Renishaw LON: RSW executives told investors at a Capital Markets Day in London that the engineering technology group is seeing stronger momentum across established product lines and emerging businesses, with artificial intelligence infrastructure, semiconductor manufacturing, defense spending and additive manufacturing among the key growth drivers highlighted.
Chief Executive Will Lee said it was “a really exciting time for Renishaw,” pointing to “a really strong portfolio of core established businesses” and “a real acceleration” in emerging businesses that are central to the company’s strategy. Lee said decisions made in recent years to focus the business are “really starting to pay dividends.”
John, who said he had been with the company for nearly three months, described Renishaw as having “great people,” a “proud history of technical innovation and commercial success,” and “bucket loads of unrealized potential.”
Financial Targets Remain in Focus
John reviewed Renishaw’s published financial metrics, including high single-digit through-cycle revenue growth, an operating profit margin target of 20% or more, operating cash conversion of more than 70%, and a 15% post-tax return on invested capital.
He said the company is already delivering within its target threshold for revenue growth, supported by core businesses in attractive markets, fast-growing emerging businesses and a product innovation pipeline. On margins, John said progress appeared less clear, with margins “flat at around 16%” versus the 20% target, but added that currency had been a “stiff headwind” and that the company is seeing underlying improvement from cost management and operating leverage.
Looking ahead, John said Renishaw sees further margin opportunity from volume growth, smarter pricing, simplification and automation. He emphasized that “smarter pricing” did not necessarily mean higher pricing, but rather choosing the right opportunities.
On cash generation, John said cash conversion has historically been affected by the business cycle, but that he sees scope for “higher and more consistent cash generation” through greater internal focus, management incentives, a review of capital expenditures and working capital. He said he would take a “hard look” at non-production capital expenditure, citing property spending as an example, but said the company would not make arbitrary cuts that could harm investment or customer relationships.
Innovation Pipeline Targets Sensors, Encoders and Shop Floor Metrology
Lee said innovation remains central to Renishaw’s strategy, which is organized around growing in existing markets, increasing technology value and extending into new markets. He said the company is also examining lower-cost “good enough” products for China, where local competition is emerging at attractive price points.
In industrial metrology, Lee highlighted new machine tool probes supported by a new radio communication protocol. One is a compact 2D scanning probe designed to allow customers to conduct more measurement on machine tools, including scanning a cylinder bore rather than taking slower touch points. Another is a thickness probe aimed at applications such as aerospace, where measuring on the machine tool could reduce the need to move parts to a coordinate measuring machine and then back for additional machining.
For coordinate measuring machines, Lee discussed PH20+, which he said offers capabilities of the PH10 while enabling faster moves, sitting between legacy indexing heads and Renishaw’s high-end REVO system. He said feedback from end users and machine builders had been positive.
In position encoders, Lee pointed to growing demand in semiconductor manufacturing, particularly advanced packaging, for measurement beyond standard position data, including height and pitch. He also discussed a new laser encoder for wafer inspection, designed to improve measurement performance and simplify maintenance through detachable fibers.
Lee said Renishaw’s Equator-X shop floor metrology platform and MODUS IM Equator programming software are seeing strong customer pull. Equator-X removes the need for a master compare process, while MODUS IM Equator is intended to simplify programming and become a common platform across Equator, CMM sensors and machine tool inspection.
Lee also said the company’s ASTRiA inductive encoder has drawn significant customer interest, particularly in defense applications, because of its accuracy, ruggedness and ease of alignment. He said Renishaw is investing in additional sizes and manufacturing ramp-up after customers asked for variants beyond the initial launch size.
Additive Manufacturing Growth Highlighted
Louise Callanan, Director of Specialized Technologies, said additive manufacturing is part of Renishaw’s newly formed Specialized Technologies segment, alongside neuro and spectroscopy. She said additive manufacturing is the largest part of that segment and the fastest-growing product line so far in fiscal 2026.
Callanan said Renishaw focuses on metal additive manufacturing, specifically laser powder bed fusion, through its RenAM 500 series. She said the company’s “simplify and focus” strategy has centered the product range on a compact, configurable mid-size system with four lasers.
Callanan said additive manufacturing is gaining traction because of design freedom, lightweighting, part consolidation, supply chain flexibility and improving cost-per-part. She cited early adoption in medical and aerospace, where performance benefits justified the technology, and said improvements in productivity are opening additive manufacturing to more applications.
Matt Parks, Strategic Development Manager for the Additive Manufacturing Group, discussed innovations including an optical system verification kit, Tempus technology and Libertas software. Parks said Tempus can eliminate dead time when lasers are not firing and in some applications can halve production cycle time. Libertas, he said, gives users more freedom to optimize printing parameters and can reduce support material, opening more part geometries to additive manufacturing.
Parks cited customer applications including suppressors, medical tibial trays and micro gas turbine components. He said the common theme is a combination of product performance, supply chain advantages and manufacturing cost effectiveness.
Renishaw is also working on a next-generation additive manufacturing platform aimed at improving production economics through managing system cost, increasing productivity and reducing downtime between builds through automation. Parks said the company is continuing to scale manufacturing capability at its Miskin site in South Wales, with floor capacity not currently a constraint and allocation already supporting double current demand.
Semiconductors, Defense and China Shape Market Outlook
Marc Saunders said Renishaw’s business portfolio gives it exposure to a wide range of markets. Industrial metrology remains the largest segment, position measurement is delivering double-digit long-term growth and Specialized Technologies is growing fastest this year, driven by additive manufacturing.
Saunders said Renishaw’s total addressable market has grown from just over £6 billion last year to around £7 billion today, helped by market growth and diversification, including inductive encoders. He said markets across the portfolio are growing by more than 5% on average through the cycle.
Semiconductor manufacturing equipment now represents more than 20% of group turnover this year, Saunders said. He also noted strength in aerospace and defense, especially defense, and growth in energy, where Renishaw metrology products are being used in manufacturing backup generators for data center infrastructure.
Lee earlier said AI data center investment is flowing through Renishaw’s encoder business, as the company supplies encoders to equipment makers serving semiconductor production. He said Renishaw and its customers do not know how long the AI-related cycle will last, adding that the company’s focus is to support customer manufacturing ramp-ups.
In China, Saunders said Renishaw has strong market positions and deep customer relationships built over more than 30 years, but local competitors offering lower-cost products are creating both a threat and an opportunity. Renishaw’s response, he said, is to develop differentiated products and entry-level products using a local Chinese supply chain.
In the U.S., Saunders said Renishaw is seeing strong demand for high-value metrology capital equipment and additive manufacturing. He said tariffs have been managed through pricing, with operating margins maintained.
During a closing Q&A, executives said the 20% operating margin target remains in place. John said there is “a lot going on in margin,” including efficiency savings, pricing and volume, and said he feels “good about getting past 20%.”
About Renishaw LON: RSW
We are a world leader in measuring and manufacturing systems.
Our products give high accuracy and precision, gathering data to provide customers and end users with traceability and confidence in what they're making. This technology also helps our customers to innovate their products and processes.
We are guided by our purpose: Transforming Tomorrow Together. This means working with our customers to make the products and the materials that are going to be needed for the future.
We believe that our purpose is incredibly relevant in today's environment where the pace of change in technology is faster than ever.
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