Trading Update

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	[phone]
Matt Webb, Chief Financial Officer	[phone]
Citigate Dewe Rogerson
Kevin Smith/Lucy Gibbs	[phone]

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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