Slide 1: Interim Results 2019
Interim Results 2019 xppower.com XP Power Interim Results 2019 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this document is for Investors should not place undue reliance on such background purposes only and does not purport to be full forward-looking statements, and XP Power Limited does or complete. No reliance may or should be placed by any not undertake any obli
Slide 3: Operational Highlights
HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Growth in Healthcare, Industrial and Technology sectors remain robust • Ongoing weakness in Semiconductor equipment manufacturing sector due to cyclical downturn • Gross margin impacted by higher US trade tariffs imposed on Chinese goods and product mix • Complete
Slide 4: Financial Highlights
HIGHLIGHTS FINANCIAL HIGHLIGHTS • Reported order intake down 1% • Annualisation of 2018 investments and lower • Like-for-like (‘LFL’) orders down 10% gross margins result in adjusted operating profit • +3% contribution from Glassman acquisition down 12%, 19% at constant currency • Adjusted operating
Slide 5: Group Financial Performance
COMPANY PERFORMANCE GROUP FINANCIAL PERFORMANCE £m 1H 2019 1H 2018 Change Change at CER(2) "Like for Like" Change(3) GBP/USD 1.29 1.39 Orders (£m) 100.6 101.4 (1)% (6)% (10)% Revenue (£m) 98.9 93.2 6% 0% (4)% Gross margin (%) 44.6% 46.7% (210)bps Adjusted Operating Profit (£m) (1) 18.2 20.7 (12)% (1
Slide 6: Group Orders & Revenue Performance
COMPANY PERFORMANCE GROUP ORDERS & REVENUE PERFORMANCE ORDERS REVENUE Contribution to Contribution to (11)% +3% +6% (1)% (5)% +4% +6% +6% YoY change YoY change N. America: £(11.8)m N. America: £(9.8)m Europe: Flat Europe: +£2.9m Asia: +£1.1m Asia: +£2.5m XP Power Interim Results 2019 6
Slide 7: Regional Revenue Performance
COMPANY PERFORMANCE REGIONAL REVENUE PERFORMANCE 1H19 Reported Revenue Change LFL change 1H19 Region 1H19 £m vs. 1H18 1H19 vs 1H18 “Book to Bill” XP Glassman 6% North America 50.4 (10)% (16)% 1.00 Asia 10% Europe 32.9 11% 10% 1.04 Asia 9.7 48% 37% 1.12 North America 51% XP Glassman 5.9 - 0.87 Group
Slide 8: Adjusted Operating Profit Performance
COMPANY PERFORMANCE ADJUSTED OPERATING PROFIT PERFORMANCE XP Power Interim Results 2019 8
Slide 9: Cash Flow Statement and Net Debt
COMPANY PERFORMANCE CASH FLOW STATEMENT AND NET DEBT £m 1H 19 1H 18 Adjusted Operating Profit 18.2 20.7 £m Amortisation of product development costs 1.8 1.4 (52.0) 12.4 Depreciation (10.2) (0.2) (50.4) 2.6 1.5 Unrealised currency losses/(gains) (0.5) 1.1 Equity award charges 0.5 0.3 (0.3) Change in
Slide 10: 2019 Financial Guidance
OUTLOOK 2019 FINANCIAL GUIDANCE • Ongoing design wins, Continued investment in the level of backlog and order business to deliver future potential • Finance charge at circa £2.7- momentum supports revenue 3.0m growth in H2 2019 • Planned capital expenditure around £7-8 million • Working capital wi
Slide 11: Our Strategy Is Delivering
STRATEGY IN ACTION OUR STRATEGY IS DELIVERING ✓ Develop a market leading range of competitive products ✓ Target accounts where we can add value ✓ Vertical penetration of target accounts ✓ Build a Global Supply Chain which balances high efficiency with market leading customer responsiveness ✓ Lead ou
Slide 12: XP Power Converters Everywhere
STRATEGY IN ACTION XP POWER CONVERTERS EVERYHERE Technology Healthcare • High end computing • Imaging • Broadcast • Patient monitoring • Displays • Life science • Communications • Surgical tools • Security • Home healthcare Trends • Higher power • Higher engineering services content Semifab Industri
Slide 13: Sector Dynamics
STRATEGY IN ACTION SECTOR DYNAMICS • 47% of revenue • 18% of revenue • 24% of revenue • 11% of revenue • Grew 12% (constant currency • Contracted 34% • Grew 8% (constant currency • Grew 12% (constant YoY) (constant currency YoY) YoY) currency YoY) • Most diverse sector with high • Comdel and Glassma
Slide 14: Revenue by Sector
STRATEGY IN ACTION REVENUE BY SECTOR CAGR +13.5% CAGR +37.0% CAGR +13.2% CAGR +10.4% 94.4 83.6 78.6 70.2 Revenue (£ Millions) 56.8 47.5 46.7 43.6 41.4 35.2 30.7 28.4 28.3 21.5 20.4 18.4 15.1 14.5 13.7 10 Industrial Semi Fab Healthcare Technology 2015 2016 2017 2018 2019 Annualised Circa 6% positive
Slide 15: Product Portfolio Significant Growth Opportunity
STRATEGY IN ACTION PRODUCT PORTFOLIO SIGNIFICANT GROWTH OPPORTUNITY Acquisitions in high voltage (EMCO and Glassman) and Radio Frequency (RF) power expand our addressable market from $2.7Bn to $4.7Bn One of few companies in the world who can provide solutions right across the power and voltage s
Slide 16: Vietnam Supply Chain Flexibility
SUPPLY CHAIN VIETNAM SUPPLY CHAIN FLEXIBILITY Significant capacity increase (75%) Cost advantage over China Construction of Vietnam II now complete – production commenced in Q2 2019 Over 1,800 different products now approved for production in Vietnam • Helps mitigate Section 301 Tariffs and
Slide 17: Supply Chain Re-engineering Transfer to Vietnam
SUPPLY CHAIN SUPPLY CHAIN RE-ENGINEERING TRANSFER TO VIETNAM Manufacture of our low power/high voltage DC- DC modules will transfer from Minden, Nevada to Vietnam Minden facility expected to be closed by June 2020 Expect annualised cost savings of approximately £4 million • £1-2 million of the
Slide 18: Outlook
OUTLOOK OUTLOOK • Semiconductor manufacturing equipment recovery not anticipated before 2020. XP will benefit from recovery and share gains from recent high value design wins • Continuing momentum in Industrial, Healthcare and Technology sectors • Larger addressable market; the product range, engine
Slide 19: Interim Results 2019 - Appendices
Interim Results 2019 - Appendices xppower.com XP Power Interim Results 2019 19
Slide 20: Market Data
COMPANY OPERATIONS MARKET DATA Market 2018 ($ Millions) Size Share XP 2018 Revenue North Share of XP Asia Europe Total (£ Millions) America (%) Asia 1,303 1.6% Healthcare 3.1 11.2 29.3 43.6 22% Europe 679 12.0% Industrial 9.9 43.2 30.6 83.7 43% North America 1,098 12.0% Semifab 0.7 0.5 46.2 47.4 24%
Slide 21: Typical Product Life Cycle
COMPANY OPERATIONS TYPICAL PRODUCT LIFE CYCLE • Substantial REVENUE (£ MILLIONS) revenue annuity 7.4 7.1 • Design in cycle 6.7 6.2 6.1 typically 18 months 5.4 5.4 • 2009 and 2012 5.2 4.9 4.8 4.6 dips due to market 4.1 downturn and not 3.7 typical 2 0.9 0.2 2004 2005 2006 2007 2008 2009 2010 2011 201
Slide 22: Own Design Revenue Trend
STRATEGY IN ACTION OWN DESIGN REVENUE TREND Own design revenue CAGR +18% 200 1% 2% 19% 20% Labelled 2% Revenue (£ Millions) 150 22% 3% Own 4% 23% Brand 100 6% 28% Own 28% 80% 78% Design 76% 50 73% 66% 68% 0 2019 2014 2015 2016 2017 2018 Annualised Third party 5.9 4.9 4.4 3.5 1.9 3.6 Labelled product
Slide 23: What Makes XP Power Successful?
STRATEGY IN ACTION 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 priority but product team critical s
Slide 24: XP Power Interim Results 2019
XP Power Interim Results 2019 24