REG-XP Power Ltd: Pre-close Trading Update

XP PowerAnnouncement

12/01/2021 07:05

12 January 2021

XP Power Limited

(“XP Power”, “the Group” or “the Company”)

Pre-close 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 year ended 31 December 2020.

Trading

The Group had a strong finish to 2020 and revenue for the full year was in
line with the Board’s expectations. Profit for 2020 is anticipated to be
ahead of expectations as the exceptional Healthcare demand led to production
efficiency gains and improved gross margins.

Order intake in the fourth quarter continued to be positive, driven by
continued demand in the Semiconductor Equipment Manufacturing sector. For the
year ended 31 December 2020 order intake was up 20% compared with 2019,
including the £15-20 million net increase directly linked to COVID-19 as
detailed in the Group’s Q3 Trading Update in October. Revenue in the fourth
quarter was up 25% compared with Q4 2019 but as expected, decreased from the
record levels seen in Q3 2020 as Healthcare shipments returned to more normal
levels following the exceptional COVID-19 related demand in the first half of
2020. Overall revenue for 2020 was up 16% on 2019.

The book to bill ratio, which tracks the relationship between orders received
and completed sales, was 0.95 for the fourth quarter (2019: 1.24) reflecting
the continued strong revenue performance in the period.  The book to bill for
2020 was 1.11 (2019: 1.08).

 £ Millions       2020   2019  Change  Change in constant currency  
 Orders                                                             
 Fourth quarter   55.9   58.4   (4%)               (2%)             
 Full Year       258.0  214.9    20%               20%              
                                                                    
 Revenues                                                           
 Fourth quarter   58.8   47.2    25%               26%              
 Full Year       232.9  199.9    16%               16%              
                                                                    
 Book to Bill                                                       
 Fourth quarter   0.95   1.24                                       
 Full Year        1.11   1.08                                       

Financial Position and dividend

Net debt at 31 December 2020 was £18.0 million, compared with £41.3 million
at 31 December 2019 and £28.2 million at 30 September 2020. The net debt
position benefited from a strong cash performance in the fourth quarter
including good working capital management.

The recommended dividend for the fourth quarter of 2020 will be announced with
the 2020 Final Results on 2 March 2021 but is not expected to be less than 34
pence per share, representing a minimum total dividend of 72 pence per share
for the year.  The dividend of 20 pence per share for the third quarter,
announced in October, will be paid on 15 January 2021, to shareholders on the
register on 11 December 2020.

CEO and CFO Succession

As previously announced, Duncan Penny stepped down as CEO effective 31
December 2020 and Gavin Griggs succeeded him from 1 January 2021. Duncan will
remain an Executive Director and member of the Board until the AGM on 20 April
2021.

The search for a new Chief Financial Officer is ongoing, and an appointment
will be announced in due course. In the interim period Johan Olivier,
currently Group Finance Director, will be acting CFO and a member of the
Group’s Executive Leadership Team but will not join the Board.  Johan
joined the Company in August 2018 as Group Finance Director, responsible for
financial planning and reporting and Treasury and has worked closely with
Gavin since then.

Outlook

Order intake for the fourth quarter was positive and the Group is performing
well, despite the challenges created by COVID-19, and we therefore expect
further underlying revenue growth in 2021. Longer term, the Group remains well
positioned to continue to deliver growth.

Enquiries:

XP Power

Gavin Griggs, Chief Executive Officer                +44 (0)118
976 5155

Johan Olivier, Acting Chief Financial Officer        +44 (0)118 976
5155

Citigate Dewe Rogerson                    

Kevin Smith/Jos Bieneman       
                       +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.

XP Power typically designs power control solutions into the end products of
major blue-chip OEMs, with a focus on the Industrial Electronics (circa 33% of
revenue), Healthcare (circa 29% of revenue), Semiconductor Equipment
Manufacturing (circa 28% of revenue) and Technology (circa 10% of revenue)
sectors.  Once designed into a programme, XP Power has a revenue annuity over
the life cycle of the customer’s product which is typically 5 to 7 years
depending on the industry sector.   

XP Power has invested in research and development and its own manufacturing
facilities in China 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 serves a global blue-chip customer base from 29
locations in Europe, North America, and Asia. 

For further information, please visit xppower.com



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