Slide 1: 2024 Interim Results
2024 Interim Results 6 August 2024
Slide 2: Agenda
Agenda 1. Highlights 2. Financial Review 3. Business Review 4. Summary & Outlook 5. Q&A 2
Slide 3: Highlights
Highlights Gavin Griggs CEO
Slide 4: H1 2024 Highlights
H1 2024 Highlights Strong execution in challenging market conditions • Period of unusually challenging trading • Slowdown across all three sectors • Semi-Fab revenues lower but orders back in growth • Industrial Tech & Healthcare impacted by destocking • Revenue consistency month-to-month as markets
Slide 5: Clear, consistent and proven strategy
Clear, consistent and proven strategy… Market Target key Drive Continually Focus on Lead our leading accounts penetration to enhance our people and industry on product where XP can grow share of global supply talent environmental portfolio add value wallet chain development responsibility 5
Slide 6: Focused on long-term structural growth markets
Focused on long-term structural growth markets….. Attractively positioned in enduring structural growth markets… • Leading positions in fundamentally attractive Semiconductor Manufacturing Equipment, Industrial Technology, Healthcare sectors • Well-positioned to prosper as these markets resume their
Slide 7: Underpinning XP's core financial framework
…..underpinning XP’s core financial framework Through-cycle performance Organic sales Adjusted Operating Cash Long term ROCE growth Operating Margin Conversion leverage c.10% c.20% ~100% >20% 0-1x 12.3% organic sales Operational leverage growth achieved over last Low capex model with high drop throu
Slide 8: Financial Review
Financial Review Matt Webb CFO
Slide 9: Key Performance Indicators H1 2024
Key Performance Indicators H1 2024 Orders & Revenue Margin Profit & Earnings Cash & Debt GROSS MARGIN ADJUSTED OPERATING ADJUSTED OPERATING ORDER INTAKE PROFIT CASH CONVERSION £87.9m 40.6% Down -22%1 Down -120bps £13.5m 259% Down -36%1 H1 2023: 138% ADJUSTED ADJUSTED DILUTED NET DEBT REVENUE OPERATI
Slide 10: Income statement
Income statement % change At actual In H1 H1 exchange constant Adjusted £m 2024 2023 rates currency Revenue 127.1 160.2 (21)% (18)% • Revenue in line with expectations and Gross margin 51.6 67.0 (23)% relatively stable during the half Gross margin % 40.6% 41.8% (120)bps • Gross Margin of 40.6% was 6
Slide 11: Order intake trends
Order intake trends Order intake by quarter 2023-2024 (£m) 61.5 54.3 44.7 48.4 43.7 44.2 • H1 order intake of £87.9m, down 22% in constant currency on prior year • Quarterly orders have been broadly stable since Q3 2023, with a modest improvement in Semi intake offset by the start of destocking in H
Slide 12: Revenue trends
Revenue trends Revenue by quarter 2023-2024 (£m) • H1 revenue in line with expectations 77.9 82.3 81.1 75.1 64.6 62.5 • 18% lower in constant currency than H1 2023, which benefited from backlog clearance • Unusual simultaneous slowdown in all three sectors, which we have responded to robustly Q1 Q2
Slide 13: Order book trends
Order book trends Order Book Book £m to Bill • Order book reduced by £42m in the 350 2.0 period to £150m 300 • Equivalent to 7 months of forward 250 1.5 orders, slightly higher than historic norms 200 1.0 • Order book to continue to reduce in 150 H2 as delivery lead times improve 100 • Book to bill
Slide 14: Adjusted Operating Profit bridge
Adjusted Operating Profit bridge Adjusted Operating Profit bridge 21.8 • Significant profit impact from market downturn • Disciplined and continuous cost review resulted in a £7.1m operating cost reduction • 20% reduction in headcount since the start of the 7.1 13.5 market downcycle, including 120 o
Slide 15: Adjusted Free cash flow
Adjusted Free cash flow Adjusted H1 H1 • Actions taken to drive strong cash generation in £m 2024 2023 “trough” market conditions Operating Profit 13.5 21.8 • Record Adjusted Operating Cash Conversion of Depreciation and amortisation 7.8 6.9 259%, delivering Adjusted Operating Cash Flow of £34.9m EB
Slide 16: Net debt and borrowing metrics
Net debt and borrowing metrics • LTM EBITDA now 26% lower than mid-2023 peak due to market slowdown • Funding Plan launched in H2 2023 has Adjusted 31 Dec 30 Jun 31 Dec 30 Jun reduced debt by 30% over the same period £m 2022 2023 2023 2024 • Balance sheet leverage broadly maintained Net Debt 151.0 1
Slide 17: 2024 Modelling Guidance
2024 Modelling Guidance Profit: • Order book suggests Q3 revenue will be similar to Q2 • Full year Adjusted Operating Expenses to be c.17% lower than 2023 • c.25% effective tax rate Cash: • Adjusted Operating Cash Conversion to remain > 100% in H2 • Total capital spend including capitalised product
Slide 18: Business Review
Business Review Gavin Griggs CEO
Slide 19: Broad market and customer exposure
XP Power – Broad market and customer exposure….. ● XP Power design and manufacture a diverse portfolio of power converters, with unrivalled customer service and Revenue by Industry by year 2020-2024 (£m) support. Focused on sectors where power is mission- 316.4 critical. Our enduring relationships a
Slide 20: Long-term structural growth markets
…..in long-term structural growth markets Industrial technology1 40% revenue Semiconductors2 36% revenue Medical devices3 24% revenue Industrial power supply market to reach Global semiconductor sales to reach Medical devices market to reach $6bn by 2027 $1 trillion by 2030 $800bn by 2030 • Driven b
Slide 21: Overview: Industrial Technology
Overview: Industrial Technology ● Diverse sector with attractive growth outlook at 7.5%* per annum over the medium term ● Customers’ applications are becoming more complicated and increasingly connected ● Digitalising our products to provide the complete power systems and become critical part of the
Slide 22: Overview: Semiconductor Manufacturing Equipment
Overview: Semiconductor Manufacturing Equipment ● Attractive long-term growth outlook as semiconductors recover ● AI& Data fueling the $1tn market by 2030. ● Partly driven by “Chips Act” spending, the industry adding more Fabs, with 70 new projects from 2023 to 2025. Combined with the 92 Fabs that s
Slide 23: Overview: Healthcare
Overview: Healthcare ● We are one of the world’s largest providers of medical power conversion products, with a portfolio that meets the high safety standards demanded in the sector ● Medical device market forecast to grow at 6.4%* CAGR to $800bn by 2030, accelerating from 5% over last decade ● Grow
Slide 24: Why we will continue to win
Why we will continue to win: A compelling customer offering with enduring advantage ● Speed, Flexibility and Customer Focus – XP core values with first time right mentality and approach ● Long-term customer relationships. Once power converters are approved XP Power receives revenue annuity for the l
Slide 25: Investment in innovation centre to enhance customer support
Investment in innovation centre to enhance customer support • Located in the heart of Silicon Valley • World class Design and Engineering facility to enable effective customer collaboration • Follow-the-sun operations between California and the Philippines specifically designed to reduce time to mar
Slide 26: Leading our industry on sustainability
Leading our industry on sustainability Continuing to make progress on sustainability agenda and reducing our carbon footprint: • 2023 carbon footprint reduced ahead of target, driven mainly by lower sales & purchases • EU now purchasing 100% renewable energy • All sites are now Single Use Plastics f
Slide 27: Summary & Outlook
Summary & Outlook FY24 Outlook unchanged • Markets stabilising but remains difficult to predict timing of recovery with precision • Cost reductions reduce sensitivity to H2 demand conditions • Profit more evenly weighted H1/H2 • FY24 profit expectations unchanged Well prepared for market recovery •
Slide 28: Q&A
Q&A
Slide 29: Appendices
“App endice: a 2 } . «e
Slide 30: Market data a growing addressable market
Market data a growing addressable market Market Size Share1 XP H1 2024 Revenue North Share of XP ($m) Asia Europe Total (£m) America (%) Asia 1,610 1.8% Healthcare 2.5 11.8 16.2 30.5 24% Europe 813 14.6% Industrial Technology 5.2 29.6 16.1 50.9 40% North America 1,258 14.1% Semi Fab 6.4 1.9 37.4 45.
Slide 31: Well-invested production footprint and R&D capabilities
Well-invested production footprint and R&D capabilities Competitive global manufacturing footprint Core R&D capabilities 8 Global R&D centres located close to customers and operations Pangbourne Kunshan >160 Munich San Jose Multi-disciplined team members working in Gloucester Stuttgart R&D and produ
Slide 32: Disclaimer
The information contained in this document is for forward-looking statements, and XP Power Limited does background purposes only and does not purport to be not undertake any obligation to update publicly or revise full or complete. No reliance may or should be placed any forward-looking statements.
Slide 33: XP Power
XP) Power POWERING THE WORLD'S CRITICAL SYSTEMS