Slide 1: Final Results 2021
Final Results 2021 1 M arc h 2 0 2 2
Slide 2: Disclaimer
Disclaimer The information contained in this document is for background purposes This document does not constitute or form part of, and should not be only and does not purport to be full or complete. No reliance may or construed as, an offer, solicitation or invitation to sell or issue, or any shoul
Slide 3: A robust performance in a challenging environment
A robust performance in a challenging environment • Continued strategic progress • Strong demand for our products - Record orders and revenue with ongoing strong cash generation • Product supply maintained despite external challenges but constrained revenue and caused some temporary margin impact •
Slide 4: Financial Highlights
XP Fo XP Power Financial Highlights
Slide 5: Record orders, strong revenue growth, good cash generation
Record orders, strong revenue growth, good cash generation ORDERS GROSS MARGIN OPERATING PROFIT2 OPERATING CASHFLOW £343.4 million 45.1% £45.1 million CONVERSION2 +43% CER1 (210)bps +5% CER1 111% 2020: 117% REVENUE OPERATING MARGIN2 ADJUSTED DILUTED EPS2 NET DEBT3 £240.3 million 18.8% 176.3p £24.6 m
Slide 6: Summarised P&L
Summarised P&L 2021 2020 % Change % Change • Revenue growth of 10% at CER predominantly driven by @ CER SemiFab, in spite of challenges faced, but also non-repeat Revenue 240.3 233.3 3% 10% of COVID-19 related sales seen in 2020 Gross Margin 108.3 110.1 (2)% 5% Gross Margin % 45.1% 47.2% (2)% • Gros
Slide 7: SemiFab and Industrial Tech orders growth offset by expected Healthcare declines
SemiFab and Industrial Tech orders growth offset by expected Healthcare declines, all regions contributing to growth YoY change +81% +45% (5)% +43% YoY change +39% +28% +89% +43% at constant FX at constant FX 7
Slide 8: SemiFab revenue delivering significant growth, all regions showing growth
SemiFab revenue delivering significant growth, all regions showing growth YoY change YoY change at constant FX +46% +3% (15)% +10% at constant FX +8% +4% +30% +10% 8
Slide 9: Pressures on profit from supply chain challenges & exchange rates
Pressures on profit from supply chain challenges & exchange rates • Gross margin decreased to 45.1% from 47.2%, driven by temporary cost pressures from: ➢ Freight costs, both rate and mix of air versus sea freight ➢ Increased labour rates during the Vietnam lockdown ➢ Component shortages and pricing
Slide 10: Good cash generation, significant available liquidity
Good cash generation, significant available liquidity • Ongoing good cash conversion despite investing in working capital to meet customer demand and secure (6.5) 11.7 critical components (9.6) • Specific items includes legal and ERP implementation costs (5.5) • Further investments include capacity
Slide 11: 2022 Modelling Guidance
2022 Modelling Guidance CAPEX INTEREST EFFECTIVE TAX RATE c. £18.0m¹ c. £2.0m 17-20% CAP PROD DEV/CAP IT COST INFLATION COST SAVINGS c. £10.0m / £4.0m c. £4.0-6.0m c. £4.0-5.0m including pricing REVENUE OPERATING CASH FLOW NET DEBT / EBITDA H2 weighted Improved Working Capital <1x by 31 December 202
Slide 12: Business Update
XP Fo XP Power Business Update
Slide 13: Making progress delivering our focused power strategy
Making progress delivering our focused power strategy Develop a market leading range of competitive products Target accounts where we can add value Further enhance our global supply chain through investment in • Continue to deliver in capacity, systems and capability a period of challenging market e
Slide 14: XP Power growth drivers
XP Power growth drivers Rapid increase of electronic devices Digital transformation Long-term healthcare • More products need power converters • Increase in smart technology • Growing and aging global population • Pace of innovation • More sophisticated customer products • Healthcare infrastructure
Slide 15: Growth drivers support long term revenue growth
Growth drivers support long term revenue growth XP Group CAGR +12.3% 240.3 221.1 at constant currency1 192.6 194.6 54.9 Healthcare £ Millions CAGR +10.0% 65.9 159.4 43.0 43.3 129.7 39.8 Semi Fab 119.7 93.4 46.8 38.3 CAGR +43.0% 64.8 30.7 31.0 27.3 15.1 10.9 102.8 113.0 Industrial Tech 83.9 92.3 90.4
Slide 16: Sector dynamics
Sector dynamics INDUSTRIAL TECHNOLOGY SEMICONDUCTOR MANUFACTURING HEALTHCARE • 38% of revenue; Grew 3% (CER YoY) as markets recovered EQUIPMENT from COVID-19 related disruption but held back by • 39% of revenue; Grew 44% (CER YoY) with continued • 23% of revenue; Declined 15% (CER YoY) as COVID-19 c
Slide 17: Order demand momentum by sector 2019 through 2021
Order Demand momentum by sector 2019 through 2021 185.8 157.6 35.7 145.8 • No evidence of “double- 28.2 stocking” or “over ordering” £ Millions 114.5 50.4 112.2 • Significant long-term 100.4 84.8 26.5 21.9 61.8 momentum over previous 21.0 cycles 26.5 44.7 20.5 44.0 • Started 2022 with £217m of firm
Slide 18: Building on our global platform to support future growth
Building on our global platform to support future growth Expanding capacity in all production sites • In all LV, RF and HV sites • Added RF to China • “Customer value add” in Vietnam Adding further manufacturing facility in Asia • North-West Malaysia Stuttgart Sunnyvale • Build to be completed in ph
Slide 19: Strategic high voltage acquisitions will accelerate growth
Strategic high voltage acquisitions will accelerate growth and high voltage roadmap with new technologies • FuG and Guth founded over 70 years ago, well established proven businesses with strong reputations • Predominantly high voltage products in new markets in Semiconductor and Industrial Technolo
Slide 20: Further expansion of the XP Power portfolio and addressable market
Further expansion of the XP Power portfolio and addressable market • Total addressable market – 600kw circa $6bn with XP Power High Power 300kw only focused on attractive 200kw Market Size $3.5Bn sectors 100kw XP ~$250m Market Size $0.7Bn 70kw XP ~$45m • Long term market growth of 50kw circa 6% 10kw
Slide 21: Industrial Technology case study – Enabling our customers to deliver
Industrial Technology case study – Enabling our customers to deliver Customer Requirement: • Customer makes digital inkjet printers that use Ultraviolet (UV) light as part of the printing process • The UV light is generated by LEDs which require high power • Flexibility so it can be adjusted for dif
Slide 22: ESG Strategy in action
ESG Strategy in action Aligned to the United Nations’ • 2021 focus was on building on our platform to ensure ESG fully embedded in XP Power Sustainable Development Goals • Re-launched our Sustainability Council and workstream leads, reinforcing our internal sustainability structure. Sustainability t
Slide 23: Group Outlook 2022
Group Outlook 2022 • Enter the year with record order book driven by: ➢ Strong momentum in Semiconductor Manufacturing Equipment segment ➢ Exciting developments driving Industrial Technology ➢ Healthcare ahead of pre COVID-19 levels • Exposed to sectors benefitting from the long-term global mega tre
Slide 24: Questions and Answers
XP Fo XP Power Questions and Answers
Slide 25: Appendices
b.(.2 XP Power Appendices
Slide 26: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Dec-21 Dec-20 2021 2020 Change Total Non-Current Assets 150.5 135.2 Adjusted Operating Profit 45.1 46.0 -2% Cash 9.0 13.9 Non-cash items 11.7 12.6 Inventory 74.0 54.2 Change in working capital (6.5) (4.6) Trade receivables 30.8 30.2 Adjusted Operating Cash Flow 50.2 54.0
Slide 27: Market Data
Market Data Market ($ Millions) Size Share XP 2020 Revenue North Share of Asia Europe Total (£ Millions) America XP (%) Asia 1,513 1.7% Healthcare 5.5 20.6 28.9 55.0 23% Europe 775 10.3% Industrial Technology 11.2 43.7 37.1 92.0 38% North America 1,187 13.4% Semifab 15.1 3.0 75.2 93.3 39% Total 3,47
Slide 28: XP Power Investment Case
XP Power Investment Case Investing in Growing Markets Leadership and People • Exposed to high growth markets • Entrepreneurial culture • Strong Customer relationships • Employee Engagement • Balanced product portfolio • Able to attract and retain the best talent • Revenue annuity Attractive Margins
Slide 29: What makes XP Power successful?
What makes XP Power successful? Service and Support - Quality Product Offering Cost Key Differentiators: • A given and paramount for • Product has to solve the • Not the customers’ top • Large technical sales mission critical solutions customer’s power problem priority but product needs and work in