Slide 1: Interim Results 2018
Interim Results 2018 xppower.com 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
Operational Highlights ❖ Record order intake, revenues and earnings achieved in 1H 2018 despite currency headwinds ❖ Excellent progress moving up in power and complexity with engineering services ❖ Acquisition of Glassman High Voltage expands product portfolio and addressable market ❖ All sectors co
Slide 4: Financial Highlights
Financial Highlights ❖ Reported order intake up 9%, comprising: ❖ Like-for-like (‘LFL’) order growth of 10% ❖ +7% contribution from acquisitions ❖ -8% headwind from foreign exchange currency movements ❖ Reported revenue growth 16%, comprising: ❖ Like-for-like (‘LFL’) revenue growth of 13% ❖ +11% con
Slide 5: Group Financial Performance
Group Financial Performance 2018 2017 Change at "Like for Like" Change H1 H1 CER(2) Change(3) GBP/USD 1.39 1.26 Orders (£m) 101.4 93.4 9% 17% 10% Revenue (£m) 93.2 80.2 16% 25% 13% Gross margin (%) 46.7% 46.9% -0.2bp Adjusted Operating Profit (£m) (1) 20.7 17.4 19% 28% 16% Adjusted Profit before tax
Slide 6: Group Orders & Revenue Performance
Group Orders & Revenue Performance Orders Revenue North America: +£6.1m North America: +£8.7m Europe: +£2.0m Europe: +£1.4m Asia: +£0.8m Asia: +£0.0m Contribution to +10% +6% +1% (8)% +9% Contribution to +13% +10% +1% (7)% +16% YoY change YoY change xppower.com XP Power Interim Results 2018 6
Slide 7: Regional Revenue Performance
Regional Revenue Performance 2018 H1 Reported Revenue LFL change 2018 H1 Change vs. 2018 H1 Region 2018 H1 vs 2017 H1 2017 H1 £m “Book to Bill” Asia 7% North America 57.0 30% 22% 1.04 XP Comdel 8% Europe -XP Organic 48.4 11% 22% 1.09 32% -XP Comdel 7.6 0.73 -XP Glassman 1.0 0.92 Europe 29.7 1% 5% 1.
Slide 8: Adjusted Operating Profit Performance
Adjusted Operating Profit Performance xppower.com XP Power Interim Results 2018 8
Slide 9: Cash Flow Statement
Cash Flow Statement £ Millions H1 2018 H1 2017 Adjusted Operating Profit 20.7 17.4 Changes in accounting policy (0.4) - Amortisation of development costs 1.4 1.2 Depreciation 1.5 1.3 Unrealised currency losses/(gains)/Equity award charges 1.4 (0.9) Change in working capital (8.4) 3.6 Cash provided b
Slide 10: 2018 Technical Guidance
2018 Technical Guidance ❖ Level of backlog and H1 book to bill continued momentum in 2018 ❖ Continued investment in the business to support future growth ❖ Increased overheads to build scalable business ❖ Planned capital expenditure around £8-9 million, principally in Vietnam and on the Supply Chain
Slide 11: Our Strategy Is Delivering
Our Strategy Is Delivering ❖ Develop a broad range of competitive products ❖ Target accounts where we can add value ❖ Drive vertical penetration of these focus accounts ❖ Enhance brand awareness through digital marketing and distribution ❖ Achieve operational excellence ❖ Lead our industry on enviro
Slide 12: Strategy In Action - Sector Dynamics
Strategy In Action - Sector Dynamics • 42% of revenue • 27% of revenue • 22% of revenue • 10% of revenue • Grew 10% (constant • Grew 65% organic • Grew 14% (constant • Grew 13% currency year on year) currency year on year) (constant currency (constant currency year on year) • Most fragmented year on
Slide 13: Strategy In Action - Revenue by Sector
Strategy In Action - Revenue by Sector CAGR +11.3% 78.6 78.2 70.2 Revenue (£ Millions) CAGR +70.8% 56.8 49.8 CAGR +12.5% 41.4 40.4 30.7 CAGR +7.5% 28.3 28.4 18.4 18.0 15.1 14.5 13.7 10.0 INDUSTRIAL SEMIFAB HEALTHCARE TECHNOLOGY 2015 2016 2017 2018* Approximately 7% decline in 2018 due to translation
Slide 14: Strategy In Action - Acquisition of Glassman HV
Strategy In Action - Acquisition of Glassman HV ❖ Acquired on 25 May 2018, positive impact to date ❖ Specialises in high power (up to 200kW)/high voltage (up to 500kV) ❖ High power/high voltage market conservatively estimated at $500 million ❖ Based in Highbridge, New Jersey, USA ❖ Cash consideratio
Slide 15: Strategy In Action – High power/high voltage applications
Strategy In Action – High power/high voltage applications ❖Semiconductor manufacturing equipment ❖Vacuum/plasma processing ❖Analytical instrumentation ❖Medical diagnostic and therapeutic systems ❖Test equipment ❖Research/academic xppower.com 15 XP Power Interim Results 2018
Slide 16: Strategy in Action – Product portfolio
Strategy in Action – Product portfolio The addition of Emco, Comdel and Glassman increases XP’s product portfolio significantly Market Size ~ $1.2Bn Market Size ~ $2.7Bn XP ~ $20m Market Size ~ $0.5Bn XP ~ $200m XP ~ $18m XP organic product Power development focused on “fill High 100KW+ GX GX GX G
Slide 17: Vietnam – Phase II
Vietnam – Phase II • Significant capacity increase and cost competitiveness advantage over China • Construction of Vietnam II began October 2017 • Expect building completion in Q4 2018 and production start in Q2 2019 • Total cost approximately $6.5M Revenue Capacity Current Utilisation ($M)* China 1
Slide 18: 2018 Outlook
2018 Outlook ❖ Strong start to 2018 ❖ Order intake, growing backlog and new programs entering production phase underpins confidence ❖ High power/high voltage and RF Power increasing addressable market and our value proposition to healthcare and semi fab sector ❖ Supply chain exhibiting lead time ext
Slide 19: Appendix
Appendix xppower.com XP Power Interim Results 2018 19
Slide 20: Market Data
Market Data Market 2017 ($ Millions) Size Share Asia 1,220 1.5% Europe 647 12.7% North America 1,047 12.8% Total 2,914 8.1% RF Power 1,200 1.8% High power/high voltage 500 3.6% Grand total 4,614 5.9% Source: Micro-Tech Consultants and XP Power Management XP Revenue Share of XP Asia Europe North Amer
Slide 21: Strategy In Action - Revenue by Geography
Strategy In Action - Revenue by Geography CAGR +27.0% 114.0 94.5 CAGR +9.6% 68.5 57.5 59.4 55.7 49.4 £millions 45.1 CAGR +13.0% 15.0 13.0 11.8 9.0 NORTH AMERICA EUROPE ASIA 2015 2016 2017 2018* Note: 2018* is six months to 30 June 2018 annualized XP Power Interim Results 2018 21
Slide 22: Strategy In Action - Own Design Revenue Trend
Strategy In Action - Own Design Revenue Trend Own design revenue CAGR +25% 200 2% Labelled 2% 20% 150 22% Revenue (£ Millions) 4% 4% 23% 100 28% Own 78% Brand Own 76% Design 50 73% 68% 0 2015 2016 2017 2018* Third party 4.8 4.4 3.6 3.0 Labelled product 30.3 30.1 36.0 38.2 Own design product 74.6 95.
Slide 23: Typical Product Life Cycle
Typical Product Life Cycle Revenue (£ Millions) 7.4 7.1 6.7 6.2 6.1 5.4 5.4 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 ❖ Substantial revenue annuity ❖ Design in cycle typically 18 months ECM40/60 Series ❖ 2009 and 2012 dips due to market downtur
Slide 24: xppower.com
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