Slide 1: Final Results 2022
Final Results 2022 28 February 2023
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 Year of Two Halves
A YEAR OF TWO HALVES • Record year-end order book • Trading performance improved significantly in H2, a record level • Continued investment - in product portfolio, acquisitions of FuG and Guth, commencement of construction in Malaysia, two new design centres in the US and roll out ERP system in Asia
Slide 4: Strategy for Long Term Sustainable Growth
STRATEGY FOR LONG TERM SUSTAINABLE GROWTH Market leading products developed organically & through M&A Organic Sales Growth c.10% Target & drive penetration in accounts where we can add value Operating Margins c.20% Continually enhance our global supply chain Cash Conversion¹ >90% Focus on people and
Slide 5: Financial Highlights
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Slide 6: Key Performance Indicators
KEY PERFORMANCE INDICATORS ORDERS GROSS MARGIN OPERATING PROFIT2 OPERATING CASHFLOW £362.9 million 41.5% £42.9 million CONVERSION2 (2)% CER1 (360)bps (12)% CER1 42% 2021: 111% REVENUE OPERATING MARGIN2 ADJUSTED DILUTED EPS2 NET DEBT3 £290.4 million 14.8% 160.1p £151.0 million +13% CER1 (400)bps (9)%
Slide 7: Income Statement
INCOME STATEMENT • FY revenue grew 13% at constant currency and 6% on an % Change £ Million 2022 2021 % Change organic constant currency basis @ CER Revenue 290.4 240.3 21% 13% • With both strong growth sequentially and year-on-year in the second half Gross Margin 120.6 108.3 11% 4% Gross Margin % 4
Slide 8: Strong Demand in 2022 with Record Order Intake
STRONG DEMAND IN 2022 WITH RECORD ORDER INTAKE ORDERS BY SECTOR ORDERS BY REGION YoY change YoY change (20)% (7)% +29% (6)% (2)% at constant FX +2% (8)% (33)% (6)% (2)% at constant FX 8
Slide 9: Significant Revenue Growth in H2, Good Contribution from Acquisitions
SIGNIFICANT REVENUE GROWTH IN H2, GOOD CONTRIBUTION FROM ACQUISITIONS REVENUE BY SECTOR REVENUE BY REGION YoY change +9% +9% (5)% +6% +13% YoY change at constant FX +6% +4% +3% +6% +13% at constant FX 9
Slide 10: Efforts Combined with Stabilising Supply Chains Provide Good Visibility
OUR EFFORTS COMBINED WITH STABILISING SUPPLY CHAINS PROVIDES GOOD VISIBILITY (£'m) Revenue vs. Backlog 350 300 • Visibility of delivery profile will 250 assist supply chain planning and inventory reduction 200 • Customer order patterns will return 150 to more normal rates in 2023 100 • Book to bill
Slide 11: Strong H2 Performance
STRONG H2 PERFORMANCE • H1 volume constrained by component shortages and lead-times, and COVID lock- down in China with gross margin decreasing to 40.2% from 46.6% • H2 improved volume and price within revenue with margin increasing to 42.6% with stronger exit in Q4 • Freight costs, both cost and mi
Slide 12: Specific Items Predominantly Related to Legal Case
SPECIFIC ITEMS PREDOMINANTLY RELATED TO LEGAL CASE • Comet legal case includes • damages of $40m £ Million 2022 2021 • legal fees incurred and estimated Comet Legal Case 52.2 10.1 costs to be incurred in FY23 Impairment of intangible assets related to legal case 7.5 0.0 • and impairment of previousl
Slide 13: Net Debt Increase Due to Acquisitions, Legal Case and Inventory
NET DEBT INCREASE DUE TO ACQUISITIONS, LEGAL CASE AND INVENTORY Net Debt • Acquisitions of FuG and Guth in January 2022 8.7 • Cash bond payment for Comet case placed in 28.8 November 2022 19.0 • Investment in inventory to support delivery of £ million backlog included in other cash items 36.9 151.0
Slide 14: Inventory Build
INVENTORY BUILD • Market conditions and long lead times for key components resulted in higher-than-normal levels of purchases to maintain supply to customers • Investment in raw materials to support delivery of the backlog which increased from £217.0m at beginning of year to £308.4m • Work in Progre
Slide 15: 2023 Modelling Guidance
2023 MODELLING GUIDANCE • Expect modest volume growth, also benefit from price • Gross margins expected to improve on 2022 but not to return to historic levels • Significant working capital unwind • Capex c.£30m • Capitalised product development c.£8m • Interest cost currently c.6% on gross debt • I
Slide 16: Business Update
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Slide 17: Order Demand Momentum by Sector
ORDER DEMAND MOMENTUM BY SECTOR • 2022 started with £217m of firm orders +13% CAGR 369.2 • 2021 & 2022 represented significant growth 362.9 over previous cycles – greater addressable 17.3 67.7 market and share gains 87.0 Healthcare 261.0 CAGR +13% • 2022 book to bill of 1.25x 208.5 224.2 72.8 161.5
Slide 18: Sector Dynamics – Industrial Technology
SECTOR DYNAMICS – INDUSTRIAL TECHNOLOGY 2022 Revenue by Sector 20% 39% 41% • Revenue grew 18% (CER YoY) as demand remained robust, FuG and Semi fab Industrial Healthcare Guth contributing significantly to this segment Industrial Technology Revenue (@ CER¹ £m) • This is a resilient long term growth m
Slide 19: Sector Dynamics – Semiconductor Equipment
SECTOR DYNAMICS – SEMICONDUCTER EQUIPMENT 2022 Revenue by Sector 20% 39% 41% • RevenueINDUSTRIAL grew 9% (CER YoY) with continued market growth and share gains TECHNOLOGY Semi fab Industrial Healthcare with new• programme Revenue grew 9% (CER wins, YoY)by driven with continued market technology grow
Slide 20: Sector Dynamics – Healthcare
SECTOR DYNAMICS – HEALTHCARE 2022 Revenue by Sector 20% 39% 41% Semi fab Industrial Healthcare • Revenue declined 7% (CER YoY) impacted by component availability with demand increasing materially in the second half of 2022 Healthcare Revenue (@CER¹ £m) • Growth coming from markets such as Robotic Su
Slide 21: Supply Chain Stabilising at Current Levels
SUPPLY CHAIN STABILISING AT CURRENT LEVELS • XP faced ongoing constrained component supply in 2022, mirroring wider industry, leading to increased inventory levels and impacting customer shipments. Supply chain conditions stabilised in Q3 and further in Q4 but still challenging • Implemented price i
Slide 22: Strategy in Action: Low Voltage – Building from the Core
STRATEGY IN ACTION: LOW VOLTAGE – BUILDING FROM THE CORE Healthcare c. $700m c.10% Market Share Open Frame FCB100 c.$3.5bn TAM LV Market is >50% of $6.3bn Market for XP Industrial Technology & Semi c. $2.8bn c.7% Market Share Typical Applications - UV Curing - Robotics Typical Applications - Analyti
Slide 23: Strategy in Action: Low Voltage – Building from the Core
STRATEGY IN ACTION: LOW VOLTAGE – BUILDING FROM THE CORE Increasing Product Types End Products & Applications Strategy Complexity & Value - MRI & CT Imaging - Advanced Manufacturing Systems - 3D Printing Low Voltage - Robotics Expand and extend new high power digital High Power - Electrolysis platfo
Slide 24: FuG and Guth One Year On
FUG AND GUTH ONE YEAR ON • Significantly enhanced our high voltage capabilities in all our sectors • Strengthened our position in strategically important German and European markets • Provided additional design and manufacturing centres, complementing XP’s existing footprint • 2022 combined revenues
Slide 25: ESG – Continuing to Lead Our Industry
ESG – CONTINUING TO LEAD OUR INDUSTRY • We have committed to being Net Zero by 2040 • We have calculated XP Power’s full carbon footprint including scope 3 Initial findings show majority of emissions are outside of our operations – mostly from Aligned to the United Nations components we purchase a
Slide 26: 2023 and Long Term Outlook
2023 AND LONG TERM OUTLOOK • Stronger H2 2022 performance gives positive momentum into 2023 supported by large order book and H1 2023 expected to be up significantly on prior year • Mindful of ongoing uncertainties but expect benefit of prior price increases to come through fully in 2023 • Working c
Slide 27: Appendices
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Slide 28: Market Data – A Growing Addressable Market
MARKET DATA – A GROWING ADDRESSABLE MARKET Market ($ Millions) Size Share1 XP 2022 Revenue North FuG & Share of XP Asia Europe Total (£ Millions) America Guth (%) Asia 1,517 1.8% Healthcare 6.0 20.4 28.9 2.1 57.4 20% Europe 802 10.7% Industrial Technology 13.9 47.0 44.6 14.4 119.6 41% North America
Slide 29: Well Invested Global Manufacturing Footprint
WELL INVESTED GLOBAL MANUFACTURING FOOTPRINT Adding Capacity in all production sites • In all LV, RF and HV sites • Added RF manufacturing capability to China, diversifying from US • “Customer value add” in Vietnam Stuttgart Sunnyvale FuG and Guth acquisitions in Germany to complement HV portfolio G
Slide 30: XP Power Long Term Growth Drivers
XP Power long term growth drivers Rapid increase of electronic devices Digital transformation Structural growth in Healthcare • More products need power converters • Increase in smart technology • Growing and aging global population • Pace of innovation • More sophisticated customer products • Healt
Slide 31: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW £ Million Dec-22 Dec-21 £ Million 2022 2021 Change Cash 22.3 9.0 Profit After Tax (19.6) 23.0 -185% Inventory 114.4 74.0 Non-cash items 55.2 21.5 Trade receivables 42.4 30.8 Change in working capital (33.5) (3.9) Other 47.5 7.9 Cash generated from Operations 2.1 40.6 -95%
Slide 32: XP Power
= he XP Power POWERING THE WORLD'S CRITICAL SYSTEMS