Slide 1: Full Year Results 2020
Full Year Results 2020 xppower.com XP Power Full Year Results 2020 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: 2020 Group Highlights
2020 GROUP HIGHLIGHTS • Employee health, safety and wellbeing a key priority • Rapid recovery of the Asia supply chain and continuing operations across our global manufacturing and warehousing facilities demonstrates XP’s resilience • Strong performance driven by the continuing momentum in SemiFab a
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS XP Power Full Year Results 2020 4
Slide 5: Group Financial Performance
GROUP PERFORMANCE GROUP FINANCIAL • Order intake up 20% on prior year • Semifab strength (+88%) PERFORMANCE • Healthcare demand (+52%) driven by COVID-19 • Industrial Technology softer (-16%) 2020 2019 Change(2) • Revenue growth of 17% GBP/USD 1.28 1.28 • Semifab (+86%), Healthcare (+51%), Orders (£
Slide 6: Group Segmental Performance
GROUP PERFORMANCE GROUP SEGMENTAL PERFORMANCE ORDERS REVENUE YoY change (19)% +88% +52% +0% +20% YoY change (18)% +84% +51% +0% +17% at constant FX at constant FX XP Power Full Year Results 2020 6
Slide 7: Group Regional Performance
GROUP PERFORMANCE GROUP REGIONAL PERFORMANCE ORDERS REVENUE YoY change YoY change +26% +80% +5% +1% +0% +17% +17% +296% (12)% +12% +0% +20% at constant FX at constant FX 14.2 3.8 37.8 31.9 XP Power Full Year Results 2020 7
Slide 8: Adjusted Operating Profit Performance
GROUP PERFORMANCE ADJUSTED OPERATING PROFIT PERFORMANCE Gross margin increase due to manufacturing efficiencies • Gross margin at 47.2%, up 210bps • FY20 margin benefitting from strong H2 as COVID-19 shipments helped drive manufacturing efficiencies Investment in IT and people (inc. bonuses) • Adjus
Slide 9: Cash Flow and Net Debt
GROUP PERFORMANCE CASH FLOW AND NET DEBT Net Debt bridge £m 2020 2019 Change £m Adjusted Operating Profit 46.0 35.0 30% Non-cash items 12.6 11.9 Change in working capital (4.6) 8.9 (41.3) 31.3 Adjusted Operating Cash Flow 54.0 55.8 -3% Specific items (5.1) (5.1) Cash generated from Operations 48.9 5
Slide 10: 2021 Modelling Guidance Approximations
OUTLOOK 2021 MODELLING GUIDANCE APPROXIMATIONS CAPEX/CAP PROD DEV/CAP IT INTEREST EFFECTIVE TAX RATE £6.0m / £10.0m / £5.0m c. £1.5m 16-18% CASH SPECIFIC ITEMS COST INFLATION COST SAVINGS £1.0 – 2.0m c. £2-3m c. £1-2m REVENUE OPERATING CASH FLOW NET DEBT / EBITDA H2 weighted Improved Working Capital
Slide 11: Business Update
BUSINESS UPDATE XP Power Full Year Results 2020 11
Slide 12: XP Power Continued Evolution
STRATEGY IN ACTION XP POWER CONTINUED EVOLUTION • Robust business and financial position • Resilient and agile supply chain and organisation • Exposed to long term growth drivers • Focused and sustainable growth strategy • Sustainable future – commitment to ESG principles throughout the business XP
Slide 13: Our Growth Focused Strategy Is Delivering
STRATEGY IN ACTION OUR GROWTH FOCUSED STRATEGY IS DELIVERING • Develop a market leading range of competitive products • Target accounts where we can add value • Further enhance our agile global supply chain through investment in capacity, systems and capability • Focus on people and talent developme
Slide 14: Sector Dynamics
STRATEGY IN ACTION SECTOR DYNAMICS INDUSTRIAL TECHNOLOGY SEMICONDUCTOR HEALTHCARE • 40% of revenue; Declined 18% (constant currency MANUFACTURING EQUIPMENT YoY) reflecting customer weakness • 30% of revenue; Grew 84% (constant currency YoY) • 30% of revenue; Grew 51% (constant currency with market r
Slide 15: Revenue by Sector
STRATEGY IN ACTION REVENUE BY SECTOR CAGR +5.8% CAGR +47.4% CAGR +19.5% High level Trends 116.6 104.0 • Increased connectivity of (£ Millions) 97.0 the power converter to the 94.4 83.9 customer's equipment 71.3 69.6 • Higher power 69.3 • Higher engineering services 47.5 45.9 content (customisation)
Slide 16: Increasing Supply Chain Agility Key to Our Strategy
SUPPLY CHAIN INCREASING SUPPLY CHAIN AGILITY KEY TO OUR STRATEGY Supply chain resilience highly valued by customers. XP focused on increasing capacity, lean initiatives, capex and headcount China focused on high complexity products and for European and Asian customers Vietnam: 2,616 different
Slide 17: Our Sustainability Strategy
ESG OUR SUSTAINABILITY STRATEGY 2020 A YEAR OF FURTHER PROGRESS Key highlights • Undertook a sustainability materiality impact assessment with key stakeholders to formulate an enhanced sustainability strategy. Upgraded UN SDG mapping with targets and progress tracked • Maintained the safety and well
Slide 18: Our Sustainability Framework
ESG OUR SUSTAINABILITY FRAMEWORK BUILDING ON OUR LONG TERM ESG TRACK RECORD Our 2021 priorities • Continue to enhance design processes including product reliability, efficiency and safety, all of which will have a material impact on our customers • Ship “XP Green Power” products resulting in minimum
Slide 19: Group Outlook
OUTLOOK GROUP OUTLOOK • 2020 demonstrated resilience and agility of XP Power allowing us to exceed expectations • Exposed to sectors that will benefit from the long-term global trends • A responsible, values-driven business aligns naturally with ESG principles • Focused on driving underlying growth
Slide 20: Questions and Answers
QUESTIONS AND ANSWERS XP Power Annual Results 2019 20
Slide 21: Full Year Results 2020 - Appendices
Full Year Results 2020 - Appendices xppower.com XP Power Full Year Results 2020 21
Slide 22: Market Data
COMPANY OPERATIONS MARKET DATA Market ($ Millions) Size Share XP 2020 Revenue North Share of Asia Europe Total (£ Millions) America XP (%) Asia 1,400 1.4% Healthcare 5.1 21.0 43.2 69.3 30% Europe 772 8.5% Industrial Electronics 14.2 42.8 37.4 94.4 40% North America 1,129 10.6% Semifab 1.8 1.2 66.6 6
Slide 23: Product Portfolio Significant Growth Opportunity
PRODUCT 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 v
Slide 24: Typical Product Life Cycle
COMPANY OPERATIONS TYPICAL PRODUCT LIFE CYCLE • Substantial revenue REVENUE HISTORY ECM40/60 SERIES (£ MILLIONS) annuity 7.4 7.1 • Design in cycle typically 6.7 6.2 6.1 18 months (longer in 5.4 5.4 healthcare) 5.3 5.2 4.8 4.6 • 2009 and 2012 dips due 4.1 4.1 to market downturn and 3.7 not typical 2
Slide 25: What Makes XP Power Successful?
STRATEGY IN ACTION WHAT MAKES XP POWER SUCCESSFUL? Service and Support Quality Product Offering Cost • Large technical, direct • Quality is a given and • Product has to solve the • Not the customers’ top sales team paramount for mission customer’s power priority but product • Significant support at
Slide 26: XP Power Full Year Results 2020
XP Power Full Year Results 2020 26