REG-XP Power Ltd: Q1 Trading Update

XP PowerAnnouncement

24/04/2025 07:02

24 April 2025

 

 

XP Power Limited

(`XP Power' or `the Group')

 

Q1 2025 Trading Update

Improved order intake and continued healthy cash generation

 

XP Power, one of the world's leading developers and manufacturers of critical
power control components to the electronics industry, is today issuing a
trading update for the first quarter ended 31 March 2025.

 

Trading

 

                     Q1 2025  Q1 2024  Change  Change in constant currency  
                                                                            
 Order intake (£m)   57.4     43.7     31%     30%                          
 Revenue (£m)        53.8     64.6     (17)%   (18)%                        
 Book-to-bill        1.07x    0.68x    0.39x                                
                                                                            

 

 

 Quarterly performance                       Q2 2024  Q3 2024  Q4 2024  Q1 2025  
                                                                                 
 Order intake (£m)                           44.2     48.8     44.9     57.4     
 % change vs prior year - constant currency  (17)%    11%      (2)%     30%      
                                                                                 
 Revenue (£m)                                62.5     60.2     60.0     53.8     
 % change vs prior year - constant currency  (22)%    (19)%    (22)%    (18)%    
                                                                                 
 Book-to-bill                                0.70x    0.81x    0.75x    1.07x    
                                                                                 

 

Q1 order intake was £57.4m. This is 23% higher than preceding quarter and 30%
higher than the comparative period in constant currency. The Group saw a
further improvement in demand from the Semiconductor Manufacturing Equipment
sector and growth in both the Industrial Technology and Healthcare sectors as
inventory in the sales channel moves closer to equilibrium. Some customers
brought forward orders previously scheduled for Q2 in response to improving
prospects.

 

Q1 revenue was £53.8m. This was 13% lower than the preceding quarter and 18%
lower than the comparative period in constant currency. The reduction was as
expected and includes the impact of the previously announced exit from China's
Semiconductor Manufacturing Equipment market.

 

Our order book at the end of the quarter was £124.0m.

 


Financial Position

 

Net debt as of 31 March 2025 was £65.4m, £28.1m lower than as of 31 December
2024. Operating cash generation continues to be healthy, with inventory
reducing by a further £5.3m to £65.8m. The closing borrowing position also
reflects the recent £40m share placing and a surety bond payment for
plaintiff's legal fees and interest in the Comet legal case, as previously
announced.

 

Tariffs

 

US sales of imported products account for c.30% of Group revenue, of which
c.20% is imported from Vietnam, c.3% from China and the balance from other
Asian countries. Tariffs are calculated with reference to product cost. US
sales of domestically manufactured products account for a further c.25% of
Group revenue.

 

The US power supply market is heavily reliant on overseas production,
particularly from Asia. Our products are "designed in" to our customers'
equipment, with multi-year product life cycles. Power supplies represent a
small proportion of the cost of the customers' products and switching supplier
is expensive and time-consuming. US tariffs on Chinese imports introduced in
2018 were passed through the supply chain.

 

We continue to monitor global tariff proposals closely and will respond
accordingly. Whilst they may create some short-term market uncertainty, we do
not believe they will impact our competitive position.

 

Outlook

 

We are encouraged by the improvement in Q1 order intake. Demand from the
Semiconductor Manufacturing Equipment sector increased and we were pleased to
see some customers in the Industrial Technology and Healthcare sectors placing
orders earlier than expected as channel inventory normalises.

 

However, we remain mindful of geopolitical uncertainty. It is too early to
tell what impact, if any, tariffs will have on our markets in the short-term,
albeit we do not believe they will impact our competitive position. The range
of potential outcomes for 2025 remains wide.

 

The Board remains confident in the Group's long-term prospects. We have
leading positions in attractive end markets and have a strong pipeline of both
new products and new business, supporting medium-term growth. This should
deliver significant performance improvement when markets recover.

 

Enquiries:

 

 XP Power                                                    
 Gavin Griggs, Chief Executive Officer  +44 (0)118 984 5515  
 Matt Webb, Chief Financial Officer     +44 (0)118 984 5515  
                                                             
 CDR                                                         
 Kevin Smith/Lucy Gibbs                 +44 (0)207 638 9571  

 

 

XP Power designs and manufactures power controllers, essential hardware
components in all electrical equipment that converts power from the
electricity grid into the correct form for equipment to function. Power
controllers are critical for optimal delivery in challenging environments but
are a small part of the overall customer product cost.

 

XP Power designs power control solutions into the end products of major
blue-chip OEMs, with a focus on the Semiconductor Manufacturing Equipment
(circa 38% of sales), Industrial Technology (circa 38% of sales) and
Healthcare (circa 24% sales) sectors. Once designed into a programme, XP Power
has a revenue annuity over the life cycle of the customer's product which is
typically five to seven years depending on the industry sector. XP Power has
invested in research and development and its own manufacturing facilities in
Vietnam, China, North America and Germany, to develop a range of tailored
products based on its own intellectual property that provide its customers
with significantly improved functionality and efficiency.

 

Headquartered in Singapore and listed on the Main Market of the London Stock
Exchange since 2000, XP Power is a constituent of the FTSE SmallCap Index. XP
Power serves a global blue-chip customer base from over 30 locations in
Europe, North America, and Asia.

 

For further information, please visit www.xppowerplc.com

 

Forward-looking statements

 

This announcement contains forward-looking statements that are subject to risk
factors associated with, among other things, the economic and business
circumstances occurring from time to time in the countries, sectors and
markets in which the Group operates. It is believed that the expectations
reflected in these statements are reasonable, but they may be affected by a
wide range of variables which could cause actual results to differ materially
from those currently anticipated. No assurances can be given that the
forward-looking statements in this announcement will be realised.

 

The forward-looking statements reflect the knowledge and information available
to management at the date of preparation of this announcement. XP Power and
its Directors accept no responsibility to third parties and undertake no
obligation to update these forward-looking statements. Nothing in this
announcement should be construed as a profit forecast.



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