REG-XP Power Ltd: Trading Update

XP PowerAnnouncement

11/01/2024 07:15

11 January 2024

 

 

XP Power Limited

(‘XP Power’ or ‘the Group’ or the ‘Company’)

 

Q4 and Full Year 2023 Trading Update

 

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 fourth quarter and full year ended 31 December 2023.

 

Trading

 

                     2023   2022   Change  Change in constant currency  
                                                                        
 Q4:                                                                    
 Order intake (£m)   49.1   68.7   (29%)   (22%)                        
 Revenue (£m)        81.2   87.4   (7%)    (5%)                         
 Book to Bill        0.6    0.8    (0.2)                                
                                                                        
 Full Year:                                                             
 Order intake (£m)   208.9  362.9  (42%)   (43%)                        
 Revenue (£m)        316.5  290.4  9%      8%                           
 Book to Bill        0.7    1.2    (0.5)                                
                                                                        

 
 

 2023 by quarter                              Q1     Q2     Q3     Q4     
                                                                          
 Order intake (£m)                            61.2   54.4   44.2   49.1   
 % change vs last year – constant currency    (45%)  (42%)  (54%)  (22%)  
                                                                          
 Revenue (£m)                                 77.9   82.3   75.1   81.2   
 % change vs last year – constant currency    16%    28%    (1%)   (5%)   
                                                                          
 Book to Bill                                 0.8    0.7    0.6    0.6    
                                                                          

 

Q4 revenue of £81.2m was slightly ahead of expectations, due largely to the
decision to reschedule the relocation of our facility in California, from
December 2023 to January 2024.  This had the effect of bringing forward
£5.0m of revenues from orders shipped earlier than expected in Q4 2023 rather
than Q1 2024.

 

Full year revenue was £316.5m, 8% higher than last year on a constant
currency basis.

 

Q4 order intake of £49.1m was £4.9m higher than Q3 due to an increase in
orders for High Voltage products for Semiconductor Manufacturing
applications.  We saw slower order intake from the Healthcare and Industrial
Technology sectors.

 

We ended 2023 with an order book of c.£192m.

 

Financial Position

 

Net debt at 31 December 2023 was £112.6m, lower than expected due to c.£12m
of capex payments, relating largely to the relocation of our US facility,
which was re-phased to early 2024, as discussed above.  Strengthening of
sterling also reduced the value of our US dollar denominated borrowings over
the final quarter.

 

Whilst the process of closing our 2023 year end accounts is at an early stage
and full year profit has yet to be finalised, we estimate that net debt /
Adjusted EBITDA at 31 December 2023 will be c.2.0x, which compares to 2.6x at
the end of Q3.

 

We expect net debt and leverage to increase in the first half of 2024 as the
deferred capex payments referenced above are made, before reducing thereafter.

 

Update on funding plan

 

Our funding plan announced on 6 November 2023 included a package of management
actions to reduce cost and borrowings.

 

These actions are on track and delivering the benefits expected.

 

2024 and longer term

 

Whilst it is too soon to be definitive about prospects for 2024, we continue
to expect that market conditions will improve as the year progresses, with our
results being weighted towards the second half.  Our performance will be
supported by the actions taken to reduce our cost base and we will continue to
respond decisively to market conditions as they evolve.

 

We will provide a further update and outlook with our full year results
announcement.

 

The Board remains confident that the Group has strong long-term prospects, and
significant value, underpinned by our leading market position and broad
product portfolio.

 

Enquiries:

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

 

 

 

Note to editors

 

XP Power designs and manufactures power controllers, the essential hardware
component in every piece of electrical equipment that converts power from the
electricity grid into the right 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 typically designs power control solutions into the end products of
major blue-chip OEMs, with a focus on the Industrial Technology (circa 41% of
sales), Healthcare (circa 20% sales) and Semiconductor Manufacturing Equipment
(circa 39% of 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
China, North America, and Vietnam, 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 All Share 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.



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