REG-XP Power Ltd: Trading Update

XP PowerAnnouncement

21/01/2025 07:15

21 January 2025

 

 

XP Power Limited

(`XP Power' or `the Group')

 

Q4 and Full Year 2024 Trading Update

Performing well in challenging end markets, improved 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 fourth quarter and year ended 31 December 2024.

 

Trading

 

                     2024   2023   Change  Change in constant currency  
                                                                        
 Q4                                                                     
 Order intake (£m)   44.9   48.4   (7)%    (2)%                         
 Revenue (£m)        60.0   81.1   (26)%   (22)%                        
 Book-to-bill        0.75x  0.60x  0.15x                                
                                                                        
 Full Year                                                              
 Order intake (£m)   181.6  208.8  (13)%   (10)%                        
 Revenue (£m)        247.3  316.4  (22)%   (20)%                        
 Book-to-bill        0.73x  0.66x  0.07x                                
                                                                        

 

 

 Quarterly performance                       Q1 2024  Q2 2024  Q3 2024  Q4 2024  
                                                                                 
 Order intake (£m)                           43.7     44.2     48.8     44.9     
 % change vs prior year - constant currency  (27)%    (17)%    11%      (2)%     
                                                                                 
 Revenue (£m)                                64.6     62.5     60.2     60.0     
 % change vs prior year - constant currency  (15)%    (22)%    (19)%    (22)%    
                                                                                 
 Book-to-bill                                0.68x    0.70x    0.81x    0.75x    
                                                                                 

 

Q4 revenue was similar to Q3 at £60.0m. Reported revenue continued to face a
headwind from currency movements in Q4, but this has since begun to dissipate
in early 2025. Sales into the Semiconductor Manufacturing Equipment sector in
Q4 grew by 13% sequentially. Destocking continued in the Industrial Technology
and Healthcare sectors, but with improving trends in order intake. In recent
months we saw generally slower than expected demand from Asia, reflecting
regional macro-economic conditions and some market hesitancy until global
trade policies become clearer. Full year revenue of £247.3m was 20% lower
than the prior year in constant currency.

 

Q4 order intake was £44.9m. Aggregate order intake from the Industrial
Technology and Healthcare sectors grew sequentially with channel inventory
moving closer to equilibrium. Order intake from the Semiconductor
Manufacturing Equipment sector did not match a particularly strong Q3, with
demand for High Voltage High Power products beginning to normalise after a
strong period. Conditions are generally improving in the Semiconductor
Manufacturing Equipment sector, particularly within our US customer base.

 

Our order book at the end of the year was £122.3m.

 

Financial Position

 

Operating cash generation remained strong throughout the second half, aided by
tight control of working capital. Net debt at 31 December 2024 was £93.5m,
£5.2m lower than at 30 September 2024 and compares to £112.7m at the end of
2023.

 

We estimate that Net Debt : Adjusted EBITDA at 31 December 2024 will be
c.2.3x.

 

Outlook

 

The Group's Adjusted Operating Profit for 2024 is expected to be within the
range of current analyst expectations*.

 

The Board is encouraged by signs that channel inventory is moving closer to
equilibrium and by improving underlying conditions in the semiconductor
industry but is also mindful of increased macro and geo-political headwinds in
Asia. Whilst it is too soon to be definitive about prospects for 2025, these
trends suggest our performance is likely to be weighted toward the second
half.

 

The Board remains confident in the Group's long-term prospects. XP Power has
leading positions in attractive end markets, has a strong pipeline of new
product launches scheduled for 2025 and is winning record amounts of new
business, supporting medium-term growth. This should deliver significant
performance improvement when markets recover.

 

* Analyst expectations for Adjusted Operating Profit for the year ended 31
December 2024 are in the range of £25.1m to £27.6m

 

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  

 

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 Semiconductor Manufacturing Equipment
(circa 38% of revenue in 2024), Healthcare (circa 24% revenue in 2024) and
Industrial Technology (circa 38% of revenue in 2024) 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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