Slide 1: Annual Results 2018
Annual Results 2018 xppower.com XP Power Annual Results 2018 1
Slide 2: Disclaimer
Disclaimer The information contained in this document is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this document or on its completeness, accuracy or fairness.
Slide 3: Operational Highlights
HIGHLIGHTS Operational Highlights • Record order intake, revenues and earnings achieved in 2018 • Excellent progress moving up in power and complexity • Acquisition of Glassman High Voltage enhances product portfolio and expands addressable market • Completed construction of second manufacturing fac
Slide 4: Financial Highlights
HIGHLIGHTS Financial Highlights • Reported order intake up 8% despite Q4 slowdown • Like-for-like (‘LFL’) order growth of 5% • +7% contribution from acquisitions • -4% headwind from foreign exchange currency movements • Reported revenue growth 17% • Like-for-like (‘LFL’) revenue growth of 11% • +10%
Slide 5: Group Financial Performance
COMPANY PERFORMANCE Group Financial Performance Change at "Like for Like" 2018 2017 Change CER(2) Change(3) GBP/USD 1.34 1.28 Orders (£m) 198.4 184.3 8% 12% 5% Revenue (£m) 195.1 166.8 17% 21% 11% Gross margin (%) 47.3% 46.5% +80bps Adjusted Operating Profit (£m) (1) 42.9 36.4 18% 21% 10% Adjusted P
Slide 6: Group Orders & Revenue Performance
COMPANY PERFORMANCE Group Orders & Revenue Performance Orders Revenue North America: +£2.4m North America: +£12.0m Europe: +£4.3m Europe: +£3.7m Asia: +£1.6m Asia: +£0.9m Contribution to +5% +3% +4% (4)% +8% Contribution to +11% +6% +4% (4)% +17% YoY change YoY change XP Power Annual Results 2018 6
Slide 7: Regional Revenue Performance
COMPANY PERFORMANCE Regional Revenue Performance 2018 Reported Revenue XP Glassman 2018 Change vs. LFL change 2018 XP Comdel Region 4% 7% 2017 2018 vs 2017 Asia 8% £m “Book to Bill” North America North America 97.5 8% 14% 1.02 50% Europe 61.1 6% 6% 1.06 Asia 14.9 0% 6% 1.06 Europe XP Comdel(1) 14.7
Slide 8: Adjusted Operating Profit Performance
COMPANY PERFORMANCE Adjusted Operating Profit Performance XP Power Annual Results 2018 8
Slide 9: Cash Flow Statement and Net Debt
COMPANY PERFORMANCE Cash Flow Statement and Net Debt £m 2018 2017 £m Adjusted Operating Profit 42.9 36.4 (2.8) Amortisation of product development costs 2.9 2.5 Depreciation 3.4 2.8 (15.6) 11.1 Unrealised currency losses/(gains) 3.2 (3.4) (0.8) Equity award charges 0.8 0.4 (21.6) 0.4 (35.5) (52.0) C
Slide 10: 2019 Technical Guidance
OUTLOOK 2019 Technical Guidance • Recent design wins, Glassman acquisition, level of backlog and order performance supports further revenue growth in 2019 • Revenue growth likely to be H2 weighted, very strong H1 2018 • Investment in the business to support future growth • Working capital will reduc
Slide 11: Our Strategy is Delivering
STATEGY 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 our
Slide 12: XP Power Converters Everywhere
STATEGY IN ACTION XP Power Converters Everywhere Technology Healthcare • High end computing • Imaging • Broadcast • Patient monitoring • Displays • Life science • Communications • Surgical tools • Security • Home healthcare Semifab Industrial • Deposition • 3D printing • Etch • Process control • Waf
Slide 13: Sector Dynamics
STATEGY IN ACTION Sector Dynamics • 43% of revenue • 24% of revenue • 22% of revenue • 11% of revenue • Grew 11% (constant • Grew 64% (constant • Grew 8% (constant • Grew 23% (constant currency year on year) currency year of currency year on year) currency year on year)* year) • Most diverse sector
Slide 14: What makes XP Power Successful?
STATEGY IN ACTION What makes XP Power Successful? Service and Support - Key Differentiators: • Large technical sales team • Significant support at the design-in stage allowing customer faster time to market • Flexibility in terms of product modifications and logistics • Speed and agility Quality • Q
Slide 15: Revenue by Sector
STATEGY IN ACTION Revenue by Sector CAGR +13.8% 83.7 78.1 Revenue (£ Millions) 70.2 CAGR +68.1% 56.8 CAGR +15.4% 47.4 41.8 43.6 CAGR +12.1% 29.7 30.7 28.4 20.4 17.2 15.1 14.5 13.7 10.0 INDUSTRIAL SEMIFAB HEALTHCARE TECHNOLOGY 2015 2016 2017 2018 Circa 4% negative impact in 2018 relating to the trans
Slide 16: Product portfolio - acquisitions
STATEGY IN ACTION Product portfolio - acquisitions Market Size ~ $3.1Bn Market Size ~ $1.2Bn Market Size ~ $0.5Bn Power High XP ~ $210m XP ~ $20m XP ~ $18m 100KW+ XP organic product 50KW development focused on “fill 10KW in products” within the core portfolio 5KW 3KW Started by building presence
Slide 17: Vietnam – Phase 2
SUPPLY CHAIN Vietnam – Phase 2 Significant capacity increase (75%) Cost competitiveness advantage over China Construction of Vietnam II now complete – production commence in Q2 2019 Helps mitigate Section 301 Tariffs and provides a competitive advantage over competitors with Chinese based ma
Slide 18: 2019 Outlook
OUTLOOK 2019 Outlook • Encouraging start to 2019 in terms of order intake • New design wins in 2018 underpins confidence • Full year benefit of the Glassman acquisition • High voltage and RF Power increasing addressable market and our value proposition to key customers • While not immune to macro-ec
Slide 19: Market Data
COMPANY OPERATIONS Market Data Market 2018 ($ Millions) Size Share Asia 1,303 1.6% Europe 679 12.0% North America 1,098 12.0% Total 3,080 7.6% RF Power 1,200 1.8% High power/high voltage 500 3.6% Grand total 4,780 5.5% Source: Micro-Tech Consultants and XP Power Management XP Revenue Share of XP Asi
Slide 20: Typical Product Life Cycle
COMPANY OPERATIONS Typical Product Life Cycle Revenue (£ Millions) 7.4 7.1 6.7 6.2 6.1 5.4 5.4 5.2 4.6 4.8 4.1 3.7 2.0 0.2 0.9 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • Substantial revenue annuity • Design in cycle typically 18 months • 2009 and 2012 dips due to ma
Slide 21: Own Design Revenue Trend
STRATEGY IN ACTION Own Design Revenue Trend Own design revenue CAGR +23% 200 1% 19% Labelled 2% Revenue (£ Millions) 150 22% 4% 4% 23% 100 7% Own 28% 28% Brand 80% Own 76% Design 50 73% 66% 68% 0 2014 2015 2016 2017 2018 Third party 5.9 4.9 4.4 3.5 1.9 Labelled product 28 30.5 30.1 35.9 37.8 Own des
Slide 22: XP Power Annual Results 2018
XP Power Annual Results 2018 22 22