Interim Results 2020 xp xp power.com 1 XP XP Power Interim Results 2020 2020
DISCLAIMER The information contained in this document is for Investors should not place undue reliance on such background purposes only and does not purport to be full forward-looking statements, and XP Power Limited does or complete. No reliance may or should be placed by any not undertake any obligation to update publicly or revise person for any purposes whatsoever on the information any forward-looking statements. contained in this document or on its completeness, accuracy or fairness. The information in this document is This document does not constitute or form part of, and subject to change. should not be construed as, an offer, solicitation or invitation to sell or issue, or any solicitation of any offer to This document contains statements about XP Power buy or acquire any securities of XP Power Limited or any Limited that are or may be forward-looking statements. of its subsidiaries in any jurisdiction or an inducement to Forward-looking statements include statements relating to enter into investment activity. No part of this document, (i) future capital expenditures, expenses, revenues, nor the fact of its distribution, should form the basis of, or earnings, synergies, economic performance, be relied upon, in connection with any contract or indebtedness, financial condition, dividend policy, losses commitment or investment decision whatsoever. This and future prospects; (ii) business and management document is not a prospectus or other offering document strategies and the expansion and growth of XP Power and does not purport to be all-inclusive. The information Limited’s operations and potential synergies; and (iii) the contained in this document has not been independently effects of government regulation on business. verified by XP Power Limited or any other party. No representation or warranty, either express or implied, is These forward-looking statements are not guarantees of made as to, and no reliance should be placed on, the future performance. They have not been reviewed by the fairness, accuracy, completeness, correctness or auditors of XP Power Limited. They involve known and reliability of the information contained herein. It should unknown risks, uncertainties and other factors which may not be regarded by recipients as a substitute for the cause the actual results, performance or achievements of exercise of their own judgment. any such person to be materially different from any results, performance or achievements expressed or This document is not directed to, or intended for implied by such statements. They are based on numerous distribution to or use by, any person or entity that is a assumptions regarding the present and future business citizen or resident or located in any locality, state, country strategies of such persons and the environment in which or other jurisdiction where such distribution, publication, each will operate in the future. All subsequent oral or availability or use would be contrary to law or regulation or written forward-looking statements attributable to XP which would require any registration of licensing within Power Limited or any of its shareholders or any persons such jurisdiction. The information contained in this acting on its behalf are expressly qualified in their entirety document does not constitute a public offer under any by the cautionary statement above. All forward-looking applicable legislation, or an offer to sell or solicitation of statements included in this document speak only as of the an offer to buy any securities. This document shall not date they were made and are based on information then constitute an offer of securities for sale in the United available to XP Power Limited. States. 2 2 XP XP Power Interim Results 2020 2020
GROUP HIGHLIGHTS • Strong performance in challenging conditions demonstrates robust business model • Order intake increases 45% to £145.8m due to recovery in Semifab and COVID-19 related demand from Healthcare customers • Revenue increases 6% to £105.1m driven by Semifab recovery • Expansion of Vietnam manufacturing facility completed in 2019 enabled Group to show supply chain resilience • Good free cash flow driven by working capital focus • Reinstatement of dividend from Q2 2020 • Exposed to sectors that should perform well in a post COVID-19 world 3 3 XP XP Power Interim Results 2020 2020
FINANCIAL HIGHLIGHTS 4 4 XP XP Power Interim Results 2020 2020
GROUP PERFORMANCE GROUP FINANCIAL Order intake up 45% on prior year • PERFORMANCE Cyclical recovery in Semifab (+105%) COVID-19 related Healthcare demand (+141%) Change H1 H1 Industrial softer (-17%), Technology (+19%) At Change 2020 2019 CER (2) Reported revenue growth of 6% • GBP/USD 1.26 1.29 Semifab (+61%), Healthcare (+19%) Orders (£m) 145.8 100.6 +45% +42% Industrial (-22%), Technology (+12%) Revenue (£m) 105.1 98.9 +6% +4% Gross margin (%) 44.9% 44.6% +30bps Gross margin increase despite COVID-19 • Adj. Operating Profit (£m) (1) 18.0 18.2 (1)% related costs Adj. Profit before tax (£m) (1) 17.0 16.6 +2% Adjusted Profit before tax growth of 2% with • Adj. ETR (%) (1)(3) 20.4% 19.4% +100bps annualisation of 2019 investments Adj. diluted EPS (p) (1) 70.2p 69.2p +1% ETR impacted by regional profit mix • DPS (p) 18p 35p (49)% Reinstated Q2 dividend of 18p (2019: 18p) (1) These adjusted performance measures represent the statutory results excluding specific items. • (2) At constant exchange rates (‘CER’) using the prior period’s exchange rates. (3) ETR = Effective tax rate 5 XP XP Power Interim Results 2020 2020
GROUP PERFORMANCE GROUP SEGMENTAL PERFORMANCE ORDERS REVENUE YoY change +100% +16% (19)% +136% +45% YoY change +56% +10% (24)% +16% +6% at constant FX at constant FX 145.8 2.4 29.3 1.1 10.2 2.4 105.1 1.8 3.9 21.2 98.9 (9.5) (11.4) £ million £ million 100.6 H1 2019 Semi Technology Industrial Healthcare FX H1 2020 H1 2019 Semi Technology Industrial Healthcare FX H1 2020 Fab electronics Fab electronics 6 XP XP Power Interim Results 2020 2020
GROUP PERFORMANCE GROUP REGIONAL PERFORMANCE ORDERS REVENUE YoY change +10% (10)% +15% +6% YoY change +61% +19% +13% +45% at constant FX at constant FX 145.8 2.4 1.4 6.4 35.0 2.4 105.1 5.9 1.5 (3.6) 98.9 £ million 100.6 H1 2019 N America Europe Asia Currency H1 2020 H1 2019 N America Europe Asia Currency H1 2020 7 XP XP Power Interim Results 2020 2020
GROUP PERFORMANCE ADJUSTED OPERATING PROFIT PERFORMANCE Gross margin increase despite COVID-19 related costs Gross margin at 44.9%, up 30bps Positive regional and segment mix 0.8 H1 margin impacted by Kunshan COVID-19 2.0 (0.5) shutdown and increased freight costs 18.2 0.2 18.0 £ million Investment in headcount and IT (2.7) infrastructure Adjusted operating margin of 17.1%, down 130bps Rev drop through Covid GM impact Currency H1 2019 GM contribution Opex investment H1 2020 8 XP XP Power Interim Results 2020 2020
GROUP PERFORMANCE CASH FLOW STATEMENT AND NET DEBT Net debt bridge £m £m H1 20 H1 19 Variance Adjusted Operating Profit 18.0 18.2 -1% Amortisation of product development costs 2.2 1.8 (41.3) 14.5 Amortisation of computer software 0.4 - 2.9 2.6 Depreciation 2.2 4.2 Change in working capital (3.2) (34.4) Adjusted Operating Cash Flow 25.7 26.8 -4% (3.9) Specific items (4.2) (1.6) Cash generated from Operations 21.5 25.2 -15% (0.5) (0.6) (2.6) Income tax paid, net of refund Payment of lease liabilities (0.8) (0.8) Purchase of property and equipment (net of disposals) (1.8) (2.5) (4.0) (4.4) Capitalised product development costs (0.8) (1.9) Capitalised software development costs (0.8) (1.4) Interest paid Sale of treasury shares 1.8 0.4 Free cash flow 14.5 12.0 21% Funding: $120 million + $60m accordion Across 3 Regional banks Leverage at 0.74x Covenant: < 3.0x Opening Net Free Cash Other cash Dividend FX Closing Net Interest Cover: 22.9x Covenant: > 4.0x Debt Flow items Payments Debt 9 XP XP Power Interim Results 2020 2020
OUTLOOK 2020 MODELLING GUIDANCE APPROXIMATIONS CAPEX/CAP PROD DEV/CAP IT INTEREST EFFECTIVE TAX RATE £6.0m / £8.0m / £2.5m c. £1.5m 20-22% CASH SPECIFIC ITEMS INFLATION COST SAVINGS £4.5 – 5.0m c. £2-3m c. £2-3m REVENUE CASH FLOW NET DEBT / EBITDA Improved EBITDA & H2 weighted – Backlog unwind c. 0.5x by 31 December 2020 Working Capital 10 XP XP Power Interim Results 2020 2020
BUSINESS UPDATE 11 11 XP XP Power Interim Results 2020 XP XP Power Interim Results 2020 2020 2020
Recommend
More recommend
