XP Power Ltd - Q3 Trading Update

8 October 2024

 

 

XP Power Limited

(`XP Power' or `the Group')

 

Q3 2024 Trading Update

Improved order intake led by Semis; revenue in line with expectations; continued strong 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 third quarter ended 30 September 2024.

 

Trading

 

 

 

 

Q3 revenue was in line with expectations at £60.2m. Foreign exchange movements in the quarter lowered the sterling value of our predominantly US dollar-denominated sales and profits, reducing Q3 profit by c.£0.7m. In constant currency, Q3 revenue was similar to Q2. Year to date revenue now stands at £187.3m.

 

Q3 order intake increased to £48.8m, £4.6m higher than Q2 and 11% higher than the comparative period in constant currency - the first quarter of growth since late 2022. The improvement was driven by the Semiconductor Manufacturing Equipment sector, orders from which were more than double the comparative period and 40% higher sequentially in constant currency. Order intake within the Healthcare and Industrial Technology sectors was similar to Q2 in constant currency, and reflects ongoing customer destocking which is lasting longer than previously expected. Year to date order intake now stands at £136.7m.

 

Our order book at the end of Q3 was c.£137.4m.

 

Financial Position

 

Net debt at 30 September 2024 was £98.7m, £5.5m lower than at 30 June 2024. Operating cash generation remained strong in Q3, aided by tight control of working capital.

 

Outlook

 

The Group's performance in the third quarter reflects the market conditions experienced throughout 2024 with currency now becoming an additional headwind. As previously indicated, the performance for the full year continues to be subject to an improvement in trading in the fourth quarter from the conversion of new orders within the Semiconductor Manufacturing Equipment sector and a slower rate of channel destocking in the Industrial Technology and Healthcare sectors.

 

On a constant currency basis, the Group's full year expectations remain within the range of current analyst expectations*.

 

* Analyst expectations for Adjusted Operating Profit for the year ending 31 December 2024 are in the range of £27.4m to £30.1m

 

Enquiries:

 

 

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 36% of sales in H1 2024), Healthcare (circa 24% sales in H1 2024) and 2 Industrial Technology (circa 40% of sales in H1 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.