of the company and

the Group and contributing to

society.

Our goal is to deliver

shareholder returns through

profitable, sustainable growth

with strong cash conversion

and efficient use of capital.

• Current and future

financial performance.

• Communication and

engagement.

• Sustainability.

• We actively engage with shareholders throughout

the year to ensure they understand the performance

of the business.

• Following the launch of our strategy in June 2024,

we held a well-attended capital markets day for

analysts and shareholders at our new compound

semiconductor facility.

• Our ongoing programme of dialogue includes

numerous shareholder meetings and roadshows,

which are facilitated alongside the publication of the

Annual Report and full-year and half-year results

announcements.

• During the year, the Chair, Senior Independent

Director, Remuneration Committee Chair and

Executive Directors all directly engaged with a range

of shareholders, including both virtual and in-person

meetings at our sites. Key topics included the

company’s financial results and strategy.

• Our externally appointed IR specialist increases the

bandwidth available to meet and inform a broader

range of new shareholders.

• The Board as a whole receives updates regarding the

nature and outcome of meetings and engagement

by certain Directors with the company’s shareholders.

This feedback helps the Board to shape the strategy

which enables the company to deliver shareholder

returns through profitable, sustainable growth with

strong cash conversion and efficient use of capital.

Developing and delivering against our

strategy.

See our strategy / Pages 29 to 32

Implementation of the Directors’

Remuneration Policy.

See the Directors’ Remuneration Report /

Pages 119 to 139

Consideration and decisions relating to our

wider sustainability agenda, from inclusion to

setting net zero targets.

See the Sustainability Report /

Pages 45 to 68 and

Sustainability Committee Report /

Pages 116 to 118

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Stakeholder and

why we value them What matters to them How we engage Outcomes of our engagement

Board decisions where

stakeholders were considered

Suppliers

Our supply chain plays a vital

role in supporting sustainable

growth and efficiency across

the business.

It is imperative that we attain

the highest quality products

and service for our customers,

whilst also striving to

enhance the efficiency of the

business and to reduce risk.

Engaging with our supply

chain is also crucial in the

development and delivery of

our net zero commitment.

• Long-term

partnerships.

• Visibility of the wider

supply chain, so that

they can best forecast

future requirements.

• Strong relationships

built on trust and

respect.

• It is crucial to provide our suppliers with accurate

forward visibility in order to align our customers’

requirements with our total supply capabilities. We

share the output from our sales and operations

planning process with them, and we have dedicated

Category Managers to help reduce risk and improve

efficiency. We must ensure our extended supply

chain meets our strict environmental compliance

requirements, whilst challenging them to provide

improvements to quality. Our key suppliers are

encouraged to become part of our new product

introduction process, allowing them to add value to

our process.

• The Board remains mindful of potential supply chain

challenges and where appropriate, will be briefed as

regards any necessary work to mitigate the impacts

of these challenges.

• As part of our operational excellence programme,

we continue to work to strengthen our supply chain

by executing a procurement strategy focused on

leveraging our scale and building long-term strategic

relationships with fewer suppliers. During the year, our

Chief Transformation Officer took on the permanent

role of Chief Operating Officer with a remit which

includes supply chain best practice.

• We have continued to develop our supplier due

diligence and audit procedures, including engaging a

leading compliance partner to support our collection

and assessment of data. We have a zero-tolerance

approach to all forms of modern slavery, including

servitude, forced, bonded and compulsory labour,

and human trafficking, and we expect our suppliers to

adopt the same approach.

Developing and delivering against our

operational excellence programme.

Decisions relating to the environmental and

governance strands of our sustainability

agenda, from supply chain responsible

sourcing to human rights and modern

slavery.

See the Sustainability Report /

Pages 45 to 68 and

Sustainability Committee Report /

Pages 116 to 118

Local communities

Striving to meet our purpose

in alignment with our values

enables us to support the

development of stronger

communities and have a

positive environmental and

social impact.

• The environment.

• Local small businesses.

• Schools and colleges

within their region.

• Volunteering

opportunities.

• Charitable donations.

• The appearance and

tangible impact of our

sites and operations.

• We actively engage in locally focused activities that

make our communities and environments a better

place to live and work.

• We are committed to empowering students with an

understanding of the working world and the range

of career opportunities that choosing STEM subjects

could open up, so we facilitate school visits, work

experience programmes and industrial post-doctoral

placements.

• We aim to support the small, independent

businesses near our sites.

• We help our employees to support their local

communities through charitable donations.

• We aim to be considerate neighbours in all aspects

of how we operate, but in particular, we recognise

the importance of the appearance and tangible

impact of our sites and operations.

• We operate ‘Go Green’ committees at many of our

sites to deliver a local environment agenda and

promote positive behaviours amongst peers. They

are focused on finding innovative ways to improve our

environmental impact.

• Many of our people are keen to share their expertise

and to make a difference to the people and

organisations that are close by, and we encourage

them to get involved through volunteering schemes.

We operate a ‘Volunteer time-off’ programme for

eligible employees which offers many benefits,

including increasing the positive impact we have in

our communities, boosting employee morale and

enhancing team bonding.

• We have facilitated collections of contributions to local

food banks and fundraising activity for local charities

and causes.

• We are committed to minimising emissions.

Decisions relating to our wider sustainability

agenda, from community impact to

supporting next-generation talent.

See the Sustainability Report /

Pages 45 to 68 and

Sustainability Committee Report /

Pages 116 to 118

How we engage with stakeholders continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Stakeholder and

why we value them What matters to them How we engage Outcomes of our engagement

Board decisions where

stakeholders were considered

Society

Through our stated

purpose – to accelerate the

breakthroughs that create a

brighter future for our world –

we are committed to making

a positive impact on the world

through our solutions and

services.

Our purpose underpins our

wholehearted commitment to

playing our part in creating a

sustainable future throughout

our operations, and by

behaving as a responsible

business.

• Protecting and

enhancing the

environment.

• Addressing the

impacts, risks and

opportunities arising

from climate change.

• The development

of new and

affordable vaccines

and treatments

fordiseases.

• Fostering a more

connected world.

• Enabling advances in

technology.

• Our technology and scientific expertise enable our

customers to discover and bring to market exciting

new advances that drive human progress.

• We use our market intimacy to develop new

products and services in pursuit of our purpose.

• We engage directly with universities, governments

and leading companies to explore and develop new

ideas, and to support productivity.

• Our Sustainability Committee elevates oversight of

the Group’s sustainability agenda to Board level,

with a specific focus on considering our approach to

climate change, amongst other things.

• Our sites and grounds are well maintained and

sensitive to the local environment and wildlife.

• We continue to develop new products and services, as

set out in the CEO review on page 19.

• Our Sustainability Committee has continued to keep

under review the progress being made across its

wider remit, including our work towards achieving our

ultimate net zero target of 2045 and interim targets to

2030 in respect of both our Scope 1 and 2 emissions.

See our Sustainability Report /

Pages 45 to 68

Information on the work of the

Sustainability Committee /

Pages 116 to 118

How we engage with stakeholders continued

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

How we engage with stakeholders continued

Principal decision case study

Augmenting our materials analysis capabilities

A key development during the year was the acquisition of FemtoTools AG, agreed on 7 June 2024,

and completed on 28 June 2024.

Based in Zurich, Switzerland, FemtoTools

specialises in nanoindentation, a technique used

to image the mechanical properties of intricate

microstructures for materials research and

semiconductor applications. The company joined

Oxford Instruments’ Imaging & Analysis division,

where its products are now sold in conjunction with

the Group’s existing range of materials analysis

tools, including electron microscope micro-

analysers and Raman microscopes.

The Board was pleased to approve the addition

of FemtoTools to the Group, in particular since the

acquisition has brought capabilities not previously

held by Oxford Instruments. In making their decision,

Board members considered the opportunities

and risks to key stakeholder groups of proceeding

with the transaction. Detailed financial projections

were secured, and growth plans set out, in order

to identify the likely impact on the Group’s revenue

and, by extension, the interests of shareholders.

Given the complementary nature of FemtoTools’

offering to the existing suite of techniques offered

by the Imaging & Analysis division, the Board was

satisfied that management had developed a strong

business case focused on the companies’ shared

end markets and customer bases.

Both the Board and management were mindful of

the impact on FemtoTools’ employees of becoming

part of Oxford Instruments and, in parallel, the

impact that assimilating new colleagues and new

technology into the Group would have on the

Imaging & Analysis and sales and service teams

around the world. Care was taken with in-person

briefings and ongoing engagement to ensure the

benefits for both were clear. Several key members

of the Imaging & Analysis leadership team, together

with additional colleagues with relevant expertise,

travelled to Zurich to support the announcement of

the acquisition, and an extensive integration plan

has been implemented since completion.

News of the acquisition, announced as part of

the Group’s annual results presentation, was well

received by analysts and shareholders. Customers

and prospective customers have also welcomed

FemtoTools’ decision to become part of Oxford

Instruments, and the expansion of our materials

analysis capabilities. The business has performed

well during the reporting year, with further

ambitious growth plans set out for 2025/26.

Read more about our nanoindentation

capabilities at www.femtotools.com

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Section 172(1) Statement

During the year to 31 March 2025, the Board of Directors has

acted to promote the long-term success of the company for

the benefit of its shareholders, whilst having due regard to the

matters set out in Section 172(1)(a) to (f) of the Companies Act

2006, being:

a. The likely consequences of any decision in the long term.

b. The interests of the company’s employees.

c. The need to foster the company’s business relationships with

suppliers, customers and others.

d. The impact of the company’s operations on the community

and the environment.

e. The desirability of the company maintaining a reputation for

high standards of business conduct.

f. The need to act fairly between members of the company.

Further information which demonstrates how the Board has had

regard to these matters can be found in the preceding ‘How we

engage with our stakeholders’ section on pages 89 to 93.

Additional information demonstrating how the Board has had regard

to the factors set out in Section 172(1) of the Companies Act 2006

Matters per Section 172(1)(a) to (f) of the Companies Act 2006 Key example(s) Page number

Consequences of any decision in the long term Our purpose-led approach 7 and 8

Our strategy 29 to 32

Risk management 69 to 78

Interests of employees Employee engagement 61 and 90

Our purpose-led approach 7 and 8

Sustainability 45 to 68

Fostering business relationships with suppliers, customers and others Engagement with suppliers 91

Engagement with customers 89

Supply chain practices 67

Impact of operations on the community and the environment Sustainability 45 to 68

Our purpose-led approach 7 and 8

Maintaining a reputation for high standards of business conduct Our purpose-led approach 7 and 8

Compliance 67 and 68

Anti-bribery and anti-corruption 67

Human rights and modern slavery 68

Privacy and data protection 68

Data security 68

Whistleblowing 114

Export Control Policy 67

Acting fairly between members Shareholder engagement 89 to 93

Shareholder information 140

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Division of responsibilities

The structure shown on the right summarises our approach to governance

throughout the organisation. The Board is ultimately responsible for having

oversight of and providing leadership to the Group. Our governance structure

demonstrates how the Board is supported in carrying out its responsibilities.

It is particularly supported by its Committees, the Executive Leadership Team

and the work of various internal forums led by senior management.

Our governance

structure

Audit and Risk

Committee

Remuneration

Committee

Nomination

Committee

Sustainability

Committee

Board of Directors

Senior management: Internal forums

Executive Leadership Team

Board of Directors

• The role of the Board is to promote the long-

term sustainable success of the company,

generating value for shareholders and

contributing to wider society.

• Responsibilities of the Board are

documented within its schedule of reserved

matters which forms part of its governance

reference materials; these are reviewed and

amended by the Board periodically.

• Certain matters are delegated to its

Committees and the day-to-day running of

the business to the Executive Directors and

the Executive Leadership Team.

• Collectively responsible for engagement

with the workforce.

Board Committees

• There are four dedicated Committees:

Audit and Risk, Nomination, Remuneration,

and Sustainability.

• In June 2025, the Board appointed a

Disclosure Committee to deal with the

management of inside information in

accordance with the UK Market Abuse

Regulation.

• With the exception of the Disclosure

Committee, all Committees comprise

Non-Executive Directors and meet the

independence requirements set out in the

UK Corporate Governance Code 2018.

• The Committees are responsible for a

range of matters specifically delegated

by the Board, as set out in their respective

terms of reference, which are reviewed on

an annual basis and can be found on our

website at: www.oxinst.com/investors/

corporate-governance. A summary of the

key responsibilities of each Committee is set

out in their respective reports included within

this Annual Report.

Executive Leadership Team

• The Executive Leadership Team is

responsible for the day-to-day running of the

business of the Group, where delegated by

the Chief Executive Officer.

• The team meets at least monthly and

focuses on Group-wide performance,

strategy and risk management.

Senior management: Internal forums

• Senior management and internal forums

report to the Executive Leadership Team

either directly or indirectly.

• They lead internally on delivering the

objectives delegated by management as

well as workstreams which encompass our

sustainability strategy via the Sustainability

Leadership Forum.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Division of responsibilities continued

Responsibilities of the Chair, Chief Executive Officer

and Senior Independent Director

The responsibilities of the Chair, Chief Executive Officer and Senior Independent Director

areformally documented and are reviewed and amended by the Board on a periodic basis.

A high-level summary of these responsibilities is set out below.

Chair

• The Chair leads the Board, promotes high standards of governance and ensures the Board is

effective in directing the company.

• He ensures that the Board has effective decision-making processes and applies appropriate

challenge to the Executive Directors.

• He sets the agenda of the Board and facilitates participation and engagement by all Directors

in Board meetings.

• He ensures that there are good information flows from the Executive to the Board, and from

the Board to the company’s key stakeholders.

• He leads an annual Board effectiveness review and is responsible for ensuring all new Directors

have an appropriate tailored induction programme.

Chief Executive Officer

• The Chief Executive Officer is responsible for the day-to-day running of the Group and ensuring

the Board’s decisions are implemented.

• He leads the development of strategy for approval by the Board as well as working with

the Chief Financial Officer to develop budgets and medium-term plans to deliver the

agreedstrategy.

• He is responsible for providing regular reports to the Board on all matters of significance to

ensure that the Board has accurate, clear and timely information on all key matters.

Senior Independent Director

• The Senior Independent Director acts as a sounding board to the Chair and supports delivery

of their objectives.

• She is available to the other Non-Executive Directors, including acting as an intermediary

ifnecessary.

• She is also available to the company’s shareholders.

• She leads the evaluation of the Chair on behalf of the other Directors.

Board and Committee meetings and attendance

The table below sets out the number of meetings attended by each Director during the year ended

31 March 2025, of those which they were required and eligible to attend.

This includes all customary meetings as well as ad hoc meetings scheduled during the year. The

Non-Executive Directors also held a number of meetings without the Executive Directors present,

both with and without the external auditor in attendance. As noted in the Committee reports,

Directors who are not members of the respective Committees may be invited to join meetings as

regular or ad-hoc attendees.

Director Board

Audit and Risk

Committee

Nomination

Committee

Remuneration

Committee

Sustainability

Committee

Neil Carson 9/9 N/A 4/4 5/5 4/4

Richard Tyson 9/9 N/A N/A N/A N/A

Gavin Hill

8/9 N/A N/A N/A N/A

Alison Wood 9/9 5/5 4/4 5/5 4/4

Mary Waldner

6/6 5/5 4/4 5/5 4/4

Sir Nigel Sheinwald 9/9 5/5 4/4 5/5 4/4

Reshma Ramachandran

2/2 1/1 1/1 1/1 1/1

Hannah Nichols 9/9 5/5 4/4 5/5 4/4

Rowena Innocent

2/2 1/1 N/A 1/1 1/1

1. Gavin Hill did not attend the meeting held to discuss arrangements and approvals relating to his stepping down from the

Board and the appointment of Paul Fry.

2. Stepped down from the Board on 4 February 2025.

3. Stepped down from the Board on 25 July 2024.

4. Appointed to the Board on 17 February 2025.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Division of responsibilities continued

Directors’ continuous development and access to advice

The Chair is responsible for ensuring that all Directors are appropriately briefed on matters arising

at Board meetings and that they have full and timely access to accurate and relevant information.

To enable the Board to discharge its duties, all Directors receive sufficient information including

briefing papers distributed in advance of their meetings. The Committees of the Board have access

to sufficient resources to discharge their duties, including external advisers and access to internal

resources and personnel.

Where they judge it to be necessary to discharge their responsibilities, Directors may obtain

independent professional advice at the Company’s expense. All Directors also have access to the

advice of the Company Secretary, who is responsible for advising the Board on all governance matters.

For information regarding the development activities undertaken by the Board during the year,

seethe Board professional development section on page 101.

Customer

Employees

Shareholders

Local communities

Suppliers

Society

Stakeholders considered key:

THEME

Strategy, performance and operations

Key areas of focus and discussion Stakeholders considered

Annual dedicated strategy review session and across a range of meetings, with a focus on progress with implementation of agreed strategy

Regularly reviewed business development activities and the acquisition proposal pipeline, including approval of the acquisition of FemtoTools AG

Monitored performance and provided challenge relating to key areas within operations in the broadest sense, including health and safety, operational excellence, human

resources, innovation and business development. Considered in particular the ongoing operational improvement-related work

THEME

Finance, reporting, risk management and controls

Key areas of focus and discussion Stakeholders considered

Monitored progress against the 2024/25 financial plan and reviewed and approved the 2025/26 financial plan

Considered and approved the Annual Report, half-year results and trading updates, as well as the proposed interim and final dividend payments

Monitored the outputs from the formal process which identifies, evaluates and reports on risks and opportunities across the Group

Stakeholder engagement

The Board is committed to developing its understanding of the views of its key stakeholders. In

addition to the direct engagement described on page 90, there is also significant engagement by

senior management and throughout the company.

During the year, the Board has been collectively responsible for workforce engagement and has

not designated a specific Non-Executive Director. The Board receives reports and updates on such

engagement and the views and feedback gathered from stakeholders are used to inform discussion

and decision making. Please see pages 27 and 28 regarding ‘Engaging with our stakeholders’ and

pages 89 to 94 regarding ‘How we engage with our stakeholders’ for more information, including

the Board’s Section 172(1) statement. The Board considers that these mechanisms for workforce

engagement have been effective, however this will be kept under review in the coming year.

Board priorities during the year

The table below summarises some of the highlights from the Board’s key areas of focus and

discussion during the financial year. For more information regarding the key areas of focus for the

Committees of the Board, please see their respective reports within this Annual Report.

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Division of responsibilities continued

THEME

Leadership and people

Key areas of focus and discussion Stakeholders considered

Assessed current composition of the Board including tenure, skills, experience and diversity characteristics, in order to inform the approach to future Board composition

Continued focus on organisational capability and succession planning within senior leadership teams and across the organisation

Completed the recruitment process for a new Non-Executive Director resulting in the appointment of Rowena Innocent, effective 17 February 2025

Concluded the succession process regarding our change of Chief Financial Officer, with Paul Fry succeeding Gavin Hill as Chief Financial Officer with effect from 1 April 2025

Reviewed the outputs and actions resulting from the 2024 employee survey

THEME

Governance and responsible business

Key areas of focus and discussion Stakeholders considered

Consideration of views of key stakeholders and impact of decisions on them, including reviews of shareholder feedback as collated by external advisers

Full-Board site visit to our Andor facility, including dedicated workforce engagement activities, strategy deep-dive session and a full site tour

Reviewed and discussed the outcomes of the external Board performance review and agreed an action plan for 2025/26. Reviewed progress against the 2024/25 internal Board

evaluation action plan

Regular meetings without the Executive Directors present

Regular meetings with our external auditors, BDO LLP, both with and without the Executive Directors present

Maintained oversight of our progress towards achieving our net zero targets

Monitored progress against the targets and measures which aim to advance the social and governance pillars of our sustainability strategy

Oversight of the Group’s sustainability-related narrative reporting and external disclosures, including our Task Force on Climate-related Financial Disclosures Statement, the

integrated Sustainability Report and our standalone Sustainability Report

Customer

Employees

Shareholders

Local communities

Suppliers

Society

Stakeholders considered key:

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Division of responsibilities continued

Board independence

At the conclusion of the financial year, the Board comprised seven Directors, including the Chair

(who was considered independent upon appointment to the Board), four Non-Executive Directors

(all of whom were considered by the Board to be independent upon annual assessment), and two

Executive Directors (being the Chief Executive and Chief Financial Officer). The Board is therefore

compliant with the recommendation of the Code that it should comprise at least 50% independent

Non-Executive Directors, excluding the Chair. The Committees of the Board also remained

compliant with the recommendations of the Code during the year and further information

regarding their membership can be found within the respective Committee reports included

within this Annual Report.

External commitments

The Board is mindful of the time commitment required by the Non-Executive Directors in order to

effectively fulfil their duties. Prior to appointment, prospective Directors provide details regarding

other roles and significant commitments which may impact their ability to commit to the company.

All Directors keep the Board informed regarding proposed external appointments or significant

commitments as they arise, with Chair approval required prior to taking on any additional external

appointment and commitments monitored to ensure that each Director has sufficient time to fulfil

their obligations. Each Director’s biographical information and significant time commitments are set

out in the Board biographies on pages 85 to 87. Changes to Directors’ commitments during the year

are noted in the table to the right.

Conflicts of interest

The Companies Act 2006 states that Directors must avoid a situation where they have, or can have,

a direct or indirect interest that conflicts, or possibly may conflict, with the Company’s interests.

Boards of public companies may authorise conflicts and potential conflicts, where appropriate, if

permitted by the company’s Articles of Association – and the company’s Articles of Association do

allow for this.

Directors are required to disclose conflicts and potential conflicts to the Chair and the Company

Secretary as and when they arise. When a Director takes on additional external commitments, they

will discuss the potential position with the Chair and confirm that, as far as they are aware, there are

no conflicts of interest. During the year, none of the Directors declared to the company any actual or

potential conflicts of interest between any of his or her duties to the company and his or her private

interests and/or other duties, except for the Executive Directors, who hold the position of Director of

the Company as well as acting as director of a number of Group subsidiary companies. The system

for monitoring potential Director conflicts remained effective throughout the period.

Change in Directors’ commitments

The table below sets out the changes to the external appointments of the Directors which took

effect or were confirmed during the financial year and up to the date of signing the Annual Report.

Director Change in commitment Effective date of change

Neil Carson Resigned as a Director of The Goldsmiths

Company Charity

May 2024

Alison Wood Appointed as Senior Independent Director of

Morgan Advanced Materials plc

November 2024

Resigned as Non-Executive Director and Chair of the

Remuneration Committee of TT Electronics plc

May 2025

Nigel Sheinwald Stepped down as a Senior Adviser to the Universal

Music Group

August 2024

Stepped down as Chair of the Royal Institute of

International Affairs (Chatham House)

September 2024

Hannah Nichols Stepped down as Chief Financial Officer of Hill & Smith plc January 2025

Appointed as Chief Financial Officer of Coats Group plc April 2025

100

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Composition, succession and evaluation

Appointments to the Board

The Nomination Committee is responsible for leading the process for appointments to the Board and its standard process when

making new appointments to the Board is set out below.

Director appointment process

Evaluate Board composition and

determine required capabilities

of proposed appointee

Evaluate the Board’s skills, experience, independence, diversity and knowledge, and utilise this

to develop a specification which reflects the role and specific capabilities required.

Advertise role and determine

long list of potential candidates

Advertise the role using open advertising (unless confidential) and by instructing external

executive search consultants with the necessary expertise.

Identify long list of potential candidates based on, amongst other things, experience,

capabilities, merit and diversity.

Refine short list of potential

candidates and complete

interviews

Determine short list and invite the potential candidates to complete a formal interview process.

Interview process to be facilitated by various Board members but specifically the Chair, Chief

Executive and senior management, as appropriate.

Consideration and approval

by Nomination Committee

Nomination Committee to consider the short-listed candidates and feedback from interview

process from both interviewers and interviewee.

Determine the preferred candidate and recommend their appointment to the Board for approval.

Consideration and approval

by Board

Board to consider and, if thought fit, approve the proposed appointment of the preferred

candidate.

Market announcement made in accordance with regulatory requirements.

Director re-election

In line with best practice and the company’s Articles of

Association, all Directors are required to retire from office at each

AGM, in order to be proposed for re-election by the company’s

shareholders should they wish to continue in their role. At the

company’s 2024 AGM, all Directors on the Board at that time

were reappointed by shareholders with majority votes ranging

from 96% to 100%.

On 17 February 2025, Rowena Innocent was appointed to the

Board as a Non-Executive Director and on 1 April 2025, Paul

Fry was appointed to the Board as an Executive Director in his

capacity as Chief Financial Officer. Both Paul and Rowena will

stand for election for the first time at the company’s 2025 AGM.

Having considered the performance and contribution of each of

the Directors, the Board remains satisfied that they are operating

effectively and continue to demonstrate commitment to their

roles. The Board will therefore recommend the election or

re-election of all Directors who intend to stand for appointment

at the AGM.

The biographical information of each Director, their initial

appointment dates and the reasons for their respective election

or re-election, where applicable, can be found on pages 85

to 87. More information regarding the Board and the Director

performance review process is set out on pages 101 and 102.

Board induction programme

The Chair and Company Secretary are responsible for ensuring

that all Directors receive a full, formal and tailored induction

upon joining the Board. Whilst our induction programme will be

tailored based on the needs, experience and background of the

individual Director, it will ensure that they gain a comprehensive

understanding of the Group through activities including: visits

to our sites, one-to-one sessions with the Executive Directors,

sessions with all members of the Management Board, meetings

with various functional and regional heads, and the opportunity

to meet with a range of employees across thebusiness.

101

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Composition, succession and evaluation continued

Board professional development

The Board and Committees receive dedicated training and information on matters relevant to the

Group’s business, including operational and technological briefings and updates on legal, regulatory

and governance developments. During the year, training and updates were provided by the

Company’s remuneration adviser and external counsel, as well as internal subject matter experts.

For more information regarding our approach to Directors’ continuous development and access to

advice, please see page 97.

Board composition

The Board, via the Nomination Committee, keeps under review its composition and that of its

committees. Its review considers the balance of the Directors’ skills and experience as well as their

tenure, independence, time commitment and diversity. The Nomination Committee also carries out

a formal, in-depth review of Board and committee composition at least annually.

For more information regarding the recent and anticipated changes to the Board’s composition, see

the Nomination Committee Report on pages 105 to 108.

Annual Board Performance Review

The Board recognises the need to monitor and improve its performance. It carries out internal or

externally facilitated Board performance reviews annually, in order to obtain feedback to help to

improve its effectiveness.

Internal Board evaluation 2023/24: Progress

The Board completed an internally facilitated performance review during the previous financial

year. This generated recommendations which the Board agreed to implement. In line with its

dedicated action plan, during the year the Board:

• enhanced its approach to risk management;

• continued to progress the workforce engagement programme through meeting and hearing from

a range of employees at various levels and roles, primarily as part of the full-Board site visits to

our new compound semiconductor site at Severn Beach and our Andor Technology site, as well as

through a dedicated session on remuneration hosted by Alison Wood in her capacity as Chair of the

Remuneration Committee; and

• facilitated Director development opportunities across a range of topics including sustainability,

corporate governance and the evolving legal landscape. Also received briefings on matters

relevant to the Group’s business, including operational updates.

Paul Fry joined the company in January 2025 as Chief Financial Officer Designate and

was appointed to the Board with effect from 1 April 2025. During the three months whilst

he was the CFO Designate, he immersed himself in getting to know the business first

hand, meeting key stakeholders including customers, shareholders and colleagues

around the world.

“I am delighted to have joined Oxford Instruments. The opportunity since January to spend

time in the business before taking on full CFO responsibilities at the beginning of April has

been really valuable. I’m really grateful for the warm welcome from our teams across all

the sites I’ve visited. I’ve been impressed by the incredible products in our portfolio, and the

opportunities for us to continue to grow both revenues and margin in the years to come.”

Highlights from Paul’s first three months as he immersed himself into the businessincluded:

• embarking on multiple visits to all of our

major sites around the world, including

those across the UK, China, Europe,

Japan and the US, which provided

opportunities to hear from a wide range

of colleagues across our organisation

and gain a first-hand insight into the

working practices at our sites;

• visits to labs at four key US academic

customer sites, seeing our products

in action and listening to customer

feedback;

• deep dive reviews including the business

divisions, transformation programme,

medium-term financial plans, investor

relations, finance organisation, M&A

pipeline, risk management and

internalcontrol;

• meetings with external advisers including

corporate brokers, external counsel and

the auditor; and

• building strong working relationships with

members of the Board and developing

his understanding of their views on the

opportunities for and challenges facing

the business.

Induction of Paul Fry as Chief Financial Officer

102

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Composition, succession and evaluation continued

External Board Performance Review 2024/25: Process

This year, the Board completed an externally facilitated performance review. The review was

facilitated by Round Governance Services, who are independent of the company and are a

signatory to the Chartered Governance Institute Code of Practice for Board Reviewers. Round

Governance Services are experienced in performing board performance reviews for listed

companies and also conducted the review for FY2021/22 against which the 2024/25 review

could be benchmarked. The review covered the overall performance of the Board and in doing so

considered if the Board as a whole, is fulfilling its purpose and objective. The review sought the

views of the Directors and the Company Secretary. The process included:

• discussions between Round Governance, the Chair and the Company Secretary to agree the

scope of the review and focus areas. The Company Secretary was responsible for providing all

requested reports to Round Governance Services;

• a review of relevant documents;

• online targeted board performance review questionnaire;

• Board meeting observation;

• one-to-one meetings with all Directors;

• observations and recommendations report prepared;

• findings and recommended actions presented to the Board by Round Governance; and

• Board discussed the report and agreed actions to be implemented.

External Board Performance Review 2024/25: Outcomes and actions

The review identified that there is a clear strategic vision for the company and the Non-Executive

Directors are engaged and motivated to add value. The Chief Executive Officer is well respected

by the Board who recognise the experience and value he brings. There is a strong understanding

of the company’s stakeholders and stakeholder interests are habitually considered in the Board’s

decisionmaking. At the time of the review, it was recognised that technical expertise had been lost

when Richard Friend stepped down at the end of his nine-year tenure. This has been addressed

through the appointment of Rowena Innocent on 17 February 2025. There are no plans to refresh

Board composition as a result of the review.

The Board developed and agreed an action plan for the year ahead, highlights from which include:

• additional Board time dedicated to deep dives of key elements of the strategy at each

Board meeting;

• more visibility of and engagement with the Senior Leadership Team who will present to the

Board on their areas of responsibility, along with more informal engagement with Directors

outside of Board meetings; and

• development of the Board’s knowledge and understanding of technology and the

investmentpipeline through sessions at Board meetings delivered by subject matter experts.

Rowena Innocent was appointed to the Board with effect from 17 February 2025 and has

undertaken a full and formal induction, tailored to her needs.

“I am delighted to have joined Oxford Instruments as Non-Executive Director and have

thoroughly enjoyed learning about the technology and meeting the teams during my visits to

Tubney, High Wycombe and Severn Beach. I have been most impressed by the energy and

enthusiasm for progressing both technical and operational excellence across thebusiness.”

Key features of Rowena’s tailored induction programme included:

• one-to-one sessions with the

Executive Directors to gain an in-depth

understanding of the business;

• sessions with members of the

Executive Leadership Team to

develop an understanding of their

roles and responsibilities;

• visits to our sites at Tubney Woods, High

Wycombe and Severn Beach;

• legal briefing session with external

counsel regarding the obligations of a

UK listed company and its directors, with

a focus on the regulatory framework for

UK listed companies, directors’ duties

and the UK Corporate Governance Code

and related obligations;

• meetings with various functional and

regional heads including the Company

Secretary, General Counsel, Director

of Communications, Group Financial

Controller, Chief HR Officer, Group Head

of Tax, Chief Information Officer and the

Head of Internal Audit; and

• introductions to the company’s

key advisers including its auditor,

UK corporate counsel and

remunerationconsultant.

Induction of Rowena Innocent as Non-Executive Director

103

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Board skills, experience and diversity

characteristics

The Board is committed to promoting diversity and inclusion

on the Board. The Board recognises that diversity, construed in

its broadest sense and including gender, religious and ethnic

diversity, disability, sexual orientation, social and economic

backgrounds, age and cognitive and personal strengths, is an

important factor in Board effectiveness.

During the year, the Directors participated in a process to identify

their own skills, experience and diversity characteristics. The

results of this process are set out in the table on the right and the

charts on the following page and have been used to help assess

the future needs of the Board, particularly in determining the

ideal attributes of prospective appointees to the Board.

The Board diversity policy and our plans and progress in line with

the recommendations of the FTSE Women Leaders Review and

the Parker Review, respectively, are described in the Nomination

Committee Report on pages 107 to 108.

Board skills and experience

Specific skill, experience or expertise

Number of Directors identifying as having

specific skill, experience or expertise

Chairmanship

Listed Company Executive directorship(s)

Listed Company Non-Executive directorship(s)

Financial expertise

Financial reporting experience

Risk management

Investor relations

Corporate governance

Executive remuneration

Workforce engagement

Strategy development

International business experience

Commercial and business development

Business management

Operations and manufacturing

Services and life cycle revenue

Technology, Science or Engineering

Sustainability

Climate change

Energy transition

Customer focus

People leadership

Digital experience

Composition, succession and evaluation continued

104

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Composition, succession and evaluation continued

Age

Were you educated outside the UK?

Board gender diversity

What is your highest level of educational

attainment?

40–49 1

Yes 0

Male 4

Level 6 – 4

Bachelor’s degree

Level 8 – 0

Doctorate or PhD

50–59 3

No 6

Female 3

Level 7 – 3

Master’s degree

60–69 2

Educated both 1

inside and

outside UK

70+ 1

Do you consider yourself to have a disability

defined by the Equality Act 2010?

No 7

What is your ethnic group?

White British 7

105

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Nomination Committee Report

Dear Shareholder,

I am pleased to present the report of the Nomination

Committee for the year ended 31 March 2025.

The Committee has again focused on succession planning

and executing those plans during the year with a number of

changes to the composition of our Board.

We were pleased to have concluded the succession process

regarding our change of Chief Financial Officer, with Paul Fry

succeeding Gavin Hill as Chief Financial Officer with effect

from 1 April 2025. The Board is thankful for the very significant

contribution Gavin has made to the success of the company

over nearly nine years and for his strong stewardship of the

Company’s finances, shaping our growth and building the

foundations for ongoing success. Paul has a strong track record

in senior positions at international healthcare and technology

companies, having held the role of CFO, most recently at Argenta

Group. To support a smooth transition, Paul joined the company

on 9 January 2025, initially in a non-Board role, and Gavin will

remain actively involved with the company until June2025.

For more detail regarding remuneration arrangements applicable

to Gavin’s retirement and Paul’s appointment to the Board, see the

Directors’ Remuneration Report on pages 120 and 135.

After completing a rigorous search process, we were pleased to

recommend that the Board appoint Rowena Innocent as a Non-

Executive Director with effect from 17 February 2025. Rowena

has over 30 years’ experience in high-tech product design and

manufacturing. Her deep technical understanding combined with

commercial acumen will be an asset to the Board. Rowena has

also been appointed as a member of the Company’s Audit and

Risk, Nomination, Remuneration and Sustainability Committees.

As explained in the Report and Financial Statements 2024,

Reshma Ramachandran stood down as a Non-Executive Director

with effect from the conclusion of the 2024 AGM, due to her

appointment in a new executive role externally, which would

restrict the available time which she can commit to her role with

the company.

Mary Waldner stood down as a Non-Executive Director on

3February 2025 following nine years on the Board. The Board

thanks Reshma and Mary for the valuable contribution they

havemade during their time as a Director.

We have also kept under review our approach to diversity,

particularly in light of the recommendations of the FTSE Women

Leaders Review and the Parker Review. We remain committed

to meeting the targets and recommendations set out in these

reviews, at Board level, for senior management and throughout

the organisation. Our Board diversity policy and our plans and

progress in line with the recommendations of both of these

reviews are explained on pages 107 and 108.

I will be available at the AGM to answer any questions you may

have regarding the work of the Committee.

NEIL CARSON

Chair of the Nomination Committee

12 June 2025

Committee membership

The current members of the Committee are:

Neil Carson (Chair), Alison Wood, Sir Nigel Sheinwald,

Hannah Nichols and Rowena Innocent.

Changes to Committee membership:

Reshma Ramachandran and Mary Waldner stepped down

as members of the Committee upon their resignations

from the Board on 25 July 2024 and 3 February 2025,

respectively. Rowena Innocent joined as member of

the Committee upon her appointment to the Board on

17February 2025.

For details of attendance at Committee meetings during

the financial year, see page 96. For the biographies of all

Committee members, see pages 85 to 87.

106

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Nomination Committee Report continued

Committee composition

In line with the Committee’s terms of reference, which are

available on our website at: www.oxinst.com/investors/

corporate-governance, the Committee comprises a majority

of independent Non-Executive Directors and is chaired by the

Chair of the Board, Neil Carson.

Meetings

The Nomination Committee holds a minimum of one meeting

annually, as required under its terms of reference, and this year

held four meetings. Regular attendees at meetings may include

the Chief Executive Officer, Chief Financial Officer and Chief

HR Officer, where appropriate. The Company Secretary is the

secretary to the Committee.

Key responsibilities

• Review the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board.

• Ensure plans are in place for orderly succession to Board and Management Board positions, and oversee the development

ofa diverse pipeline for succession, taking into account the challenges and opportunities facing the company, and the skills

and expertise needed on the Board in the future.

• Review the leadership needs of the organisation, both Executive and Non-Executive, with a view to ensuring the continued

ability of the organisation to compete effectively in the marketplace.

• Be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when

they arise.

• Before any appointment is made by the Board, evaluate the balance of skills, knowledge, experience and diversity on the

Board and, in light of this evaluation, prepare a description of the role and capabilities required for a particular appointment

and the time commitment expected.

• Ensure that, on appointment to the Board, Non-Executive Directors receive a formal letter of appointment setting out clearly

what is expected of them.

• Review the results of the Board performance evaluation process that relate to the composition of the Board and

successionplanning.

• Review annually the time required from Non-Executive Directors.

• The Committee shall also make recommendations to the Board concerning: changes needed to the succession planning

process, if required; suitable candidates as new Directors and succession for existing Directors; membership of the Audit and

Risk, Remuneration, and Sustainability Committees; the reappointment of Non-Executive Directors at the conclusion of their

specified term of office; the re-election by shareholders of Directors; any matters relating to the continuation in office of any

Director at any time; and the appointment of any Director to executive or other office.

Committee performance review

During the year, an external performance review of the

effectiveness of the Board and its Committees was conducted.

More information can be found on pages 101 to 102. The review

found that the Committee functions effectively.

How the Committee spent its time during the year

ended 31 March 2025

The responsibilities of the Committee are set out in its terms of

reference, which were last reviewed in January 2025 and which

are summarised above. Whilst these responsibilities guide

the operation of the Committee and shape its agenda, it will

also consider other matters as requested by the Board and as

relevant to its remit.

The key activities and areas of focus for the Committee during

the year are as set out below.

• Reviewed the Board’s composition and future needs, bearing

in mind in particular the current tenure, skills, experience and

diversity characteristics of the Directors.

• Reviewed the succession plans for Board and Executive

Leadership Team positions.

• Continued to consider our approach to diversity, particularly

in light of the recommendations of the FTSE Women Leaders

Review and the Parker Review.

• Completed the recruitment process for a new Non-Executive

Director, resulting in the appointment of Rowena Innocent,

effective 17 February 2025.

• Concluded the succession process regarding our change of

Chief Financial Officer, with Paul Fry succeeding Gavin Hill in

this role with effect from 1 April 2025.

Board composition and succession planning

The Nomination Committee keeps under review the composition

of the Board and its Committees. We take seriously our

responsibility for Board effectiveness and continuity and the need

to conduct a continuous and proactive process of planning and

assessment, in the context of the company’s strategic priorities

and the main trends and factors affecting the long-term success

and future viability of the company.

Recognising the value of adding technical understanding

to the Board, particularly following the departure of Richard

Friend in July 2023, the Committee acted to identify a suitable

candidate to appoint as an additional Non-Executive Director. As

a result, we were pleased to recommend that the Board appoint

Rowena Innocent as a Non-Executive Director with effect from

17 February 2025. Rowena’s experience in high-tech product

design and manufacturing will complement the current range of

expertise and experience on our Board. See page 100 for further

information regarding the Committee’s appointment process

and page 102 for details regarding Rowena’s appointment and

induction experience. The Nomination Committee engaged

EgonZhender, an executive search agency, to assist with

thisappointment.

107

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

The company and the Directors have no other connection

with EgonZhender. In order to retain access to Richard Friend’s

technical expertise and experience whilst the search process

was ongoing, the Board engaged Richard in an advisory capacity

to ensure that the Board retained the skills, knowledge and

experience it needs to operate optimally.

As announced in January 2025, after nearly nine years with the

company, Gavin Hill agreed with the Board that he would step

down from his role of Chief Financial Officer on 31 March 2025,

the end of the financial year. After a rigorous search process,

Paul Fry was appointed as Chief Financial Officer with effect

from 1 April 2025. The Director appointment process detailed

on page 100 was followed, except that open advertising was

not utilised as it was not appropriate in these circumstances.

The interview process gave each of the Committee members

a meaningful opportunity to carefully assess the experience

and capabilities of the potential candidates. The Committee

ensured that the insights gained by each of its members were

carefully considered in coming to a conclusion regarding their

preferredcandidate.

The Nomination Committee engaged Russell Reynolds, an

executive search agency, to assist with this appointment. The

company and the Directors have no other connection with Russell

Reynolds.

In addition to reviewing Board composition, the Nomination

Committee oversees the succession plans for the Executive

Leadership Team. It has regular opportunities to meet with its

members and other members of the wider senior leadership

through their attendance at Board meetings to report on their

respective business areas or functions and through workforce

engagement activities.

Nomination Committee Report continued

Board diversity

The Board is committed to promoting diversity and inclusion

on the Board. The Board recognises that diversity, construed

in its broadest sense, is an important factor in Board

effectiveness. The Board’s diversity policy considers a range of

characteristics, namely age, disability, social and educational

backgrounds, as well as gender and ethnicity, and includes

a commitment to sustaining an effective balance of female

and ethnic representation on the Board and throughout the

widerorganisation.

At the end of the financial year, the Board had 43% female

representation but did not include ethnically diverse

representation. The composition of our Board therefore met the

recommendation of the FTSE Women Leaders Review (40%

female representation by the end of 2025) but did not meet the

recommendation of the Parker Review (at least one Director of

colour by the end of 2024).

We are pleased to have surpassed the target for at least 40% of

the Board to comprise women, with 43% female representation

at present, as three of the Board’s seven Directors are women.

We are pleased to have also met the recommendation to have

at least one woman in one of four specified senior roles by the

end of 2025, as Alison Wood currently serves as our Senior

Independent Director.

Following Reshma Ramachandran stepping down as a Non-

Executive Director in July 2024 due to a change in her external

appointments and capacity to commit sufficient time to the

company, we no longer meet the target of the Parker Review for

the Board to include at least one Director of colour by the end of

2024. We remain committed to meeting the Parker Review target

of one Director of Colour and the Board will seek to address this

through its ongoing succession planning.

Any future appointments to the Board will continue to be based

on merit and objective criteria to ensure that the best individuals

are considered and appointed to the role. Wherever possible,

the search pool will be extensive and where an executive search

consultancy is used, we will only engage with those firms that

have adopted the Voluntary Code of Conduct for Executive

Search Firms.

The Parker Review also recommends that we devise and work

towards a specified target for the percentage of our senior

management team to be from ethnic minorities by the end of

2027. As an international company, we recognise the importance

of ensuring we have strong ethnically diverse leadership role

models and a diverse decision-making team that reflects our

customer base and the communities in which we operate.

As of the date of the Annual Report, the Senior Leadership Team

comprises 16 persons, of whom 19% are Asian or mixed ethnicity.

We will be seeking to maintain and improve the ethnic diversity

of this cohort on a year-on-year basis, within a target range of

20% to 25%.

In March 2025, we published our second year of ethnicity pay

gap data which showed that there was an ethnicity pay gap in

mean (15.2%) and median (2.4%) pay across our UK workforce.

This contrasts to 2022/23 where pay was slightly higher against

both measures for those in ethnic minorities (1.4% and 1.7%

respectively). We continue to focus on achieving a fully inclusive

and representative workforce where all employees have the

opportunity to develop their career to reach their full potential.

108

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Nomination Committee Report continued

Diversity of individuals on the Oxford Instruments plc Board and executive

management

In accordance with the UK Financial Conduct Authority’s Listing Rule 6.6.6 (9), the Board confirms

that as of 31 March 2025, Oxford Instruments plc:

• had surpassed the target for at least 40% of the Board to comprise women, with 43% female

representation given that three of the Board’s seven Directors are women; and

• had (i) met one of the remaining targets set out in that rule with Alison Wood holding the role of

Senior Independent Director and a woman therefore holding one of the specified senior positions

on the Board (Chair, Chief Executive Officer, Senior Independent Director or Chief Financial

Officer); and (ii) had not met the other remaining target set out in that rule, with the Board

including no Directors from a minority ethnic background.

In accordance with UK Financial Conduct Authority’s Listing Rule 6.6.6 R (10) the below tables

provide data as of 31 March 2025 regarding the gender identity or sex and the ethnic background

of both the Oxford Instruments plc Board and the Senior Leadership Team.

Our approach to collecting this data was two-fold. For our Directors, we asked that they complete a

questionnaire regarding their skills, experience and diversity characteristics, including their gender

identity or sex and their ethnic background. For our Senior Leadership Team, we collated this data

from our employee records, which they have provided on a voluntary basis understanding that it

may be used for disclosure purposes, as well as to help to ensure that our processes and pay are

fair and equitable with respect to race and ethnicity, as well as the characteristics on which we

have had full data for several years.

Gender identity or sex

Number

of Board

members

Percentage

of the

Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number

in Senior

Leadership

Team

Percentage

of Senior

Leadership

Team

Men 4 57% 3 12 75%

Women 3 43% 1 4 25%

Not specified/prefer not to say – – – – 0%

Ethnic background

Number

of Board

members

Percentage

of the

Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number in

executive

management

Percentage

of executive

management

White British or other White

(including minority-white groups) 7 100% 4 13 81%

Mixed/Multiple ethnic groups – – – 1 6%

Asian/Asian British – – – 2 13%

Black/African/Caribbean/

Black British – – – – 0%

Other ethnic group, including Arab – – – – 0%

Not specified/prefer not to say – – – – 0%

109

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report

Dear Shareholder,

I am delighted to present the Report of the Audit and Risk

Committee for the year ended 31 March 2025, my first as

Chair of the Committee, having taken up this role with effect

from the conclusion of the AGM on 25 July 2024. I would

like to extend my thanks to Mary Waldner as the preceding

Committee Chair, for her valuable leadership of and

contributions to the Committee during her tenure.

The Committee has continued to play an integral role as part of

the Group’s governance framework, monitoring the integrity of

the financial statements of the company and providing oversight

and challenge across the financial reporting processes and

internal control environment. The Committee sets a structured

programme of activities for the year, developed from its terms

of reference and including standing items for its consideration at

certain meetings. This is explained in more detail on page 111.

In addition, it considers specific risk areas identified for detailed

review in light of the evolving risk environment, assurance

activities relating to key non-financial areas and any other

matters that arise during the year.

During the year, the Committee’s work focused particularly on

the Group’s approach to several key areas of governance whilst

continuing to deliver its core remit.

Specific areas of focus included:

• delivery of the internal audit plan across a broad range of key

risk areas;

• considering the procedures to manage risk, oversee the

internal control framework and determine the nature and

extent of the principal risks the company is willing to take in

order to achieve its long-term strategic objectives;

• monitoring the processes for identifying, evaluating and

reporting on climate-related risks and opportunities across

the Group and their integration into the wider enterprise

risk management processes. This includes the detailed

assessment of key risks using a standardised methodology,

as performed by the business units across the Group;

• working with BDO LLP in respect of the annual audit for the

year ended 31 March 2024 to ensure a smooth conclusion to

this process;

• the review of papers and supporting calculations and data

relating to the significant judgements and estimates used in

the preparation of the financial statements for the financial

year ended 31 March 2025; and

• initial consideration of the approach to be taken to address

the changes the Committee believes necessary to comply

with the revised UK Corporate Governance Code published in

January 2024.

During the year, an external performance review of the

effectiveness of the Board and its Committees was conducted.

More information can be found on pages 101 to 102. The review

found that the Committee functions effectively.

Should you have any questions or comments regarding the work

of the Committee during the year, I would be pleased to hear

from you.

HANNAH NICHOLS

Chair of the Audit and Risk Committee

12 June 2025

Committee membership

The current members of the Committee are:

Hannah Nichols (Chair), Alison Wood, Nigel Sheinwald

and Rowena Innocent.

Changes to Committee membership:

Reshma Ramachandran and Mary Waldner stepped down

as a members of the Committee upon their resignations

from the Board on 25 July 2024 and 3 February 2025,

respectively. Rowena Innocent joined as member of

the Committee upon her appointment to the Board on

17February 2025.

• For details of attendance at Committee meetings during

the financial year, see page 96.

• For the biographies of all Committee members, see

pages 85 to 87.



Committee membership

The current members of the Committee are:

Hannah Nichols (Chair), Alison Wood, Nigel Sheinwald

and Rowena Innocent.

Changes to Committee membership:

Reshma Ramachandran and Mary Waldner stepped down

as a members of the Committee upon their resignations

from the Board on 25 July 2024 and 3 February 2025,

respectively. Rowena Innocent joined as member of

the Committee upon her appointment to the Board on

17February 2025.

• For details of attendance at Committee meetings during

the financial year, see page 96.

• For the biographies of all Committee members, see

pages 85 to 87.

110

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report continued

Committee composition

In line with the requirements of the UK Corporate Governance

Code and the Committee’s terms of reference, which are

available on our website at: www.oxinst.com/investors/

corporate-governance, the Committee comprises independent

Non-Executive Directors and, as a whole, has competence

relevant to the sector in which the company operates. All

members of the Committee are considered to be independent.

Hannah Nichols, the Committee Chair, has specific, recent and

relevant financial experience as the Chief Financial Officer of Hill

and Smith plc and currently of Coats Group plc, is a qualified

chartered accountant and has also held a number of senior

executive financial roles with major public companies.

Key responsibilities

• Monitor the integrity of the Financial Statements of the company and Group, and review and report to the Board on

significant financial reporting issues and judgements.

• Review statements relating to financial performance and narrative reporting, including any climate-related

financialdisclosures.

• Review the company’s internal control and risk management systems.

• Review the arrangements relating to compliance, speaking up and fraud.

• Monitor and review the effectiveness of the company’s internal audit function.

• Advise the Board on the appointment, reappointment and removal of the external auditor, agree their terms of engagement

and monitor their independence and objectivity.

• Review the effectiveness of the external audit process.

• Develop and implement the policy on the engagement of the external auditor to supply non-audit services.

Meetings

The Audit and Risk Committee holds a minimum of three

meetings annually, as required under its terms of reference,

and this year held five scheduled meetings. See page 111 for

a summary of the key matters considered at each meeting

during the year. Regular attendees at meetings include the

Chief Executive Officer, Chief Financial Officer, Group Financial

Controller, Head of Risk, Assurance and Trade Compliance,

and BDO LLP, our external auditor. Other attendees who join

meetings as required include the Chair and members of senior

management. The Company Secretary is the secretary to

theCommittee.

111

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report continued

Matters considered

June

2024

Sept

2024

Nov

2024

Jan

2025

Mar

2025

Half-year and full-year Financial Statements including

appropriateness of accounting policies, representation letters,

associated narrative reporting (Annual Report and Financial

Statements) and market announcements

External auditor Year-end Audit Report and Interim Review Report

Significant accounting estimates and judgements

Going concern

Viability statement

Group risk register, including climate-related risks and opportunities

Principal risks and uncertainties

Adequacy of internal control environment including internal control

framework and risk management processes

Internal audit update (specific theme addressed at each meeting,

per the internal audit plan for the financial year)

Internal audit plan

Effectiveness of internal audit function

Matters considered

June

2024

Sept

2024

Nov

2024

Jan

2025

Mar

2025

External auditor strategy for year-end audit

External auditor terms of engagement

External auditor independence and objectivity

Effectiveness of external audit process

Policy on non-audit services carried out by external auditor

Litigation register

Annual tax review

Systems and controls for detecting fraud and the prevention

of bribery and corruption

Whistleblowing arrangements

Committee effectiveness review

Committee terms of reference

Committee members and external auditor closed meeting

How the Committee spent its time during the year

112

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report continued

Significant Audit and Risk Committee judgements

and estimates during the financial year ended

31 March 2025

The Committee considered reports from management on

accounting policies, current accounting issues and the key

judgements and estimates in relation to this Annual Report.

It assessed whether suitable accounting policies had been

adopted and the reasonableness of the judgements and

estimates made by management. The following sections

summarise the significant judgements and estimates considered

by the Committee in relation to the Financial Statements for the

year ended 31 March 2025 and how they were addressed.

Revenue recognition

Significant matter: Revenue recognition

Sales of some of our systems within NanoScience are

recognised by reference to the progress towards completion of

the performance obligation, using the cost input method. This

requires management to estimate profit margin with reference to

prior systems sold. Additionally, the Group generates a significant

portion of revenue and profit in period 12 and any errors in

revenue cut-off could potentially have a significant impact.

Our action: We reviewed management’s reports on the approach

to revenue recognition and assumptions used, including in

relation to revenue cut-off testing.

Our conclusion: We concluded that management’s approach

to revenue recognition was reasonable and controls around

revenue cut-off were adequate.

UK defined benefit pension scheme

Significant matter: Valuation of UK defined benefit pension

scheme liabilities and assets

IAS 19 requires the Group to recognise any difference between

the net present value of the defined benefit pension scheme’s

liabilities and the fair value of its assets as at 31 March 2025 in

the balance sheet as either a pension scheme asset or deficit.

The valuation of the Group’s obligations to members of the

defined benefit pension schemes is based on a number of

assumptions including discount rate, inflation and actual

membership experience.

Our action: We reviewed management’s reports on key

assumptions with respect to the valuation of the defined benefit

scheme’s liabilities and assets. We challenged the basis of the

assumptions underlying the valuation.

Our conclusion: We concluded that the valuation is reasonable

and appropriately supported by the valuation conducted by an

external actuary, Aon Hewitt.

First Light Imaging acquisition

Significant matter: Recognition and valuation of contingent

consideration

The Group completed the acquisition of First Light Imaging SAS

(‘First Light’) on 9 January 2024 for cash consideration of €14.6m

with an additional €3.0m contingent on the business meeting

certain performance targets during the first 12 months of Group

ownership. The thresholds to pay the contingent consideration

were not met and as a result the contingent consideration has

been released into the Consolidated Statement of Income with

adjusting items.

Our action: We reviewed management’s assessment of

performance against targets for reasonableness.

Our conclusion: We concluded that the release of the contingent

consideration was appropriate.

Significant matter: Finalisation of purchase price allocation

KPMG LLP was appointed to value First Light to help determine

the allocation of the purchase price to First Light’s assets. This

allocation relies on a number of inputs and judgements including

forecasts of future financial performance. Where information is not

available due to the proximity of the acquisition date to the balance

sheet date, management applies judgement in estimating the

provision value of acquired intangibles. This provisional allocation

was finalised during the current reporting period and resulted in a

£0.3m adjustment to inventory related to FY24.

Our action: We reviewed the updates made to provisional fair

valuation of intangible assets acquired in the preceding reporting

period for reasonableness.

Our conclusion: We concluded that the updates made to

provisional fair valuation of intangible assets were reasonable.

FemtoTools acquisition

Significant matter: Recognition and valuation of

contingentconsideration

The Group completed the acquisition of FemtoTools AG on

28 June 2024 for a cash consideration of CHF 17.9m with an

additional CHF 5.5m contingent on the business meeting

certain performance targets over a period of 33 months. The

Group accrues the fair value based on the estimated additional

consideration payable as a liability at the acquisition date. To

the extent that contingent consideration is payable after one

year from the acquisition date, the contingent consideration is

discounted at an appropriate discount rate and carried at fair

value in the consolidated balance sheet.

Our action: We reviewed and challenged the calculations

in respect of contingent consideration in light of

forecastperformance.

Our conclusion: We concluded that the valuation of contingent

consideration was reasonable.

Significant matter: Purchase price allocation

KPMG LLP was appointed to value FemtoTools to help determine

the allocation of the purchase price to FemtoTool’s assets. This

allocation relies on a number of inputs and judgements including

forecasts of future financial performance.

Our action: We reviewed the provisional fair valuation of

intangible assets acquired and the subsequent finalisation of

thisvaluation for reasonableness.

Our conclusion: We concluded that the purchase price allocation

and valuation of FemtoTools was reasonable.

113

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report continued

Impairment

Significant matter: Valuation of goodwill

In carrying out impairment reviews of goodwill, a number of

significant assumptions have to be made when preparing cash

flow projections. These include the future rate of market growth,

discount rates, the market demand for products acquired and

the future profitability of products.

Our action: We reviewed management’s reports on the key

assumptions with respect to goodwill. We also challenged the

downside sensitivity analysis undertaken. Particular focus was

given to ensuring that the carrying value of Andor Technology,

the Group’s Belfast microscopy and scientific cameras business

assets, was properly supported given the recent challenging

trading period for this business. The Committee reviewed

management’s forecasts for future performance and challenged

the assumptions adopted.

Our conclusion: The Committee agreed with management’s

conclusions that there should be an impairment charge of £26.0m

in FY25 accounts in respect of Andor Technology. We concluded

that the carrying values of other acquired assets are reasonably

and appropriately supported by the cash flow projections.

Provision for inventory

Significant matter: net realisable value of inventory

Provision is made for obsolete, slow moving and defective stock

where there is evidence of impairment, to reduce the carrying

value to its net realisable value. This requires consideration

of several factors including but not limited to recent usage,

expected future demand, new product introduction plans and

likely realisable values to estimate the excess quantities and net

realisable value. The Group policy was revised during the year

and presented to the Board in November 2024. This provided a

consistent approach to inventory provisioning across the Group

for all inventory, including demonstration stock.

Our action: We reviewed the revised policy and how it would

beapplied.

Our conclusion: We approved the implementation of the new

policy for FY25.

Subsequent events

Significant matter: Disposal of NanoScience business

On 10 June 2025, the Group entered into a binding agreement

to sell its NanoScience business. IFRS 5 sets out the conditions

requiring assets to be classified as ‘held for sale’ at the balance

sheet date.

Our action: The Committee reviewed whether the IFRS 5

conditions requiring the classification of the NanoScience as

‘Assets Held For Sale’ at the balance sheet date had been met.

Our conclusion: Whilst a sale process was ongoing prior to

31March 2025, the Committee was satisfied that at that point

no binding offer or terms from prospective buyers had been

received and therefore actions to complete the sale remained

highly uncertain. In addition, management was not committed

to sale and given the macro conditions prevailing at that time

a successful sale remained highly uncertain. The Committee

concluded therefore that the conditions for classifying the

NanoScience business as held for sale at 31 March 2025 had

not been met.

Other matters related to the financial statements

Adjusted profit and EPS

The Group applies adjustments to the statutory definition of

profit and EPS to present adjusted profitability and earnings, as

the Board considers that they present a clearer picture of the

financial performance of the Group. These adjustments are set

out at Note 2 to the Financial Statements.

The Committee has reviewed the nature of the adjustments

and the methodologies used to calculate them. Based on these

enquiries and explanations provided, the Committee concluded

that adjustments have been applied consistently. Further, the

Committee is satisfied with the presentation of these adjusting

items in the 2025 Financial Statements.

Viability and Going Concern Assessment and Statements

The Committee and the Board reviewed the Viability and

Going Concern Statements as presented in more detail on

pages 79 to80.

The Committee reviewed the Viability Assessment, which was

based upon consideration of the Group’s current financial

position and the potential impact of certain of its principal risks

and uncertainties on future performance. It performed a review

of the scenario analyses prepared by management in the

Viability Assessment and concluded that the Group would be

able to continue in operation and meet its liabilities as they fall

due over the next three years.

In addition, the Committee noted that there were no material

uncertainties which may cast significant doubt over the Group’s

ability to continue as a going concern over the period of at least

12 months from the date of approval of the Financial Statements

and concluded that it was appropriate to continue to adopt the

going concern basis of accounting.

Misstatements

Management has provided the Committee with reports that they

were not aware of any material or immaterial misstatements

that had been made with the intent of achieving a particular

presentation in the Financial Statements. The Committee also

reviewed BDO’s report on unadjusted audit differences and these

were discussed by the Committee in June 2025. On the basis of

its review and those discussions, the Committee concluded that

the unadjusted differences were not material to the Financial

Statements and therefore no adjustment was required.

Fair, balanced and understandable

The Board asked the Committee to consider whether the 2025

Annual Report is fair, balanced and provides the necessary

information for shareholders to assess the Company’s position

and prospects, business model and strategy. In performing this

review, the Committee received a report from management and

considered if it meets the requirements of the 2018 UK Corporate

Governance Code including the following considerations:

• Is the Annual Report open and honest with the whole story

being presented?

• Have any sensitive areas been omitted that are material?

• Is there consistency between different sections of the Annual

Report, including between the narrative and the financial

statements, and does the reader get the same message form

reading the two sections independently?

114

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report continued

• Is there a clear explanation of key performance indicators

andtheir linkage to strategy?

• Is there a clear and cohesive framework for the Annual

Report with key messages drawn out and written in

accessiblelanguage?

• Is there an appropriate balance between the use of

statutory accounting measures and adjusted performance

measures, and are adjusted performance measures

adequatelyexplained?

Following this review, we confirmed to the Board that, in our

view, the Annual Report is fair, balanced and understandable

in accordance with the requirements of the UK Corporate

Governance Code.

Whistleblowing

Employees can report concerns of non-compliance, ethical issues

or malpractice via an independent and confidential reporting

route. Reports can be made anonymously if required and are

covered by the Group’s Whistleblowing Policy which provides for

protected disclosure. The Group recognises the importance of

other reporting channels such as via line management and HR. A

reporting route to the Senior Independent Director is also available.

Employees are informed of the reporting channels through the

company’s Code of Conduct. Irrespective of the reporting channel

used, the Group operates a formal protocol for the independent

investigation of reports which is overseen by the Chief HR Officer

and Group Compliance.

The Committee performs an annual review of the Whistleblowing

Policy and receives a summary report into the outcome of

investigations during the year.

It also receives a report from management on its activities in this

area. The latest report and review took place in January 2025

and all matters raised in the year to date had been resolved.

The Committee was pleased to note that during the year,

management had completed a campaign to ensure employee

awareness of the whistleblowing channels available to them,

including guidance and an online training course.

Risk management

The key risk management activities performed by the Group are

described on pages 69 to 71.

The Committee reviews the Group risk register, which includes

climate change-related risks, at each meeting and uses these,

supplemented by reports from management, the external auditor

and other subject matter experts, to assess the approach taken

to identify and mitigate the risks faced by the Group.

The Committee will continue to carefully review risk reporting

and the associated risk management activities during the year

ahead, in particular aiming to develop and enhance its approach

to the consideration of climate-related risks and opportunities as

well as the broader landscape of emerging risks.

For more information regarding our approach to risk

management see pages 69 to 78.

Internal control

The Committee oversees the internal control framework on

behalf of the Board. In June each year, it undertakes an annual

review of the effectiveness of the internal control environment,

comprising the company’s internal financial controls systems that

identify, assess, manage and monitor financial risks, and other

internal control and risk management systems. To support this

review, the Committee liaised with the Head of Risk, Assurance

and Trade Compliance and considered the internal and external

audit reports presented. In respect of the financial year ended

31 March 2025 and up to the date of the approval of this Annual

Report, the Committee concluded that the required standards

had been met and noted that during the financial year, it had

received no reports in the year about concerns of possible

improprieties in matters of financial reporting.

Internal audit

During the year the internal audit function was led by the Head

of Risk, Assurance and Trade Compliance, who was a regular

attendee at Committee meetings. The Company is pleased to

have appointed a new, dedicated Head of Internal Audit who has

commenced leadership of the function with effect from 1April2025.

The purpose of the internal audit function is to provide assurance

regarding the effectiveness of internal controls through regular

reviews and the provision of reports to the Committee. Once

finalised, all internal reports are also shared with the external

auditor. The Head of Internal Audit and, prior to his appointment,

the Head of Risk, Assurance and Trade Compliance, have had

direct access to the Chair of the Board and the Chair of the

Committee, to help safeguard independence from the executive

and accountability to the Committee. The internal audit function

also continues to benefit from a co-sourcing relationship,

whereby an external service provider has been engaged to

supplement certain of the work on internal audits focused on

financial controls and to provide support in other areas where

specific subject matter expertise is required or advantageous.

Internal audit plan

The annual internal audit plan was presented to the Committee

at its meeting in January 2025. It comprises audits which assess

the effectiveness of internal financial controls, to be performed on

a rotational basis across business units and the principal regional

offices. Complementing this, the programme also includes risk-

based audit areas which are proposed or recommended by a

combination of the Committee and management. Following due

consideration, the Committee approved the proposed annual

internal audit plan.

Effectiveness review

The Committee has a responsibility to carry out an annual

assessment of the effectiveness of the internal audit function.

As part of its assessment in respect of the financial year ended

31 March 2025, the Committee liaised with the Head of Risk,

Assurance and Trade Compliance, reviewed and assessed the

annual internal audit plan, reviewed the results of the internal

auditor’s work and considered whether the quality, experience

and expertise of internal audit remains appropriate for the

business. It also reviewed the actions taken by management to

implement the recommendations of internal audit and to support

the effective working of the internal audit function.

The Chair also held a one-to-one meeting with the Head of Risk,

Assurance and Trade Compliance in January 2025 to discuss

keyrisk areas in advance of the new financial year.

115

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Audit and Risk Committee Report continued

Following due consideration, the Committee agreed that the

internal audit function had remained effective.

External auditor

The Committee has principal responsibility for managing the

relationship with the external auditor, including assessing its

performance, effectiveness and independence and making

recommendations to the Board regarding its reappointment,

removal and terms of engagement, including all fees.

BDO LLP (‘BDO’) was reappointed as external auditor at the

2024 Annual General Meeting, having been initially selected

to undertake this role with effect from the financial year ended

31March 2021 following a competitive tender process. The

Committee regularly meets with the external auditor, both

with and without the Executive Directors or members of the

management team present, to discuss any appropriate matters

in a frank and openmanner.

Audit strategy

BDO presented its proposed audit strategy and plan for the

financial year ended 31 March 2025 to the Committee. The

suggested strategy had been informed through feedback from

various stakeholders including the Committee Chair, Chief

Financial Officer and Group Financial Controller. The proposal

included details of the recommended scope, materiality,

fees and timelines plus the principal areas of audit risk and

the anticipated approach for addressing such. Following due

consideration, the Committee approved BDO’s proposed audit

strategy and plan.

Effectiveness review

The Committee has a responsibility to review the effectiveness

of the audit process, including an assessment of the quality of

the audit, the handling of key judgements by the auditor, and the

auditor’s response to questions from the Committee.

As part of its assessment in respect of the financial year ended

31 March 2024, the Committee considered reports from BDO and

feedback from key members of the finance teams across the Group.

The assessment noted that BDO had demonstrated strong

investigative, analytical and judgemental competence in addition

to providing a good degree of challenge to management. BDO’s

increasing familiarity with the Group and individual business units

had supported the delivery of the audit at a component level.

Following due consideration, the Committee agreed that the

audit, particularly its quality, had been effective. The Committee

also noted the FRC’s Audit Quality Inspection and Supervision

report relating to BDO as published in July 2024, and confirmed

that it would continue to work with BDO to ensure that the audit

quality received by the company remained appropriate.

In line with the Committee’s structured programme of activities,

an assessment of the effectiveness of the audit for the financial

year ended 31 March 2025 is expected to be carried out in

September 2025.

Independence and objectivity

The Committee should assess the external auditor’s

independence and objectivity on an annual basis, considering

relevant law, regulation, the Ethical Standard and other

professional requirements, and the Group’s relationship with

the auditor as a whole, including any threats to the auditor’s

independence and the safeguards applied to mitigate those

threats, including the provision of any non-audit services.

To make this assessment, the Committee obtains confirmation

from the external auditor regarding whether it considers itself

to remain independent and also satisfies itself that there are no

relationships between the auditor and the company (other than

in the ordinary course of business) which could adversely affect

the auditor’s independence and objectivity. During the financial

year, the Committee made this assessment in both June 2024

and March 2025, in addition to again assessing in June 2025.

InMarch 2025 and June 2025, the Committee was comfortable

that BDO remained independent and objective.

Non-audit services

The Committee oversees the company’s formal policy regarding

the provision of non-audit services by the auditor, including

prior approval of non-audit services by the Committee and

specifying the types of non-audit service to be pre-approved,

and assessment of whether non-audit services have a direct or

material effect on the audited Financial Statements. During the

financial year, the Committee approved the provision of non-audit

services by BDO amounting to £8k which, when considered in light

of the audit fees amounting to £1,251k, represented less than 1% of

the total fees payable to the auditor and its associates. A further

illustration of this comparison can be seen in the following table.

Audit and non-audit fees for the financial year ended

31 March 2025

Fees (£’000) Proportion

Audit fees 1,190 95%

Audit-related assurance services 53 4%

Non-audit services 8 1%

Total fees payable to the auditor

and its associates 1,251 100%

See Note 5 of the Financial Statements for further information

regarding the external auditor’s remuneration.

Statement of Compliance with the Competition and Markets

Authority (CMA) Order

The company confirms that it has complied with The Statutory

Audit Services for Large Companies Market Investigation

(Mandatory Use of Competitive Processes and Audit Committee

Responsibilities) Order 2014 (Article 7.1), including with respect to

the Audit and Risk Committee’s responsibilities for agreeing the

audit scope and fees and authorising non-audit services.

Reappointment of external auditor

BDO LLP has expressed its willingness to continue as auditor of

Oxford Instruments plc and separate resolutions will be brought

to the Oxford Instruments plc 2025 AGM, proposing BDO LLP’s

reappointment as auditor and to authorise the Board, through

the Committee, to negotiate and agree its remuneration.

116

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability Committee Report

Dear Shareholder,

I am pleased to present the report of the Sustainability

Committee for the year ended 31 March 2025.

The Committee has continued to discharge its wide-ranging

remit covering the company’s policies and performance in the

environmental, social and governance areas.

We have made significant progress with our environmental

programme during the year. Building on the targets set in 2024,

which will see the company reach net zero in Scopes 1 and 2 by

2030, this year, the Committee addressed Scope 3, approving

an interim target of a 25% absolute reduction in emissions by

2030. The proposed reduction and metric (opting for an absolute

reduction rather than a measure of intensity) were agreed

following a baseline-setting exercise led by management with

support from external advisers. The Committee then reviewed

and approved our net zero transition plan in November 2024,

which sets out the steps required to achieve our targets across

all three scopes, including extended procurement of renewable

energy, an amount of capital investment to replace gas boilers,

the deepening of the company’s ongoing supplier engagement

programme, and action to reduce emissions from our products.

Following internal confirmation of our targets and publication

of the plan, our science-based near-term and net zero targets,

using an updated 2023/24 baseline, were submitted to the

Science Based Targets initiative (SBTi) for validation and

approval. This was secured in March and published by SBTi in

April. We will now move to overseeing and monitoring progress

on the delivery of the net zero plan.

The Committee was pleased to note the award of a B rating for

Oxford Instruments’ management of climate change by global

independent environment disclosure body CDP, reflecting our

commitment and action in this area.

We welcomed the structure developed by management to

deliver against the sustainability agenda across the company,

under the direction of the Sustainability Leadership Forum,

which reports to the Sustainability Committee, and approved

its programme for 2024/25, which was outlined at the

June2024meeting.

During the year, in addition to the environmental programme

noted above, the Committee has also spent time considering

the progress made in areas relating to social and

governancematters.

We continue to support the priority given by management

to further improving our health and safety performance, and

welcomed the extension of new Institution of Occupational

Safety and Health (IOSH)-accredited health and safety training to

reach a wider group of colleagues, together with the increased

focus on reporting accidents and near-misses through the Shield

system. We noted that a small increase in minor injury reports

largely reflected these improved reportingprotocols.

We also discussed the company’s continued efforts to foster an

inclusive workplace, welcoming the positive progress made by

employee impact groups focusing on less represented groups

among the workforce, including the recently launched women’s

group and NeuroInclusive, focusing on neurodiversity. All of our

employee impact groups are open to all employees.

The embedding of the company’s new Ways of Working,

launched in spring 2024, is seen as a key initiative to support

apositive, inclusive culture, and this has been a key focus of

the Senior Leadership Team throughout the year, as reported

totheCommittee.

Oxford Instruments remains committed to being the company

where the best people in our sector want to work, to developing

the next generation of the workforce, and to training our people

and enabling their career development and employability.

We therefore welcomed the ongoing activity across this area,

including the expansion of both the number of participants and

the range of opportunities offered in our apprenticeship and

graduate programmes; the careers pathway guidance available;

the range of training provided to managers; and the continuation

of the Foundations programme for emerging talent launched in

the prior year. For more information, see page 66.

Committee membership

The current members of the Committee are:

Sir Nigel Sheinwald (Chair), Neil Carson, Alison Wood,

Hannah Nichols and Rowena Innocent.

Changes to Committee membership:

Reshma Ramachandran and Mary Waldner stepped down

as a members of the Committee upon their resignations

from the Board on 25 July 2024 and 3 February 2025,

respectively. Rowena Innocent joined as member of the

Committee upon her appointment to the Board on

17 February 2025.

• For details of attendance at Committee meetings

during the financial year, see page 96.

• For the biographies of all Committee members,

see pages 85 to 87.

117

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability Committee Report continued

The January Sustainability Committee meeting provided an

opportunity to discuss in depth the company’s Governance

agenda. We welcomed the update provided on the new and

extended Code of Conduct, which was published in December

2024, accompanied by an extensive internal communications

campaign, and is now available in five languages. Management

also reported on the success of a year-long campaign of

refreshed and updated compliance training, with 100% of

assigned courses completed by employees.

We were also very pleased to note that MSCI, a leading provider

of critical decision support tools and services for the global

investment community, has rated our ESG practices as AA for a

second year. Oxford Instruments was also recognised as being in

the 82nd percentile among our peer group in our first submission

to S&P’s Corporate Sustainability Assessment, with only 18% of

peers scoring higher.

Our integrated Sustainability Report is available on pages 45

to 69 and includes our Task Force on Climate-related Financial

Disclosures Statement, as set out on pages 52 to 60. We are

committed to building on past progress and continuing to

challenge ourselves to go further.

I will be available at the AGM to answer any questions you may

have regarding the work of the Committee. Should you have any

queries in the meantime, I would be very happy to hear from you.

SIR NIGEL SHEINWALD

Chair of the Sustainability Committee

12 June 2025

Key responsibilities

The current key responsibilities of the Committee per its terms of reference, are as follows:

• Review all sustainability-related narrative reporting and external disclosures, including, but not limited to, those relating to the

Greenhouse Gas Protocol, Streamlined Energy and Carbon Reporting Regulations, Sustainable Development Goals and the

Task Force on Climate-related Financial Disclosures.

• Determine the guiding principles to be used when setting targets in relation to the Group’s sustainability goals and

implementation plans.

• Regularly review and provide advice on the Group’s ongoing activities and progress in relation to the three key elements of its

sustainability agenda, broadly comprising environmental, social and governance-related matters, as follows:

– Environmental: review with management and recommend to the Board for approval, sustainability-related targets,

including environmental targets and timescales; review the company’s progress towards decarbonisation of energy use

globally; and consider and recommend to the Board for approval, the methodology to be used for achieving net zero.

– Social: review any relevant externally published policies and statements and approve targets set in respect of the following

areas: equity, diversity, inclusion and belonging; health, safety and wellbeing; investing in our people; next-generation

talent; and community impact.

– Governance: review any relevant corporate policies and approve targets set, in respect of the following areas: anti-bribery

and anti-corruption; sanctions, export control and customs; dissemination of inside information to the market and share

dealing; supply chain responsible sourcing; human rights and modern slavery; intellectual property and confidentiality; data

protection, data privacy and data security; and financial sustainability and tax transparency.

• Through policy reviews and discussions with management, seek to ensure that the highest ethical standards and concern for

human rights are embedded in the company across its global operations.

118

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Sustainability Committee Report continued

Committee composition

In line with its terms of reference, which are available on our

website at: www.oxinst.com/investors/corporate-governance,

the Committee comprises a majority of independent Non-

Executive Directors. Nigel Sheinwald, the Committee Chair, brings

a wealth of skills and experience, particularly from his time as

Chair of Shell plc’s equivalent Sustainability Committee.

Meetings

The Sustainability Committee holds a minimum of three

meetings annually, as required under its terms of reference,

and this year held three meetings. Standing attendees at

meetings include the Chief Executive Officer, Chief Financial

Officer and Chief HR Officer. Other members of senior

management may also attend as required. The Company

Secretary is the secretary to the Committee.

Committee performance review

During the year, an external performance review of the

effectiveness of the Board and its Committees was conducted.

More information can be found on pages 101 and 102. The review

found that the Committee functions effectively.

How the Committee spent its time during

the year ended 31 March 2025

The responsibilities of the Committee are set out in its terms of

reference, which were last reviewed in January 2025 and which

are summarised on page 117. Whilst these responsibilities guide

the operation of the Committee and shape its agenda, it will

also consider other matters as requested by the Board and as

relevant to its remit.

The key activities and areas of focus for the Committee during

the year are as set out below.

• Kept up to date with the activities ongoing to achieve the

company’s net zero targets.

• Approved the company’s Scope 3 near-term target, together

with the publication of its net zero transition plan and the

submission of its overall science-based Scope 1, 2 and 3

targets to SBTi.

• Received updates from the Chief Executive Officer and

management regarding climate-change related matters.

• Via papers and attendance of selected members at

Committee meetings, maintained oversight of the activities of

the internal Sustainability Leadership Forum, which leads on

delivery of the company’s sustainability agenda on a day-to-

day basis within the organisation.

• Considered the annual review of social matters forming part

of the company’s sustainability agenda. Noted the maturing

approach and internal activities and measures relating to

inclusion, amongst other things. Emphasised its support for

the ongoing social initiatives being undertaken and developed

to drive change and enhance the culture within the Group.

• Noted the annual review of progress in line with the

company’s sustainability governance agenda, remaining

mindful of developments to either the internal approach or the

external landscape impacting the key aspects of this pillar of

the sustainability agenda.

• Post year end, reviewed and recommended to the Board for

approval, the sustainability-related narrative reporting and

external disclosures, including our integrated Sustainability

Report, which is available on pages 45 to 68 and includes

our Task Force on Climate-related Financial Disclosures

Statement, as set out on pages 52 to 60 and our standalone

Sustainability Report which will be published on our website

at: www.oxinst.com/sustainability.

Committee membership

The current members of the Committee are:

Alison Wood (Chair), Neil Carson, Nigel Sheinwald,

Hannah Nichols and Rowena Innocent.

Changes to Committee membership:

Reshma Ramachandran and Mary Waldner stepped down

as members of the Committee upon their stepping down

from the Board on 25 July 2024 and 4 February 2025.

Rowena Innocent joined as member of the Committee

uponher appointment to the Board on 17 February 2025.

• For details of attendance at Committee meetings

duringthe financial year, see page 96.

• For the biographies of all Committee members,

see pages 85 to 87.

119

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Remuneration Committee report

Dear Shareholder,

I am pleased to introduce the Directors’ Remuneration Report

for the year ended 31 March 2025.

The report is presented in three sections:

• My annual statement as Chair, summarising the work of

theCommittee during the year.

• The Directors’ Remuneration Policy (‘Policy’), which was

approved at the 2023 AGM.

• The Annual Report on Remuneration, detailing the

remuneration outcomes for the year ended 31 March 2025

and the implementation of the Policy for the year ahead.

Business context

It has been a year of positive progress, culminating in an

excellent set of results which underlines the Board’s confidence

in the mid-term outcomes set out in the Chief Executive’s review

on page 20. The actions taken to simplify the Group, improve

commercial execution and realign our regional presence have

resulted in strong growth in revenue and profit, and increased

margins in both divisions.

Operation of the Remuneration Policy in 2024/25

and incentive plan outcomes

The outcome for the 2024/25 annual bonus scheme was based

on a combination of profit before tax, adjusted operating profit

margin, cash conversion and non-financial strategic objectives.

The profit before tax and operating profit margin elements both

exceeded the maximum performance level and so achieved a

full payout, but the cash conversion just missed the payment

threshold for the stretching target range that was set. Overall,

this resulted in a payout, relating to the financial elements of the

scheme, of 100% of salary for the Chief Executive Officer (CEO)

and former Chief Financial Officer (CFO), out of a maximum of

150% ofsalary.

The non-financial strategic targets were based on (i) evolution of

the business portfolio (ii) establish and progressour operational

transformational programme and (iii)position the business for

margin improvement and enhanced growth in 2026. Additionally,

the former CFO had two further objectives specific to him. Having

considered each element carefully, wedetermined achievement

of 21.5% out of 25% ofbase salaryopportunity for the CEO and

17.5% out of 25% of base salary opportunity for the former CFO.

The overall bonus achieved was therefore 141% and 137% of

salary for the CEO and former CFO respectively. One-third of the

annual bonus will be paid in shares, which mustbe retained for

three years.

Awards granted in 2022 under the Performance Share Plan

(PSP) to the former Chief Executive Officer and the former

Chief Financial Officer were based on two equally weighted

performance measures. Earnings Per Share (EPS) was assessed

over the three years to 31 March 2025 and achieved a

performance level at 50% of maximum, with EPS growth of 6%

per annum. In the final year of the performance period Return

on Capital Employed (ROCE) was 26% and therefore achieved

a performance level of 25%. As a result of this performance, the

2022 PSP grant will vest at 37.5% overall. A two-year holding

period applies to the vested award. The current Chief Executive

Officer and Chief Financial Officer did notparticipate in this award.

Given the company’s strong performance during 2024/25 and

over the three-year performance period for the PSP, there has

been a robust link between reward and performance, as well as

alignment with investor returns. We are satisfied that the Policy

has operated as intended and the remuneration outcomes are

appropriate, considering the relativities between outcomes for

employees and Executive Directors, and the wider stakeholder

experience as set out above. We therefore concluded that it

would not be necessary to exercise discretion to adjust the

2024/25 incentive outcomes.

120

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Operation of the Remuneration Policy in 2025/26

We carefully reviewed the recommendations regarding base

salary increases for employees and noted that the average salary

increase across the workforce in the UK was 2.5%. In that context

we determined that the base salary for the Chief Executive should

also increase by 2.5% from £587,100 to £601,778. There was no

salary increase for the former Chief Financial Officer.

The annual bonus opportunity will remain at 150% of salary

and performance measures will continue to be based on profit

(50%), cash conversion (16.7%), adjusted operating profit margin

(16.7%) and non-financial strategic objectives (16.7%). One-third

of any bonus payable will be delivered in shares which must be

retained for three years.

Awards under the Long-Term Incentive Plan (LTIP) will be at

200% of salary for the Chief Executive and Chief Financial

Officer. We will retain the same broad mix of measures as in the

previous two years, to provide a rounded overall assessment of

performance. The measures for the grant will therefore be EPS

(30%), ROCE (30%), Total Shareholder Return (TSR) (25%) and

a sustainability-related measure (15%). The EPS measure will

require compound annual growth of between 3% and 10% over

three years and the ROCE measure will be based on a target

range of 26%-30% in 2027/28. TSR will be measured relative

to the companies comprising the FTSE 250 Index, requiring

median performance for threshold vesting and upper quartile

performance for maximum vesting. The sustainability target

is aligned to our long-term strategy andwill require reduction

in absolute Scope 1 and 2 market-based carbon emissions by

2028 by 45% (threshold) to 65% (maximum) from the FY2023/24

baseline to drive achievement of Net Zero by 2030.

Chief Financial Officer succession

We announced on 9 January 2025 that, after nearly nine years

with the company, Gavin Hill had agreed with the Board that he

would step down as Chief Financial Officer on 31 March 2025.

He will remain actively involved with the company until 10 June

2025 to support a smooth transition through the results period

and is now on garden leave for the remainder of his 12-month

notice period. He will be treated as a good leaver in respect

of his unvested PSP awards and will be subject to the post-

employment shareholding requirement, which requires him to

retain 200% of base salary, for two years effective from the end

of his notice period. Details of Gavin’s leaving arrangements are

set out later in this report.

After a rigorous search, the Board was delighted to appoint Paul

Fry as Chief Financial Officer with effect from 1 April 2025. The

Committee considered the remuneration package carefully,

recognising Paul’s significant plc experience and calibre, and

that he had received an offer elsewhere at significantly higher

total remuneration (salary, bonus and long-term incentives).

On this basis we agreed with Paul a salary of £460,000 and in

view of the significant lead time to his appointment, also agreed

that his first salary review would be 1July 2025, when it will

increase by 2.5% to £471,500. We also agreed that his LTIP award

would be set at 200% which is in line with the Policy as are all

other elements of his reward package. There are no buyout

arrangements.

Non-Executive Directors’ (NED) fees

The fees of the Chair and NEDs will increase by 2.5%. This is

consistent with the base salary increase for the Executive

Directors and the workforce.

Committee effectiveness review

During the year, an external performance review of the

effectiveness of the Board and its Committees was conducted.

More information can be found on pages 101 to 102. The review

found that the Committee functions effectively.

Conclusion

We hope that you will be supportive of the annual advisory vote

to approve the Annual Report on Remuneration at our AGM on

28 July 2025.

ALISON WOOD

Chair of the Remuneration Committee

12 June 2025

Remuneration Committee report continued

121

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Key responsibilities

The Remuneration Committee (the ‘Committee’) is responsible for recommending to the Board the remuneration packages for

Executive Directors and has oversight of the pay, bonus and share incentive strategy for the Group’s executive management.

The Chair and the Executive Directors are responsible for determining the remuneration of the Non-Executive Directors, and

the Remuneration Committee, in the absence of the Chair, is responsible for determining the remuneration of the Chair. The key

responsibilities of the Committee include:

• determining the Policy for the Executive Directors and senior leadership;

• considering and determining the components and total remuneration packages for the Executive Directors;

• determining the Policy for pension arrangements, service agreements, recruitment terms and termination payments for

Executive Directors;

• designing effective performance-related incentive plans aligned, for Executive Directors and senior leaders, to the business

strategy and the wider workforce;

• approving the structure and targets for all performance-related remuneration plans for executives as well as the overall

payments made under such plans; and

• reviewing and noting Policy and trends across the Group and considering the Executive Directors’ remuneration within

this context.

Committee composition

In line with its terms of reference, which are available on our

website at: www.oxinst.com/investors/corporate-governance

the Committee comprises a majority of independent Non-

Executive Directors. Alison Wood has held the role of Chair of

the Committee since 26 January 2021 and has significant prior

remuneration committee experience, in particular, chairing

remuneration committees at other listed companies, and

is sufficiently experienced to undertake this rolein line with

Provision 32 of the UK Corporate Governance Code 2024.

Meetings

The Remuneration Committee holds a minimum of two meetings

annually, as required under its terms of reference, and this year

held four meetings. Standing attendees at meetings may include

the Chief Executive Officer, Chief Financial Officer and Chief

HR Officer. Other members of senior management may also

attend as required. The Company Secretary is the secretary to

theCommittee.

Wider employee remuneration

The Committee seeks to ensure that the underlying principles

which form the basis for decisions on Executive Directors’ pay

are consistent with those on which pay decisions for the rest

of the workforce are taken. For example, the Committee takes

into account the general salary increase for the broader

employee population when conducting the salary review

forExecutive Directors.

A formal employee consultation on remuneration is not

operated; however, employees are able to provide feedback

on the Company’s remuneration policies to their managers as

well as through the employee engagement survey and formal

performance review process.

Committee performance review

During the year, an internal performance review of the

effectiveness of the Committee was conducted as part of the

wider review of the Board and the Board Committees. More

information can be found on pages 101 and 102. The review

found that the Committee functions effectively.

Committee advisers

Korn Ferry was the Committee’s independent remuneration

consultant during the year and continues with this appointment

in 2025/26. Korn Ferry is appointed by the Committee to provide

advice on all aspects of executive remuneration as required by

the Committee.

Korn Ferry is a signatory to the Remuneration Consultants’ Code

of Conduct and has confirmed to the Committee that it adheres

to the Code. During the year, Korn Ferry had discussions with

the Committee Chair on remuneration matters relevant to the

company and on how best its team can work with the Committee

to meet the company’s needs. The Committee is satisfied

that the advice it received from Korn Ferry for the year ended

31March 2025 was objective and independent.

Fees are charged predominantly on a time spent basis. The total

fees paid to Korn Ferry for the advice provided to the Committee

during the year were £43,170 (excluding VAT).

Remuneration Committee report continued

122

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Directors’ remuneration report

Annual bonus LTIP

Remuneration at a glance

The Committee sets stretching performance

targets for the annual bonus and performance

share plan, that are clearly linked to the

strategy and financial performance of the

Group. The outcomes in respect of the

financial year ended 31March2025 are:

Adjusted organic constant currency PBT Adjusted organic constant currency

operating profit margin

Earnings per share growth (% CAGR pa)

Return on capital employed

Excluding Andor impairment and FemtoTools acquisition

Cash conversion Strategic objectives

Threshold: £82.4m

Threshold:

Threshold: 16.5% Threshold: 4% pa CAGR

26%

Threshold: 82%

Target: £86.5m

Max:

Target: 16.8%

Max: 10% pa CAGR

32%

Target: 85%

Max: £90.5m Max: 17.2%

Max: 92%

Actual

£90.5m

Actual

17.8%

Actual (CAGR over 3 years to

31 March 2025)

6.0%

Actual 2024/25

26.0%

Actual

89%

Targets based on a range of objectives

linked to operational improvement and

progressing the new strategic plan and the

evolution of the Group’s portfolio.

For details see / Page 132

For details see / Page 133

Executive Directors’ remuneration at a glance

Total remuneration payable for 2024/25

Base salary

£’000

Benefits

£’000

Pension

£’000

Annual bonus

£’000

LTIP

£’000

Other

£’000

Total

£’000

Richard Tyson 583 26 31 828 - - 1,468

Gavin Hill

409 24 23 565 234 1 1,255

1. Gavin Hill stepped down from the Board and his role as CFO on 31 March 2025.

Principle Committee approach

Clarity:

Remuneration arrangements should be transparent

and promote effective engagement with shareholders

and the workforce.

• The metrics used in our annual bonus have a direct link to our company KPIs, which are familiar to our shareholders and the

workforce.

• Performance Shares are linked to our long-term business strategy, familiar to our shareholders and the workforce.

• The Remuneration Committee consults with shareholders to explain and clearly set out any proposed changes to the Policy,

and is committed to having an open and constructive dialogue with shareholders.

Simplicity:

Remuneration structures should avoid complexity and their

rationale and operation should be easy to understand.

• Our Remuneration Policy is in line with market norms.

• The application of the Policy is described clearly each year in this report with a clear link between reward and performance.

Risk:

Remuneration arrangements should ensure reputational and

other risks from excessive rewards, and behavioural risks that

can arise from target-based incentive plans, are identified and

mitigated.

The Committee has ensured that risks are identified and mitigated by:

• having discretion to override the formulaic outturn of incentives; and

• having robust clawback and malus provisions.

• Performance Shares (with holding periods), annual bonus deferral in shares, together with share ownership requirements,

including post-employment share ownership requirements, ensure executives are not encouraged to make short-term decisions

but to deliver sustainable shareholder returns over the long term for the benefit of all stakeholders.

Policy overview

The Policy promotes the delivery of the Group’s strategy and

seeks to align the interests of Directors, shareholders and other

stakeholders. The Committee regularly reviews the link between

its incentive structures and strategy to ensure that remuneration

packages are appropriate to attract, motivate and retain the high

calibre executives that are needed to deliver the Group’s strategy.

The company seeks to reward executives fairly and responsibly

based on Group performance and their individual contribution.

The company has a strategy aimed at delivering significant,

balanced and sustainable long-term growth and it is important

for motivation and retention that the remuneration of the

executives reflects this.

The Committee carefully considers the motivational effects of the

incentive structure in order to ensure that it is effective and does

not have an unintentional negative impact on matters such as

governance, environmental or social issues. More generally, the

Committee ensures that the overall Policy does not encourage

inappropriate risk-taking.

The Committee’s approach to determining,

reviewing and implementing the new Policy

The Committee considered the following factors described

below when determining the new Policy. For details of how we

will implement the Policy for 2025/26, see pages 130 to 139.

123

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Directors’ remuneration report continued

Directors’ Remuneration Policy (A)

This part of the Directors’ Remuneration Report sets out the

Group’s Remuneration Policy (‘Policy’) for its Directors.

The Policy was subject to a binding shareholder vote at

our AGM on 19 September 2023 and the Policy, unless

changed with shareholders’ prior agreement, will continue

until the 2026 AGM. The complete approved Policy can be

found in the Directors’ Remuneration Report in the Report

and Financial Statements 2023, which is available on our

website at www.oxinst.com/investors/financial-reports-

and-presentations

124

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Directors’ remuneration report continued

Principle Committee approach

Predictability:

The range of possible values of rewards to individual Directors

and any other limits or discretions should be identified and

explained at the time of approving the Policy.

• The scenario chart on page 128 sets out the potential rewards available to the Executive Directors under three different

performance scenarios.

• Limits to incentive plans and the basis for the Committee to use discretion are clearly set out.

Proportionality:

The link between individual awards, the delivery of strategy

andthe long-term performance of the company should

be clear. Outcomes should not reward poor performance.

• Variable pay comprises the majority of the Executive Directors’ packages, with the individual limits and payout for different

levels of performance set out in the Policy and the scenario charts within this Directors’ Remuneration Report.

• The performance conditions are aligned to strategy and the targets are set to be stretching to reward for delivering

above-market returns.

• The Committee retains discretion to override the formulaic outturns of incentives if the payout does not reflect broader company

performance and other factors.

Alignment to culture:

Incentive schemes should drive behaviours consistent with

company purpose, values and strategy.

• The alignment of metrics to the medium and long-term strategy ensures behaviours consistent with the company’s purpose and

values are being encouraged.

• Clawback and malus provisions discourage behaviours that are not consistent with the company’s purpose, values and strategy.

• The Committee reviews the wider workforce pay and policies to ensure there is alignment with the Executive Directors’

Remuneration Policy and that remuneration is designed to support the company’s people-centric culture. There is a broadly

consistent implementation of the Policy throughout the senior management team.

Consideration of shareholder views

The Committee considers feedback from shareholders received at each AGM, together with any feedback from additional meetings, as part of any review of Executive Director remuneration. In addition,

the Committee engages proactively with shareholders and their proxy advisers where any material changes to the Policy are proposed. As part of the Policy review during FY23, the Committee wrote to 20

of our largest shareholders and the major shareholder representative bodies to consult on the proposed Policy and its operation going forward. Shareholders were invited to provide any feedback they had

and were offered the opportunity to discuss the proposals with the Committee Chair.

125

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Remuneration Policy

Element of pay: Base salary

Purpose and link to strategy Operation Maximum opportunity

• To provide a competitive and

appropriate level of basic fixed pay

to recruit and retain superior talent

and avoid excessive risk taking that

might otherwise result from an over

reliance on variable remuneration.

• Reflects the experience,

performance and responsibilities

of the individual.

• Normally reviewed annually with any increase usually effective 1 July.

• Takes account of experience, performance and responsibilities as well as the performance of

the company, the complexity of the role within the Group and salary increases for employees

generally.

• Set with regard to market data for comparable positions in similar companies in terms of size,

internationality, business model, structure and complexity, including within the industry.

• Pay rises typically aligned with or below that of the workforce.

• There is no minimum or maximum annual increase.

• Higher increases than the average percentage for the

workforce may be appropriate; for example, where

an individual changes role or their responsibilities

increase, where the complexity of the Group

changes, where an individual is materially below

market comparators or is appointed on a below

market salary with the expectation that his/her salary

will increase with experience and performance.

Element of pay: Benefits

Purpose and link to strategy Operation Maximum opportunity

• Provided on a market competitive

basis, aids retention and follows the

reward structure for all employees.

• Currently include, but are not limited to, the cost of:

– life assurance;

– private medical insurance; and

– company car benefit (car, driver, car allowance, fuel); and/or overnight hotel accommodation

where necessary to enable the executive to carry out his duties efficiently at the Head Office

and other company sites.

• Executive Directors are also eligible to receive long service awards in line with other employees.

• The benefits provided may be subject to amendment from time to time by the Committee within

this Policy.

• Relocation costs and other incidental expenses may be provided as necessary and reasonable.

• Benefits are not part of pensionable earnings.

• The value of benefits varies from year to year

depending on the cost to the company and is not

subject to a specific cap.

• Benefit costs are monitored and controlled and

represent a small element of total remuneration

costs.

Element of pay: Pension

Purpose and link to strategy Operation Maximum opportunity

• To contribute towards the cost of

living in retirement.

• Company contributions to a money purchase pension scheme and/or salary supplement. • Pension contributions (or salary supplement in lieu)

are aligned to the maximum employer contribution

applying to the majority of the UK workforce,

currently 6% of salary.

Directors’ remuneration report continued

126

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Directors’ remuneration report continued

Element of pay: Annual bonus

Purpose and link to strategy Operation Maximum opportunity

• Drives and rewards the successful

achievement of targets set at the

start of the year with performance

normally assessed over a

one-year period.

• Performance targets based on the key performance indicators and strategic objectives of the

business.

• At least 70% of the bonus is based on financial metrics and the balance on non-financial/

strategic metrics.

• One-third of any bonus earned will be paid in shares, which are beneficially owned and which

must be held by the Executive Director for at least three years.

• The Committee may use discretion to override the result of any formula-driven bonus payment.

• Clawback and malus provisions apply for misstatement, error, misconduct, corporate failure or

reputational damage, or in other circumstances at the discretion of the Committee.

• Up to 15% of salary payable for achieving

threshold performance.

• 75% of salary at year end payable at

target performance.

• 150% of salary at year end payable for

maximum performance.

Element of pay: Long-Term Incentive Plan (LTIP)

Purpose and link to strategy Operation Maximum opportunity

• To incentivise the executives and

reward them for meeting stretching

long-term targets linked to the

business strategy.

• To align the Directors’ interests

with those of shareholders.

• Facilitates share ownership

to provide further alignment

with shareholders.

• Annual awards of Performance Shares with vesting subject to achievement of performance

targets. Both the vesting and performance period will normally be over a three-year period.

• Awards structured as options may have a zero exercise price or an exercise price equivalent

to the par value of an ordinary share.

• Awards may be granted in conjunction with a tax-advantaged option granted under the

applicable schedule to the LTIP (a Linked Option). This arrangement gives the participant and

Group the opportunity to benefit from the tax treatment applicable to tax advantaged options

without increasing the pre-tax value of the award delivered to the participant.

• The Committee will set targets each year linked to the long-term business strategy and may be

based on financial performance, a stock market based metric and non-financial performance.

• Up to 25% of the awards will vest at threshold performance under each performance condition.

• Vested awards must be held for a further two years before sale of the shares (other than to

pay tax).

• The Committee may use discretion to override the result of any formula-driven payment.

• Clawback and malus may be applied for misstatement, error, misconduct, corporate failure

or reputational damage, or in other circumstances at the discretion of the Committee.

• The maximum award limit is 200% of salary.

• If an LTIP award is granted as a Linked Option,

the shares subject to the tax-advantaged option

to which it is linked will not count towards the

award limit.

• In a recruitment situation the limit may be

exceeded to facilitate a buy-out award (see further

details in the ‘Recruitment and promotion policy for

Executive Directors’ section on page 129).

• Dividend equivalents may accrue on the LTIP

awards over the vesting and holding period and

would normally be paid out as shares in respect

of the number of shares that have vested.

Remuneration Policy continued

127

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Element of pay: All-employee share schemes

Purpose and link to strategy Operation Maximum opportunity

• To encourage employee

share participation.

• The company may from time to time operate tax approved share schemes (such as the

HMRC approved Share Incentive Plan (SIP)) for which Executive Directors could be eligible.

• The SIP is open to all UK permanent staff.

• The schemes are subject to the limits set by

tax authorities.

Element of pay: Shareholding guideline

Purpose and link to strategy Operation Maximum opportunity

• To further align Executive Directors’

interests with shareholders’.

• The Committee has established shareholding guidelines which encourage the Executive

Directors to build and retain a holding of company shares equivalent to 200% of base salary.

• Until the guideline is met, Executive Directors are expected to retain or acquire shares

equivalent to the value of 50% of the net amount realised from exercise/vesting of share

awards as appropriate after allowing for tax payable.

• Post cessation of employment there will be a requirement to retain the lower of the level of

shareholding at that time, or 200% of base salary, for two years (unless by genuine exception

eg serious ill health). At the Committee’s discretion, shares which have been purchased

voluntarily may be excluded, so as not to discourage further self-purchases.

• Not applicable.

Element of pay: Non-Executive Director (NED) fees

Purpose and link to strategy Operation Maximum opportunity

• To remunerate the Chair and NEDs.

The fees may be in the form of cash

or shares.

• Normally reviewed annually.

• Determined and reviewed taking into account time commitment, experience, knowledge and

responsibilities of the role as well as market data for similar roles in other companies of a

similar size and/or business to Oxford Instruments.

• NEDs based outside the UK may receive additional fees taking into account additional travel

and time commitment associated with their role.

• Out of pocket expenses including travel may be reimbursed by the company in accordance

with the company’s expenses policy including tax thereon grossed up as appropriate.

• There is no prescribed maximum or maximum

annual increase.

Directors’ remuneration report continued

Remuneration Policy continued

128

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Directors’ remuneration report continued

Discretion retained by the Committee in operating its incentive plans

The Committee may adjust the formula driven outturn for an annual bonus or LTIP performance

condition if it considers the quantum to be inappropriate in light of wider company performance or

overall shareholder experience. Any such use of discretion would be detailed in the Annual Report

on Remuneration (Part B) and in the Annual Statement of the Committee Chair.

The Committee operates the Group’s incentive plans according to their respective rules and in

accordance with HMRC rules, where relevant. To ensure the efficient administration of these plans,

it may apply certain operational discretions, including:

• selecting the participants in the plans;

• determining the timing of grants and/or payments;

• determining the quantum of grants and/or payments;

• determining the extent of vesting based on the assessment of performance;

• determining ‘good leaver’ status and, where relevant, the extent of vesting in the case of the

share-based plans;

• where relevant, determining the extent of vesting in the case of share-based plans in the event

of a change of control;

• making the appropriate adjustments required in certain circumstances (eg rights issues,

corporate restructuring events, variation of capital and special dividends); and

• the annual review of weighting of performance measures and setting targets for the annual

bonus plan and discretionary share plans from year to year.

The Committee may adjust the targets and/or set different measures and alter weightings for

existing annual bonus plans and share-based awards only if an event occurs which causes the

Committee to reasonably consider that the performance conditions would not without alteration

achieve their original purpose and the varied conditions are no less difficult to satisfy than the

original conditions. Any changes, and the rationale for those changes, will be set out clearly in

theAnnual Report on Remuneration in respect of the year in which they are made.

Legacy arrangements

In approving this Policy, authority is given to the company to honour any commitments entered into

with current or former Directors (such as the payment of a pension or the vesting or exercise of past

share awards) that have been disclosed to and approved by shareholders in previous remuneration

reports. Details of any payments to former Directors will be set out in the Annual Report on

Remuneration as they arise.

Remuneration scenarios for Executive Directors

The charts below show the level of remuneration potentially payable to Executive Directors under

different performance scenarios for FY2025/26 (see below for assumptions).

Assumptions:

• Fixed pay comprises salary levels as at 1 July 2025, pension of 6% of salary and the value of

benefits received in 2024/25 for the CEO and an estimate for the CFO.

• The on-target level of bonus is 75% of salary.

• The on-target level of vesting under the LTIP is taken to be 50% of the face value of the award

atgrant, ie 100% of salary.

• The maximum level of bonus is 150% of salary and the maximum LTIP award level is 200% of

salary for the CEO and the CFO.

• To show the impact of potential share price growth on the value of an Executive Director’s

package, the impact of share price growth of 50% on the LTIP is used.

100%

39%

26%

35%

£664k

£524k

£1,349k

£2,646k

£1,717k

£3,372k

£2,770k

£2,174k

£3,500k

£2,500k

£3,000k

£2,000k

Below target Below targetTarget

Fixed Pay Annual Bonus LTIP LTIP with 50% Share price growth

CEO CFO

TargetMaximum Maximum

£1,500k

£500k

£1,000k

40%

35%

39%

26%

43%

24%

33%

25%

34%

129

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Recruitment and promotion policy for Executive Directors

In setting total remuneration levels and in considering quantum for each element of the package

for a new Executive Director, the Committee takes into account the skills and experience of the

individual, the market rate for a candidate of that experience and the importance of securing the

relevant individual.

The company seeks to align the remuneration package with the Policy approved by shareholders.

Salary is provided at such a level as required to secure the most appropriate candidate. For new

appointments, base salary and total remuneration may be set initially at below normal market

rates on the basis that it may be increased once expertise and performance has been proven

and sustained.

Specific variable remuneration performance targets can be introduced for an individual where

necessary for the first year of appointment if it is appropriate to do so to reflect the individual’s

responsibilities and the point in the year in which he or she joined the Board.

Flexibility is retained to offer additional cash and/or share-based payments on appointment in

respect of deferred remuneration or benefit arrangements forfeited on leaving a previous employer

(ie a buy-out award). The Committee would look to replicate the arrangements being forfeited as

closely as possible and, in doing so, will take account of relevant factors including the nature of

the remuneration forfeited, performance conditions, attributed expected value and the time over

which they would have vested or been paid. Such awards may be made under the terms of the LTIP

(which, when combined with a normal annual LTIP award, may exceed the ‘normal’ 200% of salary

limit per annum) or as permitted under the Listing Rules.

For an internal appointment, any variable pay element awarded in respect of the prior role may be

allowed to continue to pay out according to its terms, adjusted as relevant to take into account the

appointment. In addition, any other ongoing remuneration obligations existing prior to appointment

may continue.

For external and internal appointments, the Committee may agree that the company will meet

certain relocation, legal and any other incidental expenses as appropriate.

Executive Directors’ service contracts and policy on cessation of employment

Details of the service contracts of the Executive Directors, available for inspection at the company’s

registered office and at the company’s AGM, are as follows:

Contract date Unexpired term of contract

Richard Tyson 1 October 2023 12-month rolling contract

Paul Fry 8 January 2025 12-month rolling contract

Details of contractual terms and the policy on cessation of employment are summarised in the

table below. Payments to departing Directors can only be made in line with this shareholder-

approved Policy:

Contractual provision Detailed terms

Notice period 12 months by the company or by the Director.

Termination

payment

A Director’s service contract may be terminated without notice and without

any further payment or compensation, except for sums accrued up to the

date of termination, in the event of gross misconduct.

For termination in other circumstances, the company has a right to pay

salary in lieu of the notice period (or part thereof) if it so determines.

In addition, any statutory entitlements in connection with the termination

would be paid as necessary, and, at the Committee’s discretion if deemed

necessary and appropriate, outplacement, legal fees and settlement of

claims or potential compensation claims.

Remuneration

entitlements

Pro rata bonus may also become payable for the period of active service

based on the satisfaction of performance conditions and payable at the

normal time, along with vesting for outstanding share awards or deferred

bonus shares (in certain circumstances – see below).

Change of control No Executive Director’s contract contains additional provisions in respect

of a change of control. Any applicable share plan rules address the

treatment of unpaid and unvested awards.

Directors’ remuneration report continued

130

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Any share-based entitlements granted to an Executive Director under the company’s share plans

will be determined based on the relevant plan rules. The default treatment for existing awards

is that any unvested awards lapse on cessation of employment. However, in certain prescribed

circumstances, such as death, injury, ill health, disability, retirement or other circumstances at

the discretion of the Committee, ‘good leaver’ status may be applied. Under the LTIP (and PSP),

awards to good leavers will vest on the normal vesting date, subject to the satisfaction of the

relevant performance conditions at that time and will normally be scaled back to reflect the

proportion of the original vesting period or performance period actually served. In the event of a

good leaver there would be no early release from a post-vest holding period (again, unless by

genuine exception, for example, serious ill health). The Committee has discretion in exceptional

circumstances to disapply time pro rating, to measure performance to, and vest awards at, the date

of cessation. Vesting at cessation would be the default position where a participant dies. Deferred

bonus shares are beneficially owned by the executive from the time of the bonus payment, so are

not at risk of forfeiture (other than in relation to clawback).

Non-Executive Directors

For the appointment of a new Chair or Non-Executive Director, the fee arrangements would be in

accordance with the approved Policy in place at the time.

Non-Executive Directors are appointed under letters of appointment for fixed terms of three years;

however, in line with governance best practice, the company proposes all Directors for annual

re-election by shareholders at the AGM. Their appointment can be terminated without notice

and with no compensation payable on termination, other than accrued fees and expenses.

Date of appointment Notice period Unexpired term

Neil Carson 1 December 2018 Rolling six months 2027 AGM

Alison Wood 8 September 2020 None 2026 AGM

Sir Nigel Sheinwald 22 September 2021 None 2027 AGM

Hannah Nichols 1 January 2024 None 2027 AGM

Rowena Innocent 17 February 2025 None 2028 AGM

Directors’ remuneration (audited)

The remuneration paid to the Directors during the year under review and the previous year is

summarised in the tables below:

Executive

Director

Salary

£’000

Benefits

£’000

Annual

bonus

£’000

Long-term

incentive

awards

£’000

Pension

£’000

Other

£’000

Total

fixed

£’000

Total

variable

£’000

Total

£’000

Richard

Tyson

2025 583 26 828 – 31 – 640 828 1,468

2024 285 13 256 – 15 823 313 1,079 1,392

Gavin

Hill

2025 409 24 565 234 23 – 456 800 1,255

2024 395 24 360 583 32 – 451 943 1,394

Total 2025 992 50 1,393 234 54 – 1,096 1,627 2,723

2024 949 64 862 1,149 73 828 1,091 2,834 3,925

1. Benefits comprise provision of a car or car allowance, health insurance, life assurance, overnight hotel accommodation

where necessary to carry out duties at the Head Office of the company. The values included in the table above are before

payment of tax.

2. Annual bonus represents the gross annual bonus for the year to March 2025 and would usually be paid in the July 2025

payroll. Of the total bonus amounts payable, £276,133 and £188,284, equal to one-third, will be paid in shares for Richard

Tyson and Gavin Hill, respectively, which must be held for three years, as per the policy.

3. Long-term incentive awards are those awards where the vesting is determined by performance periods ending in the year

under review and therefore reports the value of the PSP award granted on 20 June 2022. The value has been determined

using the average share price over the three months to 31 March 2025, £19.8005. The share price used on grant of the 2022

PSP award was £19.40, therefore the value of the PSP award that has been attributable to share price growth is £4,424 for

Gavin Hill. Dividend equivalents have been added to arrive at the total figure included in the table above. The value of the

prior year awards has been restated using the share price on the vesting date of 5 July 2024 of £25.00, giving a total vested

award value, including dividend equivalents, of £582,950 (before restatement £502,706) for Gavin Hill.

4. Each Executive Director is entitled to receive a contribution to a money purchase pension scheme for a fixed value of 6% of

current base salary. Where the contractual pension contribution exceeds the annual or lifetime allowance, any balancing

payment is made by the company as a cash allowance which, in line with the policy for all UK employees, is paid net of

employer’s national insurance contributions.

5. The company operates a Share Incentive Plan (SIP) which is open to all UK permanent staff employed for at least six months.

For Richard Tyson and Gavin Hill, ‘Other’ is the value of matching SIP shares attributable to the year, as they both participated

in the SIP up to the maximum extent permitted by HMRC. The company offers a 1:5 match for partnership shares purchased by

employees and this amounted to £186 and £306 each of matching shares for Richard Tyson and Gavin Hill, respectively.

6. Gavin Hill stepped down as Chief Financial Officer and from the Board on 31 March 2025, he then remained in active service

until 10 June 2025 to ensure a smooth transition. Details of Gavin Hill’s remuneration arrangements are set out on page 135.

Directors’ remuneration report continued

Annual Report on Remuneration (B)

The financial information in this part of the report has been audited where indicated.

131

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Non-Executive Director

Fees

£’000

Benefits

£’000

Total

£’000

Neil Carson 2025 211 – 211

2024 204 – 204

Mary Waldner

2025 52 – 52

2024 66 – 66

Alison Wood 2025 79 – 79

2024 76 1 77

Sir Nigel Sheinwald 2025 69 – 69

2024 66 – 66

Reshma Ramachandran

2025 18 – 18

2024 57 1 58

Hannah Nichols

2025 66 – 66

2024 14 – 14

Rowena Innocent

2025 7 – 7

2024 – – –

Total 2025 502 – 502

2024 483 2 485

1. Mary Waldner stepped down as a Non-Executive Director effective 4 February 2025.

2. Reshma Ramachandran stepped down as a Non-Executive Director effective 25 July 2024.

3. Hannah Nichols was appointed as a Non-Executive Director effective 1 January 2024.

4. Rowena Innocent was appointed as a Non-Executive Director effective 17 February 2025.

Details of annual bonus earned in year (audited)

As in previous years, the Committee set stretching performance targets for the annual bonus which

are clearly linked to the strategy and financial performance of the Group. Richard Tyson and Gavin

Hill’s on-target bonus opportunity was 75% of salary and the maximum opportunity was 150% of

salary. The targets set and the achievement against them are set out in the table below.

Targets

Measure (% of salary weighting) Threshold Target Maximum

Actual

Performance

Payout %

of salary

Adjusted profit before tax

(75%) £82.4m £86.5m £90.5m £90.5m 75.0%

Adjusted organic operating profit

margin

(25%) 16.5% 16.8% 17.2% 17.8% 25.0%

Cash conversion (25%) 82.0% 85.0% 92.0% 89.0% 19.6%

Strategic objectives (25%) See below CEO: 21.5%

CFO: 17.5%

Total CEO: 141.1%

CFO: 137.1%

1. 10% of the element is payable for achieving threshold performance and 50% is payable for achieving target performance.

2. Calculated on a constant currency basis.

The non-financial strategic objectives were set at the start of the year. The CEO and CFO were set

the same three main strategic objectives and the CFO was set further sub objectives under the

second objective.

Directors’ remuneration report continued

132

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Details of the objectives and an assessment as to their achievement are set out below:

Executive Directors

Strategic objectives

Weighting

CEO

Weighting

CFO

Outcome

as % of

salary

CEO

Outcome

as % of

salary

CFO Commentary

Progress evolution

of the portfolio in

line with agreed

Group strategy

32% 24% 6.25% 4.00% Delivery of turnaround in

NanoScience (NS) performance.

Continued to develop pipeline of

bolt-on opportunities within the

Imaging & Analysis division.

Establish

and progress

operational

excellence

transformation

programme

For the CFO

specifically, return

NS to profitability

and successful

implementation

of ERP across

Americas, China,

Andor and Plasma

32% 48% 7.00% 7.50% Wave 2 of OpEx30 well under

way with initial diagnostic phase

report out. Wave 1 cameras

complete and full improvement

implementation under way.

Second team established at NS

in Tubney and initial diagnostic

report out. Productivity targets

already achieved.

NS returned to profitability.

Some delays in the ERP

implementation.

Progress Group

strategic plan and

position for margin

improvement and

enhanced growth

and value in 2026

36% 28% 8.00% 6.00% China stabilised through pivot to

other commercial markets, with

team engagement renewed.

Export disruption reduced.

North America growth dynamics

improved through completion of

leadership team recruitment.

Total 100% 21.5% 17.5%

The actual bonuses payable for the Executive Directors for the year ended 31 March 2025 are set

out below.

Executive Director

Actual bonus payable

(% of salary)

Actual bonus payable

(% of maximum)

Actual bonus payable

for 2024/25

Richard Tyson 141% 94% £828,398

Gavin Hill 137% 91% £564,852

1. Bonus is calculated on salary as at 31 March 2025. Of the amounts disclosed, £276,133 and £188,284 will be paid in shares to

Richard Tyson and Gavin Hill respectively, which must be held for three years, as per the policy.

Long-term incentive plans (audited)

The performance targets, performance against them and the resulting value in respect of the

long-term incentive awards where vesting is determined by a performance period ending in

2024/25 are as follows:

Performance Share Plan (PSP)

The performance targets which applied to the awards made on 20 June 2022 for the performance

period ending in the year under review and actual performance achieved against them were as follows:

50% of the award is based on EPS measured over a three-year performance period starting 1 April 2022:

Performance level EPS growth over three years % of award that will vest

Below threshold Less than 4% per annum 0%

Threshold 4% per annum 25%

Between threshold and maximum 4% to 10% per annum 25%–100%

Maximum 10% per annum and above 100%

Actual EPS 112.4p

Actual growth achieved over the period 6% 50%

Directors’ remuneration report continued

133

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

50% of the award is based on the company’s return on capital employed in the final year of the

three-year performance period

Performance level

ROCE

for the final year

of the performance period % of award that will vest

Below threshold Less than 26% 0%

Threshold 26% 25%

Between threshold and maximum Between 26% and 32% 25%–100%

Maximum 32% per annum and above 100%

Actual ROCE achieved in 2024/25 26% 25%

1. ROCE is calculated as Earnings Before Interest and Tax (EBIT)/ average capital employed where EBIT is adjusted operating

profit less amortisation of acquired intangibles and capital employed is as documented in the Finance review on page 43.

Based on the performance against targets, the PSP awards will vest on 20 June 2025 as follows:

Date award

granted

Total number

of shares

granted

Percentage

of award

vesting

Number

of shares

vesting

Value

of shares

vesting

(£’000)

Number of

shares awarded

as dividend

equivalent

Value

of shares

vesting including

dividend

equivalent

(£’000)

Gavin Hill 20 June

2022

29,456 37.5% 11,046 218,716 781 234,181

1. As the awards vest after the date of this report, value has been calculated using the average mid market closing price of the

company’s shares over the three-month period ending 31 March 2025, £19.8005. This will be restated for the actual value on

vesting in next year’s report.

2. Dividend equivalents have been calculated based on dividends paid up until the date of this report. If dividends are payable

between the date of this report and the vesting date, additional dividend equivalents will be awarded and the value will be

updated in next year’s report.

Long-Term Incentive Plan awards made in the year and outstanding share

incentive awards (audited)

Awards made under the LTIP during the financial year ended 31 March 2025 are set out below.

Director

Date award

granted

Total number

of shares

granted

Percentage

of salary

Face value

of award at

grant date

Share price

on day before

award date Vesting date

Richard Tyson 22 July 2024 48,222 200% £1,174,206 £24.35 22 July 2027

Gavin Hill 22 July 2024 29,610 175% £721,004 £24.35 22 July 2027

The awards are nominally priced options of £0.05 and are subject to the following performance

conditions:

Performance measure Weighting Performance targets

Earnings Per

Share (EPS)

30% 2% pa (25% vesting) to 8% pa (100% vesting) CAGR over three

financial years measured from the FY2023/24 year-end EPS.

Return on Capital

Employed (ROCE)

30% 26% in the final year of the performance period (2026/27 financial

year) (25% vesting) to 30% (100% vesting).

Relative Total

Shareholder

Return (TSR)

25% Median (25% vesting) to Upper quartile (100% vesting) over three

financial years commencing with the FY2024/25 relative to the

companies comprising the FTSE 250 Index (minus Investment

Trusts) at the start of the performance period.

Sustainability

– emissions

reduction –

Site Heating

Infrastructure

Projects

7.5% Make progress towards achieving our accelerated Scope 1 and

2 net zero targets of 2030, by completing two of our site heating

infrastructure projects.

1 project completed by the final year of the performance period

(FY2026/27) (50% vesting) to 2 projects completed (100% vesting).

Sustainability

– percentage

of females in

senior leadership

positions

7.5% 35% in the final year of the performance period (FY2026/27)

(25% vesting) to 40% (100% vesting). The current percentage of

females in senior leadership positions is 34%. Senior leadership

is defined as Leadership Committee, their direct reports and key

decision makers.

Directors’ remuneration report continued

134

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

As at 31 March 2025, the outstanding options for Richard Tyson and Gavin Hill under the PSP and LTIP

were as follows:

Scheme 1 Apr 2024 Granted Exercised Lapsed

Dividend

equivalents

31 March 2025 Exercise price

Share price on

date of grant Date of grant Earliest exercise Latest exercise

Richard Tyson

LTIP

13,521 – – – – 13,521 £0.05 £20.55 14/11/2023 16/03/2024 15/03/2031

LTIP

30,975 – – 30,975 – – £0.05 £20.55 14/11/2023 14/03/2025 13/03/2032

LTIP

53,023 – – – – 53,023 £0.05 £20.55 14/11/2023 31/07/2026 13/11/2033

LTIP – 48,222 – – – 48,222 £0.05 £24.35 22/07/2024 31/07/2027 21/07/2034

Total 97,519 48,222 – 30,975 – 114,766

Gavin Hill

PSP 53,071 – 53,071 – – – £0.05 £9.58 25/09/2017 25/09/2020 24/09/2027

PSP 51,646 – – – – 51,646 £0.05 £10.10 03/07/2018 03/07/2021 02/07/2028

PSP 38,633 – – – – 38,633 £0.05 £14.00 15/07/2019 15/07/2022 14/07/202 9

PSP 33,601 – – – – 33,604 £0.05 £16.24 23/09/2020 23/09/2023 22/09/2030

PSP 23,338 – – (583) 563 23,318 £0.05 £23.80 05/07/2021 05/07/2024 0 4/07/2031

PSP

29,456 – – – – 29,456 £0.05 £21.75 20/06/2022 20/06/2025 19/06/2032

LTIP 36,697 – – – – 36,697 £0.05 £21.75 25/09/2023 31 /07/2026 24/09/2033

LTIP – 29,610 – – – 29,610 £0.05 £24.35 22/07/2024 31/07/2027 21 /07/203 4

Total 266,442 29,610 (53,071) (583) 563 242,961

1. Dividend equivalents are awarded on vesting of PSP and LTIP awards, for the period to vesting, in respect of the actual number of shares vesting.

2. During the financial year ended 31 March 2023 the Remuneration Committee agreed that those awards outstanding under the PSP, both vested and unvested, which had been granted as nil-cost options, would be converted to nominally priced options

of £0.05 per share. For the Executive Directors, a reimbursement payment will be made in respect of the immaterial disbenefit (ie the difference between £0 and £0.05 per share), at the point at which any award vests or for those awards which have

already vested, at the earlier of when they exercise their options or when future vesting activity is scheduled to take place. Upon any such payment being made, this will be disclosed and explained in the Single Figure Table as an item of

‘Other remuneration’.

3. The awards granted to Richard Tyson with vesting dates in 2024 and 2025 comprise the buy-out arrangements which replace Richard’s 2021 and 2022 LTIP awards from his previous employer, TT Electronics plc, which lapsed in connection with his

joining the company. The 2021 buy-out award vested at 43.91% as disclosed in last year’s report and the 2022 buy-out award lapsed in full as a result of the threshold performance of the original TT Electronics plc performance conditions not being met.

4. The performance conditions relating to this award have been tested and the award will vest at 37.5%.

Directors’ remuneration report continued

135

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Shareholding requirements (audited)

The Executive Directors are required to build and retain a shareholding in the company equivalent

in value to 200% of basic salary. Until the requirement is met, the Executive Directors are expected

to retain or purchase shares equivalent to the value of 50% of the net amount realised on exercise

of long-term incentive awards after allowing for tax payable. The value of vested but unexercised

PSP and LTIP awards may count towards the shareholding level, calculated at the net of tax value.

Directors’ shareholdings (and those of any persons closely associated) as at 31 March 2025 (or date

of resignation if relevant) are shown in the table below.

Beneficially

owned

Share option

awards vested

but unexercised

Percentage of

salary held in

shares under

shareholding

guideline

Guideline

met as at

31 March 2025

Share option

awards unvested

and subject to

performance

Richard Tyson 5,910 44,496 86 No 101,245

Gavin Hill

6,761 147, 198 354 Yes 95,763

Neil Carson 24,000 – N/A N/A –

Mary Waldner

– – N/A N/A –

Alison Wood – – N/A N/A –

Nigel Sheinwald – – N/A N/A –

Reshma Ramachandran

– – N/A N/A –

Hannah Nichols – – N/A N/A –

Rowena Innocent

– – N/A N/A –

1. The notional tax rate used to determine the net value of the vested share awards is 47%. Shares valued using the market

price of the shares on 31 March 2025: £17.20.

2. Award granted in June 2022 will vest at 37.5% in June 2025. Awards granted in 2023 and 2024 remain subject to

performance conditions.

3. Gavin Hill will be subject to the post-cessation shareholding obligations as set out in the Policy.

4. Reshma Ramachandran stepped down as a Non-Executive Director effective 25 July 2024. Mary Waldner stepped down as

a Non-Executive Director effective 4 February 2025.

5. Rowena Innocent was appointed as a Non-Executive Director effective 17 February 2025.

Pension arrangements

Executive Director pension arrangements (audited)

Executive Directors can decide to contribute to a pension plan of their choice. The company

contributes a fixed amount of 6% of salary, which is the maximum percentage amount payable to

the majority of the UK workforce. Only base salary is pensionable. Where the company’s pension

contribution exceeds the annual allowance, a balancing payment is paid by the company to the

Director, which is taxed as income. In line with the policy for all UK employees, this cash payment

is reduced by 12.12% to cover employer’s national insurance costs.

During the year and in respect of the periods in which they served as Directors of the company,

respectively, the company contributed £10,000 (2024: £10,000) into a personal defined contribution

plan for Gavin Hill. Balancing payments of £30,731 to Richard Tyson and £12,778 to Gavin Hill

(net of employer’s national insurance contributions) were paid as cash.

Payments to past Directors and for loss of office (audited)

As detailed earlier in this report, Gavin Hill agreed with the Board that he would step down as Chief

Financial Officer from the Board on 31 March 2025. Paul Fry took up the role of Chief Financial Officer

with effect from 1 April 2025, with Gavin continuing to be actively employed until 10 June 2025 to

ensure a smooth transition.

Gavin Hill’s remuneration arrangements for 2025/26 and for the duration of his notice period is set

out below:

• Salary, benefits and pension will continue for the duration of his 12-month notice period ie to

7January 2026.

• Gavin is eligible to participate in the 2025/26 annual bonus plan, pro-rated for the period of his

active service, ie, up to 10 June 2025 and payable at the usual time in cash and deferred shares.

• Gavin is not eligible to receive a Long-Term Incentive Plan award for 2025/26.

• Gavin will be treated as a good leaver in respect of his unvested Performance Share Plan and

Long-Term Incentive Plan awards, which will be subject to a time pro-rata reduction to the end

of his notice period ie, 7 January 2026, the achievement of performance conditions, and which

will vest at the normal time. The two-year post-vesting holding periods will continue to apply.

• Gavin is subject to a post-employment shareholding requirement which requires him to retain

a shareholding on cessation of employment, equivalent to 200% of base salary, for two years.

The two-year period will be calculated commencing from the end of his notice period.

• Gavin will receive £109,000 by way of compensation for the termination of his employment

in full and final settlement for any legal claims arising related to unfair dismissal.

Directors’ remuneration report continued

136

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

As explained in the 2023 Annual Report, Ian Barkshire was treated as a good leaver when he retired

from the Board and his role as CEO in 2023 and therefore, he retained his unvested 2022 LTIP

award which was pro-rated to the end of his notice period. As set out in this report, the award will

vest at 37.5% of maximum, which resulted in 9,276 shares vesting, including 390 dividend equivalent

shares. The value of these shares is £191,392 based on the average share price over the three

months to 31 March 2025, £19.8005.

Performance graph and CEO’s remuneration (unaudited)

The graph to the right shows for the ten years ended 31 March 2025 the total shareholder return (TSR)

on a holding of the company’s ordinary shares compared with the TSR of an equivalent value invested

in the FTSE 250 and FTSE 350 Electronic and Electrical Equipment indices. These indices have been

chosen as they are considered to be the most appropriate comparator groups for the company.

The total remuneration of the CEO over the last ten years is shown in the table below. The annual bonus

payout and PSP/LTIP vesting level as a percentage of the maximum opportunity are also shown.

2017

2024

Year ending 31 March 2016 Jonathan Flint Ian Barkshire 2018 2019 2020 2021 2022 2023 Ian Barkshire Richard Tyson 2025

Total remuneration (£’000) 743 64 620 791 1,957 1,967 2,244 2,087 2,135 1,321 1,392 1,468

Annual bonus outcome (%) 38.6% 0% 56.3% 63.7% 94.4% 62.9% 100% 74.2% 80.56% 60% 60% 94%

ESOS vesting (%) 0% 0% N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

SELTIS/PSP/LTIP

vesting (%) 0% 0% N/A N/A 92.8% 100% 100% 100% 100% 97.5% N/A N/A

1. FY2016/17: remuneration shown separately for Jonathan Flint who was CEO from 1 April to 11 May 2016 and Ian Barkshire who was CEO from 12 May 2016 to 31 March 2017.

2. Executive Directors were last granted ESOS (market value share options) and SELTIS (nil-cost options) in June 2014. PSP awards were granted from June 2014 to June 2022. LTIP awards have been granted since September 2023.

3. FY2023/24: remuneration shown separately for Ian Barkshire who was CEO from 1 April 2023 to 1 October 2023 and Richard Tyson who was CEO from 1 October 2023 to 31 March 2024.

Ratio of CEO pay to that of employees

The CEO to employee pay ratio for 2024/25 and prior financial years is set out below:

Financial year Method 25th percentile 50th percentile 75th percentile

2024/25 A 7 7.0:1 57.8:1 42.7:1

2023/24 A 76.8:1 57.7:1 42.6:1

2022/23 A 66.2:1 49.4:1 36.8:1

2021/22 A 65.3:1 48.5:1 36.3:1

2020/21 A 72.6:1 55.0:1 39.8:1

2019/20 A 62.5:1 47.8:1 33.3:1

Directors’ remuneration report continued

The aggregated payment made in respect of the CEO who served during the year, and the

employees at the percentiles for the 2024/25 ratio are set out below:

CEO 25th percentile 50th percentile 75th percentile

Salary £582,825 £33,708 £44,345 £58,500

Total pay £1,467,706 £36,336 £47,565 £62,601

400

2015 20192017 20212016 2020

As at 31 March

2018 2022 2023 2024 2025

Total Shareholder Return

300

200

100

Oxford Instruments FTSE 350 E & EE FTSE 250

137

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

The ratios have been calculated in accordance with Option A under the relevant regulations,

as this is the most statistically accurate method. The CEO pay is compared to the pay of our UK

employees at the 25th, 50th and 75th percentile, calculated based on full-time equivalent pay data

for the full financial year to 31 March 2025. All UK employees employed at the end of the financial

year who had worked the full year have been included, part-time employees have been included

and pay has been converted to a full-time equivalent number by calculating total part-time pay

and grossing up to the full-time equivalent for the role. Accordingly, any employees that left the

company or joined during the year have been excluded. There have been no discernible trends in

the movement of the pay ratios over the period of financial years covered by the pay ratios table,

with CEO and employee pay well aligned to performance and noting that the CEO pay figure in the

last two years has been impacted by the CEO succession.

The calculations use the pay for Richard Tyson as disclosed in the single figure table. The pay for all

UK employees comprises salary, benefits, pension and annual bonus payments due for 2024/25 and

includes certain remuneration elements which were specific to the terms of their joining the company

or their retirement, respectively. None of the employees at the percentiles received share awards.

The CEO pay ratio has remained broadly comparable to the prior year. As the Committee is

regularly apprised of the Remuneration Policy throughout the company to ensure that decisions

in relation to executive pay are considered in the round, the Committee is satisfied the pay of the

employees identified for the quartiles appropriately reflects the employee pay structure in each

quartile and the resulting pay ratios are consistent with the pay, reward and progression policies

in place for all employees.

Percentage change in the remuneration of the Directors (unaudited)

The table below shows the percentage change in each of the Director’s salaries, taxable benefits

and annual bonus earned between 2019/20 to 2024/25 compared to that for the average UK

based employee of the Group (on a per capita full time equivalent basis).

Directors’ remuneration report continued

Directors during the year ended

31 March 2025

2023/24 to 2024/25

% change

2022/23 to 2023/24

% change

2021/22 to 2022/23

% change

2020/21 to 2021/22

% change

2019/20 to 2020/21

% change

Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus

Richard Tyson

104.5 96.8 223.6 N/A N/A – N/A N/A – N/A – – N/A – –

Gavin Hill 3.5 0.0 56.9 5.2 -13.7 -8.9 5.0 18.8 15.3 8.5 2.3 -2.8 -4.1 8.2 57.1

Neil Carson 3.5 – – 5.0 – – 4.3 – – 8.0 – – -4.3 – –

Mary Waldner

-20.8 – – 7.0 – – 3.8 – – 8.3 – – -3.8 – –

Alison Wood 4.1 – – 8.6 100 – 9.3 – – N/A – – N/A – –

Nigel Sheinwald 4.4 – – 7.0 – – N/A – – N/A – – N/A – –

Reshma Ramachandran

-67.7 – – N/A N/A – N/A N/A – N/A – – N/A – –

Hannah Nichols

369.7 – – N/A N/A – N/A N/A – N/A – – N/A – –

Rowena Innocent

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Average employee pay

2.70 -1.0% 101.3 1.73 -11.0 -29.3 10.3 9.01 -4.7 4.24 -8.4 -23.1 -0.7 -6.7 7.0

1. Richard Tyson joined the Board on 1 October 2023 and so the prior year does not reflect an equivalent full year of salary, benefits and bonus.

2. Mary Waldner stepped down from the Board on 4 February 2025.

3. Reshma Ramachandran joined the Board on 1 September 2022 and stepped down from the Board on 25 July 2024.

4. Hannah Nichols joined the Board on 1 January 2024.

5. Rowena Innocent joined the Board on 17 February 2025.

6. Average employee pay includes all UK employees in service on 31 March 2025 for the 2023/24 to 2024/25 comparison, but excludes those who were on maternity leave, long-term sick leave and those who started or ended employment within the period.

7. The average pay increase across all employees in the UK in 2024/25 was 2.5%.

8. The value of the average employee bonus for the year ended 31 March 2025 (to be paid in July 2025) was not known at the time the Annual Report was approved and consequently the number included is management’s best estimate of the bonus that will be paid.

138

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Relative importance of the spend on pay

The following table shows the Group’s employee costs relative to dividends:

Year ended

31 March 2025

Year ended

31 March 2024 % change

Employee costs (£m) 166.6 155.4 7%

Dividends (£m) 12.1 11.4 6%

Statement of shareholder voting (unaudited)

The resolution to approve the Policy was passed at the 2023 AGM and received the following votes

from shareholders:

Resolution Votes for Votes against % for % against

Votes marked

as abstain

To approve the Directors’

Remuneration Policy 43,129,297 862,318 98.04 1.96 4,077

The resolution to approve the Annual Report on Remuneration at the 2024 AGM received the

following votes from shareholders:

Resolution Votes for Votes against % for % against

Votes marked

as abstain

To approve the Annual

Report on Remuneration 46,643,409 849,741 98.21 1.79 3,042

How the Policy will be applied in 2025/26 (unaudited)

Base salaries

With effect from 1 July 2025, the salary of the CEO will increase by 2.5% from £587,100 to £601,778

and the salary of the CFO will also increase by 2.5% from £460,000 to £471,500 in line with the

broader UK workforce.

Benefits and pension

Benefits will be in line with the Policy. Pension contributions will be 6% of salary, which is the

maximum percentage amount payable to the majority of the UK workforce.

Annual bonus

The maximum opportunity under the annual bonus plan for 2025/26 will be 150% of base salary

for both the CEO and CFO. One-third of the bonus payable will be delivered in shares subject to

a three-year holding period. A combination of financial (83.3%) and non-financial strategic (16.7%)

metrics will be used to determine the level of payment under the annual bonus for the CEO and

CFO as detailed in the table below:

Measure Weighting as a % of maximum

Profit (£m) 50.0%

Adjusted operating profit margin (%) 16.7%

Cash conversion (%) 16.7%

Strategic objectives 16.7%

For the CEO and CFO, the non-financial strategic objectives are linked to progressing operational

improvement and the strategic plan.

The Committee has chosen not to disclose, in advance, the performance targets for the

forthcoming year as these include matters which the Committee considers commercially sensitive.

Retrospective disclosure of the performance against them will be made in next year’s Annual

Report on Remuneration.

Directors’ remuneration report continued

139

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Long-term incentive awards in respect of the financial year

The 2025/26 LTIP awards will be over shares with a market value at grant of 200% of salary for the

CEO and CFO.

Vesting will be subject to the performance conditions as set out below measured over a three-year

performance period commencing 1 April 2025. The mix of performance conditions will provide a

strong and rounded assessment of the success of the business performance, strategy and purpose,

over the period.

The Committee has carefully considered the EPS and ROCE target ranges in light of the business

plan and market environment and considers the ranges to be appropriately stretching

The TSR measure will require significant stock market outperformance.

The sustainability measures will drive achievement of our target of Net Zero by 2030.

Performance measure Weighting Performance targets

Earnings Per

Share (EPS)

30% 3% pa (25% vesting) to 10% pa (100% vesting) CAGR over three

financial years measured from FY2024/25 year-end EPS.

Return on Capital

Employed (ROCE)

30% 26% (25% vesting) to 30% (100% vesting) in the final year of the

performance period (FY2027/28).

Relative Total

Shareholder

Return (TSR)

25% Median (25% vesting) to Upper quartile (100% vesting) over three

financial years commencing with FY2024/25 relative to the

companies comprising the FTSE 250 Index (minus Investment

Trusts) at the start of the performance period.

Sustainability

– emissions

reduction

15% Reduce absolute Scope 1 and 2 market-based carbon emissions

by 2028 by 45% (threshold) to 65% (maximum) from the

FY2023/24 baseline.

Directors’ remuneration report continued

Non-Executive Directors’ fees

The Committee and the Board, as appropriate, have reviewed the fees for the Chair and Non-

Executive Directors and in line with the Executive Directors, they will increase by 2.5% for 2025/26,

effective from 1 July 2025.

2024/25 2025/26 % increase

Board Chair £212,661 £217,978 2.5%

Additional fee for Deputy Chair £5,358 £5,492 2.5%

Basic fee £59,130 £60,608 2.5%

Additional fee for Senior Independent Director £10,300 £10,558 2.5%

Additional fee for Committee Chair £10,300 £10,558 2.5%

Note: The fees shown for 2024/25 and 2025/26 are the annual rates as at 1 July 2024 and

1 July 2025, respectively.

Approval

This report was approved by the Committee on 12 June 2025 and has been approved

subsequently by the Board for submission to shareholders at the Annual General Meeting

to be held on 28 July 2025.

ALISON WOOD

Chair of the Remuneration Committee

12 June 2025

140

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Financial calendar

13 June 2025 Announcement of preliminary results

10 July 2025 Final dividend ex-dividend date

11 July 2025 Final dividend record date

28 July 2025 Annual General Meeting

29 July 2025 Final dividend DRIP election date

19 August 2025 Final dividend payment date

11 November 2025 Announcement of half-year results

27 November 2025 Interim dividend ex-dividend date

28 November 2025 Interim dividend record date

16 December 2025 Interim dividend DRIP election deadline

9 January 2026 Interim dividend payment date

31 March 2026 Financial year end

1. Please note that the above dates are subject to change.

Analysis of share register at 31 March 2025

Total number

of holdings

Percentage

of holders

Total number

of shares

Percentage

of issued

share capital

By type of shareholder

Individual 1,384 74.17 1,938,562 3.33

Institutions and others 482 25.83 56,196,211 96.67

By size of shareholding

1–500 1,121 60.08 187,235 0.32

501–1,000 206 11.04 157,344 0.27

1,001–10,000 301 16.13 970,886 1.67

10,001–100,000 151 8.09 5,723,000 9.84

100,001–500,000 61 3.27 13,729,906 23.62

Over 500,000 26 1.39 37,366,402 64.28

Total 1,866 100.00 58,134,773 100.00

Shareholder information

Shareholder enquiries

Please contact MUFG Corporate Markets, our Registrar, using

the below details, for all enquiries regarding your shareholding,

including updating your address or other contact details,

direct dividend payments and amending your communication

preferences.

Online:

www.signalshares.com

To register to use this site, you will need your Investor

Code (IVC) which can be found on your share certificate or

dividendconfirmation.

By telephone:

+44 (0) 371 664 0300

Calls to the above number are charged at the standard

geographic rate and will vary by provider. Calls outside the

United Kingdom will be charged at the applicable international

rate. Lines are open 9.00am–5.30pm, Monday to Friday

excluding public holidays in England and Wales.

By email:

shareholderenquiries@cm.mpms.mufg.com

By post:

MUFG Corporate Markets

Shareholder Services,

Central Square,

29 Wellington Street,

Leeds LS1 4DL

Annual General Meeting 2025

The 2025 Annual General Meeting of Oxford Instruments plc

will be held at the office of Ashurst LLP at London Fruit & Wool

Exchange, 1 Duval Square, London, E1 6PW at 11.00am on

Monday 28 July 2025.

Further details can be found in the Notice of Meeting which

has been sent to our shareholders and which is also available

on our website at: www.oxinst.com/investors-content/annual-

general-meeting

Company information

Company name:

Oxford Instruments plc

Company number:

00775598

Registered office address:

Tubney Woods,

Abingdon,

Oxon OX13 5QX

Type:

Public Limited Company

Website:

www.oxinst.com

Auditor:

BDO LLP, R+,

2 Blagrave Street,

Reading,

Berkshire RG1 1AZ

141

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

The Directors present the Annual Report of Oxford

Instruments plc for the year ended 31 March 2025.

Principal activity and business reviews

Oxford Instruments plc (‘OI plc’) is the ultimate holding company

of a group of subsidiary undertakings (the ‘Group’) which is a

leading global provider of technology and expertise to academic

and commercial partners. The Directors of OI plc are required

to set out in this report a true and fair view of the business

of the Group during the financial year ended 31 March 2025,

the position of the Group at the end of the financial year and

a description of the principal risks and uncertainties facing

the Group. The information which fulfils these requirements

includes the Finance review on pages 37 to 45 and the report on

Sustainability on pages 45 to 68, which are incorporated in this

report by reference. The operations, the strategic review, the risk

management disclosures, the viability statement, the research

and development activities and likely future prospects of the

Group are reviewed in the Strategic Report on pages 9 to 81

which is also incorporated by reference.

Results and dividends

The results for the year are shown in the Consolidated Statement

of Income on page 146. The Directors recommend a final

dividend of 17.1p per ordinary share, which together with the

interim dividend of 5.1p per ordinary share is a total of 22.2p

per ordinary share for the year (2024: 20.8p per ordinary share).

Subject to shareholder approval, the final dividend will be

paid on 19 August 2025 to shareholders registered at close of

business on 11 July 2025.

Risks and uncertainties

The Board exercises proper and appropriate corporate

governance across the Group. It ensures that there are effective

systems of internal controls in place to manage shareholders’

interests and the Group’s assets, including the assessment

and the management of the risks to which the businesses

are exposed, and to monitor and manage compliance with

all the legal requirements that affect the Group’s worldwide

businessactivities.

Directors’ report

However, such systems are designed to manage rather than

eliminate the risk of failure to achieve business objectives

and can provide only reasonable and not absolute assurance

against material misstatement or loss.

The Executive Directors report to the Board on changes in the

business and in the external environment which may affect the

risks which the Group faces. The Executive Directors also provide

the Board with financial information at each Board meeting. Key

performance indicators are reviewed periodically.

There are a number of risks and uncertainties which may have

a material effect on the Group. These are described in Principal

Risks on pages 72 to 78.

Directors

Biographies of all the Directors at the date of this report,

including Non-Executive Directors, are set out on pages 85 to 87.

During the year ended 31 March 2025 there were a number of

changes to the Board, as noted on page 84.

Any Director who has been appointed by the Board since the

previous Annual General Meeting of shareholders, either to fill

a casual vacancy or as an additional Director, holds office only

until the conclusion of the next Annual General Meeting and

then shall be eligible for re-election by the shareholders. The

company’s Articles of Association provide that all Directors

are subject to annual re-election in accordance with the UK

Corporate Governance Code.

The Directors are subject to removal with or without cause by

the Board or the shareholders. Directors may exercise all of the

powers of the company subject to the provisions of the Articles

of Association.

Directors’ conflicts of interest

The Companies Act 2006 allows Directors of public companies

to authorise conflicts and potential conflicts of interest, where

appropriate. Only Directors with no interest in the matter under

consideration may participate in the relevant decision and in

doing so they must act in a way which they consider in good

faith will be most likely to promote OI plc’s success.

A conflicts policy is in place, which is reviewed as appropriate,

and a register of conflicts and potential conflicts is maintained.

Directors’ interests

The beneficial interests of the Directors in OI plc’s share capital,

all in fully paid up shares at 31 March 2025, are:

31 March 2025

31 March 2024

Neil Carson 24,000 24,000

Richard Tyson 5,910 –

Gavin Hill 6,762 4,014

Alison Wood – –

Nigel Sheinwald – –

Hannah Nichols – –

Rowena Innocent – N/A

Details of share options for the Executive Directors are shown in

the Remuneration Report on page 134.

No Director was beneficially interested in the shares of any

subsidiary company at any time during the year.

In the year to 31 March 2025, no Director had a material

interest in any contract of significance with OI plc or any of its

subsidiaries. As of 30 May 2025, there were no changes to the

above shareholdings apart from for Richard Tyson and Gavin Hill

who participate in the Oxford Instruments Share Incentive Plan

and since the year end had increased their respective beneficial

holdings by 20 and 21 shares.

142

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Insurance cover and Directors’ indemnities

For a number of years, the Group has purchased insurance to

cover its Directors and Officers against their costs in defending

themselves in legal proceedings taken against them in that

capacity, and in respect of damages resulting from the

unsuccessful defence of any proceedings. In addition, to the

extent permitted by UK law, the Group indemnifies its Directors

and Officers for liabilities arising from such proceedings.

Neither the insurance nor the indemnity provides cover

for situations where the Director has acted fraudulently

ordishonestly.

Share capital

OI plc only has one class of share capital, which comprises

ordinary shares of 5p each. All shares forming part of the ordinary

share capital have the same rights and carry one vote each.

There are no unusual restrictions on the transfer of a share.

The full rights and obligations attaching to OI plc’s ordinary

shares, as well as the powers of the Directors, are set out in

OI plc’s Articles of Association, a copy of which is available on

OI plc’s website. These can also be obtained from Companies

House or by contacting the Company Secretary.

During the year to 31 March 2025, the Board issued 220,981 new

shares (2024: 201,284) following the exercise of options under

OI plc’s share option schemes. At 31 March 2025, the issued

share capital of OI plc was 58,134,773 ordinary shares of 5p each.

No shares in OI plc were acquired by the company itself during

the year (2024: nil). Details of the share capital and options or

other awards outstanding as at 31 March 2025 are set out in

Notes 25 and 26, respectively, to the Financial Statements.

Powers in relation to OI plc issuing or buying

back its own shares

At the 2024 AGM, shareholders authorised the company to

allot relevant securities: (i) up to a nominal amount of £965,321

(being one-third of the company’s issued share capital); and

(ii) up to a nominal amount of £1,930,642 (being two-thirds of the

company’s issued share capital), after deducting from such limit

any relevant securities allotted under (i), in connection with an

offer by way of a rights issue or for use in connection with any

pre-emptive offer. A similar resolution will be put to shareholders

at the 2025 AGM.

In 2024, shareholders also authorised the company to purchase

its own shares in the market up to a limit of 10% of its issued

share capital, being 5,791,927 shares. As noted in the 2024

notice of meeting, the Directors will seek to renew this authority

at the 2025 AGM by proposing a further special resolution.

This authority will also be limited to a maximum of 10% of the

company’s issued share capital and the resolution will set the

minimum and maximum prices which may be paid. The Directors

will only purchase the company’s shares in the market if they

believe it is in the best interests of the company and shareholders

generally and where Directors (i) expect that such a purchase

would result in an increase in earnings per share, (ii) consider

that the company has excess cash, and/or (iii) determine that

it is appropriate to increase the company’s gearing.

Disapplication of pre-emption rights

At the 2025 AGM, OI plc will seek approval from its shareholders

to empower Directors to issue equity securities or sell treasury

shares for cash other than to existing shareholders pro-rata to

their holdings to the fullest extent permitted by the Statement

of Principles on Disapplying Pre-Emption Rights most recently

published by the Pre-Emption Group (‘Statement of Principles’).

In addition to offers or invitations in proportion to the respective

number of shares held, this equates to the ability for Directors

to issue equity securities or sell treasury shares for cash up to

10% of the company’s issued share capital for general purposes

and up to a further 10% of the company’s issued share capital

to be used in connection with an acquisition or specified

capital investment of a kind contemplated by the Statement

of Principles. In each case, the Directors will seek a power to

issue up to a further 2% of the company’s issued share capital

for the purposes of a ‘follow-on offer’ (also as contemplated by

the Statement of Principles) which would enable existing retail

shareholders to participate in relevant equity issues.

These resolutions are the same as those approved by

shareholders at the company’s 2024 AGM. The Directors

believe the resolutions being proposed at the 2025 AGM

reflect marketpractice.

Research and development

Information on the research and development activities

of the Group can be found on page 162.

Branches

Subsidiaries of the company have established branches

in a number of different countries in which they operate.

Payment of suppliers

The Group does not follow a standard payment practice but

agrees terms and conditions for its business transactions with

each of its suppliers. Payment is then made in accordance with

these terms.

Substantial shareholdings

The following are beneficial interests of 3% or more (direct), or

of 5% or more (indirect), which have been notified to OI plc, per

Chapter 5 of the Disclosure Guidance and Transparency Rules,

of OI plc’s issued ordinary share capital, the only class of voting

capital, at 30 May 2025:

As at 30 May 2025 As at 31 March 2025

% of voting rights

over ordinary

shares of 5p each

% of voting rights

over ordinary shares

of 5p each

Artemis Fund Managers 14.23 14.23

Ameriprise Financial, Inc 9.94 9.94

BlackRock, Inc. 8.67 8.67

Lady KA Wood and the Estate

of the late Sir MF Wood 3.94 3.94

Directors’ report continued

143

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Tax strategy

The Group’s tax strategy supports the strategic objectives of the

Group and applies equally to both UK and non-UK taxes and

to all forms of taxation. The Group pays a significant amount

of tax to national and local governments, including taxes on

employment, corporate taxes on profits, customs and excise

duty on purchases, withholding taxes and environmental taxes.

We also administer VAT and similar sales taxes charged to

our customers and withholdings on payments made to our

employees. The Group’s tax strategy is published on the Group’s

website at www.oxinst.com/investors-content/tax-strategy.

Charitable donations

During the year, the Group made charitable donations of

£6,167 (2024: £5,668).

Political donations

During the year, the Group made no political donations (2024: nil).

Disclosure of information to auditor

Pursuant to Section 418(2) of the Companies Act 2006, the

Directors who held office at the date of approval of this Directors’

Report confirm that, so far as they are each aware, there is no

relevant audit information of which OI plc’s auditor is unaware;

and each Director has taken all the steps that he or she might

reasonably have been expected to have taken as a Director to

make himself or herself aware of any relevant audit information

and to establish that OI plc’s auditor is aware of that information.

Annual General Meeting

The Notice of the Annual General Meeting to be held on

28 July 2025 is set out in a letter to shareholders together

with explanatory notes relating to the resolutions.

Articles of Association

The company’s Articles of Association may be amended by

a special resolution at a general meeting of the shareholders.

The current Articles of Association were adopted by shareholders

at the AGM held on 8 September 2020.

External auditor

A resolution to reappoint BDO LLP as auditor for FY2024/25 was

passed at the 2024 Annual General Meeting and a resolution to

reappoint them as auditor for FY2025/26 will be proposed at the

2025 Annual General Meeting on 28 July 2025.

Change of control arrangements

There are a number of agreements that take effect, alter

or terminate upon a change of control of OI plc following a

takeover, such as banking agreements and OI plc share plans.

On a change of control, OI plc’s committed credit facilities may

be cancelled by lenders by giving not less than three days’

notice. It is also possible that pension plan funding arrangements

would need to be changed following a change of control if that

resulted in a weakening of the employer covenant.

Corporate governance statement

The Board’s corporate governance statement is set out on

page 88. The Board reviews its work on corporate governance

in the Governance Report on pages 83 to 144. Pages 27 to

28 summarise how we engage with our stakeholders. Pages

89 to 93 include further details of how we engage with our

stakeholders and page 94 includes our statement in accordance

with Section 172(1) of the Companies Act 2006.

Financial risk management

Details of the Group’s financial risk management objectives and

policies, including the exposure to price, credit and liquidity risk,

are set out in Note 23 to the Financial Statements.

Employees

The Board recognises that its employees are fundamental to

the Group’s success. The Group’s aim is to ensure there are

equal opportunities for all employees and that there is an

inclusive culture where differences are valued and people are

given the environment in which they can do their best work. The

Sustainability Report on pages 61 to 68 further describes how

diversity and inclusion is managed within Oxford Instruments.

It is the policy of Oxford Instruments plc to give full and fair

consideration to applications for employment from disabled

persons; to continue, wherever possible, the employment of

members of staff who may become disabled; and to ensure that

suitable training, career development and promotion of disabled

persons takes place.

For further information regarding employee engagement,

please see ‘How we engage with our stakeholders’ on page 90.

S172 Statement

For information on how the Directors have had regard to the

interests of employees and the need to foster the company’s

business relationships with suppliers, customer and others as

well as the effect of that regard on the principal decisions

taken by the company during the financial year, please see

the S172 statement on page 94.

Greenhouse gas emissions

To meet the requirements of the Companies Act 2006

(Strategic and Directors’ Report) Regulations 2013, CO

emissions

are reported on as part of our reporting on greenhouse gas

emissions in Sustainability on pages 48 to 49.

Material events

On 10 June 2025, the Group entered a binding agreement to

sell the trade and assets of Oxford Instruments NanoScience to

Quantum Design International Inc for a £60m total consideration,

including up to £3m of deferred consideration linked to

performance of the business post-closing.

Directors’ report continued

144

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

The Directors are responsible for preparing the Report and the

Group and Parent Company Financial Statements in accordance

with applicable law and regulations.

Company law requires the Directors to prepare Group and

Parent Company Financial Statements for each financial year.

Under that law they are required to prepare the Group Financial

Statements in accordance with UK-adopted International

Accounting Standards and applicable law and have elected

to prepare the Parent Company Financial Statements in

accordance with UK accounting standards, including FRS 101

Reduced Disclosure Framework.

Under company law the Directors must not approve the Financial

Statements unless they are satisfied that they give a true and

fair view of the state of affairs of the Group and Parent Company

and of their profit or loss for that period. In preparing each of the

Group and Parent Company Financial Statements, the Directors

arerequiredto:

• select suitable accounting policies and then apply

them consistently;

• make judgements and estimates that are reasonable,

relevant, reliable and prudent;

• for the Group Financial Statements, state whether they have

been prepared in accordance with UK-adopted International

Accounting Standards;

• for the Parent Company Financial Statements, state whether

applicable UK accounting standards have been followed,

subject to any material departures disclosed and explained in

the Parent Company Financial Statements;

• assess the Group and Parent Company’s ability to continue as

a going concern, disclosing, as applicable, matters related to

going concern;

• use the going concern basis of accounting unless they either

intend to liquidate the Group or the Parent Company or to

cease operations, or have no realistic alternative but to do

so; and

• prepare a Strategic Report, Directors’ Report, Directors’

Remuneration Report and Corporate Governance Statement

which comply with requirements of the Companies Act and

the applicable laws and regulations.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Parent

Company’s transactions and disclose with reasonable accuracy

at any time the financial position of the Parent Company and

enable them to ensure that its Financial Statements comply

with the Companies Act 2006. They are responsible for such

internal control as they determine is necessary to enable the

preparation of Financial Statements that are free from material

misstatement, whether due to fraud or error, and have general

responsibility for taking such steps as are reasonably open to

them to safeguard the assets of the Group and to prevent and

detect fraud and other irregularities.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information included

on the company’s website. Legislation in the UK governing the

preparation and dissemination of Financial Statements may

differ from legislation in other jurisdictions. The maintenance

and integrity of the company’s website is the responsibility of

the Directors. The Directors’ responsibility also extends to the

ongoing integrity of the Financial Statements contained therein.

Responsibility statement of the Directors

in respect of the annual financial report

We confirm that to the best of our knowledge:

• the Financial Statements, prepared in accordance with the

applicable set of accounting standards, give 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 taken as a whole; and

• the Strategic Report/Directors’ Report includes a fair review

of the development and performance of the business and the

position of the issuer and the undertakings included in the

consolidation taken as a whole, together with a description of

the principal risks anduncertainties that they face.

We consider the Annual Report, taken as a whole, is fair,

balanced and understandable and provides the information

necessary for shareholders to assess the Group’s position and

performance, business model andstrategy.

Signed on behalf of the Board

RICHARD TYSON

Chief Executive Officer

PAUL FRY

Chief Financial Officer

12 June 2025

Directors’ responsibilities in relation to the Annual Report

145

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Financial

statements

146 Consolidated statement of income

146 Consolidated statement of comprehensive income

147 Consolidated statement of financial position

148 Consolidated statement of changes in equity

149 Consolidated statement of cashflows

150 Material accounting policies

157 Notes to the consolidated financial statements

190 Parent Company statement of financial position

191 Parent Company statement of changes in equity

192 Notes to the Parent Company financial statements

201 Independent auditor’s report to the members of

Oxford Instruments plc

211 Historical financial summary

146

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Note

			2025			2024
			Adjusting			Adjusting
			items			items
		Adjusted	(Note 2)	Total	Adjusted	(Note 2)	Total
		£m	£m	£m	£m	£m	£m
Revenue	1	500. 6	–	500. 6	470 . 4	–	4 70. 4
Cost of sales		(241 .8)	–	(241 .8)	(228 .0)	–	(228 .0)
Gross profit		258. 8	–	25 8.8	242 . 4	–	242 . 4
Other operating income		–	–	–	–	3.3	3.3
Research and development	3	(4 1 . 1)	–	(4 1 . 1)	(3 9. 1)	–	(39 .1)
Selling and marketing		(78 . 7)	–	(78 . 7)	(74 . 5)	–	(74 . 5)
Administration and shared
services		(56 . 5)	(4 2.7)	(9 9. 2)	(58 .7)	(14 . 6)	(73. 3)
Foreign exchange (loss)/gain		(0. 3)	(0. 3)	(0.6)	10. 2	(0.7)	9.5
Operating profit		82 . 2	(4 3 . 0)	39. 2	80. 3	(1 2. 0)	68.3
Financial income	6	2 .6	–	2.6	4.7	–	4.7
Financial expenditure	7	(1 . 4)	(0.6)	(2 .0)	(1 .7)	–	(1.7)
Profit/(loss) before income tax	1	83 . 4	(4 3 . 6)	39. 8	83 .3	(12 .0)	71 .3
Income tax (expense)/
credit	8	(18. 2)	4.4	(13 .8)	(20. 3)	(0. 3)	(20. 6)
Profit/(loss) for the year
attributable to equity
shareholders of the parent		65 . 2	(3 9. 2)	26.0	63 .0	(1 2. 3)	50. 7
Earnings per share
(in pence)	10
Basic		112 . 4p		44.8p	109. 0p		8 7. 7p
Diluted		111 . 1p		44.3p	1 0 7. 5p		86.5p

Consolidated statement of income

Year ended 31 March 2025

The attached notes form part of these Financial Statements.

		2025	2024
	Note	£m	£m
Profit for the year		26.0	50. 7
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to Consolidated Statement of Income
Foreign exchange translation differences		(2 . 0)	(5 . 5)
Items that will not be reclassified to Consolidated
Statement of Income
Remeasurement loss in respect of post-retirement
benefits	24	(1 .1)	(1 9.4)
Tax credit on items that will not be reclassified to Consolidated Statement of Income		0. 2	4. 8
Total other comprehensive expense		(2 .9)	(2 0.1)
Total comprehensive income for the year attributable to equity shareholders of the parent		23. 1	30. 6

Consolidated statement of comprehensive income

Year ended 31 March 2025

147

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

			2024
		2025	as restated 1
	Note	£m	£m
Assets
Non-current assets
Property, plant and equipment	12	85.6	80. 5
Intangible assets	13	121 .8	138.2
Right-of-use assets	14	29.9	32.4
Long-term receivables		1 .0	1 .3
Derivative financial instruments	22	0.3	0. 2
Retirement benefit asset	24	24. 4	16 .1
Deferred tax assets	8	11 . 1	13 .7
		2 74 . 1	28 2.4
Current assets
Inventories	15	9 9.1	108 . 1
Trade and other receivables	16	126. 2	114 . 7
Current income tax receivable		9.4	1 .0
Derivative financial instruments	22	1 .9	2.3
Cash and cash equivalents	18	94. 1	97. 8
		330. 7	323 .9
Total assets		604.8	606. 3
Equity
Capital and reserves attributable to the company’s
equity shareholders
Share capital	25	2 .9	2.9
Share premium		62 .6	62. 6
Other reserves		0. 2	0. 2
Translation reserve		5.4	7. 4
Retained earnings		305 .0	292.6
		376 . 1	365 .7

			2024
		2025	as restated 1
	Note	£m	£m
Liabilities
Non-current liabilities
Bank loans	19	0.5	0. 9
Lease liabilities	14	26. 7	28. 6
Retirement benefit obligations	24	0.9	–
Provisions	21	1.3	–
Deferred tax liabilities	8	16. 7	12.9
		46.1	42.4
Current liabilities
Bank loans and overdrafts	19	9.2	1 3.1
Trade and other payables	20	1 5 7. 7	166 . 2
Lease liabilities	14	4. 5	4. 8
Current income tax payables		6.0	7. 6
Derivative financial instruments	22	0. 6	0. 1
Provisions	21	4.6	6.4
		182 .6	198. 2
Total liabilities		228.7	24 0 . 6
Total liabilities and equity		604.8	606. 3

1. Details of restatement of prior period numbers can be found in Note 11.

The Financial Statements were approved by the Board of Directors on 12 June 2025 and signed on

its behalf by:

RICHARD TYSON PAUL FRY

Director Director

Company number: 775598

Consolidated statement of financial position

As at 31 March 2025

148

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

	Share	Share	Other	Translation	Retained
	capital	premium	reserves	reserve	earnings	Total
	£m	£m	£m	£m	£m	£m
As at 1 April 2024	2.9	62 .6	0. 2	7. 4	2 92 .6	365.7
Profit for the year	–	–	–	–	2 6.0	2 6.0
Foreign exchange translation differences	–	–	–	(2 . 0)	–	(2 . 0)
Remeasurement loss in respect of post-retirement benefits	–	–	–	–	(1 .1)	(1 . 1)
Tax credit on items that will not be reclassified to Consolidated Statement of Income	–	–	–	–	0. 2	0. 2
Total comprehensive (expense)/income	–	–	–	(2 . 0)	25.1	23. 1
Share-based payment transactions	–	–	–	–	(0. 1)	(0. 1)
Income tax on share-based payment transactions	–	–	–	–	(0. 5)	(0. 5)
Dividends	–	–	–	–	(12 . 1)	(12 .1)
Total transactions with owners:	–	–	–	–	(1 2.7)	(12. 7)
As at 31 March 2025	2.9	62 .6	0. 2	5.4	30 5.0	3 76 . 1
As at 1 April 2023	2.9	62.6	0. 2	12.9	265 .4	3 4 4.0
Profit for the year	–	–	–	–	50.7	50.7
Foreign exchange translation differences	–	–	–	(5. 5)	–	(5. 5)
Remeasurement loss in respect of post-retirement benefits	–	–	–	–	(19.4)	(19. 4)
Tax credit on items that will not be reclassified to Consolidated Statement of Income	–	–	–	–	4. 8	4.8
Total comprehensive (expense)/income	–	–	–	(5. 5)	36 .1	30.6
Share-based payment transactions	–	–	–	–	3 .0	3.0
Income tax on share-based payment transactions	–	–	–	–	(0. 5)	(0 . 5)
Dividends	–	–	–	–	(11 .4)	(1 1 .4)
Total transactions with owners:	–	–	–	–	(8 .9)	(8 .9)
As at 31 March 2024	2.9	62.6	0. 2	7. 4	292.6	365.7

Consolidated statement of changes in equity

Year ended 31 March 2025

149

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

		2025	2024
	Note	£m	£m
Cash flows from operating activities
Profit for the year		26.0	50. 7
Adjustments for:
Income tax expense	8	13.8	2 0.6
Net financial income	6, 7	(0.6)	(3 .0)
Fair value movement on financial derivatives		0. 3	0. 7
Impairment of goodwill	13	26.0	–
Amortisation of right-of-use assets	14	5.4	5 .0
Depreciation of property, plant and equipment	12	5 .9	5.3
Amortisation and impairment of intangible assets	13	10. 6	9.8
Loss on disposal of plant, property and equipment		1.3	–
(Credit)/charge in respect of equity-settled employee
share schemes		(0. 1)	3.0
Contributions paid to the pension scheme more than the charge to operating profit		(7. 9)	(8 .0)
Decrease/(increase) in inventories	27	8.8	(26 . 3)
Increase in receivables	27	(10.0)	(2.7)
Increase/(decrease) in payables and provisions	27	1 .1	(2 .8)
(Decrease)/increase in customer deposits	27	(11 .1)	7. 1
Cash generated from operations		69. 5	59. 4
Interest paid		(0.6)	(0. 9)
Income taxes paid		(19. 8)	(16 .1)
Net cash from operating activities		49.1	42 .4

		2025	2024
	Note	£m	£m
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		2.3	0. 5
Purchase of property, plant and equipment	12	(14. 4)	(2 7. 0)
Acquisition of subsidiaries, net of cash acquired	11	(15.4)	(13.4)
Capitalised development expenditure	13	(1 .5)	(0. 7)
Interest received		1.6	3 .1
Net cash used in investing activities		(2 7. 4)	(3 7. 5)
Cash flows from financing activities
Interest paid on lease liabilities	14	(0. 6)	(0. 8)
Payment of lease liabilities	14	(4 . 9)	(4 . 0)
Repayment of borrowings	19	(0.8)	(1 . 8)
Dividends paid		(12 . 1)	(1 1 . 4)
Net cash used in financing activities		(1 8 .4)	(18. 0)
Change in cash and cash equivalents		3.3	(13.1)
Cash and cash equivalents at beginning of the year		85 .5	101 . 5
Effect of exchange rate fluctuations on cash held		(3. 5)	(2 .9)
Cash and cash equivalents at end of the year	18	85 .3	85 .5
Comprised of:
Cash and cash equivalents as per the Consolidated
Statement of Financial Position		94 .1	97. 8
Bank overdrafts	19	(8. 8)	(1 2. 3)
		85.3	85. 5

Consolidated statement of cash flows

Year ended 31 March 2025

150

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Material accounting policies

Year ended 31 March 2025

Oxford Instruments plc (the ‘Company’) is a public company limited by shares incorporated under

the Companies Act 2006 and domiciled in the United Kingdom.

The Group Financial Statements have been prepared in accordance with UK adopted International

Accounting Standards (IAS) in conformity with the requirements of the Companies Act 2006 and

interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies

reporting under UK-adopted IFRS.

The accounting policies set out below have, unless otherwise stated, been applied consistently to

all periods presented in these Group Financial Statements.

Going concern

The Financial Statements have been prepared on a going concern basis based on the Directors’

opinion, after making reasonable enquiries, that the Group has adequate resources to continue

in operational existence for the foreseeable future.

In determining the basis of preparation for the Consolidated Financial Statements, the Directors

have considered the Group’s available resources, current business activities and factors likely

to impact on its future development and performance, including the impact of current macro-

economic factors, tariffs, and climate change on the Group, which are described in the Chief

Executive Officer’s review and Finance review.

The Group’s business activities, together with factors likely to affect its future development,

performance and financial position, are set out in the Strategic Report on pages 9 to 36. The financial

position of the Group, its cash flows, and borrowing facilities are described in the Finance review

on pages 37 to 44. In addition, Note 23 to the Financial Statements includes the Group’s objectives,

policies and processes for managing its capital; its financial risk management objectives; details of

its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk.

The Group finances its operations from retained earnings, and where needed, from third-party

borrowings. In the prior year, on 19 March 2024, the Group entered into a new multi-currency

revolving facility agreement, which is committed until March 2028 with 15-month and 12-month

extension options at the end of the first and second years respectively. The facility has been entered

into with four banks and comprises a euro-denominated multi-currency facility of €95m and a

US-dollar-denominated multi-currency facility of $150m.

The Group regularly monitors its financial position to ensure that it remains within the terms of its

financial covenants. Debt covenants are net debt to EBITDA less than 3.0 times and EBITDA to

interest greater than 4.0 times. At the date of approving these Financial Statements, the facility

remains undrawn.

In addition to the above, at year end, the Group had a cash and cash equivalents balance of

£94.1m. The Group also had bank overdrafts of £8.8m and other small loan balances that totalled

£0.9m. This resulted in a net cash position of £84.4m, an increase of £0.6m from the £83.8m net cash

position at 31 March 2024.

The Group has prepared and reviewed cash flow forecasts for the period to 30 June 2026 for the

Going Concern assessment, which reflect forecasted changes in operating profit, and operating

cash across its business. The Group’s net cash position and undrawn credit facilities provide

substantial liquidity headroom that even under extreme stress scenarios, it would be able to meet

its obligations for well beyond the 12-month assessment period.

In its going concern assessment, the Directors considered not only its base case but also ‘severe

but plausible’ downside scenarios. These scenarios reflected a 25% reduction in Adjusted Operating

Profit, a 25% increase in working capital and a third scenario of incorporating both. In each scenario

the Group’s cash balances remained positive, and the facility remains undrawn throughout the

going concern period to 30 June 2026.

Following this assessment, the Board of Directors are satisfied that the Group has sufficient

resources to continue in operation for a period of not less than 12 months from the date of this

report. Accordingly, they continue to adopt the going concern basis in relation to this conclusion and

preparing the Consolidated Financial Statements. Further information on the going concern of the

Group can be found on pages 79 to 80 in the Viability Statement.

(a) Changes in accounting standards

The International Accounting Standards Board (IASB) issued a new Standard, IFRS 18 Presentation

and Disclosure in Financial Statements, on 9 April 2024 that will replace IAS 1 Presentation of

Financial Statements. The purpose of the new standard is to provide more consistent presentation

of financial information across preparers as it is acknowledged that existing standards have

given flexibility to present information in different ways. IFRS 18 will not impact the recognition or

measurement of items in the Financial Statements. Many of the existing presentation principles

in IAS 1 are retained, but there are some more specific requirements that will require the Group to

make some changes in its future Annual Report and Interim Financial Statements.

The new Standard is not yet endorsed by the UK Endorsement Board (UKEB) but is expected to be

applicable for reporting periods beginning on or after 1 January 2027. Comparative information for

2026 will need to be restated when the 2027 Interim Financial Statements and Annual Report and

Accounts are published and early adoption is expected to be permitted.

The Group has started an initial review of the Standard and expects changes to the presentation

of the Consolidated Statement of Income. The process of assessing the financial impact on the

Consolidated Financial Statements will continue during 2025.

151

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

There are no standards or amendments that are not yet effective and that would be expected to

have a material impact on the Group in the current or future reporting periods and on foreseeable

future transactions.

(b) Significant estimates and judgements

The preparation of Financial Statements requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, income and expenses. Actual results may differ from these estimates.

Significant judgements

In the opinion of the Group there is one key judgement made in the preparation of the Financial

Statements in respect of which taking a different view would have a material impact on the

Financial Statements:

Recognition of Oxford Instruments NanoScience as not held for sale at 31 March 2025

On 10 June 2025, the Group entered a binding agreement to sell the trade and assets of Oxford

Instruments NanoScience (NS). IFRS 5 Non-current Assets Held-for-Sale and Discontinued

Operations sets out the conditions for an asset to be classified as held-for-sale. At 31 March 2025,

the Group had not received a binding offer or terms from prospective buyers and therefore actions

to complete the sale were highly uncertain. In addition, management were not committed to sell

and given the macro conditions prevailing at that time a successful sale remained highly uncertain.

As a result, the Directors consider that the IFRS 5 conditions were not fully met, and therefore the NS

assets are not classified as held-for-sale at 31 March 2025.

Significant estimates

Revisions to accounting estimates are recognised in the period in which the estimate is revised if

the revision affects only that period or in the period of the revision and future periods if the revision

affects both current and future periods. Four key areas where estimates have been used and

assumptions applied have been identified as follows:

Measurement of defined benefit scheme liabilities

The Group recognises and measures costs relating to defined benefit pension schemes in

accordance with IAS 19 (Revised) Employee Benefits. In applying IAS 19 (Revised) the costs are

assessed in accordance with the advice of independent qualified actuaries. This requires certain

estimates and assumptions in relation to future changes in salaries and inflation, as well as

mortality rates, expected returns on plan assets and the selection of suitable discount rates. The

factors affecting these assumptions are influenced by wider macroeconomic factors that are largely

outside of the Group’s control. A sensitivity analysis is set out in Note 24.

Provision for inventory

Provision is made for obsolete, slow-moving and defective stock where there is evidence of

impairment, to reduce the carrying value to its net realisable value. This requires consideration of

several factors including, but not limited to, recent usage, expected future demand, new product

introduction plans and likely realisable values to estimate the excess quantities and net realisable

value. The level of provisioning requires certain estimates regarding future demand and possible

design changes to identify excess quantities. Amounts provided represent in aggregate the Group’s

best estimate of the levels of provisioning required.

Acquisition of FemtoTools AG (FemtoTools) and First Light Imaging SAS (First Light Imaging)

On the acquisition of a business, in order to comply with IFRS 3 (Revised) Business Combinations

it is necessary to reflect the assets and liabilities acquired at their fair value. This requires certain

estimates and assumptions in relation to, inter alia, the forecast performance of the acquired

business, the expected life of certain intangible assets and the likely future customer base of the

business. In order to assist in undertaking this fair value exercise, the Group appointed an external

firm of advisers. The fair value adjustments arising from this review are set out in Note 11.

Impairment of goodwill

The determination of whether goodwill and other indefinite life intangible assets should be impaired

requires the estimation of future cash flows and growth factors adopted by each cash generating

unit. Furthermore, discount rates applied to these cash flows are determined by reference to the

markets in which they operate and are risk adjusted to reflect risks and opportunities existing

for each cash generating unit. These factors are all affected by prevailing market and economic

factors outside the Group’s control. Further information on this issue, including sensitivity analyses,

is included in Note 13.

The Financial Statements are presented in sterling, rounded to the nearest £0.1m and are prepared

on the historical cost basis except as described below in accounting policy (e).

The Group Financial Statements include the accounts of Oxford Instruments plc and its subsidiary

companies adjusted to eliminate intra-Group balances and any unrealised gains and losses or

income and expenses arising from intra-Group transactions.

Subsidiaries are entities controlled by the Group. Control exists when the Group is exposed to or has

rights to variable returns from its investment with the investee and has the ability to affect those

returns through its power over the investee. In assessing control, potential voting rights that are

currently exercisable or convertible are taken into account. The results of subsidiary companies

are included in the consolidated Financial Statements from the date that control commences

until the date that control ceases. The acquisition method is used to account for the acquisition

of subsidiaries.

Material accounting policies continued

152

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(d) Consideration of climate change

In preparing the Financial Statements, the Directors have considered the impact of climate

change, particularly in the context of the risks identified in the TCFD disclosure on pages 52 to 60

this year. There has been no material impact identified on the financial reporting judgements and

estimates. In particular, the Directors considered the impact of climate change in respect of the

following areas:

• Going concern and viability of the Group.

• Cash flow forecasts used in the impairment assessments of non-current assets

including goodwill.

• Carrying value and useful economic lives of property, plant and equipment.

Whilst there is currently no medium-term impact expected from climate change, the Directors are

aware of the ever-changing risks attached to climate change and will regularly assess these risks

against judgements and estimates made in preparation of the Group’s Financial Statements.

(e) Financial instruments

Financial assets and liabilities are recognised in the Group’s Consolidated Statement of Financial

Position when the Group becomes a party to the contractual provisions of the instrument. Forward

foreign exchange contracts (derivative financial instruments) of the Group are used to hedge its

exposure to foreign currency risks arising from operational, financing and investment activities. The

Group does not hold or issue derivative financial instruments for trading purposes. The Group has

chosen not to apply hedge accounting in respect of these exposures. All derivatives are initially

recognised at fair value; attributable transaction costs are recognised in profit or loss as incurred.

Foreign exchange contracts are classified as “fair value through profit and loss” under IFRS 9.

Subsequent to initial recognition, derivatives are measured at fair value and gains or losses on the

settlement of such derivatives are recognised in operating expenses. Where such derivatives relate

to the following year’s exposure, any gains or losses resulting from the change in fair value are

recognised as an adjusting item in operating expenses.

The fair value of forward exchange contracts is their market price at the Consolidated Statement

of Financial Position date, being the present value of the forward price. The gain or loss on

remeasurement to fair value of forward exchange contracts is recognised immediately in the

Consolidated Statement of Income.

Contingent purchase consideration is measured at fair value at the date of acquisition and subsequently

carried at fair value, with movements recognised in the Consolidated Statement of Income.

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs.

Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any

difference between cost and redemption value being recognised in the Consolidated Statement of

Income over the period of the borrowing on an effective interest basis.

(f) Property, plant and equipment

Property, plant and equipment is stated at historical cost less provisions for impairment (see

accounting policy (k)) and depreciation which, with the exception of freehold land which is not

depreciated and rental assets (see below), is provided on a straight-line basis over each asset’s

estimated economic life. Depreciation is provided based on historical cost less estimated residual

value. The principal estimated economic lives used for this purpose are:

Freehold buildings, long leasehold land and buildings	50 years
Furniture and fittings	10 years
Machinery and other equipment	5 to 10 years
Computer equipment	4 years
Vehicles	4 years

Machinery and other equipment, computer equipment and vehicles are included within the

‘Plant and equipment’ sub heading in Note 12.

For leasehold improvements, where the length of the lease is less than the principal estimated

economic lives noted above, the length of the lease is used.

Material accounting policies continued

153

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(g) Intangible assets

(i) Goodwill

All business combinations are accounted for by applying the acquisition method. Goodwill

represents amounts arising on acquisition of subsidiaries and is the difference between the cost

of the acquisition and the fair value of the assets, liabilities and contingent liabilities acquired.

In respect of acquisitions prior to this date, goodwill is included on the basis of its deemed cost,

which represents the amount recorded under previous GAAP.

The Group expenses transaction costs associated with its acquisitions and movements in liabilities

relating to contingent consideration within the Consolidated Statement of Income.

Goodwill arising on acquisitions is stated at cost less any accumulated impairment losses and

allocated to cash-generating units (CGUs) that are anticipated to benefit from the combination.

It is not amortised but is tested annually for impairment (see accounting policy (k)), or more

frequently when there is an indicator that the unit may be impaired.

(ii) Development costs

Research and development costs are charged to the Consolidated Statement of Income in the

year in which they are incurred unless development expenditure is applied to a plan or design for

the production of new or substantially improved products, in which case they are capitalised. The

criteria for capitalisation include demonstration of the technical feasibility of completing a new

intangible asset that will be available for sale and that the asset will generate probable future

economic benefits. Where expenditure meets the criteria, development costs are capitalised and

amortised through the Consolidated Statement of Income over their useful economic lives.

(iii) Acquired intangible assets

An intangible asset acquired with a subsidiary undertaking is recognised as an intangible asset

if it is separable from the acquired business or arises from contractual or legal rights, is expected

to generate future economic benefits and its fair value can be reliably measured. The asset is

amortised through the Consolidated Statement of Income over its useful economic life.

(iv) Amortisation

Amortisation of intangible assets is charged to the Consolidated Statement of Income on a systematic

basis in proportion to the use of the assets over their estimated useful economic lives as follows:

Capitalised development costs	3 to 5 years
Technology-related acquired intangibles	5 to 14 years
Customer-related acquired intangibles	6 months to 15 years
Development costs acquired intangibles	10 years
Software	10 years

Customer-related acquired intangible assets include a number of different types of asset.

For example, the shorter end of the useful economic life relates to the order book of acquired

businesses, whilst the longer useful economic life relates to assets such as trademarks.

(h) Trade and other receivables

Trade and other receivables are initially recognised at fair value and subsequently stated at

their amortised cost less appropriate provision for impairment. The provision for impairment of

receivables is based on lifetime expected credit losses, which is then updated for any reasonable

and supportable forward-looking information and expectations. Lifetime expected credit losses are

calculated by assessing historic credit loss experience. The movement in the provision is recognised

in the Consolidated Statement of Income.

(i) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct

labour, an attributable proportion of production overheads based on normal operating capacity

and all other expenditure incurred in acquiring the inventories and bringing them to their existing

location and condition. Net realisable value is the estimated selling price in the ordinary course of

business, less the estimated costs of completion and selling expenses.

Provision is made for obsolete, slow-moving and defective stock where appropriate in light of recent

usage, expected future requirements, new product introduction plans and likely realisable values.

As outlined in Note (p) below, the revenue associated with both the sale and installation of certain

complex products is recognised at the time that the installation is completed. The net realisable

value associated with complex products is included in finished goods inventories where the

installation has not yet been completed.

Material accounting policies continued

154

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(j) Cash and cash equivalents

Cash and cash equivalents are carried in the Statement of Financial Position at amortised cost.

Cash and cash equivalents include cash at bank and in hand, investments in money-market funds

and short-term deposits with a maturity of three months or less on inception. Bank overdrafts that

are repayable on demand and form an integral part of the Group’s cash management are included

as a component of cash and cash equivalents for the purpose of the Statement of Cash Flows.

(k) Impairment of non-current assets

All non-current assets are tested for impairment whenever events or circumstances indicate

that their carrying value may be impaired. Additionally, goodwill is subject to an annual

impairment review.

For the purposes of impairment testing, assets are grouped together into the smallest group of

assets that generates cash flows from continuing use that are largely independent of the cash

inflows from other groups of assets.

An impairment loss is recognised in the Consolidated Statement of Income under the administration

and shared services heading, to the extent that an asset’s carrying value, or a CGUs carrying value,

exceeds its recoverable amount, which represents the higher of its net realisable value and its

value in use. Value in use is the present value of the future cash flows expected to be derived from

the asset or from the CGU to which it relates. The present value is calculated using a discount rate

that reflects the current market assessment of the time value of money and the risks specific to the

asset concerned.

Impairment losses recognised in previous periods for an asset other than goodwill are reversed if

there has been a change in estimates used to determine the asset’s recoverable amount, but only

to the extent that the carrying amount of the asset does not exceed its carrying amount had the

impairment loss not been recognised in previous periods. Impairment losses in respect of goodwill

are not reversed.

Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount

of any goodwill allocated to CGUs and then to reduce the carrying amount of the other assets in

the unit.

(l) Employee benefits

The Group operates a number of defined benefit and defined contribution plans which require

contributions to be made to independent trustee-administered funds.

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in

the Consolidated Statement of Income as incurred.

(ii) Defined benefit plans

The Group’s net obligation in respect of defined benefit pension plans is calculated separately for

each plan by estimating the amount of future benefit that current and past employees have earned

in return for their service in prior periods. That benefit is discounted to determine its present value

and is deducted from the fair value of any plan assets. Surpluses in schemes are recognised as

assets only if they represent economic benefits available to the Group in the future. The calculation

is performed by a qualified actuary using the projected unit credit method.

All actuarial gains and losses in calculating the Group’s net obligation are recognised in the

Consolidated Statement of Comprehensive Income in the year.

The charge to the Consolidated Statement of Income reflects the current service cost. The interest

expense or income is calculated on the net defined benefit asset by applying the discount rate to

the net defined benefit asset, and is included within financial expenditure or financial income in the

Consolidated Statement of Income respectively.

(iii) Share-based payment transactions

The fair value of equity-settled share option programmes is measured at grant date and charged

to the Consolidated Statement of Income, with a corresponding increase in equity, on a straight-line

basis over the period during which the employees become unconditionally entitled to the options.

The fair value of the options granted is measured using an option valuation model, taking into

account the terms and conditions upon which the options were granted.

The amount recognised as an expense is adjusted to reflect the actual number of share options that

vest, except where forfeiture is only due to market performance conditions not being met.

Material accounting policies continued

155

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(m) Provisions

A provision is recognised in the Consolidated Statement of Financial Position when the Group

has a present legal or constructive obligation as a result of a past event and it is probable that

an outflow of economic benefits will be required to settle the obligation. A provision for warranty

and product-related liability is recognised when the underlying products are sold. A provision for

restructuring is recognised when the Group has approved a detailed and formal restructuring plan

and the restructuring has either commenced or has been announced publicly.

A provision for onerous contracts is recognised when the expected benefits to be derived by the

Group from a contract are lower than the unavoidable cost of meeting its obligations under the

contract. A provision for a claim or dispute is made when it is considered probable that an adverse

outcome will occur and the amount of the loss can be reasonably estimated.

Contractual and other provisions represent the Directors’ best estimate of the cost of settling future

obligations where the Directors, taking into account professional advice received, assess that it is

more likely than not that such proceedings may be successful.

If the effect is material, provisions are determined by discounting the expected future cash flows

at a pre-tax rate that reflects current market assessments of the time value of money and, where

appropriate, the risks specific to the liabilities.

(n) Customer deposits

Customer deposits are classified as contract liabilities and included within trade and other payables

in the Statement of Financial Position.

Customer deposits represent the cash payments received or consideration due from customers

prior to the recognition of revenue in respect of product sales; for example, deposits received

on order (and shipment in the case of complex products where revenue is not recognised until

installation).

(o) Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs.

Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any

difference between cost and redemption value being recognised in the Consolidated Statement of

Income over the period of the borrowings on an effective interest basis.

(p) Revenue

Revenue is recognised in the Consolidated Statement of Income when the performance conditions

in the contract with the customer are met.

In most cases where the contract includes the sale of both a product and installation then the sale of

the product and the related installation are treated as two separate performance conditions. This is

because the Group considers that the customer is able to benefit from the product even if the Group

does not supply installation, ie it would be possible for them to arrange installation by a third party. In

such situations, revenue in respect of the product is recognised when control passes to the customer

which is normally upon shipment of the product. Revenue in respect of the installation is recognised

when the customer confirms acceptance of the installation. Revenue in respect of both product and

installation is recognised at a point when it is considered the performance conditions are met.

Revenue is allocated between the product and installation based on the relative standalone selling

prices of those products and installation activities. Where it is difficult to establish a standalone

selling price by a market comparator, the standalone selling price is estimated, where required,

by applying the cost plus margin approach.

A receivable is recognised for products when control passes over to the customer, and for

installation when the customer confirms acceptance of the installation, since this is the point in

time that the consideration is unconditional because only the passage of time is required before the

payment is due.

In the case of fixed-price contracts, the customer pays the fixed amount based on a payment

schedule. If the performance obligations met by the Group exceed the payment, a contract asset

is recognised. If the payments exceed the performance obligation, a contract liability is recognised.

In the NanoScience business, which is part of the Advanced Technologies segment, certain

contracts for the sale of more complex systems are deemed to comprise just one performance

condition as customers are unable to realise the economic benefit from having received the

equipment without the specialist installation. Given the highly interdependent nature of the

product and installation, this performance condition is met, and the revenue recognised, when

the customer confirms acceptance of the installed product at their premises.

Sales of large quantum computing systems in the NanoScience business are recognised as

long-term contracts by reference to the progress towards completion of the performance obligation.

The performance towards this contract does not create an asset with an alternative use, and the

company has an enforceable right to payment for performance completed to date. As a result, per

IFRS 15, the company transfers control of the goods over time and, therefore, satisfies a performance

obligation and recognises revenue over time. Revenue is recognised using the cost input method which

best reflects the transfer of control to the customer.

Within service revenue, revenue for fixed-term maintenance and support contracts is recognised

over time using the output method by determining the proportion of the elapsed time relative to the

contract period.

Revenue excludes value added tax and similar sales-based taxes and is stated before commission

payable to agents which is recognised in cost of sales.

Material accounting policies continued

156

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(q) Income taxes

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is

recognised in the Consolidated Statement of Income except to the extent that it relates to items

recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted

or substantively enacted at the reporting date, and any adjustment to tax payable in respect of

previous years.

Tax positions are reviewed to assess whether a provision should be made based on prevailing

circumstances. Tax provisions are included within current taxation liabilities.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for: the initial recognition of goodwill; the initial

recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences

relating to investments in subsidiaries to the extent that they will probably not reverse in the future.

The amount of deferred tax provided is based on the expected manner of realisation or settlement

of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at

the Statement of Financial Position date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will

be available against which the asset can be utilised. Deferred tax assets are reduced to the extent

that it is no longer probable that the related tax benefit will be realised. Deferred tax assets are

measured on an undiscounted basis.

Additional income taxes that arise from the distribution of dividends are recognised at the same

time as the liability to pay the related dividend.

Where there is uncertainty surrounding an income tax position, consideration is given to whether the

tax authority (with full knowledge of the facts) would probably be more or less likely to accept the

uncertain tax position. If the conclusion reached is that it is probable that the tax authority would

not accept a tax position, a provision is calculated either as the most likely outcome (where the

possible outcomes are binary or concentrated on one value) or as the expected value (where there

is a range of possible outcomes) depending on which method would provide the better prediction

for the resolution of the uncertainty.

(r) Leases

The Group recognises a right-of-use asset and a lease liability at the lease commencement

date. The right-of-use asset is initially measured at cost, which comprises the initial amount

of the lease liability adjusted for any lease payments made at or before the commencement

date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the

underlying asset or to restore the underlying asset or the site on which it is located, less any lease

incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the

commencement date to the earlier of the end of the useful life of the right-of-use asset or the end

of the lease term. The estimated useful lives of right-of-use assets are determined on the same

basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced

by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid

at the commencement date, discounted using the interest rate implicit in the lease or, if that rate

cannot be readily determined, the lessee’s incremental borrowing rate. Generally, the Group uses

its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise fixed payments.

The lease liability is measured at amortised cost using the effective interest method. It is

remeasured when there is a change in future lease payments arising from a change in an index

or rate, if there is a change in the Group’s estimate of the amount expected to be payable under

a residual value guarantee, or if the Group changes its assessment of whether it will exercise a

purchase, extension or termination option. If such remeasurement is required, it is performed using

the original incremental borrowing rate, unless there is a change in estimated lease term; in which

case it is performed using a new incremental borrowing rate.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the

carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount

of the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term

leases of machinery that have a lease term of 12 months or less and leases of low-value assets,

including IT equipment. The Group recognises the lease payments associated with these leases

as an expense on a straight-line basis over the lease term.

Material accounting policies continued

157

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(s) Segment reporting

An operating segment is a distinguishable component of the Group that engages in business

activities from which it may earn revenues and incur expenses, including any revenues and

expenses that relate to transactions with any of the Group’s other components. Operating

components are combined into aggregated operating segments to the extent that they have similar

economic characteristics. Aggregated operating segments’ operating results are reviewed regularly

by the Group’s Board of Directors to make decisions about resources to be allocated to the segment

and to assess its performance, for which discrete financial information is available. Segment results

that are reported to the Board include items directly attributable to a segment as well as those that

can be allocated on a reasonable basis.

A reportable segment is an aggregated operating segment in respect of which revenue or

profit exceeds 10% of the Group total. Discrete financial information is disclosed for each

reportable segment.

1 Segment information

The Group’s operating segments were previously combined into three aggregated operating

segments: Materials & Characterisation, Research & Discovery, and Service & Healthcare. From

1 April 2024, these have now been combined into two new aggregated operating segments to the

extent that they have similar economic characteristics, with relevance to products and services,

type and class of customer, methods of sale and distribution, and the regulatory environment in

which they operate. Each of these two aggregated operating segments is a reportable segment.

In the previous structure, service revenue for operating segments was reported within Service

& Healthcare, in the new structure service revenue is reported within each respective operating

segment. The aggregated operating segments are as follows:

• The Imaging & Analysis segment comprises a group of businesses focusing on microscopy,

cameras, analytical instruments and software.

• The Advanced Technologies segment comprises a group of businesses focusing on compound

semiconductor fabrication equipment, cryogenic and superconducting magnet technology and

X-ray tubes.

Prior year results have been adjusted to reflect the new operating segments.

The Group’s internal management structure and financial reporting systems differentiate the two

aggregated operating segments based on the economic characteristics discussed above.

Reportable segment results include items directly attributable to a segment as well as those which

can be allocated on a reasonable basis. The operating results of each are regularly reviewed by the

Chief Operating Decision Maker, which is deemed to be the Executive Directors. Discrete financial

information is available for each segment and used by the Executive Directors for decisions on

resource allocation and to assess performance. No asset information is presented below as this

information is not presented in reporting to the Group’s Executive Directors.

On 9 January 2024, the Group acquired 100% of the issued share capital of First Light Imaging which

has been integrated into the Imaging & Analysis segment. On 28 June 2024, the Group acquired

100% of the issued share capital of FemtoTools which has also been integrated into the Imaging

& Analysis segment. Further information can be found in Note 11.

Notes to the consolidated financial statements

158

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

1 Segment information continued

Results

	Imaging &	Advanced
	Analysis	Technologies	Total
2025	£m	£m	£m
External product revenue	270.1	146.0	416.1
External service revenue	60.4	24.1	84.5
Total external revenue	330.5	170.1	500.6
Inter-segment product revenue	–	1.0
Total segment revenue	330.5	171.1
Segment adjusted operating profit	76.2	6.0	82.2

	Imaging &	Advanced
	Analysis	Technologies	Total
2024	£m	£m	£m
External product revenue	272.8	121.5	394.3
External service revenue	55.3	20.8	76.1
Total external revenue	328.1	142.3	470.4
Inter-segment product revenue	0.2	0.3
Total segment revenue	328.3	142.6
Segment adjusted operating profit	79.0	1.3	80.3

No individual customer accounts for more than 10% of revenue.

As at 31 March 2025, the Group had unfulfilled performance obligations under IFRS 15 of £262.6m

(2024: £301.5m). It is anticipated that £261.9m (2024: £277.3m) of this balance will be satisfied within

one year. The remainder is anticipated to be satisfied in the following financial year.

Reconciliation of reportable segment profit

	Imaging &	Advanced	Unallocated
	Analysis	Technologies	Group items	Total
2025	£m	£m	£m	£m
Segment adjusted operating profit	76.2	6.0	–	82.2
Transaction-related costs	(0.7)	(1.1)	–	(1.8)
Impairment of goodwill	(26.0)	–	–	(26.0)
Restructuring costs and charges associated
with management changes	(1.8)	(5.4)	(0.6)	( 7.8)
Amortisation and impairment of acquired
intangibles	(9.0)	(0.2)	–	(9.2)
Fair value movement on financial derivatives	–	–	(0.3)	(0.3)
Financial income	–	–	2.6	2.6
Financial expenditure	–	–	(2.0)	(2.0)
Release of contingent consideration	2.1	–	–	2.1
Profit/(loss) before income tax	40.8	(0.7)	(0.3)	39.8

Notes to the consolidated financial statements continued

159

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

1 Segment information continued

	Imaging &	Advanced	Unallocated
	Analysis	Technologies	Group items	Total
2024	£m	£m	£m	£m
Segment adjusted operating profit	79.0	1.3	–	80.3
Intellectual property litigation settlement	–	3.3	–	3.3
Adjustments relating to defined benefit
pension schemes	–	–	(0.4)	(0.4)
Transaction-related costs	(0.7)	(0.3)	–	(1.0)
Restructuring costs and charges associated
with management changes	–	(1.7)	(2.0)	(3.7)
Intellectual property litigation costs	–	(0.4)	–	(0.4)
Amortisation and impairment of acquired
intangibles	(9.1)	–	–	(9.1)
Fair value movement on financial derivatives	–	–	(0.7)	(0.7)
Financial income	–	–	4.7	4.7
Financial expenditure	–	–	(1.7)	(1.7)
Profit/(loss) before income tax	69.2	2.2	(0.1)	71.3

	Imaging &	Advanced	Unallocated
	Analysis	Technologies	Group items	Total
2025	£m	£m	£m	£m
Capital expenditure	(3.9)	(10.2)	(0.3)	(14.4)
Depreciation of property, plant and equipment	(2.9)	(2.4)	(0.6)	(5.9)
Amortisation of right-of-use assets	(2.2)	(1.2)	(2.0)	(5.4)
Amortisation and impairment of intangibles	(35.6)	(0.5)	(0.5)	(36.6)
Capitalised development expenditure	(0.8)	(0.7)	–	(1.5)

	Imaging &	Advanced	Unallocated
	Analysis	Technologies	Group items	Total
2024	£m	£m	£m	£m
Capital expenditure	(18.1)	(6.6)	(2.3)	(27.0)
Depreciation of property, plant and equipment	(3.3)	(1.5)	(0.5)	(5.3)
Amortisation of right-of-use assets	(2.4)	(0.4)	(2.2)	(5.0)
Amortisation and impairment of intangibles	(9.5)	(0.3)	–	(9.8)
Capitalised development expenditure	(0.2)	(0.5)	–	(0.7)

Notes to the consolidated financial statements continued

160

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

The Group’s revenue by destination of the end user is as follows:

	2025	2024
Revenue	£m	£m
UK	20.4	30.4
China	107. 2	127.4
Japan	46.4	43.5
USA	142.3	111.6
Germany	41.4	35.5
Rest of Europe	54.0	50.3
Rest of Asia	66.3	50.6
Rest of World	22.6	21.1
	500.6	470.4

	2025	2024
Non-current assets (excluding deferred tax)	£m	£m
UK	172.3	191.0
China	2.0	4.0
Japan	5.4	6.2
USA	11.2	12.5
Germany	30.0	32.1
Rest of Europe	41.4	22.4
Rest of Asia	0.5	0.2
Rest of World	0.2	0.3
	263.0	268.7

2 Adjusting items

In the preparation of adjusted numbers, the Directors exclude certain items in order to assist

with comparability between peers and to give what they consider to be a better indication of

the underlying performance of the business. In determining whether an event or transaction is

an adjusting item, the Directors consider quantitative as well as qualitative factors such as the

frequency or predictability of occurrence.

These adjusting items are excluded in the calculation of adjusted operating profit, adjusted profit

before tax, adjusted profit for the period, adjusted EBITDA (defined as adjusted operating profit

before depreciation and amortisation of capitalised development costs), adjusted EPS, adjusted

cash conversion and adjusted effective tax rate. Details of adjusting items are given below.

Adjusted EBITDA is calculated by adding back depreciation of property, plant and equipment,

amortisation of right-of-use assets and amortisation of intangible assets to adjusted operating

profit, and can be found in the Consolidated Statement of Cash Flows. The calculation of adjusted

EPS can be found in Note 10. Adjusted effective tax rate is calculated by dividing the share of

tax attributable to adjusted profit before tax by adjusted profit before tax. The definition of cash

conversion is set out in the Finance review.

Notes to the consolidated financial statements continued

161

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2 Adjusting items continued

Reconciliation between operating profit and profit before income tax and adjusted profit

	2025		2024
	Operating	Profit before	Operating	Profit before
	profit	income tax	profit	income tax
	£m	£m	£m	£m
Statutory measure	39.2	39.8	68.3	71.3
Intellectual property litigation settlement	–	–	(3.3)	(3.3)
Adjustments relating to defined benefit
pension schemes	–	–	0.4	0.4
Transaction-related costs	1.8	1.8	1.0	1.0
Impairment of goodwill	26.0	26.0	–	–
Restructuring costs and charges
associated with management changes	7. 8	7.8	3.7	3.7
Intellectual property litigation costs	–	–	0.4	0.4
Amortisation and impairment
of acquired intangibles	9.2	9.2	9.1	9.1
Fair value movement on financial
derivatives	0.3	0.3	0.7	0.7
Unwind of discount in respect
of contingent consideration	–	0.6	–	–
Release of contingent consideration	(2.1)	(2.1)	–	–
Total adjusting items	43.0	43.6	12.0	12.0
Adjusted measure	82.2	83.4	80.3	83.3
Adjusted income tax expense		(18.2)		(20.3)
Adjusted profit	82.2	65.2	80.3	63.0
Adjusted effective tax rates		21.8%		24.4%

Intellectual property litigation settlement

The income in the prior year represents one-off settlement income in the Advanced Technologies

segment from defending our intellectual property.

Adjustments relating to defined benefit pension schemes

During the prior year, the Group recognised a one-off charge of £0.4m in respect of removing the

pension increase exchange at retirement option for deferred members.

Transaction-related costs

These represent the costs of one-off charges incurred at the Statement of Financial Position date

relating to transactional work.

Impairment of goodwill

The Group’s microscopy and scientific cameras business, Andor Technology, faced a challenging

trading period as a result of continued healthcare and life science market weakness, loss of

revenues in China, and operational challenges with certain product lines. Actions have been

put in place in to improve the performance of the business. These plans are in the early phases

of execution, and therefore forecasts at 31 March 2025 for expected future cash flows from the

business give greater weight to recent performance and reflect future uncertainty over the potential

outcomes of those plans. Based on these forecasts it was determined that Andor’s expected future

cash flows at 31 March 2025 were not sufficient to support its full carrying value, resulting in a

partial impairment of the acquisition goodwill. Further information can be found in Note 13.

Restructuring costs and charges associated with management changes

In the current year, these represent £5.0m of costs associated with the relocation of production

facilities within the semiconductor business and £2.8m of one-off restructuring within the Group.

In the prior year, these represent £1.7m of costs associated with the relocation of production facilities

within the semiconductor business and charges of £2.0m incurred in respect of the recruitment of

the CEO and one-off dual-running costs associated with this appointment.

Intellectual property litigation costs

These represent one-off legal costs to defend our intellectual property.

Amortisation and impairment of acquired intangibles

Adjusted profit excludes the non-cash amortisation and impairment of acquired intangible assets.

Notes to the consolidated financial statements continued

162

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2 Adjusting items continued

Fair value movement on financial derivatives

Under IFRS 9, all derivative financial instruments are recognised initially at fair value. Subsequent

to initial recognition, they are also measured at fair value. In respect of instruments used to hedge

foreign exchange risk and interest rate risk, the Group does not take advantage of the hedge

accounting rules provided for in IFRS 9 since that standard requires certain stringent criteria

to be met in order to hedge account, which, in the particular circumstances of the Group, are

considered by the Board not to bring any significant economic benefit. Accordingly, the Group

accounts for these derivative financial instruments at fair value through profit or loss. To the extent

that instruments are hedges of future transactions, adjusted profit for the period is stated before

changes in the valuation of these instruments so that the underlying performance of the Group

can be more clearly seen.

Unwind of discount in respect of contingent consideration

This represents the unwind of the discount in respect of the contingent consideration on the

acquisition of FemtoTools (Note 11).

Release of contingent consideration

This represents the release of the earn-out provision in respect of the acquisition of First Light Imaging.

Adjusted income tax expense

Statutory income tax is adjusted for the income tax impact on the adjusting items described above.

3 Research and development (R&D)

The total research and development spend by the Group is as follows:

	Imaging &	Advanced
	Analysis	Technologies	Total
2025	£m	£m	£m
R&D expense charged to the Consolidated Statement of Income	24.8	16.3	41.1
Less: depreciation of R&D-related fixed assets	(0.2)	–	(0.2)
Less: amortisation and impairment of R&D costs previously
capitalised as intangibles	(0.6)	(0.3)	(0.9)
Add: amounts capitalised as intangible assets	0.8	0.7	1.5
Total cash spent on R&D during the year	24.8	16.7	41.5

	Imaging &	Advanced
	Analysis	Technologies	Total
2024	£m	£m	£m
R&D expense charged to the Consolidated Statement of Income	24.9	14.2	39.1
Less: depreciation of R&D-related fixed assets	–	(0.2)	(0.2)
Add: amounts capitalised as fixed assets	0.2	–	0.2
Less: amortisation of R&D costs previously capitalised
as intangibles	(0.3)	(0.3)	(0.6)
Add: amounts capitalised as intangible assets	0.2	0.5	0.7
Total cash spent on R&D during the year	25.0	14.2	39.2

Notes to the consolidated financial statements continued

163

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

4 Employee information

Personnel costs incurred during the year were as follows:

	2025	2024
	£m	£m
Wages and salaries	143.0	131.5
Social security costs	17.0	15.5
Contributions to defined contribution plans (Note 24)	6.8	6.4
Defined benefit income (Note 24)	(0.1)	(1.0)
(Credit)/charge in respect of employee share options	(0.1)	3.0
	166.6	155.4

Directors’ remuneration during the year was as follows:

	2025	2024
	£m	£m
Short-term benefits	2.4	2.7
Post-employment benefits	0.1	0.1
Charge in respect of share options	0.2	1.1
	2.7	3.9

Further details of Directors’ remuneration are disclosed in the Remuneration Report on pages 122 to

139 of this Report and Financial Statements.

The average monthly number of people employed by the Group (including Directors and temporary

employees) during the year was as follows:

	2025	2024
	number	number
Production	912	894
Sales and Marketing	620	555
Research and Development	474	487
Administration and Shared Services	328	308
	2,334	2,244

5 Auditor’s remuneration

	2025	2024
	£’000	£’000
Audit of these Financial Statements	381	345
Amounts received by the auditor and its associates in respect of:
– Audit of Financial Statement of subsidiaries pursuant to legislation	809	757
– Audit-related assurance services	53	50
– Other assurance services	8	8
Total fees payable to the auditor and its associates	1,251	1,160

6 Financial income

	2025	2024
	£m	£m
Interest receivable	1.6	3.2
Interest credit on pension scheme net assets	1.0	1.5
	2.6	4.7

7 Financial expenditure

	2025	2024
	£m	£m
Bank interest payable	0.8	0.9
Interest on lease liabilities	0.6	0.8
Unwind of discount on contingent consideration	0.6	–
	2.0	1.7

Notes to the consolidated financial statements continued

164

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

8 Taxation

Income tax expense

	2025	2024
	£m	£m
Recognised in the Consolidated Statement of Income
Current tax expense
Current year	12.6	17.1
Adjustment in respect of prior years	(2.5)	1.1
	10.1	18.2
Deferred tax expense
Origination and reversal of temporary differences	3.7	1.6
Adjustment in respect of prior years	–	0.8
	3.7	2.4
Total tax expense	13.8	20.6
Reconciliation of effective tax rate
Profit before income tax	39.8	71.3
Income tax using the weighted average statutory tax rate of 25%
(2024: 25%)	9.9	17.8
Effect of:
Tax rates other than the weighted average statutory rate	1.1	(0.2)
Change in rate at which deferred tax recognised	(0.9)	–
Transaction costs, deferred consideration and impairments not deductible for tax	7.0	0.4
Non-taxable income and non-deductible expenses	0.1	0.7
Tax incentives – technology-related	(1.1)	–
Movement in unrecognised deferred tax	0.2	–
Adjustment in respect of prior years	(2.5)	1.9
Total tax expense	13.8	20.6

Notes to the consolidated financial statements continued

	2025	2024
	£m	£m
Taxation credit recognised directly in other comprehensive income
Current tax – relating to employee benefits	(0.1)	(2.1)
Deferred tax – relating to employee benefits	(0.1)	(2.7)
Taxation (credit)/charge recognised directly in equity
Current tax – relating to share options	(0.3)	(0.6)
Deferred tax – relating to share options	0.8	0.5

The UK deferred tax assets and liabilities have been calculated based on the enacted rate of 25%.

The Group carries tax provisions in relation to uncertain tax positions arising from the possible

outcome of negotiations with tax authorities. The provision is calculated using the expected value

method from a range of possibilities and assumes that the tax authorities have full knowledge of

the facts. Such provisions reflect the geographical spread of the Group’s operations and the variety

of jurisdictions in which it carries out its activities.

165

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

8 Taxation continued

Deferred tax

	Property,
	plant and		Employee	Intangible
	equipment	Inventory	benefits	assets	Tax losses	Other	Total
	£m	£m	£m	£m	£m	£m	£m
Balance at 1 April 2023	(4.0)	3.7	0.1	(5.0)	5.5	4.4	4.7
Recognised in income	(3.4)	0.7	1.0	1.4	(2.1)	–	(2.4)
Recognised in other comprehensive income	–	–	2.7	–	–	–	2.7
Recognised directly in equity	–	–	(1.1)	–	–	–	(1.1)
Acquired on business
combination	–	–	–	(2.5)	–	–	(2.5)
Effect of movements
in foreign exchange
rates	(0.1)	(0.1)	(0.3)	–	–	(0.1)	(0.6)
Balance at 31 March
2024	(7.5)	4.3	2.4	(6.1)	3.4	4.3	0.8
Recognised in income	(1.6)	0.4	(2.6)	2.3	(2.0)	(0.2)	(3.7)
Recognised in other comprehensive income	–	–	0.1	–	–	–	0.1
Recognised directly in equity	–	–	(0.8)	–	–	–	(0.8)
Acquired on business
combination	–	–	0.1	(2.1)	–	–	(2.0)
Effect of movements in foreign exchange rates	–	0.1	–	0.1	(0.1)	(0.1)	–
Balance at 31 March
2025	(9.1)	4.8	(0.8)	(5.8)	1.3	4.0	(5.6)

The deferred tax category of ‘Other’ includes deferred tax recognised on accounting general liability

accruals/provisions, deferred revenue and bad debts. Deferred tax is recognised on provisions

made against inventory on which tax relief has not yet been granted.

Notes to the consolidated financial statements continued

Certain deferred tax assets and liabilities have been offset as follows:

	Assets		Liabilities		Net
	2025	2024	2025	2024	2025	2024
	£m	£m	£m	£m	£m	£m
Gross assets/(liabilities)	16.5	15.6	(22.1)	(14.8)	(5.6)	0.8
Offset	(5.4)	(1.9)	5.4	1.9	–	–
Net assets/(liabilities)	11.1	13.7	(16.7)	(12.9)	(5.6)	0.8

Deferred tax assets have not been recognised in respect of the following items:

	2025	2024
	£m	£m
Tax losses	0.5	0.5

The tax losses and the deductible temporary differences do not expire under current tax legislation.

Deferred tax assets have not been recognised on tax losses related to gross unrecognised losses

of £1.7m (2024: £2.3m), as it is not probable that future taxable profits will be available in the

subsidiaries concerned against which the Group can utilise the brought forward tax losses.

No deferred tax liability has been recognised in respect of £52.3m (2024: £59.2m) of undistributed

earnings of overseas subsidiaries since the majority of such distributions would not be taxable. In

other cases the Group considers that it is able to control the timing of remittances so that any tax is

not expected to arise in the foreseeable future.

166

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

9 Dividends

The following dividends per share were paid by the Group:

	2025	2024
	pence	pence
Previous period final dividend	15.9	14.9
Current period interim dividend	5.1	4.9
	21.0	19.8

The following dividends per share were proposed by the Group in respect of each accounting

period presented:

	2025	2024
	pence	pence
Interim dividend	5.1	4.9
Final dividend	17. 1	15.9
	22. 2	20. 8

The final dividend for the year to 31 March 2024 of 15.9p per share was approved by shareholders at

the Annual General Meeting on 25 July 2024 and was paid on 20 August 2024. The interim dividend

for the year to 31 March 2025 of 5.1p per share was approved by a sub-committee of the Board on

11 November 2024 and was paid on 10 January 2025.

The proposed final dividend for the year ended 31 March 2025 of 17.1p per share was not provided

at the year end and is subject to shareholder approval at the Annual General Meeting on 28 July

2025. It is expected to be paid on 19 August 2025, to shareholders on the register on the record date

of 11 July 2025, with an ex-dividend date of 10 July 2025 and with the last date of election for the

Dividend Reinvestment Plan (DRIP) being 29 July 2025.

10 Earnings per share

Basic earnings per ordinary share (EPS) is calculated by dividing the profit attributable to equity

shareholders of the parent by the weighted average number of ordinary shares in issue during the

period, excluding ordinary shares held by the Employee Benefit Trust, which have been treated as

if they had been cancelled.

For the purposes of calculating diluted and diluted adjusted EPS, the weighted average number of

ordinary shares is adjusted to include the weighted average number of ordinary shares that would

be issued on the conversion of all potentially dilutive ordinary shares expected to vest, relating to

the company’s share-based payment plans. Potential ordinary shares are only treated as dilutive

when their conversion to ordinary shares would decrease EPS.

The following table shows the weighted average number of shares used in the calculation and the

effect of share options on the calculation of diluted earnings per share:

	2025	2024
	shares	shares
	million	million
Weighted average number of shares outstanding	58.0	57.9
Less: weighted average number of shares held by Employee
Benefit Trust	–	(0.1)
Weighted average number of shares used in calculation of basic
earnings per share	58.0	57. 8
Effect of shares under option	0.7	0.8
Number of ordinary shares per diluted earnings per share
calculations	58.7	58.6

Notes to the consolidated financial statements continued

167

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

10 Earnings per share continued

Basic and diluted EPS are based on the profit for the period attributable to equity shareholders of

the parent, as reported in the Consolidated Statement of Income. Adjusted and diluted adjusted

EPS are based on adjusted profit for the period, as reported in Note 2:

	2025		2024
	£m	pence	£m	pence
Profit attributable to equity shareholders
of the parent/basic EPS	26.0	44.8	50.7	87.7
Total underlying adjustments to profit
before tax (Note 2)	43.6	75.2	12.0	20.8
Related tax effects	(4.4)	(7.6)	0.3	0.5
Adjusted profit attributable to equity
shareholders of the parent/adjusted EPS	65.2	112.4	63.0	109.0
Diluted basic EPS		44.3		86.5
Diluted adjusted EPS		111.1		107.5

11 Acquisitions

Acquisition of First Light Imaging

On 9 January 2024, the Group acquired 100% of the issued share capital of First Light Imaging

SAS (‘First Light Imaging’) on a cash-free, debt-free basis for consideration of €19.3m (£16.6m), of

which €3.0m (£2.5m) was conditional on trading performance over a period of 12 months from the

acquisition. The conditions for the contingent consideration were meeting certain revenue, order and

margin thresholds. In the calculations below, it was assumed that these thresholds were to be met.

During the period, £0.5m of deferred consideration in relation to a net asset adjustment was paid.

This is included within “acquisition net of subsidiaries, net of cash acquired” in the period in the

Consolidated Statement of Cash Flows.

The thresholds to pay the remaining contingent consideration were not met and the payable has

been released to the Consolidated Statement of Income (Note 2).

Acquisition-related costs in the period of £0.1m were expensed to the Consolidated Statement of

Income as an adjusting item in the administration and shared services cost line. Acquisition-related

costs in the prior year of £0.7m were expensed to the Consolidated Statement of Income as an

adjusting item in the administration and shared services cost line.

The acquisition contributed revenue of £0.6m, adjusted operating loss of £0.6m and a statutory loss

before tax of £0.6m to the Group’s profit for the prior year.

If the acquisition had occurred on the first day of the prior year the acquisition would have contributed

revenue of £5.7m, adjusted operating profit of £0.3m and a statutory profit before tax of £0.3m for

the year ended 31 March 2024.

Retrospective adjustment for prior year business combination accounting

A restatement has been made in the prior year, in relation to a fair value adjustment to inventory at

acquisition of First Light Imaging.

In the Consolidated Financial Statements for the year ended 31 March 2024, provisional values for

the book and fair value of the assets and liabilities acquired were used because the initial acquisition

accounting was incomplete as at the date of the report. A fair value adjustment has been made to

the provisionally reported amounts, reducing inventory by £0.3m with a corresponding increase in

goodwill. The book and fair value of the assets and liabilities acquired given in the table below, are

no longer provisional.

As a result, the Consolidated Statement of Financial Position as at 31 March 2024 has been restated

as follows:

			2024
	2024	Restatement	(restated)
	£m	£m	£m
Consolidated Statement of Financial Position
Non-current assets
Intangible assets	1 37.9	0.3	138.2
Current assets
Inventories	108.4	(0.3)	108.1

The restatement did not result in any change to reported profit, earnings per share, net assets or net

cash from operating activities reported in the 2024 full-year Financial Statements.

Notes to the consolidated financial statements continued

168

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

11 Acquisitions continued

Acquisition of FemtoTools

On 28 June 2024, the Group acquired 100% of the issued share capital of FemtoTools AG

(‘FemtoTools’) on a cash-free, debt-free basis for consideration of CHF 17.9m (£15.8m), with a further

CHF 5.5m (£4.8m) which was conditional on trading performance over a period of 33 months from the

acquisition. The conditions for the contingent consideration were meeting certain revenue, order and

margin thresholds. In the calculations below, it has been assumed that these thresholds will be met.

The book and fair value of the assets and liabilities acquired is given in the table below. Fair value

adjustments have been made to better align the accounting policies of the acquired business with

the Group accounting policies and to reflect the fair value of assets and liabilities acquired.

	Book value	Adjustments	Fair value
	£m	£m	£m
Intangible assets	–	10.5	10.5
Property, plant and equipment	0.3	–	0.3
Inventories	0.6	–	0.6
Trade and other receivables	0.9	–	0.9
Deferred tax	0.1	(2.1)	(2.0)
Trade and other payables	(0.9)	–	(0.9)
Retirement benefit obligations	(0.3)	–	(0.3)
Provisions	(0.1)	–	(0.1)
Cash	1.1	–	1.1
Net assets acquired	1.7	8.4	10.1
Goodwill			9.5
Total consideration			19.6
Net cash acquired			(1.1)
Contingent consideration after discounting to transaction
date			(3.6)
Net cash outflow relating to the acquisition			14.9

The goodwill arising is considered to represent the value of the acquired workforce and the value

of technology that has not been individually fair valued.

Acquisition-related costs in the year of £0.7m were expensed to the Consolidated Statement of

Income as an adjusting item in the administration and shared services cost line. There were no

acquisition-related costs in the prior year in relation to this acquisition.

The acquisition contributed revenue of £5.9m, adjusted operating profit of £1.5m and a statutory loss

before tax of £1.5m in the year.

If the acquisition had occurred on the first day of the year the acquisition would have contributed

revenue of £7.2m, adjusted operating profit of £1.3m and a statutory profit before tax of £1.3m in

the year.

Notes to the consolidated financial statements continued

169

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

12 Property, plant and equipment

	Land and	Plant and	Fixtures and
	buildings	equipment	fittings	Total
	£m	£m	£m	£m
Cost
Balance at 1 April 2023	45.9	43.1	10.2	99.2
Additions – business combinations	0.1	0.3	0.1	0.5
Additions	15.8	9.7	1.5	27.0
Disposals	(0.6)	(0.5)	(0.1)	(1.2)
Exchange differences	0.3	0.4	(0.2)	0.5
Balance at 31 March 2024 and 1 April 2024	61.5	53.0	11.5	126.0
Additions – business combinations	–	0.3	–	0.3
Additions	7.7	4.9	1.8	14.4
Disposals	(1.1)	(4.9)	(0.6)	(6.6)
Exchange differences	–	(0.3)	–	(0.3)
Balance at 31 March 2025	68.1	53.0	12.7	133.8
Depreciation and impairment losses
Balance at 1 April 2023	5.9	28.0	6.0	39.9
Depreciation charge for the year	0.5	4.2	0.6	5.3
Disposals	(0.5)	(0.5)	(0.1)	(1.1)
Exchange differences	–	1.4	–	1.4
Balance at 31 March 2024 and 1 April 2024	5.9	33.1	6.5	45.5
Depreciation charge for the year	0.6	4.7	0.6	5.9
Disposals	–	(2.7)	(0.3)	(3.0)
Exchange differences	–	(0.2)	–	(0.2)
Balance at 31 March 2025	6.5	34.9	6.8	48.2

Notes to the consolidated financial statements continued

	Land and	Plant and	Fixtures and
	buildings	equipment	fittings	Total
	£m	£m	£m	£m
Carrying amounts
Balance at 1 April 2023	40.0	15.1	4.2	59.3
Balance at 31 March 2024 and 1 April 2024	55.6	19.9	5.0	80.5
Balance at 31 March 2025	61.6	18.1	5.9	85.6

Included within land and buildings are assets under construction with additions in the year of £5.8m

and a carrying amount of £39.0m (2024: £33.2m).

170

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

13 Intangible assets

		Customer-	Technology-	Development	Development
		related acquired	related acquired	costs acquired	costs internally
	Goodwill	intangibles	intangibles	intangibles	generated	Software	Total
	£m	£m	£m	£m	£m	£m	£m
Cost
Balance at 1 April 2023	124.6	34.1	101.0	1.8	37. 3	4.3	303.1
Additions – business combinations as restated 1	5.7	0.2	10.1	–	–	0.1	16.1
Additions – internally generated	–	–	–	–	0.7	0.2	0.9
Disposals	–	–	–	–	(2.8)	–	(2.8)
Effect of movements in foreign exchange rates	(0.8)	(0.4)	(1.3)	–	–	–	(2.5)
Balance at 31 March 2024 and 1 April 2024 as restated 1	129.5	33.9	109.8	1.8	35.2	4.6	314.8
Additions – business combinations	9.5	0.9	9.6	–	–	–	20.0
Additions – internally generated	–	–	–	–	1.5	–	1.5
Disposals	–	–	–	–	–	(1.2)	(1.2)
Effect of movements in foreign exchange rates	(1.0)	(0.5)	(1.7)	–	0.2	0.1	(2.9)
Balance at 31 March 2025	138.0	34.3	117.7	1.8	36.9	3.5	332.2
Amortisation and impairment losses
Balance at 1 April 2023	22.9	27.0	81.6	1.6	34.9	3.0	171.0
Amortisation and impairment charged	–	1.2	7.9	–	0.6	0.1	9.8
Disposals	–	–	–	–	(2.8)	–	(2.8)
Effect of movements in foreign exchange rates	(0.3)	(0.4)	(0.6)	(0.3)	0.1	0.1	(1.4)
Balance at 31 March 2024 and 1 April 2024	22.6	27. 8	88.9	1.3	32.8	3.2	176.6
Amortisation and impairment charged	26.0	1.3	7.7	0.2	0.9	0.5	36.6
Disposals	–	–	–	–	–	(1.2)	(1.2)
Effect of movements in foreign exchange rates	(0.2)	(0.5)	(1.2)	(0.1)	0.2	0.2	(1.6)
Balance at 31 March 2025	48.4	28.6	95.4	1.4	33.9	2.7	210.4
Carrying amounts
Balance at 1 April 2023	101.7	7.1	19.4	0.2	2.4	1.3	132.1
Balance at 31 March 2024 and 1 April 2024 as restated 1	106.9	6.1	20.9	0.5	2.4	1.4	138.2
Balance at 31 March 2025	89.6	5.7	22.3	0.4	3.0	0.8	121.8

1. Details of the restatement of prior year numbers can be found in Note 11.

Notes to the consolidated financial statements continued

171

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

13 Intangible assets continued

During the year the Group made impairments of £0.2m (2024: £nil) in respect of capitalised

development costs, and £26.0m (2024: £nil) in respect of goodwill.

The following intangible assets are considered material by the Directors as they represent

97% (2024: 96%) of total acquired intangible assets:

					2024 as
			2025		restated 1
		Net book		Remaining	Net book
		value	Amortisation	amortisation	value
Acquisition	Type	£m	period years	period years	£m
Andor	Trademarks	2.6	15.0	3.8	3.9
Andor	Technology, know-
	how and patents	3.1	12.0	0.8	7.3
WITec	Trademarks	1.7	10.0	6.6	2.0
WITec	Technology, know-
	how and patents	1.4	5.0	1.6	2.4
First Light Imaging	Trademarks	0.1	2.0	0.8	0.2
First Light Imaging	Technology, know-
	how and patents:
	– OCAM	0.3	12.0	10.8	0.3
	– C-RED	8.6	14.0	12.8	9.3
Asylum	Technology, know-
	how and patents	–	12.0	–	1.0
FemtoTools	Trademarks	0.8	7.0	6.3	–
FemtoTools	Technology, know-
	how and patents	8.8	11.0	10.3	–

Notes to the consolidated financial statements continued

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating

units (CGUs) that are expected to benefit from that business combination. The carrying amount of

goodwill was allocated to individual CGUs as follows:

		2024 as
	2025	restated 1
	£m	£m
Imaging & Analysis
NanoAnalysis	9.8	9.9
Magnetic Resonance	2.3	2.3
Andor	40.9	67.0
WITec	20.6	21.0
FemtoTools	9.4	–
Advanced Technologies
NanoScience	6.6	6.7
	89.6	106.9

1. Details of restatement of prior period numbers can be found in Note 11.

The Group tests goodwill annually for impairment, or more frequently if there are indications that

goodwill might be impaired.

Impairment tests on the carrying values of goodwill, which are the Group’s only indefinite life

intangible assets, are performed by analysing the carrying value allocated to each significant CGU

against its value in use. Value in use is calculated for each CGU as the net present value of that unit’s

discounted future cash flows. These cash flows are based on board approved budget cash flow

information for a period of one year and board approved strategic plans for the following 2 years,

both of which are prepared taking into account a range of factors including past experience, the

forecast future trading environment and macroeconomic conditions in the Group’s key markets. The

cash flows beyond the strategic plan period use growth rates between 2.0% and 2.5%. This rate was

considered to be at or below long-term market trends for the Group’s businesses. These forecasts

are also adjusted for more recent information where this is considered to have a material impact.

172

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

13 Intangible assets continued

Key assumptions

The key assumptions are those regarding discount rates and growth rates.

The growth rates are at or below the Group’s view on long-term trends within its markets. Changes

in selling prices and direct costs are based on past practices and expectations of future changes in

the market.

The post-tax weighted average cost of capital used for Imaging & Analysis and Advanced

Technologies in impairment testing is between 13.38% and 13.98% (2024: 13.14% to 13.64%), in line

with the risk associated with each of the business segments. Management has estimated these

discount rates by reference to past experience and an industry average weighted cost of capital as

adjusted for appropriate risk factors reflecting current economic circumstances and the risk profiles

of each CGU.

Result of impairment assessment

Based on the methodology set out above, as explained in Note 2, the impairment review for

Andor Technology concluded that the carrying values of the business exceeded their recoverable

amounts and accordingly an impairment charge of £26.0m has been recognised.

The Group’s microscopy and scientific cameras business, Andor Technology, faced a challenging

trading period as a result of continued healthcare and life science market weakness, loss of

revenues in China, and operational challenges. Actions have been put in place in to improve the

performance of the business. These plans are in the early phases of execution, and therefore

forecasts at 31 March 2025 for expected future cash flows from the business give greater weight

to recent performance and reflect future uncertainty over the potential outcomes of those plans.

Based on these forecasts it was determined that Andor’s expected future cash flows at

31 March 2025 were not sufficient to support its full carrying value, resulting in an impairment

of the Andor CGU.

Sensitivity analysis

The Group has applied sensitivities to assess whether any reasonable possible changes in

assumptions could cause an impairment of the goodwill in any CGU that would be material to

these Consolidated Financial Statements. The sensitivity analyses did not identify any potential

impairment for any CGU, with the exception of Andor Technology.

For Andor Technology, revenue growth, long-term adjusted operating profit growth, cash

conversion %, and the discount rate are the key assumptions to which the goodwill impairment

review is most sensitive.

Notes to the consolidated financial statements continued

The following table provides information of the impact on calculated headroom of various

independent scenarios for each of those key assumptions:

			Additional
		Sensitivity	impairment
Input	Scenario	applied	charge £m
Revenue growth rate FY27–FY28	Base case	2.5%	–
	Sensitised	0.0%	(10.4)
Adjusted operating profit growth rate FY28 onwards	Base case	2.0%	–
	Sensitised	0.0%	(7.1 )
Cash conversion	Base case	86%	–
	Sensitised	80%	(7. 5)
Post-tax discount rate	Base case	13.98%	–
	Sensitised	15.48%	(7.4)

14 Leases

The Group leases a number of properties in the jurisdictions from which it operates. In some

jurisdictions it is customary for lease contracts to provide for payments to increase each year by

inflation and in others to be reset periodically to market rental rates. In some jurisdictions’ property

leases, the periodic rent is fixed over the lease term.

The Group also leases certain items of plant and equipment. In some contracts for services with

distributors, those contracts contain a lease of vehicles. Leases of plant, equipment and vehicles

comprise only fixed payments over the lease terms.

The Group sometimes negotiates break clauses in its property leases. On a case-by-case basis, the

Group will consider whether the absence of a break clause would expose the Group to excessive

risk. Typically, factors considered in deciding to negotiate a break clause include:

• the length of the lease term;

• the economic stability of the environment in which the property is located; and

• whether the location represents a new area of operations for the Group.

173

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

14 Leases continued

The Group leases assets including land and buildings, vehicles and machinery. Information about

leases for which the Group is a lessee is presented below.

Right-of-use assets

	Property	Other
	leases	leases	Total
	£m	£m	£m
Cost
Balance at 1 April 2023	42.5	3.0	45.5
Additions – business combinations	0.7	–	0.7
Additions	5.8	0.2	6.0
Disposals	(1.1)	(0.2)	(1.3)
Exchange differences	(1.5)	(0.1)	(1.6)
Balance at 31 March 2024	46.4	2.9	49.3
Additions	2.4	0.5	2.9
Disposals	(0.7)	(0.7)	(1.4)
Exchange differences	(0.6)	–	(0.6)
Balance at 31 March 2025	47.5	2.7	50.2
Amortisation and impairment losses
Balance at 1 April 2023	12.8	1.3	14.1
Amortisation charge for the year	4.5	0.5	5.0
Disposals	(1.6)	(0.1)	(1.7)
Exchange differences	(0.5)	–	(0.5)
Balance at 31 March 2024	15.2	1.7	16.9
Amortisation charge for the year	4.8	0.6	5.4
Disposals	(1.0)	(0.7)	(1.7)
Exchange differences	(0.3)	–	(0.3)
Balance at 31 March 2025	18.7	1.6	20.3
Carrying amounts
Balance at 1 April 2023	29.7	1.7	31.4
Balance at 31 March 2024 and 1 April 2024	31.2	1.2	32.4
Balance at 31 March 2025	28.8	1.1	29.9

Notes to the consolidated financial statements continued

Lease liabilities

	2025	2024
	£m	£m
Balance at beginning of year	33.4	31.4
Additions – business combinations	–	0.7
Additions	2.9	6.0
Disposals	(0.3)	–
Payments made (cash flows from financing activities)	(5.5)	(4.8)
Interest charge	0.6	0.8
Effect of movements in foreign exchange rates	0.1	(0.7)
	31.2	33.4
Amounts falling due after more than one year	26.7	28.6
Amounts falling due in less than one year	4.5	4.8

Amounts recognised in Consolidated Statement of Income

	2025	2024
	£m	£m
Interest on lease liabilities	(0.6)	(0.8)
Amortisation of right-of-use assets	(5.4)	(5.0)

Repayments of lease liabilities of £5.5m (2024: £4.8m) have been recognised in the Consolidated

Statement of Cash Flows.

174

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Notes to the consolidated financial statements continued

15 Inventories

		2024 as
	2025	restated 1
	£m	£m
Raw materials and consumables	52.5	59.0
Work in progress	28.0	27.3
Finished goods	18.6	21.8
	99.1	108.1

1. Details of restatement of prior period numbers can be found in Note 11.

The amount of inventory recognised as an expense was £190.9m (2024: £182.4m). In the ordinary

course of business, the Group makes impairment provisions for slow-moving, excess and

obsolete inventory as appropriate. Inventory is stated after charging impairments of £0.6m in the

current period (2024: £1.2m). In the current year, £nil (2024: £nil) was reversed relating to previous

impairments. Impairments are included within gross profit.

Inventory carried at net realisable value is £3.2m (2024: £0.2m).

16 Trade and other receivables

	2025	2024
	£m	£m
Trade receivables	102.2	88.5
Less provision for impairment of receivables	(4.7)	(3.6)
Net trade receivables	97.5	84.9
Accrued income	12.2	11.7
Prepayments	9.9	9.9
Other receivables	2.3	3.4
Other taxation receivable 1	4.3	4.8
	126.2	114.7

1. Other taxation receivable has been added as an additional line item in the current year. The prior year number in relation to

this balance was previously included in other receivables and has been separated out to show the comparison.

Trade receivables are non-interest-bearing. Standard credit terms provided to customers differ

according to business and country, and are typically between 30 and 60 days.

The maximum exposure to credit risk for trade and other receivables plus accrued income,

by geographic region, was:

		2024 as
	2025	restated 1
	£m	£m
UK	7.9	8.2
China	9.4	16.1
Japan	15.6	15.4
USA	42.5	24.2
Germany	6.7	5.4
Rest of Europe	13.5	15.9
Rest of Asia	8.9	10.4
Rest of World	7.5	4.4
	112.0	100.0

1. Prior year numbers have been restated to exclude tax-related balances of £4.8m from credit risk disclosures.

175

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

16 Trade and other receivables continued

The ageing of financial assets comprising net trade receivables and other receivables plus accrued

income at the reporting date was:

		2024 as
	2025	restated 1
	£m	£m
Current (not overdue)	81.5	49.9
Less than 31 days overdue	11.7	20.5
More than 30 but less than 91 days overdue	8.2	15.2
More than 90 days overdue	10.6	14.4
	112.0	100.0

1. Prior year numbers have been restated to exclude tax-related balances of £4.8m from credit risk disclosures.

In the current year £0.2m (2024: £0.2m) of the provision against trade receivables and other

receivables plus accrued income relates to balances less than 90 days overdue. The remaining

balance relates to balances more than 90 days overdue.

The movement of the Group’s expected credit losses provision in respect of trade receivables and

other receivables plus accrued income are as follows:

	2025	2024
	£m	£m
Balance at start of year	3.6	3.5
Increase in loss allowance recognised in the Consolidated Statement of Income during the year	1.1	0.1
Balance at end of year	4.7	3.6

The loss allowance is recognised in the administration and shared services line in the

Consolidated Statement of Income.

Notes to the consolidated financial statements continued

17 Contract assets and liabilities

		2025				2024
	Contract	Contract		Contract		Contract
	asset		liability	asset		liability
	Accrued	Customer	Deferred	Accrued	Customer	Deferred
	income	deposits	income	income	deposits	income
	£m	£m	£m	£m	£m	£m
Balance at 1 April	11.7	(58.4)	(22.9)	9.4	(52.1)	(21.3)
Acquired balances	–	–	–	–	(0.4)	(0.7)
Transfers in the period from contract assets to trade
receivables	(11.7)	–	–	(9.4)	–	–
Amounts included in contract
liabilities that were recognised as revenue during the period	–	57. 3	22.9	–	48.5	21.3
Excess of revenue recognised
over cash (or rights to cash) being recognised during the period	12.2	–	–	11.7	–	–
Cash received in advance of performance and not recognised
as revenue during the period	–	(45.3)	(24.6)	–	(54.4)	(22.2)
Balance at 31 March	12.2	(46.4)	(24.6)	11.7	(58.4)	(22.9)

Contract assets and contract liabilities are included within trade and other receivables, and trade

and other payables respectively on the face of the Consolidated Statement of Financial Position.

Payment terms for the sale of large goods typically require payment of a deposit on order, with

the remaining payments due on shipment, and in some cases installation. For lower value goods,

payment is typically required at shipment. Maintenance and service contracts are generally paid

in full at inception. There is no financing component in the arrangements, and contracts are for

specified, pre-agreed amounts with no variable element.

176

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

18 Cash and cash equivalents

	2025	2024
	£m	£m
Cash balances	94.1	97.8
Bank overdrafts (Note 19)	(8.8)	(12.3)
Cash and cash equivalents in the Consolidated Statement of Cash Flows	85.3	85.5
Bank loans at First Light Imaging	(0.4)	(0.8)
Covid-19 loan at WITec	(0.5)	(0.9)
Net cash after borrowings at the end of the year	84.4	83.8

Cash and cash equivalents at 31 March 2025 includes £0.9m (2024: £0.5m) that is not available for

general use by the Group. This balance relates to customer deposits received on orders by Oxford

Instruments India that are then placed into a fixed deposit account. The cash is released back to

Oxford Instruments India once the order is completed.

Reconciliation of changes in cash and cash equivalents to movement in net cash

after borrowings

	2025	2024
	£m	£m
Net increase/(decrease) in cash and cash equivalents	3.3	(13.1)
Effect of exchange rate fluctuations on cash held	(3.5)	(2.9)
Movement in net cash in the year	(0.2)	(16.0)
Bank loans at First Light Imaging acquired	–	(2.2)
Repayment of borrowings	0.8	1.8
Net cash after borrowings at the start of the year	83.8	100.2
Net cash after borrowings at the end of the year	84.4	83.8

Notes to the consolidated financial statements continued

19 Borrowings

	2025	2024
	£m	£m
Current
Bank loans at First Light Imaging	–	0.4
Covid-19 loan at WITec	0.4	0.4
Bank overdrafts	8.8	12.3
At the end of the year	9.2	13.1

	2025	2024
	£m	£m
Non-current
Bank loans at First Light Imaging	0.4	0.4
Covid-19 loan at WITec	0.1	0.5
At the end of the year	0.5	0.9

177

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

19 Borrowings continued

In the prior year on 19 March 2024, the Group entered into a new multi-currency revolving facility

agreement, which is committed until March 2028 with 15-month and 12-month extension options at

the end of the first and second years respectively. The facility has been entered into with four banks

and comprises a euro-denominated multi-currency facility of €95m and a US-dollar-denominated

multi-currency facility of $150m. Debt covenants are net debt to EBITDA less than 3.0 times and

EBITDA to interest greater than 4.0 times.

The Group’s undrawn committed facilities available at 31 March 2025 were £196.1m, comprising the

undrawn portion of the Group’s £196.1m revolving credit facilities.

Bank overdrafts reflect the aggregated overdrawn balances of Group companies (even if

those companies have other positive cash balances). The overdrafts are held with the Group’s

relationship banks.

The Group’s uncommitted overdraft facilities at 31 March 2025 were £18.2m (2024: £18.3m).

A reconciliation of the Group’s borrowings balances is shown below:

	2025	2024
	£m	£m
Balance at the beginning of the year	14.0	12.5
Increase in borrowings (from acquisition of First Light Imaging)	–	2.2
Repayment of borrowings (cash flow from financing activities)	(0.8)	(1.8)
(Decrease)/increase in bank overdrafts	(3.5)	1.1
Interest charged	1.4	0.9
Interest paid	(1.4)	(0.9)
At the end of the year	9.7	14.0

Notes to the consolidated financial statements continued

20 Trade and other payables

	2025	2024
	£m	£m
Trade payables	31.4	32.6
Customer deposits	46.4	58.4
Social security and other taxes	5.9	6.3
Accrued expenses	40.9	39.3
Deferred income	24.6	22.9
Other payables	8.5	6.7
	157.7	166.2

21 Provisions for other liabilities and charges

		IP-related
	Warranties	claims	Other	Total
	£m	£m	£m	£m
Balance as at 1 April 2024	3.2	0.6	2.6	6.4
Provisions made during the year	3.1	–	0.5	3.6
Provisions used during the year	(2.0)	–	(0.8)	(2.8)
Provisions released during the year	(0.7)	(0.6)	–	(1.3)
Balance as at 31 March 2025	3.6	–	2.3	5.9
Amounts falling due before one year	3.6	–	1.0	4.6
Amounts falling due after more than one year	–	–	1.3	1.3

Warranty provisions

Product warranty provisions reflect commitments made to customers on the sale of goods in

the ordinary course of business and included within the Group companies’ standard terms and

conditions. Warranty commitments typically apply for a 12-month period. The provision represents

the Directors’ best estimate of the Group’s liability based on past experience.

178

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

21 Provisions for other liabilities and charges continued

Intellectual-property-related claims

The company has on occasion been required to take legal or other actions to defend itself against

proceedings brought by other parties. Provisions are made for the expected costs associated with

such matters, based on past experience of similar items and other known factors, taking into account

professional advice received, and represent the Directors’ best estimate of the likely outcome. The

timing of utilisation of these provisions is frequently uncertain, reflecting the complexity of issues

and the outcome of various court proceedings and negotiations. Contractual and other provisions

represent the Directors’ best estimate of the future cost of settling obligations arising from past activity

and reflect the Directors’ assessment of the likely settlement method, which may change over time.

However, no provision is made for proceedings which have been brought by other parties against

Group companies unless the Directors, taking into account professional advice received, assess that

it is more likely than not that such proceedings may be successful.

Other provisions

Other provisions relate to various obligations, including obligations in respect of onerous contracts,

product-related liabilities, dilapidation provisions and provisions for other claims.

Notes to the consolidated financial statements continued

22 Financial instruments

Fair values of financial assets and liabilities

The following table shows the carrying amounts and fair values of financial assets and financial

liabilities, including their levels in the fair value hierarchy. It does not include fair value information

for financial assets and financial liabilities not measured at fair value if the carrying amount is a

reasonable approximation of fair value.

		As at 31 March 2025		As at 31 March 2024
		Carrying		Carrying
	Fair value	amount	Fair value	amount	Fair value
	hierarchy	£m	£m	£m	£m
Financial assets measured
at fair value
Derivative financial assets:
– Foreign currency contracts	2	2.2	2.2	2.5	2.5
Financial assets measured at amortised cost
Long-term receivables		1.0		1.3
Trade receivables		97.5		84.9
Other receivables and accrued
income		14.5		15.1
Cash and cash equivalents		94.1		97.8
Financial liabilities measured
at fair value
Derivative financial liabilities:
– Foreign currency contracts	2	(0.6)	(0.6)	(0.1)	(0.1)
– Contingent consideration	3	(4.0)	(4.0)	(2.8)	(2.8)
Financial liabilities measured
at amortised cost
Trade and other payables		(76.8)		(75.8)
Bank overdrafts		(8.8)		(12.3)
Borrowings		(0.9)		(1.7)

179

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

22 Financial instruments continued

The following summarises the major methods and assumptions used in estimating the fair values of

financial instruments reflected in the above table.

Derivative financial instruments

Derivative financial instruments are marked-to-market using market prices.

Fixed and floating rate borrowings

The fair value of fixed and floating rate borrowings is estimated by discounting the future contracted

principal and interest cash flows using the market rate of interest at the reporting date.

Trade and other receivables/payables

For receivables/payables with a remaining life of less than one year, the carrying amount is

deemed to reflect the fair value. All other receivables/payables are discounted to determine their

fair value. Advances received are excluded from other payables above as these are not considered

to be financial liabilities. Tax-related receivables and payables are excluded from the above table

as these are not considered to be financial assets and liabilities.

Fair value hierarchy

The table above gives details of the valuation method used in arriving at the fair value of financial

instruments. The different levels have been identified as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly (ie as prices) or indirectly (ie derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data.

There have been no transfers between levels during the period.

Notes to the consolidated financial statements continued

23 Financial risk management

The Group’s multinational operations and debt financing expose it to a variety of financial risks. In

the course of its business, the Group is exposed to foreign currency risk, interest rate risk, liquidity

risk, commodity risk and credit risk. Financial risk management policies are set by the Board of

Directors. These policies are implemented by a central treasury function that has formal procedures

to manage foreign exchange risk, interest rate risk and liquidity risk, including, where appropriate,

the use of derivative financial instruments. Commodity risk is managed locally by the operating

businesses. The Group has clearly defined authority and approval limits.

In accordance with its Treasury Policy, the Group does not hold or use derivative financial

instruments for trading or speculative purposes. Such instruments are only used to manage the

risks arising from operating or financial assets or liabilities or highly probable future transactions.

The Group uses derivative financial instruments to hedge its exposure to fluctuations in foreign exchange

rates. In common with a number of other companies, the Group has decided that the additional costs of

meeting the extensive documentation requirements of IFRS 9 to apply hedge accounting to derivative

financial instruments used for hedging exposure to foreign currency and interest rate volatility cannot be

justified. Accordingly, the Group does not use hedge accounting for such derivatives.

Foreign currency risk

Foreign currency risk arises both where sale or purchase transactions are undertaken in currencies

other than the respective functional currencies of Group companies (transactional exposures) and

where the results of overseas companies are consolidated into the Group’s reporting currency of

sterling (translational exposures). The Group has operations around the world which record their

results in a variety of different local functional currencies. In countries where the Group does not

have operations, it invariably has some customers or suppliers that transact in a foreign currency.

The Group is therefore exposed to the changes in foreign currency exchange rates between a

number of different currencies but the Group’s primary exposures relate to the US dollar, the euro

and the Japanese yen. To reduce uncertainty, the Group maintains a rolling hedge of forward

contracts up to 80% (2024: 80%) of the exposure expected to arise over the following 12 months.

The remaining 20% is sold on the spot market. The fair value of outstanding currency contracts

recognised as a liability as at 31 March 2025 amount to £0.6m (2024: £0.1m) and those recognised

as an asset amount to £2.2m (2024: £2.5m).

Movements in the fair value of derivative financial instruments are recognised in the Consolidated

Statement of Income immediately. However, in order to facilitate a more meaningful comparison of the

Group’s performance year-on-year, the elements of these movements that relate to hedges in respect

of future sales are treated as an adjusting item in the calculation of adjusted earnings (Note 2).

The Group’s translational exposures to foreign currency risks can relate both to the Consolidated

Statement of Income and net assets of overseas subsidiaries. The Group’s policy is not to hedge the

translational exposure that arises on consolidation of the Consolidated Statements of Income of

overseas subsidiaries.

180

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

23 Financial risk management continued

Interest rate risk

Interest rate risk comprises both the interest rate price risk that results from borrowing at fixed

rates of interest and also the interest cash flow risk that results from borrowing at variable rates.

The Group’s policy is to use a mixture of revolving short-and medium-term floating rate debt

underpinned by longer-term fixed rate debt. The short-and medium-term floating rate debt provides

flexibility to reduce debt levels as appropriate. The longer-term fixed rate debt provides stability and

cost certainty to the Group’s financing structure.

Liquidity risk

Liquidity risk represents the risk that the Group will not be able to meet its financial obligations as

they fall due. The Group’s approach to managing this risk is to ensure, as far as possible, that it will

always have sufficient liquidity to meet its liabilities when due, under both normal and stressed

conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The

Group manages this risk by maintaining adequate committed lines of funding from high-quality

lenders. The facilities committed to the Group as at 31 March 2025 are set out in Note 19.

Credit risk

Credit risk arises because a counterparty may fail to perform its obligations. The Group is exposed to

credit risk on financial assets such as cash balances, derivative financial instruments, accrued income,

trade and other receivables. The Group’s credit risk is primarily attributable to its trade receivables

and cash balances. The amounts recognised in the Consolidated Statement of Financial Position

are net of expected credit losses, which are estimated by the Group’s management based on the

Group’s historical experience of losses, along with consideration of any reasonably and supportable

forward-looking information and expectations. Due to its wide geographic base and large number of

customers, the Group is not exposed to material concentrations of credit risk on its trade receivables.

The Group’s experience of credit loss is minimal, which has and continues to be mitigated through

receiving payment in advance of delivery or using trade guarantees provided by the Group’s

relationship banks. In the unusual event of a particular issue with a particular customer, a specific

provision will be made if appropriate. Trade receivables are subject to credit limits and control and

approval procedures in the operating companies. There has been no material change in the Group’s

experience of credit losses over the reporting period.

Credit risk associated with cash balances and derivative financial instruments is managed by

transacting with financial institutions with high-quality credit rating. In particular, a Board-approved

policy sets out guidelines for which categories of institutions may be used and the maximum amount

which may be invested with each institution within a particular category. Accordingly, the Group’s

associated credit risk is limited. The Group has no significant concentration of credit risk. The Group’s

maximum exposure to credit risk is represented by the carrying amount of each financial asset,

including derivative financial instruments, in the Group Consolidated Statement of Financial Position.

Notes to the consolidated financial statements continued

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum

exposure to credit risk by type of asset at 31 March 2025 is as shown below:

	2025	2024
	£m	£m
Long-term receivables	1.0	1.3
Trade receivables	97.5	84.9
Other receivables and accrued income	14.5	15.1
Cash and cash equivalents	94.1	97. 8
Derivative financial instruments	2.2	2.5
	209.3	201.6

The maximum exposure to credit risk for trade receivables is discussed in Note 16.

Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a

going concern in order to provide returns for shareholders and benefits for other stakeholders and to

maintain an optimal capital structure to reduce the cost of capital.

The Board’s long-term objective is to have an efficient capital structure by maintaining a balance

between the higher returns that might be possible with higher levels of borrowings and the

advantages and security afforded by a sound capital position. This is monitored by reference to

the ratio of net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) and

the Board has set itself internal limits, which are well inside any covenants the Group has with

lenders. The Group maintains the right to purchase its own shares in the market; the timing of

these purchases would depend on market prices. Buy and sell decisions are made on a specific

transaction basis by the Board.

Each year the Board carefully considers the appropriate level of dividend payments. In doing this,

the Board looks to increase dividends in line with underlying earnings, although the Board will also

take into account other considerations in their decision-making process. The Board does not have a

policy to pay a fixed dividend yield or to maintain a fixed rate of dividend cover but assesses both of

these metrics in line with sustained earnings growth.

181

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

23 Financial risk management continued

The Board encourages employees to hold shares in the company. As well as various share option

plans (full details of which are given in Note 26), from April 2008 all UK employees have been

offered the opportunity to take part in a Share Incentive Plan (SIP). Under this plan, employees

are able to invest up to £1,800 each tax year in shares in the company. The company awards one

additional free share (a matching share) for every five shares bought by each employee.

There were no changes to the Group’s approach to capital management during the year. Neither

the company nor any of its subsidiaries are subject to externally imposed capital requirements.

Maturity of financial liabilities

					Due more
	Carrying	Contractual	Due within	Due one to	than five
	amount	cash flows	one year	five years	years
2025	£m	£m	£m	£m	£m
Foreign exchange contracts	(0.6)	0.6	0.6	–	–
Contingent consideration	(4.0)	4.8	–	4.8	–
Trade and other payables	(76.8)	76.8	76.8	–	–
Bank overdrafts	(8.8)	8.8	8.8	–	–
Borrowings	(0.9)	0.9	0.4	0.5	–
Lease liabilities	(31.2)	36.2	5.3	14.8	16.1
	(122.3)	128.1	91.9	20.1	16.1

					Due more
	Carrying	Contractual	Due within	Due one to	than five
	amount	cash flows	one year	five years	years
2024	£m	£m	£m	£m	£m
Foreign exchange contracts	(0.1)	0.1	0.1	–	–
Trade and other payables	(78.6)	78.6	78.6	–	–
Bank overdrafts	(12.3)	12.3	12.3	–	–
Borrowings	(1.7)	1.7	1.2	0.5	–
Lease liabilities	(33.4)	36.8	5.3	17.3	14.2
	(126.1)	129.5	97.5	17. 8	14.2

Notes to the consolidated financial statements continued

	Carrying	Carrying
	amount	amount
	2025	2024
	£m	£m
Variable rate instruments
Cash and cash equivalents	94.1	97. 8
Bank overdrafts	(8.8)	(12.3)
Fixed rate instruments
Bank loans	(0.9)	(1.7)

Sensitivity analysis

The Group has estimated the impact on the Consolidated Statement of Income and on equity of the

following changes in market conditions at the balance sheet date:

• One percentage point increase in interest rates.

• Ten percentage point weakening in the value of sterling against all currencies.

• Ten percentage point strengthening in the value of sterling against all currencies.

The sensitivities above represent the Directors’ view of reasonably possible changes in each risk

variable, not worst-case scenarios or stress tests. The outputs from the sensitivity analysis are

estimates of the impact of market risk assuming that the specified changes occur at the year end and

are applied to the risk exposures at that date. Accordingly, they show the impact on the balance sheet

of an instantaneous shock. The calculations include all hedges in place at the year end.

Actual results in the future may differ materially from these estimates due to commercial actions

taken to mitigate any potential losses from such rate movements, to the interaction of more than

one sensitivity occurring and to further developments in global financial markets. As such, this table

should not be considered as a projection of likely future gains and losses.

182

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

23 Financial risk management continued

	1% increase in	10% weakening	10% strengthening
	interest rates	in sterling	in sterling
2025	£m	£m	£m
Impact on adjusted profit (Note 2)	0.9	1.7	(1.7)
Impact on reported profit	0.9	(15.6)	15.6
Impact on equity	0.6	(11.7)	11.7

	1% increase in	10% weakening	10% strengthening
	interest rates	in sterling	in sterling
2024	£m	£m	£m
Impact on adjusted profit (Note 2)	0.9	(15.4)	15.5
Impact on reported profit	0.9	(12.2)	12.2
Impact on equity	0.7	(11.6)	11.6

24 Retirement benefit assets and obligations

The Group operates a defined benefit plan in the UK. The plan offers pensions in retirement and

death in service benefit to members. Pension benefits are related to members’ final salary at

retirement and their length of service. The scheme has been closed to new members since 2001

and closed to future accrual since 2010.

On acquisition of FemtoTools AG on 28 June 2024, the Group now also operates a defined benefit

pension scheme in Switzerland.

Defined contribution schemes

In the UK, employees are offered participation in the defined contribution Oxford Instruments

Stakeholder Plan. The company contribution rate and employee contribution rate varies between

grades and whether the individual had previously been in the defined benefit scheme. The company

contribution ranges between 4% and 14% of base salary. The Group also operates a 401k defined

distribution plan in the US. Details of pension schemes contributions made in respect of Directors

can be found in the Remuneration Report.

Notes to the consolidated financial statements continued

The expense recognised in the Consolidated Statement of Income is:

	2025	2024
	£m	£m
Total defined benefit income	(0.1)	(1.0)
Contributions to defined contribution schemes	6.8	6.5
	6.7	5.5

Pension costs are recorded in the following lines in the Consolidated Statement of Income:

	2025	2024
	£m	£m
Cost of sales	2.0	2.1
Research and development	1.2	1.6
Selling and marketing costs	1.4	1.3
Administration and shared services	3.1	2.0
Financial income	(1.0)	(1.5)
	6.7	5.5

Remeasurement gains and losses shown in the Consolidated Statement of Comprehensive Income:

	2025	2024
	£m	£m
Actual return on assets excluding interest income	(28.7)	(20.8)
Experience gain/(loss) on scheme obligations	1.6	(5.4)
Changes in assumptions underlying the present value of scheme obligations:
– Financial	25.3	3.1
– Demographic	0.7	3.7
Actuarial losses recorded in the Statement of Comprehensive Income	(1.1)	(19.4)

183

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

24 Retirement benefit assets and obligations continued

The amounts recognised in the Consolidated Statement of Financial Position are:

		2025			2024
	UK	Switzerland	Total	UK	Switzerland	Total
	£m	£m	£m	£m	£m	£m
Present value of funded
obligations	194.8	2.9	197.7	223.6	–	223.6
Fair value of plan assets	(219.2)	(2.0)	(221.2)	(239.7)	–	(239.7)
Recognised (asset)/liability
for defined benefit obligations	(24.4)	0.9	(23.5)	(16.1)	–	(16.1)

The reconciliation of the opening and closing balances of the present value of the defined benefit

obligation is as follows:

		2025			2024
	UK	Switzerland	Total	UK	Switzerland	Total
	£m	£m	£m	£m	£m	£m
Benefit obligation at the beginning of the year	223.6	–	223.6	225.1	–	225.1
Pension obligations acquired
on acquisition of FemtoTools	–	1.9	1.9	–	–	–
Administrative expenses	–	0.1	0.1	–	–	–
Past service cost	–	–	–	0.4	–	0.4
Interest on defined
benefit obligation	10.5	–	10.5	10.5	–	10.5
Benefits paid	(11.1)	0.3	(10.8)	(11.0)	–	(11.0)
Remeasurement
gain on obligation	(28.2)	0.6	(27.6)	(1.4)	–	(1.4)
Benefit obligation
at the end of the year	194.8	2.9	197.7	223.6	–	223.6

Notes to the consolidated financial statements continued

The reconciliation of the opening and closing balances of the present value of the fair value of plan

assets is as follows:

		2025			2024
	UK	Switzerland	Total	UK	Switzerland	Total
	£m	£m	£m	£m	£m	£m
Fair value of plan assets at the beginning of the year	239.7	–	239.7	251.5	–	251.5
Pension assets acquired on acquisition of FemtoTools	–	1.6	1.6	–	–	–
Interest on plan assets	11.5	–	11.5	12.0	–	12.0
Contributions by employer	8.7	0.1	8.8	8.5	–	8.5
Benefits paid	(11.1)	0.3	(10.8)	(11.0)	–	(11.0)
Administrative expenses	(0.9)	–	(0.9)	(0.5)	–	(0.5)
Actual return on assets
excluding interest income	(28.7)	–	(28.7)	(20.8)	–	(20.8)
Fair value of plan assets
at the end of the year	219.2	2.0	221.2	239.7	–	239.7

184

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

24 Retirement benefit assets and obligations continued

Defined benefit scheme – UK

A full actuarial valuation of the UK plan was carried out as at 31 March 2024 which, for reporting

purposes, has been updated to 31 March 2025 by a qualified independent actuary.

The major assumptions used by the actuary for the purposes of IAS 19 were (in nominal terms):

	2025	2024
	%	%
Discount rate	5.8	4.8
Rate of increase in pensions in payment (‘3LPI')	2.2	2.2
Rate of increase in pensions in payment (‘5LPI')	2.8	2.9
Rate of inflation (‘CPI')	2.3	2.3
Rate of inflation (‘RPI')	2.9	3.0
Mortality – pre-and post-retirement	107% of S4PA ‘Light’ tables	91% of S2PA tables
	(101% for females) future	(93% for females) future
	improvement in line with	improvement in line with
	CMI 2023 with 1.25%	CMI 2022 with 1.25%
	long-term trend	long-term trend

As at 31 March 2025 the weighted average duration of the defined benefit obligations was 11 years

(2024: 13 years).

The mortality assumptions imply the following expected future lifetime from age 65:

	2025	2024
	years	years
Pre-retirement – males	23.3	23.2
Pre-retirement – females	25.5	25.3
Post-retirement – males	22.1	21.8
Post-retirement – females	24.1	23.8

The assumptions have been chosen by the Directors from a range of possible actuarial

assumptions, which, due to the timescales covered, may not be borne out in practice.

Notes to the consolidated financial statements continued

The assets in the plan were:

	2025	2024
	£m	£m
Equities	1.6	7.5
Corporate and emerging market bonds	22.9	22.9
Gilts	163.0	174.3
Insurance-linked funds	2.7	5.8
Credit and global loan funds	12.3	0.1
Hedge funds	–	24.3
Cash	16.7	4.8
	219.2	239.7

Where assets have no observable market price, a valuation will be provided by the fund manager.

The scheme’s investment manager will accept that valuation if it is within the expected range of

performance. Otherwise, the investment manager will query the valuation with the fund manager.

Complex financial instruments are valued by the scheme’s investment manager who uses financial

models which take as their input the characteristics of the instrument and observable market data

such as swap rates.

The investment strategy for the UK scheme is controlled by the trustee in consultation with the

Group. A de-risked investment strategy is in place to mitigate funding volatility.

The Group has agreed a basis for deficit recovery payments with the trustees of the UK pension

scheme. The deficit recovery payments are payable through to and including 2029. The annual

deficit recovery payment was £8.7m (2024: £8.5m) for the financial year. The annual deficit recovery

payment will be £9.0m for the next financial year, then £4.0m per annum until 2029.

In 2018 the trustees of the UK defined benefit scheme, in consultation with the company, reduced its

exposure to on-risk assets (a portfolio of market-focused asset classes, the majority being equities)

with a corresponding increase in its liability-driven investments, with the objective of steering a

more stable journey to being fully funded. The pension fund’s gross exposure to on-risk assets fell

from 85% to 45%; the majority of transactions required to make this change were completed in

February 2018. As a result, the level of risk inherent in the investment strategy is now significantly

lower than previously, in addition to a substantial reduction in funding level volatility. Following

investment outperformance and contributions made by the Group in the year to 31 March 2022,

the allocation to on-risk assets has been further reduced to 35%, with a view to further reduction in

funding level volatility.

185

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

24 Retirement benefit assets and obligations continued

The Group has considered the requirements of IFRIC 14. The terms of the scheme give the Group

the right to recover any surplus assets on the scheme upon wind-up and therefore management

has concluded that there is no impact on the amounts recognised in respect of retirement benefit

obligations, ie there is no need to apply the ‘asset ceiling’.

The Group expects to contribute approximately £9.0m to the UK defined benefit plan in the next

financial year.

The table below shows the sensitivity of the Consolidated Statement of Financial Position to

changes in the significant pension assumptions:

		Discount rate	Inflation rate	Life expectancy
	2025	(-0.1% pa)	(+0.1% pa)	(+one year)
	£m	£m	£m	£m
Present value of funded obligations	194.8	197.0	196.6	200.9
Fair value of plan assets	(219.2)	(219.2)	(219.2)	(219.2)
Surplus	(24.4)	(22.2)	(22.6)	(18.3)

The valuation of defined benefit liabilities is most sensitive to changes in the discount rate, inflation

rate and mortality rate. The sensitivities have been calculated by running the liability calculations

in full using the alternative assumptions. In each case, only the indicated assumption has changed

by the amount stated. For the inflation sensitivity, the impact on the assumptions that are based

on RPI inflation, such as CPI inflation and the inflation-linked pension increases, has been included.

Defined benefit scheme – Switzerland

A full actuarial valuation of the Swiss plan was carried out as at 31 March 2025.

The major assumptions used by the actuary for the purposes of IAS 19 were (in nominal terms):

	2025	2024
	%	%
Discount rate	1.2	–
Rate of increase in pensions in payment	2.5	–
Rate of inflation	1.0	–
Mortality – pre-and post-retirement	BVG 2020	N/A

Notes to the consolidated financial statements continued

The assets in the plan were:

	2025	2024
	£m	£m
Equities	0.6	–
Corporate and emerging market bonds	0.6	–
Property	0.3	–
Infrastructure	0.2	–
Alternative investments	0.3	–
	2.0	–

Virgin Media

The Group is aware of a UK High Court legal ruling that took place in June 2023 between Virgin

Media Limited and NTL Pension Trustees II Limited, which decided that certain historic rule

amendments were invalid if they were not accompanied by actuarial certifications. The ruling was

subject to an appeal with a judgement delivered on 25 July 2024. The Court of Appeal unanimously

upheld the decision of the High Court and concluded that the pre-April 2013 conditions applied to

amendments to both future and past service. Whilst this ruling was in respect of another scheme,

this judgement will need to be reviewed for its relevance to the Oxford Instruments Pension Scheme.

A high-level review has been undertaken of the scheme which concluded that there is a very low

risk of any historic plan amendments being found to be invalid. The company’s pension advisers

have not completed detailed numerical analysis and no adjustments have been made to the

Consolidated Financial Statements at 31 March 2025. There is a separate legal case which is due

to be taken to the High Court in 2025, this is expected to provide further clarification on several

outstanding points of detail relevant to this case.

186

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

25 Capital and reserves

Issued and fully paid ordinary shares:

	2025		2024
	number of		number of
	shares		shares
At the beginning of the year	57,913,792		57,712,508
Issued for cash	220,981		201,284
At the end of the year	58,134,773	57,9	13 ,792

	2025			2024
	Number of			Number of
	shares	£m		shares	£m
Allotted, called up and fully paid
Ordinary shares of 5p each	58,134,773	2.9	57,913	,792	2.9

The holders of the ordinary shares are entitled to receive dividends as declared, a proportionate

amount of capital on a winding up of the company and one vote per share at meetings of

the company.

Other reserves comprise the capital redemption reserve, which represents the nominal value of

shares repurchased and then cancelled during the year ended 31 March 1999.

The foreign exchange translation reserve comprises all foreign exchange differences arising since

1 April 2004 from the translation of the Group’s net investments in foreign subsidiaries into sterling.

Notes to the consolidated financial statements continued

26 Share option schemes

Share Incentive Plan (SIP)

UK employees may be eligible to participate in the Group’s HM Revenue and Customs-approved

SIP. Participating employees may make a cash contribution to the SIP of up to £1,800 each year.

The Group contributes a further amount equal to 20% of the employee’s contribution. Independent

trustees then purchase partnership and matching shares in the market on behalf of the employees.

Subject to the rules of the SIP, matching shares may be withdrawn without forfeiture after they have

been held for three years, provided the participant has remained an employee. On a similar basis,

shares can be withdrawn tax-free after five years’ service.

Long-Term Incentive Plan Scheme (LTIP)

Under the LTIP awards of nominally priced options of £0.05, conditional share awards or cash

conditional awards may be made annually to certain senior managers. Subject to vesting based on

the achievement of performance targets and the rules of the LTIP, options granted under the plan

may have a life of ten years, including a vesting period of three years. Subject to vesting based on

performance and the rules of the LTIP, conditional share awards and cash conditional awards will

vest appropriately three years after the award date. Awards were valued using the Black-Scholes

option pricing models with the exception of options relating to the total shareholder return tranche

which were valued using Stochastic option-pricing models. In the prior year under the LTIP, Richard

Tyson was granted two awards of nominally priced options of £0.05, which comprised part of the

buy-out arrangements to replace the 2021 and 2022 LTIP awards from his previous employer, TT

Electronics plc, which lapsed in connection with his joining the company. Further information can be

found in the Directors’ Remuneration Report on page 139.

Share option schemes that have been discontinued but for which options were outstanding at the

year end include the following:

Performance Share Plan Scheme (PSP)

Under the PSP, awards of nominally priced options of £0.05 were made annually to certain senior

managers. The last grants were made under this scheme in 2022. Awards to persons other than the

Executive Directors may also be referred to as Medium-Term Incentive Plan awards (‘MTIP'). Subject

to vesting based on the achievement of performance targets and the rules of the PSP, awards may

have a life of ten years, including a vesting period of a minimum of three years. Options were valued

using the Black-Scholes option-pricing models.

187

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

26 Share option schemes continued

Executive Share Option Scheme (ESO)

Under the ESO awards of approved options, unapproved options and share appreciation rights were

made annually to certain senior managers. The last grants were made under this scheme in 2016.

The exercise prices were determined according to the mid-market closing share price on the day

before the date of grant. Subject to vesting based on the achievement of performance targets and

the rules of the ESO, awards may have a life of ten years, including a vesting period of a minimum

of three years. Options were valued using the Black–Scholes option-pricing models.

Performance conditions

Awards under the ESO, PSP and LTIP schemes may be or may have been subject to the

achievement of certain performance conditions. The performance conditions applicable for the

Executive Directors of Oxford Instruments plc, can be found in the Directors’ Remuneration Report

on pages 122 to 139.

Administrative expenses include a credit of £0.1m (2024: charge of £3.0m) in respect of the cost of

providing share-based remuneration. The cost of share awards is calculated by estimating the fair

value of the award at grant date and spreading that amount over the vesting period after adjusting

for an expectation of non-vesting.

For options granted in the year ended 31 March 2025, the fair value and the assumptions used in

the calculation are as follows:

				LTIP:
				Conditional
	LTIP CEO	LTIP CFO	LTIP: Options	shares July	LTIP: Options
	July 2024	July 2024	July 2024	2024	March 2025
Weighted average fair value
of options granted	£20.42	£20.42	£21.73	£23.79	£17.64
Share price at grant date	£24.35	£24.35	£24.35	£24.35	£18.06
Exercise price	£0.05	£0.05	£0.05	£0.05	£0.05
Expected volatility	29.1%	29.1%	29.1%	N/A	N/A
Expected option life	3 years	3 years	3 years	3 years	2.3 years
Expected dividend yield	–	–	0.9%	0.9%	0.9%
Risk-free interest rate	3.9%	3.9%	3.9%	N/A	N/A

Notes to the consolidated financial statements continued

For options granted in the year ended 31 March 2024, the fair value and the assumptions used in

the calculation are as follows:

		LTIP CEO	LTIP CEO			LTIP:
		buy-out	buy-out		LTIP:	Conditional
	LTIP CEO	2021	2022	LTIP CFO	Options	Shares
	November	November	November	September	September	September
	2023	2023	2023	2023	2023	2023
Weighted average fair value of options granted	£16.99	£11.04	£13.38	£18.19	£19.09	£21.16
Share price at grant date	£20.55	£20.55	£20.55	£21.75	£21.75	£21.75
Exercise price	£0.05	£0.05	£0.05	£0.05	£0.05	£0.05
Expected volatility	41.3%	31.5%	30.9%	40.5%	40.5%	N/A
Expected option life	3 years	0.5 years	1.5 years	3 years	3 years	3 years
Expected dividend yield	–	–	–	–	0.9%	0.9%
Risk-free interest rate	4.4%	5.3%	4.9%	4.4%	4.4%	N/A

188

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

26 Share option schemes continued

Movements in the share option schemes during the year were as follows:

		Executive Share		Performance		Long-Term
		Option Scheme		Share Plan	Incentive Plan
		Weighted		Weighted	Weighted
		average		average		average
	Number of	exercise	Number of	exercise	Number of	exercise
	shares	price	shares	price	shares	price
Outstanding at 1 April 2023	125,669	£8.82	828,376	£0.05	–	–
– Granted	–	–	–	–	216,207	£0.05
– Forfeited	–	–	(25,533)	£0.05	–	–
– Exercised	(18,623)	£8.93	(180,018)	£0.05	–	–
– Lapsed	(8,317)	£10.28	(318)	£0.05	(15,635)	£0.05
Outstanding at 31 March 2024	98,729	£8.68	622,507	£0.05	200,572	£0.05
– Granted	–	–	–	–	191,905	£0.05
– Forfeited	–	–	(9,125)	£0.05	(20,001)	–
– Exercised	(18,986)	£9.79	(201,744)	£0.05	–	–
– Lapsed	(9,878)	£9.94	(7,854)	£0.05	(5,850)	£0.05
Outstanding at 31 March 2025	69,865	£8.20	403,784	£0.05	366,626	£0.05
Exercisable at 31 March 2025	69,865	£8.20	265,829	£0.05	43,213	£0.05
Exercisable at 31 March 2024	98,729	£8.68	362,419	£0.05	12,237	£0.05

The number and weighted average exercise prices of those options are as follows:

The weighted average share price at the time of exercise of the options was £21.86 (2024: £23.42).

The weighted average remaining contractual life for the share options as at 31 March 2025 was one

year (2024: one year).

The total consideration received from exercise of options in the year was £0.0m (2024: £0.0m).

Notes to the consolidated financial statements continued

27 Working capital movements

Reconciliation of movements in working capital

			Payables and	Customer
	Inventories 1	Receivables 2	provisions 2	deposits	Total
	£m	£m	£m	£m	£m
As at 1 April 2023	81.4	115.7	(116.1)	(52.1)	28.9
Working capital movement	26.3	2.7	2.8	( 7.1 )	24.7
First Light Imaging-related flows
(as restated Note 11)	1.6	2.9	(5.0)	(0.4)	(0.9)
Exchange differences	(1.2)	(2.8)	4.7	1.2	1.9
FV movement on financial
derivatives	–	–	(0.7)	–	(0.7)
As at 31 March 2024 and 1 April 2024 (as restated Note 11)	108.1	118.5	(114.3)	(58.4)	53.9
Working capital movement	(8.8)	10.0	(1.1)	11.1	11.2
First Light Imaging-related flows	–	–	2.8	–	2.8
FemtoTools-related flows	0.6	0.9	(4.7)	–	(3.2)
Exchange differences	(0.8)	–	(0.2)	0.9	(0.1)
FV movement on financial
derivatives	–	–	(0.3)	–	(0.3)
As at 31 March 2025	99.1	129.4	(117.8)	(46.4)	64.3

1. Details of restatement of prior period numbers can be found in Note 11.

2. Receivables and payables include derivative financial instruments.

189

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

28 Commitments and contingencies

The Group has entered into agreements in respect of the new Severn Beach site for its Plasma

Technology business. At 31 March 2025 commitments for future expenditure are £0.4m (2024: £8.0m)

and include capital expenditure, fit-out costs, plant and machinery, furniture and computer equipment.

In an international group of companies, a variety of legal claims arise from time to time. The Board,

having taken legal advice, is of the opinion that any ongoing actions and investigations will not have

a material impact on the Group’s financial position.

29 Related parties

All transactions with related parties are conducted on an arm’s length basis and in accordance with

normal business terms. Transactions between the company and its subsidiaries, which are related

parties, have been eliminated on consolidation and are not disclosed in this note.

The remuneration of key management personnel is as follows:

	2025	2024
	£m	£m
Short-term employee benefits	4.1	4.8
Post-employment benefits	0.1	0.2
Share-based payment charges	0.9	2.6
Total	5.1	7.6

Key management personnel include the Executive Directors and the Management Board.

Short-term employee benefits comprise salary and benefits earned during the year and bonuses

awarded for the year.

Notes to the consolidated financial statements continued

30 Subsequent events

Disposal of Oxford Instruments NanoScience

On 10 June 2025, the Group entered into a binding agreement to sell the trade and assets of

the NanoScience business to Quantum Design International Inc for £60m total consideration,

including up to £3m of deferred consideration linked to performance of the business post-closing.

NanoScience is our Quantum business and a separately identifiable business within the

Oxford Instruments Nanotechnology Tools Limited legal entity. The disposal is expected to

complete during FY26.

In 2025, NanoScience generated approximately £57.2m of revenue and £1.1m of adjusted operating

profit. Non-recurring transaction-related costs are expected to be approximately £2m– £3m in

2026. At 31 March 2025, the business accounted for £34.7m of net assets within the Advanced

Technologies segment.

190

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Parent Company statement of financial position

As at 31 March 2025

Notes

2025

£m

2024

£m

Assets

Non-current assets

Intangible assets d 0.7 1.2

Tangible assets c 0.4 0.6

Right-of-use assets – 0.1

Investments in subsidiary undertakings e 357.9 356.9

Trade and other receivables f 2.8 3.0

Derivative financial instruments 0.3 0.2

Retirement benefit asset 5.6 3.7

Deferred tax assets i 0.4 2.1

368.1 367. 8

Current assets

Trade and other receivables f 39.0 48.3

Derivative financial instruments 2.1 2.5

Cash and cash equivalents 11.2 34.1

52.3 84.9

Total assets 420.4 452.7

Equity

Capital and reserves attributable to the company’s

equity shareholders

Share capital 2.9 2.9

Share premium 62.6 62.6

Capital redemption reserve 0.1 0.1

Other reserves 7.6 7.6

Retained earnings 292.7 276.1

365.9 349.3

Notes

2025

£m

2024

£m

Liabilities

Current liabilities

Bank overdrafts h 3.8 2.6

Derivative financial instruments 1.3 2.3

Trade and other payables g 49.4 98.5

54.5 103.4

Total liabilities 54.5 103.4

Total liabilities and equity 420.4 452.7

The company’s profit for the financial year was £29.4m (2024: £1.8m). Other comprehensive expense

in the year was £0.1m (2024: expense of £3.3m). The expense will not subsequently be reclassified to

statement of income.

The Financial Statements were approved by the Board of Directors on 12 June 2025 and signed on

its behalf by:

RICHARD TYSON PAUL FRY

Director Director

Company number: 775598

191

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Parent Company statement of changes in equity

Year ended 31 March 2025

Share capital

£m

premium

account

£m

Capital

redemption

reserve

£m

Other reserves

£m

Retained

earnings

£m

Total

shareholders’

equity

£m

As at 1 April 2024 2.9 62.6 0.1 7.6 276.1 349.3

Profit for the year 29.4 29.4

Other comprehensive expense: – – – –

– Remeasurement of defined benefit liability, net of tax (0.1) (0.1)

Total comprehensive income for the year – – – – 29.3 29.3

– Share options awarded to employees – – – – (1.1) (1.1)

– Share options awarded to employees of subsidiaries – – – – 1.0 1.0

– Tax charge in respect of share options – – – – (0.5) (0.5)

– Proceeds from shares issued – – – – – –

– Dividends paid – – – – (12.1) (12.1)

As at 31 March 2025 2.9 62.6 0.1 7.6 292.7 365.9

As at 1 April 2023 2.9 62.6 0.1 7.6 286.4 359.6

Profit for the year 1.8 1.8

Other comprehensive expense: – – – –

– Remeasurement of defined benefit liability, net of tax (3.3) (3.3)

Total comprehensive expense for the year – – – – (1.5) (1.5)

– Share options awarded to employees – – – – 1.9 1.9

– Share options awarded to employees of subsidiaries – – – – 1.1 1.1

– Tax charge in respect of share options – – – – (0.3) (0.3)

– Proceeds from shares issued – – – – – –

– Dividends paid – – – – (11.5) (11.5)

As at 31 March 2024 2.9 62.6 0.1 7.6 276.1 349.3

Details of issued, authorised and allotted

share capital are included in Note 25 to

the Group Financial Statements.

Details of the Group’s share option

schemes are included in Note 26 to the

Group Financial Statements.

Details of the Group’s defined benefit

pension scheme are included in Note 24

to the Group Financial Statements.

Details of dividends paid are included in

Note 9 to the Group Financial Statements.

Other reserves relates to premium on

shares issued as part of acquisitions

made in the year to 31 March 1987.

192

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Notes to the Parent Company financial statements

Year ended 31 March 2025

(a) Accounting policies

Basis of preparation

Oxford Instruments plc is a company incorporated and domiciled in the UK. These Financial

Statements have been prepared in accordance with Financial Reporting Standard 101 Reduced

Disclosure Framework (FRS 101) on the historical cost basis, except that derivative financial

instruments are stated at their fair value.

In preparing these Financial Statements, the company applied the recognition, measurement and

disclosure requirements of international accounting standards in conformity with the requirements

of the Companies Act 2006.

In these Financial Statements, the company has applied the exemptions available under FRS 101

in respect of the following disclosures:

• A cash flow statement and related notes.

• Comparative period reconciliations for share capital, tangible fixed assets, intangible assets and

investment properties.

• Disclosures in respect of transactions with wholly owned subsidiaries.

• Disclosures in respect of capital management.

• The effects of new, but not yet effective, accounting standards.

• Disclosures in respect of the compensation of key management personnel.

As the consolidated Financial Statements of Oxford Instruments plc include the equivalent

disclosures, the company has also taken the exemptions under FRS 101 available in respect of the

following disclosures:

• IFRS 2 Share-based Payments in respect of Group settled share-based payments.

• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by

IFRS 7 Financial Instrument Disclosures.

As permitted by Section 408 of the Companies Act 2006, a separate statement of income for the

company has not been included in these Financial Statements.

The accounting policies set out below have, unless otherwise stated, been applied consistently to

all periods presented in these Financial Statements.

Going concern

The Financial Statements have been prepared on a going concern basis, based on the Directors’

opinion, after making reasonable enquiries, that the company has adequate resources to continue

in operational existence for the foreseeable future. Further details on the Group’s going concern can

be found on pages 79 to 80.

Material accounting policies

Trade and other receivables

Trade and other receivables are recognised initially at fair value. Subsequent to initial

recognition they are measured at amortised cost using the effective interest method, less any

impairment losses.

Trade and other payables

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they

are measured at amortised cost using the effective interest method.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs.

Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using

the effective interest method, less any impairment losses. Details of the Group’s interest-bearing

borrowings are included in Note 19 to the Group Financial Statements.

Intra-Group lending

The company has lent funds to and from its UK subsidiaries on interest-free terms. These amounts

are repayable on demand. They are stated at cost less any impairment losses.

Derivative financial instruments

The company’s accounting policies for financial instruments are the same as the Group’s accounting

policies under IFRS, namely IAS 32 Financial Instruments: Presentation, IFRS 9 Financial Instruments

and IFRS 7 Financial Instruments: Disclosures. These policies are set out in accounting policy ‘(e)

Financial instruments’ in the Group accounting policies, on page 152.

193

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(a) Accounting policies continued

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment

losses. Where parts of an item of tangible fixed assets have different useful lives, they are accounted

for as separate items of tangible fixed assets.

Depreciation is charged to the statement of income on a straight-line basis over the estimated

useful lives of each part of an item of tangible fixed assets. The estimated useful lives are as follows:

• Computer equipment – 4 years

• Furniture and fittings – 4 years

Depreciation methods, useful lives and residual values are reviewed at each statement of financial

position date.

Intangible assets

Intangible assets represents internally developed software. Amortisation is charged to the

statement of income on a straight-line basis over the estimated useful lives of intangible assets

unless such lives are indefinite. Intangible assets are amortised from the date they are available

for use. The estimated useful lives are as follows:

• Software – 10 years

Impairment excluding deferred tax assets

Financial assets (including trade and other receivables)

Trade and other receivables are initially recognised at fair value and subsequently stated at

their amortised cost less appropriate provision for impairment. The provision for impairment of

debtors is based on lifetime expected credit losses, which is then updated for any reasonable and

supportable forward-looking information and expectations. Lifetime expected credit losses are

calculated by assessing historic credit loss experience. The movement in the provision is recognised

in the company’s statement of income.

Non-financial assets

The carrying amounts of the company’s non-financial assets, other than deferred tax assets,

are reviewed at each reporting date to determine whether there is any indication of impairment.

If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in

use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows

are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset. For the purpose of

impairment testing, assets that cannot be tested individually are grouped together into the smallest

group of assets that generates cash inflows from continuing use that are largely independent of the

cash inflows of other assets or groups of assets (the ‘cash-generating unit’ (CGU)).

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated

recoverable amount.

Impairment losses are recognised in statement of income. Impairment losses recognised in respect

of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and

then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro-rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any

indications that the loss has decreased or no longer exists. An impairment loss is reversed if there

has been a change in the estimates used to determine the recoverable amount. An impairment loss

is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount

that would have been determined, net of depreciation or amortisation, if no impairment loss had

been recognised.

Notes to the Parent Company financial statements continued

194

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(a) Accounting policies continued

Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which the company pays

fixed contributions into a separate entity and will have no legal or constructive obligation to pay

further amounts. Obligations for contributions to defined contribution pension plans are recognised

as an expense in the statement of income in the periods during which services are rendered

byemployees.

Defined benefit plans

The company is the sponsoring employer of a Group-wide defined benefit pension plan. The net

defined benefit cost of the plan is charged to participating entities on the basis of the proportion

of scheme membership attributable to each legal entity at the reporting date. The contributions

payable by the participating entities are determined using an agreed ratio which has been in place

for approximately ten years.

The company’s net obligation in respect of defined benefit pension plans is calculated by estimating

the amount of future benefit that current and past employees have earned in return for their service

in prior periods. That benefit is discounted to determine its present value and is deducted from the

fair value of any plan assets. Surpluses in schemes are recognised as assets only if they represent

economic benefits available to the company in the future. The calculation is performed by a

qualified actuary using the projected unit credit method.

All actuarial gains and losses in calculating the company’s net obligation are recognised in the

statement of comprehensive income in the year.

The charge to the statement of income reflects the current service cost. The interest expense

or income is calculated on the net defined benefit asset by applying the discount rate to the

net defined benefit asset, and is included within financial expenditure or financial income in the

Statement of Income respectively.

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed

as the related service is provided. A liability is recognised for the amount expected to be paid under

short-term cash bonus or profit-sharing plans if the company has a present legal or constructive

obligation to pay this amount as a result of past service provided by the employee and the

obligation can be estimated reliably.

Termination benefits

Termination benefits are recognised as an expense when the company is demonstrably committed,

without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment

before the normal retirement date, or to provide termination benefits as a result of an offer made to

encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised

as an expense if the company has made an offer of voluntary redundancy, it is probable that the

offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are

payable more than 12 months after the reporting date, then they are discounted to their present value.

Share-based payment transactions

The grant date fair value of share-based payments awards granted to employees is recognised

as an employee expense, with a corresponding increase in equity, over the period in which the

employees become unconditionally entitled to the awards. The fair value of the awards granted

is measured using an option valuation model, taking into account the terms and conditions upon

which the awards were granted. The amount recognised as an expense is adjusted to reflect the

actual number of awards for which the related service and non-market vesting conditions are

expected to be met, such that the amount ultimately recognised as an expense is based on the

number of awards that do meet the related service and non-market performance conditions at

the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair

value of the share-based payment is measured to reflect such conditions and there is no true-up for

differences between expected and actual outcomes.

Where the company grants options over its own shares to the employees of its subsidiaries, it

recognises, in its individual Financial Statements, an increase in the cost of investment in its subsidiaries

equivalent to the equity-settled share-based payment charge recognised in its consolidated Financial

Statements with the corresponding credit being recognised directly in equity. Amounts recharged

to the subsidiary are recognised as a reduction in the cost of investment in subsidiary. If the amount

recharged exceeds the increase in the cost of investment, the excess is recognised as a dividend.

Short-term leases and leases of low-value assets

The company has elected not to recognise right-of-use assets and lease liabilities for short-term

leases of machinery that have a lease term of 12 months or less and leases of low-value assets,

including IT equipment. The company recognises the lease payments associated with these leases

as an expense on a straight-line basis over the lease term.

Foreign currencies

The company enters into forward exchange contracts and options to mitigate the currency

exposures that arise on sales and purchases denominated in foreign currencies. Transactions

in foreign currencies are converted into sterling at the rate ruling on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling

at the statement of financial position date. Exchange profits and losses arising from the above are

dealt with in the statement of income.

Notes to the Parent Company financial statements continued

195

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(a) Accounting policies continued

Investments

Investments in subsidiaries are stated at cost, less any provision for impairment, where appropriate.

Dividends on shares presented within shareholders’ funds

Dividends unpaid at the statement of financial position date are only recognised as a liability at

that date to the extent that they are appropriately authorised and are no longer at the discretion

of the company. Unpaid dividends that do not meet these criteria are disclosed in the notes to the

Financial Statements.

(b) Profit for the year

The company’s profit for the financial year was £29.4m (2024: £1.8m). Other comprehensive expense

in the year was £0.1m (2024: expense of £3.3m). The expense will not subsequently be reclassified to

statement of income.

The auditor’s remuneration comprised £381,000 (2024: £345,000) for the statutory audit.

The average number of people employed by the company (including Directors) during the year

was94 (2024: 84). All these individuals were involved in administration.

The aggregate payroll costs (including Directors) of these people were as follows:

2025

£m

2024

£m

Wages and salaries 10.8 9.3

Social security costs 1.5 1.4

Other pension costs 0.5 0.4

12.8 11.1

The share-based payment credit was £1.1m (2024: charge of £1.9m). Details of the Group’s share

option schemes are included in Note 26 to the Group Financial Statements.

Full details of the emoluments paid to Directors can be found in the Remuneration Report on

pages 122 to 139.

Furniture and

fittings

£m

Computer

equipment

£m

Total

£m

Cost

Balance at 1 April 2024 0.2 2.0 2.2

Additions 0.1 – 0.1

Disposals – (1.3) (1.3)

Balance at 31 March 2025 0.3 0.7 1.0

Depreciation

Balance at 1 April 2024 0.1 1.5 1.6

Charge for year – 0.1 0.1

Disposals – (1.1) (1.1)

Balance at 31 March 2025 0.1 0.5 0.6

Net book value

Balance at 31 March 2024 0.1 0.5 0.6

Balance at 31 March 2025 0.2 0.2 0.4

Notes to the Parent Company financial statements continued

196

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(d) Intangible assets

Software

£m

Cost

Balance at 1 April 2024 3.1

Disposals (1.3)

Balance at 31 March 2025 1.8

Depreciation and impairment losses

Balance at 1 April 2024 1.9

Charge for year 0.5

Disposals (1.3)

Balance at 31 March 2025 1.1

Net book value

Balance at 31 March 2024 1.2

Balance at 31 March 2025 0.7

(e) Investments

Investments

in subsidiary

undertakings

£m

Cost or valuation

Balance at 1 April 2024 375.6

Expense in respect of share options transferred to subsidiary undertakings 1.0

Balance at 31 March 2025 376.6

Impairment

Balance at 1 April 2024 and 31 March 2025 18.7

Net book value

Balance at 31 March 2024 356.9

Balance at 31 March 2025 357.9

Related undertakings of the Group

The following disclosure is provided in accordance with Section 409 of the Companies Act 2006.

As of 31 March 2025, the companies listed below and on the following pages are indirectly held by

Oxford Instruments plc, except for Oxford Instruments Industrial Products Holdings Limited, Oxford

Instruments Nanotechnology Tools Holdings Limited and Oxford Instruments Overseas Holdings

Limited, which are all 100% directly owned by Oxford Instruments plc.

The financial year end of each company is 31 March unless otherwise indicated.

All subsidiary undertakings are controlled by the Group and their results are fully consolidated in the

Group’s Financial Statements.

Notes to the Parent Company financial statements continued

197

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Company name Address Ownership interest

% of

class held

Andor Technology

Limited

7 Millennium Way, Springvale

Business Park, Belfast, NI, BT12 7AL

Ordinary shares 100

Andor Technology, Inc. 300 Baker Avenue, Suite 150,

Concord MA 01742, United States

Common stock 100

Bitplane AG Zurcherstrasse 6, 8952 Schlieren,

Switzerland

Ordinary shares

Preference shares

100

FemtoTools AG

Furtbachstrasse 4, 8107 Buchs ZH,

Switzerland

Ordinary shares 100

First Light Imaging

Corporation

1209 Orange Street, Wilmington

DE 19801, United States

Common stock 100

First Light Imaging SAS

Europarc Sainte Victoire Bâtiment 5,

Route de Valbrillant Le Canet, 13590

Meyreuil France

Ordinary shares

Preference shares

100

Oxford Instruments

AFM Limited

Tubney Woods, Abingdon, Oxon,

OX13 5QX, England

Ordinary shares 100

Oxford Instruments

America Inc.

300 Baker Avenue, Suite 150,

Concord MA 01742, United States

Common stock 100

Oxford Instruments

Asylum Research Inc.

7416 Hollister Avenue, Santa Barbara,

CA 93117, United States

Common stock 100

Oxford Instruments

Australia Pty Limited

C/O ECOVIS, Suite 7, 13 Hickson Road,

Dawes Point, New South Wales,

Australia

Ordinary shares 100

Oxford Instruments

Funding Limited

PO Box 175, Frances House,

Sir William Place, St Peter Port,

GY1 4HQ, Guernsey

Ordinary shares 100

Oxford Instruments

GmbH

Borsigstrasse 15a, 65205,

Wiesbaden, Germany

Ordinary shares 100

Oxford Instruments

Holdings 2013 Inc.

300 Baker Avenue, Suite 150,

Concord MA 01742, United States

Common stock 100

Company name Address Ownership interest

% of

class held

Oxford Instruments

Holdings Europe

Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Holdings GmbH

Borsigstrasse 15a, 65205,

Wiesbaden, Germany

Ordinary shares 100

Oxford Instruments

India Private Limited

Plot No. A-279, Ground Floor Road

No. 16A, Ambica Nagar, Wagle

Industrial Estate, Thane (West),

Thane, MH, 400604, India

Equity shares 100

Oxford Instruments

Industrial Products

Holdings Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Industrial Products

Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Italia s.r.l.

Via Della Chiusa 15, 20123,

Milan, Italy

Capital stock 100

Oxford Instruments KK Sumitomo Fudosan Osaki Twin

Building East, 5-1-18 Kita-Shinagawa,

Shinagawa-ku, Tokyo, 141-0001,

Japan

Ordinary shares 100

Oxford Instruments

Management Services

Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Molecular Biotools

Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Nanotechnology Tools

Holdings Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

(e) Investments continued

Subsidiaries

Notes to the Parent Company financial statements continued

198

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Company name Address Ownership interest

% of

class held

Oxford Instruments

Nanotechnology

Tools Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Nordiska AB

C/o TMF Sweden AB, Sergels Torg 12,

111 57, Stockholm, Sweden

Shares 100

Oxford Instruments

Overseas Espana SL

Calle Ferraz No. 78 2 A, 28008

Madrid, Spain

Ordinary shares 100

Oxford Instruments

Overseas Holdings

2008 Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Overseas Holdings

Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Overseas Marketing

GmbH

Borsigstrasse 15a, 65205,

Wiesbaden, Germany

Ordinary shares 100

Oxford Instruments

Overseas Marketing

Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

Private Limited

Messrs Tan Rajah & Cheah,

80 Raffles Place, #58-01 UOB Plaza 1,

048624, Singapore

Ordinary shares 100

Oxford Instruments SAS 9 Avenue du Canada, Immeuble

“Le Méridien”, 91940 Les Ulis, France

Ordinary shares 100

Oxford Instruments

(Taiwan) Co., Ltd

No. 195, Section 4, ZhongXing Rd,

ZhuDong Township, HsinChu County,

310 Taiwan

Ordinary shares 100

Oxford Instruments

Technologies Oy

Technopolis Innopoli 1, Tekniikantie 12,

Espoo, 02150, Finland

Ordinary shares 100

Company name Address Ownership interest

% of

class held

Oxford Instruments

Technology (Shanghai)

Co. Ltd

Floor 1, Building 60, 461 Hongcao

Road, Xuhui District, Shanghai, China

Registered capital 100

Oxford Instruments

UK 2013 Limited

Tubney Woods, Abingdon,

Oxon, OX13 5QX, England

Ordinary shares 100

Oxford Instruments

X-Ray Technology Inc.

360 El Pueblo Road, Scotts Valley

CA 95066, United States

Common stock 100

Spectral Applied

Research Inc.

199 Bay Street, Suite 5300,

Commerce Court West,

Toronto ON M5L 1B9, Canada

Common shares 100

WITec (Beijing) Scientific

Technology Co. Ltd

Unit 1307A, Air China Plaza Tower

1, No. 36 Xiaoyun Road, Chaoyang

District, 100027, Beijing, China

Registered capital 100

WITec Pte. Ltd

25 International Business Park,

#03-59A German Centre, 609916,

Singapore

Ordinary shares 100

WITec Wissenschaftliche

Instrumente und

Technologie GmbH

Lise-Meitner-Str. 6, D-89081 Ulm,

Germany

Ordinary shares 100

1. UK tax resident.

2. Dormant entity.

3. Financial year end is 31 August.

4. Entity to take advantage of s479A Companies Act 2006 (s479A) audit exemption for the year ending 31 March 2024. Oxford

Instruments plc will issue a guarantee pursuant to S479A in relation to the liabilities of the entity.

5. Financial year end is 31 December.

6. Acquired 28 June 2024.

7. Incorporated on 14 January 2025.

8. Incorporated on 16 September 2024.

9. Acquired on 6 March 2025. Financial year end is 31 December.

(e) Investments continued

Notes to the Parent Company financial statements continued

199

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(f) Trade and other receivables

2025

£m

2024

£m

Amounts falling due after one year:

Amounts owed by subsidiary undertaking 2.8 3.0

Amounts falling due within one year:

Amounts owed by subsidiary undertaking 35.3 43.1

Other receivables 0.7 1.1

Prepayment and accrued income 3.0 4.1

39.0 48.3

Amounts owed by subsidiary undertakings are interest-free, unsecured and repayable on demand.

The company has no immediate intention to recall £2.8m (2024: £3.0m) of these balances in the

short term and so these amounts are classified as amounts falling due after more than one year.

(g) Trade and other payables

2025

£m

2024

£m

Amounts falling due within one year:

Trade payables 2.5 3.0

Amounts owed to subsidiary undertaking 39.1 82.5

Tax, social security and sales-related taxes 2.3 2.3

Accruals and deferred income 5.5 10.7

49.4 98.5

Prior year numbers have been restated to correct a classification error. At 31 March 2024, amounts

owed to group undertakings has increased by £4.3m, and accruals have decreased by £4.3m.

Amounts owed to subsidiary undertakings are interest-free and repayable on demand.

(h) Bank overdraft

2025

£m

2024

£m

Current

Bank overdraft 3.8 2.6

At the end of the year 3.8 2.6

(i) Deferred tax asset

2025

£m

2024

£m

Balance at 1 April 2.1 2.3

Statement of income (debit)/credit (1.2) 0.1

Other comprehensive income credit – 0.6

Statement of changes in equity debit (0.5) (0.9)

Balance at 31 March 0.4 2.1

The amounts of deferred tax assets are as follows:

Recognised

2025

£m

2024

£m

Excess of depreciation over corresponding capital allowance 0.2 0.2

Employee benefits – pension and share scheme 0.2 1.9

0.4 2.1

The company recognises deferred tax assets only to the extent that there will be suitable taxable

profits from which the future reversal of the underlying timing differences can be deducted.

The UK deferred tax assets and liabilities have been calculated based on the enacted rate of 25%.

Notes to the Parent Company financial statements continued

200

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

(j) Pension commitments

The company and its employees contribute to the Oxford Instruments Pension Scheme (‘the Scheme’),

a defined benefit pension scheme, which offers pensions in retirement and death in service benefit

to members. Pension benefits are related to members’ final salary at retirement and their length

of service.

The Scheme was closed to new members from 1 April 2001. Since this date, new employees have

been invited to join the Oxford Instruments Stakeholder Plan, a defined contribution scheme. The

Scheme is also closed to future accrual.

The Oxford Instruments Group policy for charging net defined benefit costs to participating entities

states that member costs are charged directly to a participating company if that member is also

an employee of said participating company. The costs of scheme members that are no longer

employees of any participating company or directly affiliated with a Group company are allocated

on the basis of the participating company’s scheme members as a percentage of the total scheme

members that are also employees of participating companies.

The policy for determining contributions to be paid by participating companies is the same as that

for charging net defined benefit costs.

Details of the Scheme, its most recent actuarial valuation and its funding can be found in Note 24 to

the Group Financial Statements. The contributions paid by the company to the Oxford Instruments

Pension Scheme were £2.0m (2024: £2.0m). The company’s share of the retirement benefit asset

was £5.6m (2024: £3.7m).

(k) Guarantees

The company has given a guarantee to the pension scheme in respect of the liability of its UK

subsidiaries to the pension scheme. The guarantee is for the excess of 105% of the liabilities of

the scheme, calculated on the basis of Section 179 of the Pensions Act 2004, over the assets of

theScheme.

The company and its UK subsidiaries have entered into a cross-guarantee for £10.0m (2024: £10.0m)

in respect of bank overdraft facilities, of which £nil (2024: £nil) was drawn at the year end.

(l) Commitments

At 31 March 2025, capital commitments contracted were £nil (2024: £nil) and authorised were

£nil (2024: £nil).

(m) Related party transactions

The company has a related party relationship with its Directors and Executive Officers and with its

wholly owned subsidiary companies.

Transactions with key management personnel are disclosed in the Remuneration Report on pages

122 to 139. There were no other significant transactions with key management personnel in either

the current or preceding year.

Notes to the Parent Company financial statements continued

201

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Independent auditor’s report to the members of Oxford Instruments plc

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the Parent

Company’s affairs as at 31 March 2025 and of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted

international accounting standards;

• the Parent Company financial statements have been properly prepared in accordance with

United Kingdom Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements of Oxford Instruments plc (the ‘Parent Company’) and

its subsidiaries (the ‘Group’) for the year ended 31 March 2025 which comprise the Consolidated

statement of income, the Consolidated statement of comprehensive income, Consolidated

statement of financial position, Consolidated statement of changes in equity, Consolidated

statement of cash flows, Parent company statement of financial position, Parent company

statement of changes in equity and notes to the financial statements, including a summary of

material accounting policies. The financial reporting framework that has been applied in the

preparation of the Group financial statements is applicable law and UK adopted international

accounting standards. The financial reporting framework that has been applied in the preparation

of the Parent Company financial statements is applicable law and United Kingdom Accounting

Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework

(United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those standards are further described in the Auditor’s

responsibilities for the audit of the financial statements section of our report. We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our

audit opinion is consistent with the additional report to the audit committee.

Independence

Following the recommendation of the audit committee, we were appointed by the Board of

Directors on 4 March 2020 to audit the financial statements for the year ended 31 March 2021

and reappointed by the members of the Company at the annual general meeting for subsequent

financial periods. The period of total uninterrupted engagement including retenders and

reappointments is five years, covering the years ended 31 March 2021 to 31 March 2025.

We remain independent of the Group and the Parent Company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s

Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements. The non-audit services prohibited by that

standard were not provided to the Group or the Parent Company.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern

basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of

the Directors’ assessment of the Group and the Parent Company’s ability to continue to adopt the

going concern basis of accounting included:

• Evaluating the Directors’ method of assessing going concern including the relevance and

reliability of underlying data used to make the assessment, and whether assumptions and

changes to assumptions from prior years are appropriate and consistent with each other;

• Considering the adequacy of the Group’s banking facilities and ability to meet key

financial covenants;

• Testing the arithmetic accuracy of the model, challenging the assumptions applied and where

possible agreeing the model to supporting documentation, including order books;

• Considering the appropriateness of the downside scenarios and challenging the Directors on

the completeness and level of downside assumptions based on our industry knowledge;

• Review of the Directors’ downside scenario modelling forecasts, modelling scenarios

to covenants and consideration of the likelihood of occurrence and feasible actions to

increase headroom;

• Reviewing the period assessed by the Directors ensuring that it meets the requirements of the

applicable accounting standards, and challenging the Directors on whether there are any future

events falling outside of the period considered that may impact the assessment completed;

• Reviewing the adequacy and appropriateness of disclosures in the financial statements

regarding the going concern assessment; and

• Comparing the level of available financial resources with the Group’s financial forecasts,

including taking account of reasonably possible (but not unrealistic) adverse effects that could

arise from risks, both individually and collectively, relating to the Group.

Based on the work we have performed, we have not identified any material uncertainties relating

to events or conditions that, individually or collectively, may cast significant doubt on the Group and

the Parent Company’s ability to continue as a going concern for a period of at least twelve months

from when the financial statements are authorised for issue.

202

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance

Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in

the financial statements about whether the Directors considered it appropriate to adopt the going

concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are

described in the relevant sections of this report.

Overview

Key audit matters

2025 2024

Revenue recognition

Inventory provisioning

Valuation of Group goodwill (Andor CGU)

Materiality Group financial statements as a whole

£3.3m (2024: £3.5m) based on 5% (2024: 5%) of Profit before tax

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, the

applicable financial reporting framework and the Group’s system of internal control. On the basis of

this, we identified and assessed the risks of material misstatement of the Group financial statements

including with respect to the consolidation process. We then applied professional judgement

to focus our audit procedures on the areas that posed the greatest risks to the group financial

statements. We continually assessed risks throughout our audit, revising the risks where necessary,

with the aim of reducing the group risk of material misstatement to an acceptable level, in order to

provide a basis for our opinion.

Components in scope

Oxford Instruments plc is a United Kingdom manufacturing and research company that designs and

manufactures tools and systems for industry and research. There are 87 separate entities across the

Group making it a very disaggregated Group. The control environment is disaggregated as different

IT systems, process, controls and finance teams are used across the components in the group.

As part of performing our Group audit, we determined the components to be business units, which

consist of individual components or branches, each with its own discrete financial information.

None of the components include more than one legal entity. These components were selected

following a detailed risk assessment. We considered the size of the component, the control

environment, and other qualitative factors, including adding an element of unpredictability.

Independent auditor’s report to the members of Oxford Instruments plc continued

For components in scope, we used a combination of risk assessment procedures and further audit

procedures to obtain sufficient appropriate evidence. These further audit procedures included:

• procedures on the entire financial information of the component, including performing

substantive procedures;

• procedures on one or more classes of transactions, account balances or disclosures; and

• specific audit procedures over certain balances

Procedures performed at the component level

For the purpose of our group audit, the group consisted of 87 components in total. These were

comprised of 39 legal entities. We performed procedures to respond to group risks of material

misstatement at the component level that included the following:

• Procedures were performed on the entire financial information of 6 components;

• Procedures were performed on one or more classes of transactions, account balances or

disclosures of 8 of components;

• Specified procedures were performed at 7 components; and

• Risk assessment procedures were performed on the remaining 66 components.

Procedures performed centrally

We considered there to be a high degree of centralisation of financial reporting and commonality of

controls for significant estimates and judgements. This is applicable for the valuation of Retirement

Benefit asset and obligation, share based payments, FemtoTools and First Light acquisitions,

goodwill impairment review and recognition of deferred and current taxation. These are all

evaluated by Group management. We therefore designed and performed procedures centrally in

these areas.

The group operates a combination of a centralised and decentralised IT function that supports

IT processes across the components in the group. This IT function is subject to specified

risk-focused audit procedures, predominantly the testing of the relevant IT general controls

and IT application controls.

Locations

Oxford Instruments plc’s operations are spread over a number of different geographical locations.

The group engagement team visited locations in three countries out of a total of twenty-three.

Our teams (including component teams) conducted procedures in Oxford Instruments plc’s

locations in UK, United States of America, Germany and Japan.

In addition, our teams worked remotely, holding calls and video conferences with local

management, and with digital information obtained from Oxford Instruments plc.

203

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Changes from the prior year

As a result of the International Standard on Auditing (UK) 600 (Revised), there has been a change

in number of components scoped in and the scope of components. The change in the group audit

scope from the prior year is the decrease in the number of components where procedures on one

or more classes of transactions, account balances or disclosures on seven components compared

to the eight components in the prior year. This included the two overseas entities acquired in

the current and prior period, replacing one of the US entities, in line with cyclical rotation of

overseas components.

In the current year, the component team located in Japan performed procedures over one or more

classes of transactions, account balances or disclosures in respect of Japanese entity. In the prior

year a full scope audit was performed. This change in scope is as a result of a more risk-based

audit approach being taken.

Working with other auditors

As Group auditor, we determined the components at which audit work was performed, together

with the resources needed to perform this work. These resources included component auditors,

who formed part of the group engagement team as reported above. As Group auditor we are solely

responsible for expressing an opinion on the financial statements.

In working with these component auditors, we held discussions with component audit teams on the

significant areas of the group audit relevant to the components based on our assessment of the

group risks of material misstatement. We issued our group audit instructions to component auditors

on the nature and extent of their participation and role in the group audit, and on the group risks of

material misstatement.

We directed, supervised and reviewed the component auditors’ work. This included holding

meetings and calls during various phases of the audit, and reviewing component auditor

documentation either in person or remotely, and evaluating the appropriateness of the audit

procedures performed and the results thereof.

Independent auditor’s report to the members of Oxford Instruments plc continued

Climate change

Our work on the assessment of potential impacts on climate-related risks on the Group’s operations

and financial statements included:

• Enquiries and challenge of management and those charged with governance to understand

the actions they have taken to identify climate-related risks and their potential impacts on the

financial statements and adequately disclose climate-related risks within the annual report;

• Our own qualitative risk assessment taking into consideration the sector in which the Group

operates and how climate change affects this particular sector;

• Involvement of climate-related experts in evaluating managements risk assessment; and

• Review of the minutes of Audit and Risk Committee meetings and Sustainability Committee

meetings and other papers related to climate change and performed a risk assessment as

to how the impact of the Group’s commitment as set out in the Task Force on Climate-related

Financial Disclosures (TCFD) Report may affect the financial statements and our audit.

We challenged the extent to which climate-related considerations, including the expected cash

flows from the initiatives and commitments have been reflected, where appropriate, in the Directors’

going concern assessment and viability assessment.

We also assessed the consistency of management’s disclosures included as ‘Other Information’ on

pages 52 to 60 with the financial statements and with our knowledge obtained from the audit.

Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters that

were materially affected by climate-related risks and related commitments.

204

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed

risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and

directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide

a separate opinion on these matters.

Key audit matter How the scope of our audit addressed the key audit matter

Revenue

recognition

(Revenue:

£500.6million

(2024: £470.4

million))

Material

Accounting policies

(p) and note 1

Given the nature of the products’ varying shipping terms and installation

arrangements, across the various divisions, there are manual

procedures involved in determining when control has passed, and

therefore revenue recognised. This is assessed by two factors: when

International Commercial Terms (“Incoterms”) have been met and when

the installation element of the sale has been completed.

Our procedures included:

Testing, on a sample basis, whether specific product revenue transactions in period 12, including those

within accrued income balances at the year end, had been recognised in the appropriate period.

Each sampled item was tested by assessing the nature of products and the terms of sale within the

associated contracts. Revenue recognition was tested by confirming relevant Incoterms to supporting

evidence, including installation acceptances or shipping/delivery dates to carrier, as appropriate.

Testing, on a sample basis, credit notes issued after the year-end, for evidence that related revenue for the

year under audit should be reduced.

Critically reviewed journals and other adjustments around the year end where they impact revenue to

ensure they are supported and appropriate.

Key observations:

Based on the work performed, we consider revenue, in all material aspects, to be appropriately recognised

in the correct period.

Independent auditor’s report to the members of Oxford Instruments plc continued

205

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Key audit matter How the scope of our audit addressed the key audit matter

Inventory

provisioning

(Inventories:

£99.1million

(2024: £108.1

million))

Material accounting

policies (b) and (i)

and note 15

During our audit, we identified inventory provisioning, specifically over

raw materials, as a key audit matter due to the inherent complexity

of the group’s inventory provision calculations and the significant

judgments made by management in determining the appropriate level

of provision required.

The complexity in inventory provisioning for this manufacturing group

arises from a variety of factors, including the diverse range of products,

the stages of production, and the estimation processes required to

assess potential obsolescence.

Slow-moving and obsolete inventory provision (SMOP) is generally

system generated and determined with respect to the usage of the

particular item of inventory over a period of time; and in the case of

demonstration stock; the ageing of inventory. The system generated

SMOP does not consider strategic purchases or situations where

customers no longer need the product or changes in specifications.

As a result, there are manual interventions incorporated into the

estimate, leading to a high degree of subjectivity. The provision for

raw materials in particular is significant in the subsidiaries that produce

products at greater volumes.

Whilst historically the annual movement in provisions held over

inventory are low, the amounts cumulatively held on the statement

of financial position are significant, and therefore any changes in

assessments over valuations could have a material income

statement impact.

We critically reviewed and challenged the assumptions and methodologies used by management in the

calculation of inventory provisions, including an assessment of historical data and trends. The inputs that

management has used for the assumptions and methodologies have been tested to determine whether

those assumptions were appropriate.

We critically challenged management’s assessment of those provisions by obtaining evidence to support

management’s assessment. These included discussions with engineers and other members outside of the

finance team, to determine any changes in the status of each of the inventory lines, including obsolescence.

We have assessed the completeness over these provisions, by reviewing the subsequent sale of finished

items held within year-end inventory, and reviewed items held within raw materials to ensure that they

are still used within the business, and to consider whether there is evidence that an inventory provision is

required. Where we have become aware of changes in the pattern of customer orders through our inquiries

and other procedures performed; we have challenged management as to whether these changes in

circumstances may indicate additional provisions required.

We performed a retrospective review of the prior year inventory provisions held by the group, to assess

the reliability of the estimation process.

In addition to all of the procedures above, for certain components where ageing is used to calculate

provisions, we have assessed the appropriateness of the basis of the provision. We have also reviewed

these inventory provisions made by management, by agreeing the invoice date which was used to

calculate the age of inventory to supplier invoices, and recalculated the provisions to determine the

accuracy of the provision calculations.

Key observations:

Based on the work performed, we consider the inventory provision assessed by management to

be reasonable.

Independent auditor’s report to the members of Oxford Instruments plc continued

206

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Key audit matter How the scope of our audit addressed the key audit matter

Valuation of Group

goodwill (Andor

CGU)

The Group’s

accounting

estimates and

policies relating

to the impairment

of the carrying

value of goodwill

are shown in

the material

accounting policies

section ((b) and (k))

with the supporting

disclosures outlined

in note 13.

Management exercises significant judgement in determining the

underlying assumptions used in the impairment review of the Group’s

cash-generating units (“CGUs”).

These assumptions include the determination of the discount rate, CGU

forecast performance including revenue growth, adjusted operating

profit growth, and cash conversion over the measurement period.

Due to increased risk factors for the Andor CGU including poor

performance against budget, and the significance of the impairment

charge in the year, we assessed the risk on impairment to be significant

for the Andor CGU, impacting Group goodwill.

Due to these factors, we considered the valuation of Group goodwill

(Andor CGU) and the related disclosures to be a key audit matter.

We have performed the following procedures over the impairment assessment performed by management

on the valuation of goodwill on consolidation:

• We have assessed management’s determination of the Andor CGU against the criteria of IAS 38.

We also confirmed the carrying value of the CGU, and the allocation of goodwill and net assets of the

Andor CGU to the underlying consolidation, which we have performed detailed testing on.

• We have obtained, reviewed and challenged the impairment model prepared by management including

confirming their arithmetic accuracy and obtaining an understanding of the assumptions included within

the CGU forecasts.

• With the assistance of our internal valuation experts we have reviewed and assessed the

appropriateness of the post-tax weighted average cost of capital rate applied. We independently

recalculated the CGU specific post-tax weighted average cost of capital rate, based on applicable

gearing, risk and equity premiums and compared this to the rate used by management.

• We have performed retrospective review of the performance of the Andor CGU in the current year in

comparison to the budget for FY25, to inform our assessment and challenge of the assumptions applied

in the forecast.

• We challenged and assessed the appropriateness of the Andor CGU level FY26 budgets and the

expected growth rates and cash conversion assumptions within the models through agreement to

supporting documentation, for example: to confirmed orders, post year end sales, and results, and

historical performance data.

• We have challenged management on the assumptions used in their budgets and forecasts, applying

further sensitivities to test their robustness.

• Sensitivities that have been applied by management have been challenged and compared against

sensitivities deemed reasonable by the audit team ensuring that the current economic environment has

been taken into consideration.

• We have reviewed the relevant Group disclosures to assess if the relevant assumptions and sensitivity

conclusions have been correctly summarised by management based on their assessment performed.

Key observations:

We considered the judgements made by management in the impairment assessment of the Andor CGU,

and the related disclosures, to be reasonable.

Independent auditor’s report to the members of Oxford Instruments plc continued

207

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating

the effect of misstatements. We consider materiality to be the magnitude by which misstatements,

including omissions, could influence the economic decisions of reasonable users that are taken on

the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed

materiality, we use a lower materiality level, performance materiality, to determine the extent of testing

needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial

as we also take account of the nature of identified misstatements, and the particular circumstances

of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a

whole and performance materiality as follows:

Group financial statements Parent company financial statements

2025

£m

2024

£m

2025

£m

2024

£m

Materiality 3.30 3.50 3.10 3.15

Basis for determining

materiality

5% of Profit

before tax

5% of Profit

before tax

Lower of 2%

of net assets and

95% of group

materiality

Lower of 2%

of net assets and

90% of group

materiality

Rationale for the

benchmark applied

As a trading Group, profit before tax

is considered to be the most relevant

GAAP measure for the users of the

financial statements.

Net assets is considered to be the

most appropriate benchmark as

the parent entity is an investment

holding company and does not trade.

Materiality was capped at 95% (2024:

90%) of group materiality.

Performance

materiality

2.30 2.28 2.19 2.04

Basis for

determining

performance

materiality

70% of

materiality

65%

of materiality

70% of

materiality

65%

of materiality

Rationale for the

percentage applied

for performance

materiality

We set performance materiality taking into account our assessment of the

control environment, the history of misstatements, along with management’s

attitude to proposed adjustments. This has increased to 70% in the current

year based on our assessment of the aggregation risk in the current year.

Component performance materiality

For the purposes of our Group audit opinion, we set performance materiality for each component

of the Group, apart from the Parent Company whose materiality and performance materiality are

set out above, based on a percentage of between 5% and 95% (2024: 30% and 90%) of Group

performance materiality dependent on a number of factors on the size and our assessment of the

risk of material misstatement of those components. Component performance materiality ranged

from £0.1m to £2.19m (2024: £1.1m to £3.15m). The lower component materiality threshold in the

current year relates to components where specific procedures were performed only over cash.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences

in excess of £100,000 (2024: £80,000) and £95,000 (2024: £70,000) for the group and parent

company financial statements, respectively. We also agreed to report differences below this

threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other information. The other information comprises the

information included in the document entitled ‘Report and Financial Statements’ other than the

financial statements and our auditor’s report thereon. Our opinion on the financial statements does

not cover the other information and, except to the extent otherwise explicitly stated in our report,

we do not express any form of assurance conclusion thereon. Our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the course of the audit, or otherwise

appears to be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this gives rise to a material misstatement in

the financial statements themselves. If, based on the work we have performed, we conclude that

there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Independent auditor’s report to the members of Oxford Instruments plc continued

208

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Corporate governance statement

The UK Listing Rules require us to review the Directors’ statement in relation to going concern,

longer-term viability and that part of the Corporate Governance Statement relating to the parent

company’s compliance with the provisions of the UK Corporate Governance Code specified for

our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following

elements of the Corporate Governance Statement is materially consistent with the financial

statements or our knowledge obtained during the audit.

Going concern

and longer-term

viability

• The Directors’ statement with regards to the appropriateness of adopting the

going concern basis of accounting and any material uncertainties identified

set out on page 80;

• The Directors’ explanation as to their assessment of the Group’s prospects,

the period this assessment covers and why the period is appropriate set out

on page 80; and

• The Directors’ statement on whether they have a reasonable expectation

that the group will be able to continue in operation and meet its liabilities set

out on page 80.

Other Code

provisions

• Directors’ statement on fair, balanced and understandable set out on page

144;

• Board’s confirmation that it has carried out a robust assessment of the

emerging and principal risks set out on pages 71 to 72;

• The section of the annual report that describes the review of effectiveness

of risk management and internal control systems set out on pages 69 to 78;

and

• The section describing the work of the audit committee set out on pages

109 to 115.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the

audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and

matters as described below.

Strategic report

and Directors’

report

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the

financial year for which the financial statements are prepared is consistent

with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in

accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Group and Parent

Company and its environment obtained in the course of the audit, we have not

identified material misstatements in the Strategic report or the Directors’ report.

Directors’

remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has

been properly prepared in accordance with the Companies Act 2006.

Matters on

which we

are required

to report by

exception

We have nothing to report in respect of the following matters in relation to

which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Parent Company,

or returns adequate for our audit have not been received from branches not

visited by us; or

• the Parent Company financial statements and the part of the Directors’

remuneration report to be audited are not in agreement with the accounting

records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not

made; or

• we have not received all the information and explanations we require for

our audit.

Independent auditor’s report to the members of Oxford Instruments plc continued

209

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Responsibilities of Directors

As explained more fully in the Directors’ Responsibilities statement, the Directors are responsible for

the preparation of the financial statements and for being satisfied that they give a true and fair view,

and for such internal control as the Directors determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and

the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of accounting unless the Directors

either intend to liquidate the Group or the Parent Company or to cease operations, or have no

realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s

report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered

material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud. These procedures were incorporated

into our instructions to the component auditors for the material and significant components not

audited by the Group engagement team, and the results included as part of our review of their

work. The extent to which our procedures are capable of detecting irregularities, including fraud

is detailed below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Group and the industry in which it operates;

• Discussion with management, in-house legal counsel, internal audit and those charged

with governance; and

• Obtaining an understanding of the Group’s policies and procedures regarding compliance

with laws and regulations,

We considered the significant laws and regulations to be the Companies Act 2006, the relevant tax

legislations, UK Listing Rules, along with the relevant financial reporting framework (UK adopted

international accounting standards, United Kingdom Accounting Standards, including Financial

Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted

Accounting Practice)).

The Group is also subject to laws and regulations where the consequence of non-compliance could

have a material effect on the amount or disclosures in the financial statements, for example through

the imposition of fines or litigations. We identified such laws and regulations to be the bribery

legislation, modern slavery and data protection.

Our procedures in respect of the above included:

• Review of minutes of meetings of those charged with governance for any instances of

non-compliance with laws and regulations;

• Review of correspondence with regulatory and tax authorities for any instances of

non-compliance with laws and regulations;

• Review of financial statement disclosures and agreeing to supporting documentation;

• Involvement of tax specialists in the audit; and

• Review of legal expenditure accounts to understand the nature of expenditure incurred.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including

fraud. Our risk assessment procedures included:

• Enquiry with management and those charged with governance regarding any known or

suspected instances of fraud;

• Obtaining an understanding of the Group’s policies and procedures relating to:

– Detecting and responding to the risks of fraud; and

– Internal controls established to mitigate risks related to fraud.

• Review of minutes of meetings of those charged with governance for any known or suspected

instances of fraud;

• Discussion amongst the engagement team as to how and where fraud might occur in the

financial statements;

• Performing analytical procedures to identify any unusual or unexpected relationships that

may indicate risks of material misstatement due to fraud; and

• Considering remuneration incentive schemes and performance targets and the related

financial statement areas impacted by these.

Independent auditor’s report to the members of Oxford Instruments plc continued

210

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Based on our risk assessment, we considered the areas most susceptible to fraud to be

management override of controls, revenue recognition and key areas of estimation uncertainty

or judgement.

Our procedures in respect of the above included:

• Testing a sample of journal entries throughout the year, which met defined risk criteria, by

agreeing to supporting documentation;

• Assessing significant estimates made by management for bias in particular in respect of the

inventory provisioning, intangible assets impairment review, assumptions used in determining

adjusting items, FemtoTools and First Light acquisitions review, revenue recognition of bespoke

NanoScience contracts in relation to sale of QX systems, and assumptions used in determining

the defined benefit pension liability;

• In response to the risk of fraud in revenue recognition, the procedures set out in the key audit

matters section above; and

• Review of the consolidation and, in particular, any late journals posted at consolidated level or

to the financial statements.

We also communicated relevant identified laws and regulations and potential fraud risks to all

engagement team members, who were all considered to have appropriate competence and

capabilities, and remained alert to any indications of fraud or non-compliance with laws and

regulations throughout the audit. For component auditors, we also reviewed the result of their

work performed in this regard.

Our audit procedures were designed to respond to risks of material misstatement in the financial

statements, recognising that the risk of not detecting a material misstatement due to fraud is higher

than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment

by, for example, forgery, misrepresentations or through collusion. There are inherent limitations

in the audit procedures performed and the further removed non-compliance with laws and

regulations is from the events and transactions reflected in the financial statements, the less likely

we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website

at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Parent Company’s members, as a body, in accordance with

Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we

might state to the Parent Company’s members those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept

or assume responsibility to anyone other than the Parent Company and the Parent Company’s

members as a body, for our audit work, for this report, or for the opinions we have formed.

SANDRA THOMPSON (SENIOR STATUTORY AUDITOR)

For and on behalf of BDO LLP, Statutory Auditor

Reading, United Kingdom

12 June 2025

BDO LLP is a limited liability partnership registered in England and Wales

(with registered number OC305127).

Independent auditor’s report to the members of Oxford Instruments plc continued

211

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

Historical financial summary

2021

£m

2022

£m

2023

£m

2024

£m

2025

£m

Consolidated Statement of Income

Revenue 318.5 367.3 444.7 470.4 500.6

Adjusted operating profit

56.7 66.3 80.5 80.3 82.2

Intellectual property litigation settlement (0.4) (0.4) – 3.3 –

Transaction-related costs (0.4) (0.4) – (1.0) (1.9)

Impairment of goodwill – – – – (26.0)

Release of provision on disposal – – 0.4 – –

Adjustments relating to defined benefit pension schemes – – – (0.4) –

WITec post-acquisition gross margin adjustment – (1.7) (0.5) – –

Restructuring costs and charges associated with

management changes – – (0.4) (3.7) (7.8)

Intellectual property litigation costs – – (0.5) (0.4) –

Impairment of capitalised development costs (1.3) – (0.8) – –

Amortisation and impairment of acquired intangibles (8.4) (9.5) (9.3) (9.1) (9.1)

Fair value movement on financial derivatives 6.4 (6.4) 3.0 (0.7) (0.3)

Release of contingent consideration – – – – 2.1

Operating profit 53.0 48.3 72.4 68.3 39.2

Net financing (costs)/income (0.8) (0.7) 1.1 3.0 0.6

Profit before taxation 52.2 47.6 73.5 71.3 39.8

Income tax expense (10.4) (9.0) (14.9) (20.6) (13.8)

Profit for the year 41.8 38.6 58.6 50.7 26.0

Adjusted profit before tax 55.9 65.9 82.0 83.3 83.4

2021

£m

2022

£m

2023

£m

2024

£m

2025

£m

Consolidated Statement of Financial Position

Property, plant and equipment 21.1 31.7 59.3 80.5 85.6

Right-of-use assets 7.3 17.9 31.4 32.4 29.9

Intangible assets 122.6 140.7 132.1 138.2 121.8

Long-term receivables – – 0.5 1.3 1.0

Deferred and current tax 3.9 (5.4) (2.9) (5.8) (2.2)

Inventories 58.7 65.3 81.4 108.1 99.1

Trade and other receivables 76.0 95.8 115.2 117. 2 128.4

Trade and other payables (121.4) (141.0) (160.6) (166.3) (158.3)

Lease liabilities – current (2.6) (3.5) (5.2) (4.8) (4.5)

Net assets excluding net cash 166.6 201.5 251.2 300.8 300.8

Cash and cash equivalents 128.0 96.4 112.7 97.8 94.1

Bank overdrafts (30.4) (8.7) (11.2) (12.3) (8.8)

Bank borrowings – (1.8) (1.3) (1.7) (0.9)

Net cash 97.6 85.9 100.2 83.8 84.4

Lease liabilities – non-current (4.9) (14.9) (26.2) (28.6) (26.7)

Provisions (9.4) ( 7.8) (7.6) (6.4) (5.9)

Retirement benefit obligations 16.3 51.7 26.4 16.1 23.5

Net assets employed/capital and reserves

attributable to the company’s equity holders 266.2 316.4 344.0 365.7 376.1

212

Oxford Instruments plc

Annual Report 2025

Financial StatementsGovernanceStrategic ReportOverview

2021

£m

2022

£m

2023

£m

2024

£m

2025

£m

Cash flows

Net cash from operating activities 42.0 49.1 66.5 42.4 49.1

Net cash used in investing activities (5.1) (45.6) (36.4) (37.5) (27.4)

Net cash used in financing activities (30.5) (15.7) (16.6) (18.0) (18.4)

Net increase/(decrease) in cash equivalents 6.4 (12.2) 13.5 (13.1) 3.3

pence pence pence pence pence

Per ordinary share

Earnings – continuing 72.8 67.1 101.6 87.7 44.8

Adjusted earnings

78.6 94.3 112.7 109.0 112.4

Dividends 17.0 18.1 19.5 20.8 22.2

Employees

Average number of employees 1,619 1,878 2,027 2,244 2,334

1. Adjusted numbers are stated to give a better understanding of the underlying business performance. Details of adjusting

items can be found in Note 2 to the Group Financial Statements.

Historical financial summary continued

CBP030752

Printed by a CarbonNeutral® Company certified to ISO 14001 environmental management system.

Printed on material from well-managed, FSC® certified forests and other controlled sources.

100% of the inks used are HP Indigo ElectroInk which complies with RoHS legislation and meets the chemical requirements

of the Nordic Ecolabel (Nordic Swan) for printing companies, 95% of press chemicals are recycled for further use and, on

average 99% of any waste associated with this production will be recycled and the remaining 1% used to generate energy.

The paper is Carbon Balanced with World Land Trust, an international conservation charity, who offset carbon emissions

through the purchase and preservation of high conservation value land. Through protecting standing forests under threat

of clearance, carbon is locked-in that would otherwise be released.

Oxford Instruments plc

Tubney Woods,

Abingdon,

Oxfordshire.

OX13 5QX.

t: +44(0)1865 393200

e: investors@oxinst.com