Slide 1: Interim Results 2021
Interim Results 2021 2 n d Au gu st 2 0 2 1
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: Strong first half performance
Strong first half performance • Robust order performance (+8%) driven by SemiFab and Industrial Technology sectors, offset by expected normalisation in Healthcare • Strong revenue performance (+14%) predominantly in SemiFab, where the momentum has continued, with early-stage recovery in Industrial T
Slide 4: 2021 H1 Highlights
XP Fo XP Power 2021 H1 Highlights
Slide 5: Record orders, strong revenue growth, good margins
Record orders, strong revenue growth, good margins ORDERS GROSS MARGIN OPERATING PROFIT2 OPERATING CASHFLOW £157.6 million 46.6% £23.2 million CONVERSION2 +17% CER1 +170bps +29% 113% 2020: 143% REVENUE OPERATING MARGIN2 ADJUSTED DILUTED EPS2 NET DEBT3 £119.9 million 19.3% 93.3p £20.3 million +23% CE
Slide 6: Current Sector dynamics
Current Sector dynamics INDUSTRIAL TECHNOLOGY SEMICONDUCTOR MANUFACTURING HEALTHCARE • 38% of revenue; Grew 5% (CER YoY) as markets start to EQUIPMENT recover from COVID-19 related disruption • 37% of revenue; Grew 62% (CER YoY) with continued • 25% of revenue; Grew 14% (CER YoY) driven by market gr
Slide 7: SemiFab and Industrial orders growth offset by expected Healthcare
SemiFab and Industrial orders growth offset by expected Healthcare, all regions contributing to growth ORDERS ORDERS YoY change YoY change +40% +50% (37)% +17% +7% +27% +51% +17% at constant FX at constant FX 7
Slide 8: SemiFab revenue recording significant growth, all regions showing double digit growth
SemiFab revenue recording significant growth, all regions showing double digit growth REVENUE REVENUE YoY change YoY change +62% +5% +14% +23% +26% +19% +23% +23% at constant FX at constant FX 8
Slide 9: Increase in Adjusted Operating Profit
Increase in Adjusted Operating Profit • Gross margin increased to 46.6% from 44.9%, driven by operating leverage on higher volumes and cost savings from transferring manufacturing to Asia from North America • Raw material and freight costs starting to see increases • Operating expense increases prim
Slide 10: Excellent cash generation, significant available liquidity
Excellent cash generation, significant available liquidity • High cash conversion despite investing in working capital to meet customer demand and secure critical components (3.6) • Specific items includes legal costs and ERP 6.7 (4.6) implementation costs (2.2) • Further investments include replace
Slide 11: 2021 Modelling Guidance
2021 Modelling Guidance CAPEX/CAP PROD DEV/CAP IT INTEREST EFFECTIVE TAX RATE £6.0m / £9.0m / £6.0m c. £1.5m 16-18% CASH SPECIFIC ITEMS COST INFLATION COST SAVINGS c. £5.0-6.0m c. £2.0-3.0m c. £1.5-2.0m REVENUE OPERATING CASH FLOW NET DEBT / EBITDA Modestly H2 weighted Improved Working Capital c. 0.
Slide 12: Business Update
XP Fo XP Power Business Update
Slide 13: Our Growth focused strategy is delivering
Our Growth focused strategy is delivering Develop a market leading range of competitive products Target accounts where we can add value We have performed well in Further enhance our global supply chain through investment in a period of continued capacity, systems and capability macroeconomic uncerta
Slide 14: A leading Power Business exposed to attractive long term growth markets
A leading Power Business exposed to attractive long term growth markets Growing markets • Global GDP growth; • Growth in the use of electronics requiring a power converter; • Exposure to ‘secular’ growth markets IoT, AI • Global population that is both increasing and ageing, coupled with advances in
Slide 15: XP Power Growth Drivers
XP Power Growth Drivers Proliferation of electronic devices Digital transformation Long term demand for • More and more products require power • Silicon content growing rapidly as smart Healthcare conversion units technology increasingly embedded: • Global population growing and ageing • Pace of inn
Slide 16: Longer term Revenue performance
Longer term Revenue performance XP Group CAGR +12.3% High level Trends 239.8 • Increased connectivity of the 220.6 power converter to the customer's at constant currency1 192.2 194.1 59.9 Healthcare equipment £ Millions 65.7 CAGR +11.7% 159.1 42.9 43.2 • Higher power 129.7 Semi Fab • Higher engineer
Slide 17: Capital Allocation
Capital Allocation Maintain a strong financial position and provide flexibility for growth 1 Maximise organic investment including R&D to support growth A well proven, 2 Continue our progressive dividend policy, maintaining cover consistent range of 2.0-2.5 of adjusted earnings model 3 Continue to s
Slide 18: ESG Strategy
ESG Strategy Our Sustainability strategy Aligned to UN SDGs • Produce quality products that are safe, more efficient, and solve our customers’ power problems; • Minimise the impact the Group and its products have on the environment; • Adopt responsible sourcing practices considering social and envir
Slide 19: Group Outlook 2021
Group Outlook 2021 • Enter second half with record order book driven by: ➢ Strong momentum in Semiconductor Manufacturing Equipment segment ➢ Continued recovery in Industrial Technology ➢ Healthcare growing ahead of pre COVID-19 levels • Continued pressure on supply chain with increased raw material
Slide 20: Questions and Answers
XP Fo XP Power Questions and Answers
Slide 21: Appendices
b.(.2 XP Power Appendices
Slide 22: Detailed P&L and Balance Sheet
Detailed P&L and Balance Sheet H1 2021 H1 2020 Jun-21 Dec-20 Revenue 119.9 105.1 Total Non-Current Assets 138.3 135.2 Cash 8.5 13.9 Gross Margin 55.9 47.2 Inventory 58.3 54.2 Gross Margin % 46.6% 44.9% Trade receivables 34.1 30.2 Operating expenses (32.7) (29.2) Other 7.4 8.7 Operating Profit (adjus
Slide 23: Cash flow
Cash flow H1 2021 H1 2020 Change Adjusted Operating Profit 23.2 18.0 29% Non-cash items 6.7 5.5 Change in working capital (3.6) 2.2 Adjusted Operating Cash Flow 26.3 25.7 2% Specific items (4.6) (4.2) Cash generated from Operations 21.7 21.5 1% Income tax paid, net of refund (2.1) (0.6) Payment of L
Slide 24: 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 25: What makes XP Power successful?
What makes XP Power successful? Service and Support - Quality Product Offering Cost Key Differentiators: • Quality is a given and • Product has to solve the • Not the customers’ top • Large technical sales paramount for mission customer’s power problem priority but product needs critical solutions a
Slide 26: Market Data
Market Data Market ($ Millions) Size Share XP 2020 Revenue North Share of Asia Europe Total (£ Millions) America XP (%) Asia 1,400 1.4% Healthcare 5.1 21.0 43.2 69.3 30% Europe 772 8.5% Industrial Technology 14.2 42.8 37.4 94.4 40% North America 1,129 10.6% Semifab 1.8 1.2 66.6 69.6 30% Total 3,301
Slide 27: Product Portfolio – Significant growth opportunity
Product Portfolio – Significant growth opportunity Acquisitions in high voltage (EMCO and Glassman) and Radio Frequency (RF - Comdel) power expand our addressable market from $2.7Bn to $5.0Bn One of few companies in the world who can provide solutions right across the power and voltage spectrum
Slide 28: Typical Product Lifecycle
Typical Product Lifecycle • Substantial revenue REVENUE HISTORY ECM40/60 SERIES (£ MILLIONS) annuity 7.4 7.1 • Design in cycle typically 18 6.7 6.2 6.1 months (longer in 5.6 healthcare) 5.4 5.4 5.3 5.2 4.8 • 2009 and 2012 dips due to 4.6 4.1 4.1 market downturn and not 3.7 typical 2 0.9 0.2 2004 200
Slide 29: xppower.com
D2 XP Power POWERING THE WORLD'S CRITICAL SYSTEMS